Industrial Networks as Governance Structures: A Framework Integrating Channels, Logistics and Pricing

Abstract

As functional, spatial, and temporal interdependencies between companies are increasing, traditional command and control approaches between organizations are being challenged (Bowersox and Cooper 1991). Against this background, when organizing channel, logistics, and pricing activities, managers are faced with some fundamental questions, such as: (1) what is the level of interdependence between channel members? (2) how strong are channel relationships? and (3) are channel decisions made on the basis of pure economic analysis, or are there other forces (e.g. long term relations, level of trust etc.) affecting channel behavior? Two disciplinary orientations that can provide useful insights into the structure and performance of marketing channels and logistics are social network theory and institutional economics.