Dark network tensions and illicit forbearance: Exploring paradox and instability in illegal cartels |
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| Institution: | 1. University of Birmingham, Department of Marketing, Birmingham Business School, Edgbaston, Birmingham B15 2TT, United Kingdom;2. Foundation for Management Education, Unit C, 33/F, Tower 6, Harbour Place, Hung Hom, Kowloon, Hong Kong;1. School of Business and Management, Queen Mary University of London, Bancroft Building, Mile End Road, London E1 4NS, United Kingdom;2. Tasmanian School of Business and Economics, University of Tasmania, Private Bag 84, Hobart TAS 7001, Australia;3. Newcastle University Business School, Newcastle University, 5 Barrack Road, Newcastle upon Tyne NE1 4SE, United Kingdom;1. Kent Business School, University of Kent, Canterbury, Kent CT2 7NZ, UK;2. School of Business and Management, Lappeenranta University of Technology, P.O. Box 20, 53850 Lappeenranta, Finland;3. Middlesex University Business School, Middlesex University, Hendon NW4 4BT, London;1. School of Communication, Journalism and Marketing, Massey University Albany Campus, Private Bag 102 904, North Shore, Auckland 0745, New Zealand;2. Department of Marketing & Quantitative Analysis, College of Business, University of New Haven, West Haven, CT 06516, USA;3. College of Management, National Sun-yat Sen University, 70 Lien-Hai Road, Kaohsiung 804, Taiwan, ROC;4. Department of Marketing, College of Business, City University of Hong Kong, Kowloon Tong, Hong Kong |
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| Abstract: | In this case study investigating illegal cartels, we contribute to our understanding of the dark side of business relationships in three different areas. First, we expand upon the dark side of business relationships theme, by investigating the nature of opportunism in price-fixing cartels and the role of illicit forbearance. Due to their illicit nature, cartels are forced to operate outside legally binding contractual frameworks requiring other ways to facilitate agreements to avoid opportunistic behaviour. Second, our investigation contributes to our understanding of tensions in business relationship settings. Our findings indicate that network tensions are made significantly worse by the illicit nature of cartels, resulting in inherently unstable relationships. Third, in addition to cartels, we argue for a broadening of the scope of the ‘dark side of business relationships towards one that recognises the importance of illicit practices undertaken by marketing managers. This is significant because illicit relationships are often archetypal examples of opportunistic behaviour, which are likely to result in different types of conflict in a business relationship/network context. In the case of cartels, this opportunistic behaviour influences cartel participants, customers, suppliers (not privy to the cartel agreement) and the wider public. Theoretical and practical implications are provided. |
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