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How is the relationship significance brought about? A critical realist approach

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Author Info
Filipe J. Sousa () (Departamento de Gestão e Economia (DGE), Universidade da Madeira (UMa))
Luís M. de Castro () (Faculdade de Economia do Porto (FEP))

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Abstract

The markets-as-networks theorists contend, at least tacitly, the significance of business relationships for the focal firm – that is, business relationships contribute somewhat to the focal firm’s survival and growth. We do not deny the existence of significant business relationships but sustain, in contrast to the consensus within the Markets-as-Networks Theory, that relationship significance should not be a self-evident assumption. Significance cannot be a taken-for-granted property of each and every one of the focal firm’s business relationships. We adopt explicitly a critical realist position in this conceptual paper and claim that the relationship significance is an event of the business world, whose causes remain yet largely unidentified. Where the powers and liabilities of business relationships (i.e., their functions and dysfunctions) are put to work, inevitably under certain contingencies (namely the surrounding networks and markets), effects result for the focal firm (often benefits in excess of sacrifices, i.e., relationship value) and as a result the relationship significance is likely to be brought about. In addition, the relationship significance can result from the dual influence that business relationships have on a great part of the structure and powers and liabilities of the focal firm, i.e., its nature and scope respectively.

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Paper provided by Universidade do Porto, Faculdade de Economia do Porto in its series FEP Working Papers with number 282.

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Length: 49
Date of creation: Jul 2008
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Handle: RePEc:por:fepwps:282

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Related research
Keywords: Markets-as-Networks Theory relationship significance business relationships focal firm resources competences activities

Find related papers by JEL classification:
M31 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Marketing

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  3. Hart, Oliver & Moore, John, 1990. "Property Rights and the Nature of the Firm," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1119-58, December. [Downloadable!] (restricted)
    Other versions:
  4. Steve Fleetwood, 2001. "Causal Laws, Functional Relations and Tendencies," Review of Political Economy, Taylor and Francis Journals, vol. 13(2), pages 201-220, April. [Downloadable!] (restricted)
  5. Brian J. Loasby, 2000. "Market institutions and economic evolution," Journal of Evolutionary Economics, Springer, vol. 10(3), pages 297-309. [Downloadable!] (restricted)
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  8. Hakansson, Hakan & Ford, David, 2002. "How should companies interact in business networks?," Journal of Business Research, Elsevier, vol. 55(2), pages 133-139, February. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Susanne Sieber, . "Österreichs Attraktivität für ausländische Direktinvestitionen sowie als Standort für Headquarters Funktionen," FIW Research Reports series 21, FIW. [Downloadable!]
  2. W. Altzinger, . "Österreichs Multinationalen Unternehmen (MNUs) und deren konzernexterner und - interner Handel," FIW Research Reports series 23, FIW. [Downloadable!]
  3. W. Koller & Robert Stehrer, . "Outsourcing and Employment: A Decomposition Approach," FIW Research Reports series 18, FIW. [Downloadable!]
  4. Julia Woerz & Olga Pindyuk, . "Trade in Services: Note on the Measurement and Quality of Data Sources," FIW Research Reports series 1, FIW. [Downloadable!]
  5. W. Altzinger, . "The Profitability of Austrian Foreign Direct Investment - Reinvestment or Repatriation?," FIW Research Reports series 10, FIW. [Downloadable!]
  6. Bernhard Felderer & Günther Grohall & Christian Haefke & Ulrich Schuh & Edith Skriner, . "Verflechtungen in der österreichischen Außenwirtschaft," FIW Research Reports series 24, FIW. [Downloadable!]
  7. Joseph F. Francois & Olga Pindyuk & Julia Woerz, . "Trade Effects of Services Trade Liberalization in the EU," FIW Research Reports series 4, FIW. [Downloadable!]
  8. Klaus Nowotny & Gerhard Palme, . "Fokus Ostintegration: Grenzüberschreitende Dienstleistungserbringung in die neuen EU Länder," FIW Research Reports series 6, FIW. [Downloadable!]
  9. Martin Falk & Yvonne Wolfmayr, . "The Impact of Outward FDI in Central and Eastern Europe on Employment in the EU-15 Countries," FIW Research Reports series 16, FIW. [Downloadable!]
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