Governance and Management of Horizontal Business Networks: An Analysis of Retail Networks in Germany

Abstract

The paper examines two important elements in the development and effectiveness of horizontal businessnetworks: governance and management. Case studies were conducted in three horizontal retailer networks inGermany with the aim of understanding how these networks are structured and which internal governancemechanisms support their development. Through secondary data and in-depth interviews, the study shows thatthe retail networks developed and implemented their own governance mechanisms and management structures toretain and attract a large number of members, facilitate strategic decision making and increase their effectiveness.The results highlight that governance structures are transitional and adapted according to specific contingencies.In the cases studied, the growth and effectiveness of the business networks have demanded changes in thegovernance structure, with greater autonomy for professional network managers. Although the retail networkkeeps its cooperative character, there is a trade-off, in which member-firms agree to delegate greater decisionmaking power to managers in exchange for greater network efficiency and competitiveness.