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Article
Publication date: 10 August 2015

Jan Simon Raue and Andreas Wieland

Over the last decades, horizontal cooperations between logistics service providers (LSPs) have become a well-established organizational form and their use is expected to…

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1838

Abstract

Purpose

Over the last decades, horizontal cooperations between logistics service providers (LSPs) have become a well-established organizational form and their use is expected to grow even further in the future. In spite of this increasing importance of horizontal LSP cooperations, little research has been done to reveal how to govern these relationships successfully. Particularly, the role of contractual governance and its interplay with operational governance mechanisms remain to be investigated. The paper aims to discuss these issues.

Design/methodology/approach

This research analyzes the influence of contractual governance on the effectiveness of two types of operational governance (a formal and a relational type). It relates contractual governance and operational governance to two major outcome dimensions of horizontal cooperations between LSPs (cooperation-based firm performance and cooperation-based learning) and uses multivariate statistical methods.

Findings

The results reveal that contractual safeguarding is able to partly replace process formalization when aiming for better cooperation-based firm performance and complement process formalization when aiming for cooperation-based learning. At the same time, relational capital is always complemented by contractual safeguarding independently from the desired cooperation outcome.

Originality/value

This is the first study analyzing the role of contractual safeguarding in horizontal cooperations between LSPs. It shows its interplay with operational governance mechanisms, and, thereby, not only considers a relational type of operational governance, but also a formal type.

Details

The International Journal of Logistics Management, vol. 26 no. 2
Type: Research Article
ISSN: 0957-4093

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Article
Publication date: 8 February 2011

Sinéad Carey and Benn Lawson

Building social capital within buyer‐supplier relationships is often associated with high performing supply chains. However, little research has examined the mechanisms by…

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2424

Abstract

Purpose

Building social capital within buyer‐supplier relationships is often associated with high performing supply chains. However, little research has examined the mechanisms by which social capital is formed. The purpose of this paper is to examine the effects of relational and contractual governance mechanisms on the formation of social capital under varying levels of demand and supply uncertainty.

Design/methodology/approach

A conceptual framework is developed, grounded in the literature on supply chain management and social capital theory (SCT).

Findings

A series of propositions showed that relational governance leads to the formation of social capital under conditions of supply uncertainty, but is subject to opportunism when customer product demand is uncertain. By contrast, in conditions of high demand uncertainty, contractual governance is associated with social capital formation.

Practical implications

The paper illustrates the need for managers to consider both the way in which their choice of governance mechanisms (contractual and relational) contributes to social capital, as well as highlighting the contingent nature of these mechanisms depending on the environmental context.

Originality/value

This paper is a novel contribution, applying SCT to the literature on supply chain management.

Details

Journal of Manufacturing Technology Management, vol. 22 no. 2
Type: Research Article
ISSN: 1741-038X

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Article
Publication date: 23 September 2020

Imran Khan and Meike Eilert

The purpose of this paper is to investigate the differential influence of buyer and supplier relationship-specific investments (RSI) on a buyer’s relationship governance decisions.

Abstract

Purpose

The purpose of this paper is to investigate the differential influence of buyer and supplier relationship-specific investments (RSI) on a buyer’s relationship governance decisions.

Design/methodology/approach

Based on transaction economics and social exchange theories (SET), the authors develop a framework to understand how and when buyer and supplier RSI influence governance decisions. This model was tested using a survey of 301 Information Technology (IT) procurement professionals across a multitude of industries.

Findings

This research shows that buyer and supplier RSI impact governance decisions differently. Supplier investments are positively associated with relationship formalization when goals between both parties are shared. Buyer investments are more strongly related to formalization in technologically uncertain environments.

Originality/value

This research adds to the literature by integrating arguments from both transaction cost and SET to hypothesize why buyer and supplier investments have a differential impact on relationship governance decisions. In line with these arguments, it ultimately demonstrates conditions that render such investments more/less influential.

Details

Journal of Business & Industrial Marketing, vol. 36 no. 6
Type: Research Article
ISSN: 0885-8624

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Article
Publication date: 1 April 2002

Harminder Battu, Robert McMaster and Michael White

This paper exploits a unique data set to explore the importance of key contractual characteristics on the duration of employment tenure. The paper recognises the insights…

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1434

Abstract

This paper exploits a unique data set to explore the importance of key contractual characteristics on the duration of employment tenure. The paper recognises the insights of the human capital and job‐matching approaches in informing discussion on employment tenure. Nevertheless, this paper argues that features of the contractual arrangements between employer and employee have been under‐emphasised. The paper demonstrates that key features of contracts such as job security develop simultaneously with tenure. A clear lock‐in effect is observed in the results.

Details

Journal of Economic Studies, vol. 29 no. 2
Type: Research Article
ISSN: 0144-3585

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Article
Publication date: 27 August 2020

Qiyuan Zhang, Jason Lu Jin and Defeng Yang

Given the pivotal influence of institutional forces, an important yet underexplored question in supply chain management literature is how contractual and relational…

Abstract

Purpose

Given the pivotal influence of institutional forces, an important yet underexplored question in supply chain management literature is how contractual and relational governance jointly affect supplier performance under weak legislative environments. This study tends to solve the debate by distinguishing contractual definability from contractual enforceability and by considering the contingent role of legal development in China.

Design/methodology/approach

Using a combined dataset of secondary data and a survey of 224 buyer–supplier dyads in China, this study examines how contractual definability and contractual enforceability interact with relational governance differently in driving supplier performance, and assesses the contingent role of legal development.

Findings

This study finds that contractual definability complements yet contractual enforceability substitutes relational governance in affecting supplier performance. Moreover, legal development weakens the complementary effect but strengthens the substitutive effect.

Originality/value

The study firstly enriches supply chain management literature by classifying the roles of contracts into contractual definability and contractual enforceability and showing their differential interplay with relational governance. Second, the study contributes to the complements–substitutes debate by revealing the shifting role of legal development. Third, the research enriches the understanding of supply chain management in the Chinese market.

Details

International Journal of Operations & Production Management, vol. 40 no. 6
Type: Research Article
ISSN: 0144-3577

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Article
Publication date: 20 July 2020

Longwei Wang, Meige Song, Min Zhang and Li Wang

This study aims to empirically investigate the role of contracts in tacit knowledge acquisition in research and development (R&D) alliances. By combining the perspectives…

Abstract

Purpose

This study aims to empirically investigate the role of contracts in tacit knowledge acquisition in research and development (R&D) alliances. By combining the perspectives of sensemaking and transaction cost economics (TCE), this study proposes a model about the mechanisms through which shared goals and contract completeness jointly affect tacit knowledge acquisition.

Design/methodology/approach

This study adopted a quantitative design and used the questionnaire survey method to collect data. The authors finally collected data on 196 R&D alliance samples in China. Multiple regression analysis was used to test the hypotheses.

Findings

There is strong empirical support that contract completeness has a positive effect on shared goals and that shared goals have a positive effect on tacit knowledge acquisition. Meanwhile, contract completeness weakens the positive effect of shared goals on tacit knowledge acquisition. Therefore, this study reveals that contract completeness has an inverted U-shaped effect on tacit knowledge acquisition.

Practical implications

The findings suggest that managers should consider both the psychological and rational effects of contract governance simultaneously, thus recognizing the importance of a moderate level of contract completeness for tacit knowledge acquisition in R&D alliances.

Originality/value

This study enhances the current understanding of contract governance by integrating the sensemaking and TCE perspectives. The findings provide a possible explanation of how contracts affect tacit knowledge acquisition in R&D alliances. The authors expand the research on contract governance and alliance knowledge acquisition by revealing the inverted U-shaped relationship between contract governance and tacit knowledge acquisition.

Details

Journal of Knowledge Management, vol. 25 no. 5
Type: Research Article
ISSN: 1367-3270

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Article
Publication date: 17 May 2018

Sherwat Elwan Ibrahim and Khaled Farouk Mohamed Altahawi

This study aims to investigate the effect of power and dependence as separate constructs on opportunism. Power-dependence studies have been previously used to explain…

Abstract

Purpose

This study aims to investigate the effect of power and dependence as separate constructs on opportunism. Power-dependence studies have been previously used to explain opportunistic behavior in strategic outsourcing relationships. However, there have been no clear distinctions about the separate effects of each regardless of the different theoretical dispositions each construct uses with respect to the dynamics of strategic outsourcing.

Design/methodology/approach

This study used multiple theoretical perspectives to analyze the courses of six dyadic strategic outsourcing relationships from the pharmaceutical industry in Egypt. The study employed an exploratory research approach to retrospectively examine the development of dependency and power-balance variables throughout the pre- and post-contractual phases.

Findings

The paper concludes with a time-phased theoretical framework and a set of propositions that further segment the post-contractual relationship phase. The segmentation allows for better studying the outsourcing phenomenon and differentiates between having power, recognizing power and exercising power.

Research limitations/implications

The paper theorizes that buffering against opportunism requires a certain state of power-balance awareness, as power was found to be dynamic, relative and arguably “perceptual”. This awareness would not be needed if the outsourcing relationship was static, but given the time argument in this study, awareness of the power-balance shifts becomes necessary in managing strategic outsourcing relations.

Practical implications

The comprehensive framework represents a guiding tool for managers who are planning to, or are currently involved in, strategic outsourcing relationships.

Originality/value

This study applied a time dimension to studying opportunism in strategic outsourcing relationships, and used this perspective to examine the length of the period of mutual dependency and power-balance between buyers and suppliers. The notions of power-balance awareness and latent sources of power are introduced.

Details

Journal of Global Operations and Strategic Sourcing, vol. 11 no. 2
Type: Research Article
ISSN: 2398-5364

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Article
Publication date: 30 April 2021

Hongjiang Yao, Yongqiang Chen, Yangbing Zhang and Bo Du

The purpose of this paper is to establish an integrated framework of the antecedents of enforcement after contract violations in construction projects and to examine…

Abstract

Purpose

The purpose of this paper is to establish an integrated framework of the antecedents of enforcement after contract violations in construction projects and to examine whether contract provisions (control and coordination provisions) and trust (goodwill and competence trust) affect enforcement mechanisms (contractual enforcement and relational enforcement).

Design/methodology/approach

A survey method was employed to test the hypotheses. The authors collected data from the Chinese construction industry, and general contractor respondents were asked to answer a questionnaire about a contract violation by one of their subcontractors.

Findings

Control provisions and competence trust are positively related to contractual enforcement, but goodwill trust is negatively related to contractual enforcement. Relational enforcement is influenced by goodwill trust and competence trust.

Research limitations/implications

This study treats contract violations as a given variable, and it focuses on contract violations by subcontractors. The cross-sectional design makes it difficult to confirm the causality of the relationships.

Practical implications

Overly strict contractual enforcement can generate disputes and a vicious cycle of retaliation, and overly severe relational enforcement can damage a potentially profitable long-term relationship. In construction projects, the violating party will benefit from this study to avoid excessively contractual enforcement and relational enforcement, thus developing a more collaborative atmosphere on the current project and even establishing a solid long-term relationship.

Originality/value

This study extends the project management literature by investigating the antecedents of enforcement after contract violations, an area not yet fully researched.

Details

International Journal of Managing Projects in Business, vol. 14 no. 6
Type: Research Article
ISSN: 1753-8378

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Book part
Publication date: 22 September 2009

Witold J. Henisz

This article posits that the effect of political hazards on the choice of market entry mode varies across multinational firms based on the extent to which they face…

Abstract

This article posits that the effect of political hazards on the choice of market entry mode varies across multinational firms based on the extent to which they face expropriation hazards from their potential joint-venture partners in the host country (the level of contractual hazards). As political hazards increase, the multinational faces an increasing threat of opportunistic expropriation by the government. Partnering with host-country firms that possess a comparative advantage in interactions with the host-country government can safeguard against this hazard. However, as contractual hazards increase, the potential benefit to the joint-venture partner of manipulating the political system for its own benefit at the expense of the multinational increases as well, thereby diminishing the hazard-mitigating benefit of forming a joint venture. A two-stage bivariate probit estimation technique is used to test these hypotheses on a sample of 3,389 overseas manufacturing operations by 461 firms in 112 countries.

Details

Economic Institutions of Strategy
Type: Book
ISBN: 978-1-84855-487-0

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Article
Publication date: 28 January 2014

Jens Roehrich and Mike Lewis

While previous studies explored the argument that allies the notion of complexity to the complex product-service offerings being procured, this paper aims to explore…

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1759

Abstract

Purpose

While previous studies explored the argument that allies the notion of complexity to the complex product-service offerings being procured, this paper aims to explore whether there is a corollary with exchange governance complexity. More specifically, the paper analyzes the relationship between systemic complexity and complexity of contractual and relational exchange governance in procuring complex performance (PCP) arrangements.

Design/methodology/approach

A multiple, longitudinal case study method is used to examine the relationship between systemic complexity and exchange governance complexity. The study deploys rich data sets by combining government and company reports with 43 semi-structured interviews.

Findings

Preliminary conclusions suggest that as a response to increasing systemic complexity, organizations respond with increasing contractual governance complexity. However, better performing PCP arrangements illustrate that the use of simplified contractual governance in form of working agreements in combination with relational governance such as inter-personal relationships may be more effective to counteract complexity.

Practical implications

The paper questions whether organizations should respond with increasing exchange governance complexity to counteract systemic complexity. Managers must consider the manageability and enforceability of complex contracts in combination with the formation of inter-personal relationships and simplified working agreements.

Originality/value

This study adds to the limited empirical understanding on the nature of long-term public-private interactions in PCP. It also contributes through a rare focus on the relationship between systemic complexity and exchange governance complexity in PCP arrangements.

Details

International Journal of Operations & Production Management, vol. 34 no. 2
Type: Research Article
ISSN: 0144-3577

Keywords

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