Adrian Tan

ABSTRACT

Constantly changing markets demand, increasingly globalized competition and technological connectability drive the formation of Dispersed Manufacturing Networks (DMN). A DMN is defined as a loosely-coupled network of independent firms that engaged in voluntary collaborations. The short-term and flexible links in a DMN, which may be either vertically or horizontally directed, allow these firms to more effectively achieve individual and shared goals. Both relational and contractual ties are important in a DMN, but it can be argued that the degree of flexibility in these networks is strongly dependent upon the quality of relational ties among firms. In addition, though firms may cooperate within a DMN to achieve common goals, they also compete among themselves to benefit most from cooperative opportunities. A firm will be able to maximally benefit from its participation in any DMN only if it can develop and make use of its relational capability to manage its network. This presentation seeks to analyze and describe the importance of relational capability to a firm within the DMN perspective.