Close but not committed? The multiple dimensions of relational embeddedness

This research addresses the complexity of embedded inter-firm ties. Based on both qualitative and quantitative data from field research in the computer motherboard manufacturing industry, this paper investigates the origins of close ties and committed relationships, and explores the relationships between these two dimensions of embedded inter-firm relationships. The results show that companies establish close relationships with their partners to resolve coordination uncertainty due to a high level of task interdependence in their exchanges, and that firms become more collaboratively committed when they seek to alter a disadvantaged power asymmetry. At the same time, the fieldwork found an underlying conflict between the embeddedness dimensions of closeness and commitment: too much closeness reduces a partner’s commitment. These findings have significant implications for the formation of embedded corporate ties as well as the effects of embeddedness on organizations.