Browse > Article
http://dx.doi.org/10.13106/ajbe.2021.vol11.no4.31

Strategic Alliance within the Sugar Industry of Pakistan: A Resource Dependence Perspective  

AMAN, Rameesha (Institute of Administrative Sciences, University of the Punjab)
KHAN, Abdul Rehman (Faculty of Management Sciences, GIFT Gujranwala)
Publication Information
Asian Journal of Business Environment / v.11, no.4, 2021 , pp. 31-38 More about this Journal
Abstract
Purpose: This paper uses the resource-dependency theory to present the case of the Pakistan sugar industry to highlight how the industry uses a strategic alliance to gain a powerful bargaining position over its critical dependencies. The case of the Pakistan sugar industry is well-known and it is common knowledge that the alliance or the cartel within it is responsible for frequent price hikes and sugar supply shortages in the country. Research design, data and methodology: We use a case study, qualitative document analysis design to trace how the alliance overcomes its various dependencies, and in doing so, how does it harm various stakeholder interests. Results: This paper finds that the sugar industry alliance maintains its bargaining power by manipulating sugar supply through horizontal alliances, political affiliations, underselling and under-reporting sugar stocks, purchasing sugarcane from the black market, and by gaining billions of rupees in export subsidies by hoarding stock and using its political connections. Conclusion: The paper concludes by providing a summary of the measures which the government has taken to curb this anticompetitive conduct; the most important of which is the removal of protectionist measures for sugar trade and allowing market forces to control the demand and supply of sugar in the local market.
Keywords
Pakistan sugar market; Resource Dependencies; Strategic Alliance; Anticompetitive Conduct;
Citations & Related Records
연도 인용수 순위
  • Reference
1 Roundy, P. T., & Bayer, M. A. (2019). To bridge or buffer? A resource dependence theory of nascent entrepreneurial ecosystems. Journal of Entrepreneurship in Emerging Economies.
2 Coupet, J., & McWilliams, A. (2017). Integrating organizational economics and resource dependence theory to explain the persistence of quasi markets. Administrative Sciences, 7(3), 29.   DOI
3 Dieleman, M., & Widjaja, H. (2019). How powerful political ties appropriate resources and how weaker organizations protect themselves: A case study from Indonesia. Asia Pacific Journal of Management, 36(1), 61-86.   DOI
4 Drees, J. M., & Heugens, P. P. (2013). Synthesizing and extending resource dependence theory: A meta-analysis. Journal of Management, 39(6), 1666-1698.   DOI
5 Frynas, J. G., & Yamahaki, C. (2016). Corporate social responsibility: Review and roadmap of theoretical perspectives. Business Ethics: A European Review, 25(3), 258-285.   DOI
6 Javid, H. (2012). Class, power, and patronage: the landed elite and politics in Pakistani Punjab. The London School of Economics and Political Science (LSE).
7 Khan, R. E. A., & Gill, A. R. (2010). Determinants of inflation: A case of Pakistan (1970-2007). Journal of Economics, 1(1), 45-51.   DOI
8 Khushk, A. M., Lashari, M., & Memon, A. (2008). Political economy of sugar industry in Pakistan. Pakistan Agricultural Research Council-Technology Transfer Institute, Tandojam, Sindh, 85-86.
9 Krishna, R. (1963). Farm supply response in India-Pakistan: A case study of the Punjab region. The Economic Journal, 477-487.
10 Lowrey, W. (2017). The emergence and development of news fact-checking sites: Institutional logics and population ecology. Journalism Studies, 18(3), 376-394.   DOI
11 Hussain, M. F., Anwar, S., & Hussain, Z. (2006). Economics of sugarcane production in Pakistan: A price risk analysis. International Research Journal of Finance and Economics, 4(4).
12 Meyer, K. E., Estrin, S., Bhaumik, S. K., & Peng, M. W. (2009). Institutions, resources, and entry strategies in emerging economies. Strategic management journal, 30(1), 61-80.   DOI
13 Paracha, S. (2020, 13 July). Sugar reforms committee to submit findings within one month. The Express Tribune.
14 Pollock, T. G., Chen, G., Jackson, E. M., & Hambrick, D. C. (2010). How much prestige is enough? Assessing the value of multiple types of high-status affiliates for young firms. Journal of Business Venturing, 25(1), 6-23.   DOI
15 Hillman, A. J., Withers, M. C., & Collins, B. J. (2009). Resource dependence theory: A review. Journal of management, 35(6), 1404-1427.   DOI
16 Raza, M., Saeed, D., & Shahid, M. (2013). Impact of low-sugar-cane-yield on sugar industry of Pakistan. Journal of Agricultural Sciences, 3(1), 431-450.
17 Santos, F. M., & Eisenhardt, K. M. (2005). Organizational boundaries and theories of organization. Organization science, 16(5), 491-508.   DOI
18 Raza, S. I. (2020, June 10). PM wants sugar scam inquiry taken to logical end, Dawn.
19 Tabassum, M. (2018). Sugar mill recovery: a challenge of sugar crises in the country. Journal of Agricultrural Sciences, 23(3), 45-55.
20 Vermeulen, F., & Barkema, H. (2001). Learning through acquisitions. Academy of Management journal, 44(3), 457-476.   DOI
21 Buschman, J. (2017). Leadership and the Political: The Environment of the Information Management Organization. The Emerald Handbook of Modern Information Management, 23(6), 53-76.   DOI
22 Ahsan, H., Iftikhar, Z., & Kemal, M. A. (2011). The determinants of food prices: A case study of Pakistan. PIDE Working Papers, 76(1), 45-76.
23 Ansari, I. (2021, March 25). FIA nabs gang involved in sugar hoarding, The Express Tribune.
24 Association, P. S. M. (2020). Annual Report
25 Casciaro, T., & Piskorski, M. J. (2005). Power imbalance, mutual dependence, and constraint absorption: A closer look at resource dependence theory. Administrative science quarterly, 50(2), 167-199.   DOI
26 Combs, J. G., Ketchen, J., David J, Crook, T. R., & Roth, P. L. (2011). Assessing cumulative evidence within 'macro' research: Why meta-analysis should be preferred over vote counting. Journal of Management Studies, 48(1), 178-197.   DOI
27 Committee, T. I. (2020). Report of the Inquiry Committee constituted by the Prime Minister of Pakistan.
28 Connor, J. M. (2014). Price-fixing overcharges. Applied Economic Perspectives and Policy, 19(2), 34-46.
29 Hatch, M. J. (2018). Organization theory: Modern, symbolic, and postmodern perspectives. London: Oxford University Press.
30 Hashmi, M. A., Brahmana, R. K., & Lau, E. (2018). Political connections, family firms and earnings quality. Management Research Review.
31 Henisz, W. J., & Zelner, B. A. (2003). The strategic organization of political risks and opportunities. Strategic Organization, 1(4), 451-460.   DOI
32 Iqbal, M. A., & Iqbal, A. (2014). Sugarcane production, economics and industry in Pakistan. American-Eurasian Journal of Agricultural & Environmental Sciences, 14(12), 1470-1477.
33 Khlif, H., Ahmed, K., & Souissi, M. (2017). Ownership structure and voluntary disclosure: A synthesis of empirical studies. Australian Journal of Management, 42(3), 376-403.   DOI
34 Lee, J., Rethemeyer, R. K., & Park, H. H. (2018). How does policy funding context matter to networks? Resource dependence, advocacy mobilization, and network structures. Journal of Public Administration Research and Theory, 28(3), 388-405.   DOI
35 Naz, S., & Jahangir, G. Z. (2008). Pakistan Sugar Industry. Pakistan Sugar Journal, 12(1), 14-25.
36 Raheman, A., Qayyum, A., Afza, T., & Iqbal, M. M. (2009). Efficiency dynamics of sugar industry of Pakistan [with comments]. The Pakistan Development Review, 921-938.
37 Ries, F. (2017). Population ecology: how the environment influences the evolution of organizations Palgrave Handbook of Inter-Organizational Relations in World Politics (pp. 157-168). Washington: Springer.
38 Zona, F., Gomez-Mejia, L. R., & Withers, M. C. (2018). Board interlocks and firm performance: Toward a combined agency-resource dependence perspective. Journal of Management, 44(2), 589-618.   DOI
39 Gray, B., & Wood, D. J. (1991). Collaborative alliances: Moving from practice to theory. The Journal of applied behavioral science, 27(1), 3-22.   DOI
40 Siddiqui, M. A., & Shoaib, A. (2012). Energy Perspective of Sugar Industries in Pakistan: Determinants and Paradigm Shift. The Journal of Distribution Science, 10(2), 7-17.   DOI
41 Fink, R. C., Edelman, L. F., Hatten, K. J., & James, W. L. (2006). Transaction cost economics, resource dependence theory, and customer-supplier relationships. Industrial and Corporate Change, 15(3), 497-529.   DOI
42 Ali, I., & Malik, A. (2009). The political economy of industrial development in Pakistan: a long-term perspective. The Lahore Journal of Economics, 14, 29.   DOI