When is dependence on other organizations burdensome? The effect of asymmetric dependence on internet firm failure

Although critical resource providers offer ample access benefits to deficient firms, dependence on these resource providers is burdensome because dependency places deficient firms into a vulnerable position, especially when the dependency is asymmetric. Thus, we ask: Is it better to balance dependen...

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Bibliographic Details
Published in:Strategic management journal 2015-12, Vol.36 (13), p.2058-2074
Main Authors: Lee, Seung-Hyun, Mun, Hee Jin, Park, Kyung Min
Format: Article
Language:English
Subjects:
asymmetry
Business failures
competition
dependence
failure
Internet
internet firms
Internet service providers
Resource management
Studies
Traffic flow
Web portals
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Summary:Although critical resource providers offer ample access benefits to deficient firms, dependence on these resource providers is burdensome because dependency places deficient firms into a vulnerable position, especially when the dependency is asymmetric. Thus, we ask: Is it better to balance dependence among critical resource providers or asymmetrically depend on one if there is more than one resource provider? We use a unique context of the internet industry where satellite internet firms depend on portals that provide Web traffic and find that asymmetric dependence on portals increases the likelihood of failure, but market leaders suffer less from asymmetric dependence, while satellite internet firms with higher dependence on portals suffer more from asymmetric dependence.
ISSN:0143-2095
1097-0266
DOI:10.1002/smj.2330