To conduct business with customers, suppliers, partners and other external parties, the company has three options: to throw away, embedded social and virtually embedded ties. At arm's length relationships are relationships that exist only for a particular business transaction. The problem with the arm's length relationships is that they have difficulty processing transactions that are ambiguous, complex, or opportunistic. Embedded Links are compounds that overcome the shortcomings at arm's length relationships, inserting the transaction in a favorable context or social or virtual. With the built-in social tie, trust, disclosure of confidential information, and joint problem-solving form the basis for economic relations in order to minimize the risk of transactions. In virtually embedded tie, the economic relationship and continue to be through the use of electronic technology, which helps to minimize the risk of operations by improving transparency, exchange of information, and community problem solving. Companies in different environments are likely to benefit from the use of different combinations of these types of connections. "Hide
by Thomas B. Lawrence, Eric A. Morse, Sally Fowler Source: MIT Sloan Management Review 9 pages. Publication Date: January 1, 2005. Prod. #: SMR162-PDF-ENG
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