Social embeddedness and supply chains: Doing business with friends versus making friends in business

Haoyuan Ding, Yichuan Hu, Han Jiang, Jing Wu and Yu Zhang

Production and Operations Management, 2023, vol. 32, issue 7, 2154-2172

Abstract: Network literature has widely documented that the managerial ties between corporate leaders in two firms can promote their economic exchanges in supply chains, that is, social embeddedness. In this study, we strive to advance this line of inquiry by exploring the dynamics of such socially embedded supply chains, examining whether and when the dissolution of managerial ties between two firms would cause the subsequent termination of their supplier–buyer exchanges. We address this question by distinguishing two types of socially embedded supply chains based on their different relational origins: business‐with‐friend links in which the managerial ties precede the supply chains, and friend‐in‐business links in which the supplier–buyer exchanges precede the managerial ties. We posit that the managerial tie dissolution has a negligible effect on the subsequent termination of supply chains in business‐with‐friend links. In contrast, in friend‐in‐business links, the dissolution of managerial ties between two firms is associated with a significantly higher likelihood for their supplier–buyer exchanges to dissolve afterward. We find strong empirical evidence for the above propositions using a nuanced data set that integrates the managerial tie information and the supply chain data. In sum, we show that socially embedded supply chains with different origins (“doing business with friends” vs. “making friends in business”) would have distinct patterns of evolution and dissolution.

Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/poms.13962

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:popmgt:v:32:y:2023:i:7:p:2154-2172

Ordering information: This journal article can be ordered from
http://onlinelibrary ... 1111/(ISSN)1937-5956

Access Statistics for this article

Production and Operations Management is currently edited by Kalyan Singhal

More articles in Production and Operations Management from Production and Operations Management Society
Bibliographic data for series maintained by Wiley Content Delivery ().