INVESTMENT RISKS IN SUPPLIER NETWORKS

Summary This study explains how networking changes the environment in which investment decisions are made. Other parties in the network affect each other's decisions. In buyer-dominant supplier networks the suppliers are getting greater responsibility for an end product's production. Dependence on the buyer creates pressure to make certain investments and buyers' own interests can influence the information that they give to suppliers. The study proposes that suppliers should manage the risks of investments by estimating the possible impact and strategic importance before the final investment decision.