The objective of this study is to investigate the potential
contribution of vertical marketing systems to the
development of small business entrepreneurs and in
particular to entrepreneurially disadvantaged groups. The
following are the two major questions for this study:
1. Do vertical linkage systems serve as a pathway for the
entrepreneurially disadvantaged groups, namely those
with no entrepreneurial experience, from families without
business background, and from indigenous ethnic groups?
The modernization process in Third World countries, and
in particular Indonesia, may create a widening gap
between the modern and the traditional sectors. Vertical
relationship systems with their unique characteristics
(e. g. a symbiotic relationship between large and small
business operation) may contribute towards reducing this
gap through developing the entrepreneurially
disadvantaged groups into business careers.
2. Do vertical relationships accomodatb, independent
entrepreneurs?
It is assumed that independent entrepreneurs can perform
better entrepreneurial functions than those
"entrepreneurs" who are constrained by external power.
There are doubts whether the vertical relationship,
characterized by a large firm's dominant role, can
accomodate independent entrepreneurs.
This study reveals that despite many problems and
limitations a tight-control type of vertical marketing
system can serve as a pathway for individuals from
entrepreneurially disadvantaged groups to become successful
modern-type entrepreneurs. The performance of these
disadvantaged groups is equal to that of other different
groups. Also, independent entrepreneurs exist in all the
vertical marketing systems studied