FORMATION OF AGROINDUSTRIAL ENTERPRISES INTERORGANIZATIONAL INTERACTION BASED ON THE PROXIMITY HYPOTHESIS

Abstract

The article considers the enterprises’ interorganizational interaction as the basis for constructing agroindustrial business networks. The research claims that enterprise-actors will strive to provide network coordination processes in order to increase network efficiency which positively affects the growth of their own value.
The article substantiates the application of interorganizational proximity as an instrument for building up enterprises’ business networks effectiveness. The author defines main areas, components and key factors of influence. Interorganizational proximity of enterprises and the efficiency of network interaction are interdependent and base on dynamic characteristics. According to the proximity hypothesis, the more completely enterprise coincides with the proximity parameters, the higher is the probability of effective cooperation. Proximity provides a better chance of gaining benefits from network interaction (enhances the effectiveness of the business network and enterprise-actor accelerates network knowledge creation) and minimizes risks (opportunism and information asymmetry). Over time, enterprise policymakers adapt to all areas of closeness in the business network space, and multi-vector adaptation contributes to the effectiveness of network collaboration and helps to achieve network goals.
The research proves proximity paradox in the network interaction of enterprises is to find the golden mean which depends on the advantages of closeness and methods of its conservation. Participants of the business network may have ambiguous views on management approaches, different level of bureaucracy, centralization of power and distribution of authority, thus ensuring the desired level of organizational closeness will influence the choice of mechanisms for coordinating enterprises’ network interaction. Thus, the integrator and the actors of the business network are obliged to constantly analyze areas of closeness to each other in order to maintain their level that would make comfortable and mutually beneficial network cooperation of this membership.