1990/02/01 by Jan B. Heide, George John · 751 citations
Business, Management and Accounting · Economics, Econometrics and Finance · #Action (physics) #Business #Closeness #Computer science #Database transaction #Economics #Industrial organization #Key (lock) #Law, Economics, and Judicial Systems #Marketing #Microeconomics #Normative #Outsourcing and Supply Chain Management #Purchasing #Sample (material) #Securities Regulation and Market Practices #Transaction cost
paper · doi:10.1177/002224379002700103
published in Journal of Marketing Research 27(1), 24-36 (SAGE Publishing)
openalex publication_date 1990/02/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/26
Recent trends in industrial markets indicate that buyers and sellers are increasingly supplanting conventional “arm's length” arrangements with “alliances” involving closer ties. The authors develop a theoretical model of industrial buyer-supplier ties that presents joint action as a key aspect of closeness. Whereas conventional ties emphasize a clearly defined division of labor, these newer relationships are distinguished by more tightly integrated roles based on undertaking activities jointly. Drawing primarily on a normative theory of transaction costs, the authors identify the conditions under which these relationships are useful. The utility of the relationships derives from an ability to safeguard relationship-specific investments and to facilitate adaptation to uncertainty. Using data from a sample of industrial firms and their suppliers, the authors test these predictions. The results show good support for the model. Consequences for research and practice in marketing are drawn.