Uncertainty in the transaction environment: An empirical test

Kathleen M. Sutcliffe, Akbar Zaheer

Research output: Contribution to journalArticlepeer-review

241 Scopus citations


Previous studies examining the relationship between uncertainty and vertical integration have produced a conflicting set of results. To clarify this puzzle we drew on the literature to conceptualize three distinct forms of uncertainty - primary, competitive, and supplier - and hypothesized that each had a different effect on vertical integration. The hypotheses were tested using experimental data collected from 308 managers. Consistent with our prediction of differential effects, we found that primary and competitive uncertainty were negatively associated with the decision to vertically integrate, but supplier uncertainty was positively related to the vertical integration decision. No interaction effects were found. Implications for theory and research are suggested.

Original languageEnglish (US)
Pages (from-to)1-23
Number of pages23
JournalStrategic Management Journal
Issue number1
StatePublished - Jan 1998
Externally publishedYes


  • Competitive uncertainty
  • Uncertainty
  • Vertical integration

ASJC Scopus subject areas

  • Business and International Management
  • Strategy and Management


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