Understanding collaborative supply chain relationships through the application of the Williamson Organisational Failure Framework

Many researchers have studied supply chain relationships however, the preponderance of open markets situations and ‘industry-style’ surveys have reduced the empirical focus on the dynamics of long-term, collaborative, interdependent, dyadic relationships. Within the supply chain the need for much closer, long-term relationships is increasing due to supplier rationalisation and globalisation (Spekman et al, 1998) and more information about these interactions is required. This paper describes the results from a substantial, exploratory research project undertaken within the UK Defence sector. This sector was chosen in order to reduce the distraction caused by competitive influences on the relationships in view. The research specifically tested the well-accepted Williamson’s (1975) Economic Organisations Failure Framework as a theoretical model through which long term collaborative relationships can be viewed. The study demonstrated that the theoretical model could provide powerful insights into the research subject and especially revealed the important part played by co-operation, co-ordination and collaboration (C Behaviour) in reducing the inherently negative effects of close proximity and limited choice relationships. The implications for theory and practise are discussed.