A relational view of horizontal collaboration among micro and small enterprises: a study of the brewery sector in Wales

Purpose This study aims to explore how horizontal collaboration can help small and micro enterprises within the drink sector through the relational theory lens. Design/methodology/approach The use of qualitative research methods, including focus groups and interviews, facilitated understanding the horizontal collaboration in micro and small companies within the Welsh brewery industry. Data collection involved conducting three focus groups and 13 interviews within the Welsh brewery sector in the UK. The collaboration phenomena were explained using the three elements of relational theory: relational rents, relational capitals and relational governance. Findings Micro and small enterprises in the drink sector use collaborative initiatives in building new capabilities to generate relational rents. In addition, relational capitals and relational governance mechanisms were identified to support the horizontal collaboration among these enterprises. Research limitations/implications The focus is on only one part of the drinks industry, i.e. the brewery industry; therefore, this study could be extended to other industries within the drink sector or across manufacturing industries. Practical implications The micro and small enterprises can collaborate to achieve relational rent, but this collaboration requires strong relational capitals, such as trust. These partners need to change informal governance mechanisms that already exist towards more contractual formal mechanisms. Originality/value Prior research has largely focused on vertical collaboration, with limited studies using the relational theory lens to explicate horizontal collaboration phenomena and no previous research in the context of micro and small companies. Relational rents, relational capitals and relational governance mechanisms are studied to provide insights into an effective collaboration in this context.