The Role of Altruism in Inter-firm Relationships: Long-term Value Creation in Business Networks

This theoretical paper seeks to contribute to a better understanding of the role of altruism in business relationships. Firstly, we try to provide an overview on the state-of-the-art about this topic, investigating theories of altruism within 1. economic studies; 2. sociological studies; 3. psychological studies; 4. organizational theories and theories of the firm; 5. the Industrial Network perspective; 6. game theories; 7. systems theories; 8. evolutionary studies. Then, we try to compare the results coming from these eight different approaches, identifying a possible integrated model for studying the role of altruism in business relationships. This framework is based on the identification of several forms or types of altruism; studies have identified, for example, reciprocal altruism (triggering direct and indirect reciprocity), competitive altruism (triggering "altruism contests" to be chosen as cooperators), kin altruism (strongly related to kin selection), unconditional altruism (often triggered by "warm glow" processes). Studies have also demonstrated that inter-personal and inter-organizational networks may create "environments" where the conditions for sustainable altruistic behaviors are more likely. We found that the most fertile contributions to a possible theory of altruism in inter-firm relationships come from relational models in organizational theories, on the one side, and from integrated game-system-evolutionary models, on the other side. In particular, focusing on Industrial Network Perspective, our work investigates how altruism is related to actors' bonds and how altruism, as a consequence, can influence the relationships and their development. The Industrial Network Perspective is particularly useful to investigate those forms of reciprocal altruism occurring in long-term business relationships. On the other side, the integrated game-system-evolutionary models help to understand also other forms of altruism, such as indirect reciprocity, altruistic punishment, or competitive altruism, that are often essential for creating value in business settings. In sum, the eight different approaches to altruism we investigated, once integrated and systematized, revealed that: * There are several different types of altruism; * Different forms of altruism tend to develop (or to atrophy) for specific reasons and under specific conditions; * Different altruistic/selfish behaviors, under specific conditions, may result in specific and recurrent advantages/disadvantages for individual actors, for the group/network they belong to, and for society as a whole; * A better understanding of the dynamics of altruistic behaviors may be useful to better assess the health and the perspectives of business settings, such as inter-firm networks. This research proposes a Concept Matrix which correlates (a) the different forms/types of altruism, (b) the different conditions under which they tend to develop (or to atrophy) in business settings (c) their possible positive/negative roles in the processes of value creation within business relationship processes.