Managing relationships in showery weather: The role of umbrella agreements

Network approaches are expanding our view of markets as interconnected networks of exchange relationships but our knowledge of the process of interaction in these networks is still limited. Interactions are complex processes that include the features of recursive time, manifold rationality, norm diversity, multilateral connectivity and joint consent. The present paper deals with an increasingly important aspect of network interaction, which is the role of umbrella agreements in business relationships. These umbrella agreements are attempts to mirror the reality of business interaction by providing a framework of principles within which exchanges may happen. The study builds on ideas on interaction to examine real-world cases of umbrella agreements, based on empirical research in manufacturer–retailer networks in Germany that covered the period between 2001 and 2004. The study draws conclusions on the role of these agreements for managers and more widely on the nature of interaction itself.