The Management of Subcontracted Networks as an Alternative to Internalisation: The Shift from the Standardised to the Specialised in Frozen and Chilled Foods

This paper is to highlight the management of subcontracted networks as an alternative to internalisation. The contrasting examples of the frozen food sector and the chilled ready meals sector are employed to examine the different economic relationships. The paper draws upon transaction costs economics, interdisciplinary literature from organisation studies, network theory, and sociology to contextualise the functioning of network relationships. The paper examines the shift in the role of the firm from producer, to the firm as co-ordinator of information flows. In contrast to the vertically integrated frozen food sector, the chilled food industry manifests plural organisational forms, with close-knit trust based inter-organisational networks and arms-length subcontracting.