The relational view of strategy: Empirical evidence from business cooperation networks

Abstract

The purpose of this article is to debate evidence of how collective action in business cooperation networks can complement or even question the dominant perspectives of organization strategy. The present study is supported by the emerging relational view of strategy, rather than by its traditional individual view, and it revisits three leading approaches about strategy: industry structure, resource-based view and transaction costs. The motivator for this investigation is the possibility of exploring the apparent dissonance between those two views when considering these three perspectives. This dissonance is noticed in the context of the collective action adopted by business cooperation networks seeking to become more competitive. To shed light on these empirical speculations, this study further analyzes, through field research, the business cooperation networks in the State of Rio Grande do Sul, Brazil. This empirical context is the result of a public policy which supported the creation of over 200 cooperation networks of small and medium businesses. For data collection, the researchers conducted 60 in-depth interviews in 12 cooperation networks. The evidence found supported a critical analysis of the dominant perspectives of strategy when considering the relational point of view. Findings question the individualistic approach of the industry structure perspective, demonstrating that it is possible to achieve a superior competitive position in the industry by collaborating, even with competitors. Also, the relational view of strategy complements the resource-based view, demonstrating that the collective assets, rather than those exclusively kept by the individual organization, can equally sustain a competitive strategy in the market. The evidence also demonstrates that by means of closer relationships cooperation networks minimize the requirements for contracts and encourage relations of trust among the businesses involved.

Key words: cooperation, strategy, competitiveness, small businesses, networks.