Relación de Causalidad

This chapter has discussed the broader business context in which today’s agri-food chains operate. It has also described the long-term trends which have shaped agri-food sectors and markets and which have contributed to the rise of vertical business systems such as supply or value chains. In particular, the changing economic, technological, social and policy environments have been reviewed. These include globalization (i.e., the widespread trade liberalizations), increasing consumer quality demands and the linked rise in public and private standards, the ubiquity of ICTs, and the increasing skills base and entrepreneurial capacities in today’s knowledge-based societies which foster the development of highly networked economies.

The trends in agri-food chains outlined above will not stop any time soon. However, the speed of some of those developments discussed will vary between different parts of the world. For example, as economic integration of high-income countries has already reached relatively high levels, in the future the globalization process will primarily become evident by higher trade volumes and FDI flows between the developed and developing world as well as among LDCs. In the more sophisticated markets, convenience and pleasure aspect of food have become ever more important. Besides this, fulfilling public demands regarding safety, sustainability and social requirements in the production process provides nothing more than the ‘license to operate’ (Schmid, 2007). In the coming decade this trend will also reach nations with low per-capita income that are still lagging behind. This will lead to further convergence of consumption patterns, standards and distributions systems as well as technologies in the food sector at a global scale. Thus, some of the discussed implications for inter-organizational relationships that are today primarily of relevance in the developed world will likely gain in importance in LDCs and EMs in the future.

Given the new reality, vertical business systems have emerged as highly competitive organizational formats which allow collaborating companies to exploit economies of size (scale and scope) while maintaining strategic flexibility, agility and managerial independence.

However, one requirement for establishing competitive vertical business systems is the development of sustainable inter-organizational relationships. Building and managing such relationships is in particular a challenge for farmers who traditionally have operated on the basis of spot market exchanges. Yet the decline of specialized food retailing and the rise of global supermarkets also pose problems. Supermarkets that deal with large numbers of (food and non-food) suppliers on a regular basis increasingly use procurement practices which build on private standards, formalized contracts and electronic auctions, therefore sidestepping individual supplier relationships.

While the transition from the transaction- to a relationship-based agri-food economy will take time and be partial, the future seems to favour the extensively embedded, consumer-oriented agri-enterprise rather than the traditional owner-centred, price-driven farm business as the following chapters in this volume argue.

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Chapter 2

Inter-organizational Relationships in Agri-food