Merging netchain and social network: Introducing the 'social netchain' concept as an analytical framework in the agribusiness sector

Abstract

Along fifty years of study in the agribusiness field a wide range of analytical frameworks have been used: chains, supply chains, networks, and recently, netchains. All of those frameworks are centered in a product, a firm or an organization as main subjects of analysis. In a parallel way, in the sociological field especially, the Social Network Theory emerged and was substantially developed, taking into account the individuals and their interpersonal relationships as its main subjects of analysis. At the same time, in economics and organizational sciences, the discussions about transaction costs, structures and mechanisms of governance were intense. In part, these discussions revolved around the possibility of using trust as a mechanism of governance. This paper proposes that to better understand the trust as a mechanism of governance, individuals and their interpersonal relationships should be the central subject of analysis. Based on this assumption, the paper aims to introduce the concept of ‘Social Netchain’ as an agribusiness analytical framework and argues about its implications on trust as a mechanism of governance. ‘Social Netchain’ is defined in the paper as a set of interpersonal relationships networks comprised of horizontal ties between individuals of the firms or organizations within a particular agribusiness sector. These horizontal ties are sequentially arranged based on the vertical ties between individuals of the firms or organizations in different layers of that agribusiness sector. An application essay is presented and its managerial and political implications are discussed. We conclude that Social Netchain can be applied to better understand the trust-based relationship as a mechanism of governance into the agribusiness structures. Key words: Social netchain, transaction costs, mechanisms of governance, governance structures, trust, individuals, contracts.