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Interpersonal ties influencing strategic decisions regarding inter-firm partnerships
The agri-food industries changed from vertically integrated supply chains towards vertical cooperating networks. In this context, inter-firm partnerships are seen as a possible tool to address changing markets and competition. Within strategic management, inter-firm partnerships are valued as a potential source of competitive advantage, which ascribes importance to the strategic management of partnerships. In the underlying classical cooperation theory, business cooperation decisions are assumed to be made rationally. Initial empirical studies show that managers have a personal influence on strategic decisions in business cooperation and that their decisions are not always in line with the common rationality assumptions in economics. Preliminary studies show initial "softer" or even "non-economic" interpersonal factors such as heuristics, biases, emotions, personality traits, or norms that can mitigate rationality and impact decisions in strategic collaborations made by managers. Human agents and their influence on strategic relationship management and intrafirm-, interfirm- and network-level outcomes are put into the research center of this study. Specifically, this thesis aims to explore whether managers (can) take an individual influence on strategic decision-making in B2B cooperation relations. Furthermore, it aims to analyze and identify which personal characteristics factors play a role during the decision-making process regarding inter-firm partnerships in the agri-food industry.
First empirical studies have evidenced that interaction – or in other words, the influence of managers – is a critical process in developing strategic buyer-seller relationships in B2B relations. I have argued that personal characteristics exist, and they influence decisions in inter-firm cooperation. An additional level, namely the personal-level, has to be explicitly included in the strategic chain management framework. Four general research expectations on which personal characteristics influence decision-making in inter-firm partnerships were derived.
As a consequence of the currently limited literature base I conducted two exploratory and qualitative studies in the form of expert interviews to first identify and prioritize the most critical driving personal influences on mangers in the German wine industry. Together, these two studies served as the basis for developing the research expectations and the main study in the form of factorial surveys. The study's statistical population size includes all companies that engage in grape-buying relationships (in Germany) to produce wine commercially (roughly 9,000 firms). The sample size based on the number of respondents is 203, but based on the judgments, the sample size is 602 judgments, as each respondent judged several items. After a descriptive statistical analysis, the Partial Least Squares (PLS) technique, in particular the multi-group analysis was used to evaluate the results.
The most important finding is that managers’ personal characteristics influence strategic decisions in chain management, particularly on mechanisms to manage cooperation. Furthermore, in this study, the characteristics of fairness, escalation of commitment, overconfidence, and representation heuristic significantly impacted some of the power and trust statements. Thus, focal firms have to consider and develop appropriate mechanisms to address and manage personal influences. Secondly, it was shown that various personal characteristics influence chain management decisions simultaneously and with different intensities in a positive or negative manner.