EMBEDDEDNESS, INTERDEPENDENCE, AND OPPORTUNISM IN ORGANIZATIONAL SUPPLIER-BUYER NETWORKS

Despite the value of Williamson's (1975; 1985) transaction cost economics perspective to organization theorists for offering new ways of thinking about relations between organizations, its focus on supplier-buyer dyads operating on a continuum ranging from markets to hierarchies de-emphasizes the importance of cooperative network relations. In this paper, theory and hypotheses are developed explaining constraints on the emergence of opportunism when supplier-buyer relations are considered in a network context. The general thesis is that the opportunistic behavior of individual network suppliers relative to the dominant buyer, or hub firm, will decline at increasing levels of embeddedness in an interdependent supplier-buyer network, despite conditions of high asset specificity and small numbers bargaining.