Uncertainty in the transaction environment: An empirical test

Kathleen M. Sutcliffe, Akbar Zaheer

Research output: Contribution to journalArticlepeer-review

233 Scopus citations

Abstract

Previous studies examining the relationship between uncertainty and vertical integration have produced a conflicting set of results. To clarify this puzzle we drew on the literature to conceptualize three distinct forms of uncertainty - primary, competitive, and supplier - and hypothesized that each had a different effect on vertical integration. The hypotheses were tested using experimental data collected from 308 managers. Consistent with our prediction of differential effects, we found that primary and competitive uncertainty were negatively associated with the decision to vertically integrate, but supplier uncertainty was positively related to the vertical integration decision. No interaction effects were found. Implications for theory and research are suggested.

Original languageEnglish (US)
Pages (from-to)1-23
Number of pages23
JournalStrategic Management Journal
Volume19
Issue number1
DOIs
StatePublished - Jan 1998

Keywords

  • Competitive uncertainty
  • Uncertainty
  • Vertical integration

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