The purchase of information technology products by Dutch SMEs : problem resolution

This research focuses on the purchase of information technology (IT) products by small and medium-sized enterprises (SMEs) in the Netherlands. Based on nationwide representative survey data (a total of 1,252 IT transactions), the research considers the problems that Dutch SMEs are faced with and the way in which these problems are dealt with. On average, 28 percent of transaction are completed without problems. If problems are encountered, they mostly involve inadequate documentation (45 percent of all transactions). Frequently mentioned problems, such as incompatibility with other IT products and being over budget, occur much less frequently (about 25 percent of all transactions). Moreover, strong support was found for the existence of a specific sequence in dealing with ex-post problems. Nearly all SMEs at least communicate the problem to the supplier; if that does not solve the issue, it is almost always followed by active deliberation with the supplier about a solution. If that does not help, about half of the SMEs impose some kind of sanction (most of the time delaying the payment). If that still does not settle the issue, virtually all SMEs give up on it. Third parties, such as arbitration committees or the courts, are rarely invoked

How inter-firm co-operation depends on social embeddedness : a vignette study

This paper examines the effects of the social context of economic exchange on the governance of transactions in buyer-supplier relations between firms. We distinguish three dimensions of social embeddedness of transactions, namely, repeated exchange between the partners (temporal embeddedness), relations with third parties such as other firms (network embeddedness) and social institutions that allow for credible agreements and commitments (institutional embeddedness). Together with transaction characteristics, social embeddedness shapes trust problems in economic exchange and how firms mitigate such trust problems through contractual planning. More precisely, we analyse how transaction characteristics and social embeddedness affect effort invested in contractual planning. We argue that social embeddedness provides alternatives for costly contractual planning, such as reciprocity and conditional co-operation. Forty purchase managers participated in a factorial survey. Virtual transactions were presented. Each transaction was represented by a vignette composed of eight characteristics, the levels of which were varied randomly. Three characteristics represented 'economic' features of transactions, namely, transaction-specific investments, monitoring problems and volume of the transaction. Five vignette characteristics represented social embeddedness: the history of previous transactions between the partners, expected future transactions, voice and exit networks and a rough indicator of institutional embeddedness. The purchase managers had to judge how much time negotiations would take, and also how many departments would be involved. Results show that social embeddedness leads a purchase manager to put less effort into the management of the transaction. While one-sided specific investments. monitoring problems and the volume of a transaction induce more negotiation efforts, such efforts decrease if transactions are embedded 'better' in a temporal or network sense, or if buyer and supplier can rely on more institutional embeddedness

Creative edge of cities: a comparative analysis of the top 500 creative industries businesses in Beijing and Shanghai

This article studies creative industries in the two economically most important cities in China: Beijing and Shanghai. Both cities have been at the forefront of Chinese economic modernization endeavour in the past three decades, and now lead the way in developing city-based creative economy strategies and policies. To date, research on creative industries in China has centred on the issues related to conceptual and definitional debate, with very limited attention being paid to firm-level evidence. Through applying the United Kingdom's Department for Culture, Media and Sport (DCMS) definition of creative industries (DCMS 1998 and 2001), this study responds to this challenge by identifying the 500 largest creative industries businesses in both cities, and subsequent comparative analysis focuses on the composition, size, ownership and level of marketization of the top 500 in both cities. The article argues that the development of creative and cultural industries in China is both constrained and enabled by the existing institutional frameworks at central and local level. The strength and weakness of the particular subsector are heavily influenced by a city's own historical, socio-economic and political institutions. The concept institutional thickness (Amin and Thrift 1995) thus provides a useful perspective to understand why cities differ from each other in terms of subsectoral competitiveness and structure. The relative strength of particular sectors, as this article conceptualizes the creative edge of cities can best be explained as a result of the lock-in effect derived from the process of thickening a particular set of place-bound cultural and creative institutions. China is an evident example of the state acting as the key architect of building those institutions