IDEAS home Printed from https://ideas.repec.org/p/por/fepwps/282.html
   My bibliography  Save this paper

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

Author

Listed:
  • Filipe J. Sousa

    () (Departamento de Gestão e Economia (DGE), Universidade da Madeira (UMa))

  • Luís M. de Castro

    () (Faculdade de Economia do Porto (FEP))

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.

Suggested Citation

  • Filipe J. Sousa & Luís M. de Castro, 2008. "How is the relationship significance brought about? A critical realist approach," FEP Working Papers 282, Universidade do Porto, Faculdade de Economia do Porto.
  • Handle: RePEc:por:fepwps:282
    as

    Download full text from publisher

    File URL: http://www.fep.up.pt/investigacao/workingpapers/08.07.04_wp282.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Mouzas, Stefanos & Ford, David, 2006. "Managing relationships in showery weather: The role of umbrella agreements," Journal of Business Research, Elsevier, vol. 59(12), pages 1248-1256, November.
    2. 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 1119-1158, December.
    3. Steve Fleetwood, 2001. "Causal Laws, Functional Relations and Tendencies," Review of Political Economy, Taylor & Francis Journals, vol. 13(2), pages 201-220.
    4. Brian J. Loasby, 2000. "Market institutions and economic evolution," Journal of Evolutionary Economics, Springer, vol. 10(3), pages 297-309.
    5. Joao Mota & Luis M. de Castro, 2004. "A Capabilities Perspective on the Evolution of Firm Boundaries: A Comparative Case Example from the Portuguese Moulds Industry," Journal of Management Studies, Wiley Blackwell, vol. 41(2), pages 295-316, March.
    6. Grossman, Sanford J & Hart, Oliver D, 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 691-719, August.
    7. Alessia Contu & Hugh Willmott, 2005. "You Spin Me Round: The Realist Turn in Organization and Management Studies," Journal of Management Studies, Wiley Blackwell, vol. 42(8), pages 1645-1662, December.
    8. Young, Allyn A., 1928. "Increasing Returns and Economic Progress," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 38, pages 527-542.
    9. Alajoutsijärvi, Kimmo & Eriksson, Päivi & Tikkanen, Henrikki, 2001. "Dominant metaphors in the IMP network discourse: 'the network as a marriage' and 'the network as a business system'," International Business Review, Elsevier, vol. 10(1), pages 91-107, February.
    10. McLoughlin, Damien & Horan, Conor, 2002. "Markets-as-networks: notes on a unique understanding," Journal of Business Research, Elsevier, vol. 55(7), pages 535-543, July.
    11. Michael Reed, 2005. "Reflections on the 'Realist Turn' in Organization and Management Studies," Journal of Management Studies, Wiley Blackwell, vol. 42(8), pages 1621-1644, December.
    12. Richardson, G B, 1972. "The Organisation of Industry," Economic Journal, Royal Economic Society, vol. 82(327), pages 883-896, September.
    13. Hakansson, Hakan & Ford, David, 2002. "How should companies interact in business networks?," Journal of Business Research, Elsevier, vol. 55(2), pages 133-139, February.
    14. Patel, Pari & Pavitt, Keith, 1997. "The technological competencies of the world's largest firms: Complex and path-dependent, but not much variety," Research Policy, Elsevier, vol. 26(2), pages 141-156, May.
    15. Mouzas, Stefanos, 2006. "Efficiency versus effectiveness in business networks," Journal of Business Research, Elsevier, vol. 59(10-11), pages 1124-1132, October.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Markets-as-Networks Theory; relationship significance; business relationships; focal firm; resources; competences; activities;

    JEL classification:

    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:por:fepwps:282. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: http://edirc.repec.org/data/fepuppt.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.