Social Networks and Supply chain Management in Rural Areas: A Case Study Focusing on Organic Olive Oil

Medicamento, Umberto and Degennaro, Bernardo (2006): Social Networks and Supply chain Management in Rural Areas: A Case Study Focusing on Organic Olive Oil. Published in: International Association of Agricultural Economists Conference (18 August 2006)

Abstract

In recent years, due to the growing supply of organic production, the economic performances and the competitive advantages of the farms, have become more dependent on network organisations in the supply chains. This evolution requires methodological approaches able to capture all the variables involved in the generating value processes. Our aim is to show that different structure of social networks – which groves on different positions in terms of achieving common goals and sustaining and developing norms and networks for collective action - is helpful for successful uptake of socio-economic processes and then in taking market choices and in framework shaping of supply-chain in rural areas. “The importance of understanding formal and informal organizations and their contribution to the construction of social capital is necessary to perceive how people mobilize and acquire a wide range of assets and gain access to decision making processes, technologies, resources and markets, and benefit from them” (D.Parthasarathy and V.K.Chopde, 2000). So the network dimension of the supply-chain becomes a key element, and enables us to understand better the competitive performances of firms. The relationships of firms, among intangible assets, are recently considered one of the main sources of profit. So the relational capital forms the essence of the value of the firm and it is advantages on the whole coming out by occupying a specific position (role) in the network of social relationships, the social network (Costabile, 2001). The goods present in a context are not enough to explain the wealth of a firm or a supply chain or a sector, so it is necessary to understand the nature of exchanges and how do they work trough the network. For these reasons our study compares supply chains of organic olive oil in Italy and Spain using the Social Network Analysis. The data was collected by survey in two areas: the Sierra de Segura (Andalucia, Spain) and the province of Bari (Puglia, Italy). By the results of our study we can assert that the Sierra de Segura shows a simple network which allows, trough a cooperative organisation, to generate value for the farms. On the other hand, in the province of Bari the network organisation is quite disperse, denoting a luck of organisation which bring to a low level in competitiveness of the whole supply chain. At the same time, firms with a good economic results have also a central position in the network.

• Item Type: MPRA Paper
• Language: English
• Keywords: organic agriculture; olive oil; supply chain; network; relationships; social capital
• Subjects: L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L14 - Transactional Relationships ; Contracts and Reputation ; Networks; D - Microeconomics > D2 - Production and Organizations > D23 - Organizational Behavior ; Transaction Costs ; Property Rights; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q1 - Agriculture > Q13 - Agricultural Markets and Marketing ; Cooperatives ; Agribusiness; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q0 - General > Q01 - Sustainable Development; Z - Other Special Topics > Z1 - Cultural Economics ; Economic Sociology ; Economic Anthropology > Z13 - Economic Sociology ; Economic Anthropology ; Social and Economic Stratification; D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D85 - Network Formation and Analysis: Theory

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