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Transaction cost economics sees a broad spectrum of governance structures spanned by two types of economic adaptation: autonomous and cooperative. Stakeholder theorists have drawn much inspiration from transaction cost economics but have not paid explicit attention to the centrality of the idea of adaptation in this literature. This study aims to address this gap.

The authors develop a novel conceptual framework applying the distinction between the two types of economic adaptation to stakeholder theory.

The authors argue that the idea of cooperative adaptation is particularly useful for describing the firm’s collaboration with primary stakeholders in the joint value creation process. In contrast, autonomous adaptation is more relevant for firms interacting with secondary stakeholders who are not directly engaged in joint value creation and may not have formal contractual relationships with the firm. Accordingly, cooperative adaptation can be seen as vital for resolving team production problems affecting joint value creation, whereas autonomous adaptation addresses how the firm maintains legitimacy within the larger stakeholder environment.

Similar to its significance for transaction cost economics, the distinction between the two types of adaptation equips stakeholder theory with a new systematic understanding of a potentially broad spectrum of firm–stakeholder collaboration forms.

The sustainable development of contractor organizations depends highly on bidding decision-making of projects. This current study, leveraging the risk decision-making theory, attempts to elucidate the process of contractors’ bid/no-bid decision-making and reveal how the process is influenced by their perception of risk. In particular, this study aims to explore the multiple mediating effects of contractors’ trust in owners and risk perception in explaining the relationship between contractual governance outlined in owners’ bidding documents and the bid/no-bid decisions.

A questionnaire survey was used to obtain data from the Chinese construction industry. The PLS-SEM technique was employed to analyze a dataset of 557 available questionnaires.

The findings indicate that (1) the contractual governance provided by owners’ bidding documents positively impacts contractors’ bid/no-bid decisions; (2) both risk perception and trust serve as multiple mediators in this relationship and (3) trust mediates the relationship between contractual governance and contractors’ risk perception.

Drawing upon the risk decision-making theory, this study proposes a multiple mediation model for understanding contractors’ bid/no-bid decision-making processes. It contributes to a better understanding of contractors’ bidding decision-making mechanisms, thereby offering theoretical guidance for contractors to make reasonable and informed risk decisions.

This study aims to investigate the integration of smart contracts into the legal framework of Saudi Arabia, spotlighting the pivotal role of blockchain technology in revolutionizing contractual processes. It evaluates the capacity of smart contracts to enhance the efficiency, security and transparency of legal transactions, while critically examining the legal challenges their adoption presents.

Through qualitative analysis, this research explores the operational dynamics of smart contracts, with a focus on their autonomous execution and the digital codification of contractual terms. It scrutinizes the alignment of smart contracts with the Saudi legal system, concentrating on pivotal issues such as the establishment of mutual consent, the verification of contracting parties’ capacity and adherence to conventional legal doctrines.

This study uncovers the transformative potential of smart contracts in redefining the execution of contracts, highlighting their advantages in streamlining transactions and enhancing contractual reliability. However, it also identifies significant obstacles in the path of their full integration into Saudi Arabia’s legal landscape, notably the challenge of reconciling smart contracts’ technology-driven operations with established legal norms and rectifying potential legal inconsistencies.

Offering fresh perspectives on the confluence of technology and law, this paper illuminates the complex task of implementing smart contracts within a legal framework that is in the process of adapting to digital innovation. It advocates for a sophisticated strategy of regulatory adjustment that promotes the legal system's evolution alongside technological progress, ensuring the effective and legally sound utilization of smart contracts.

This chapter analyzes the efficiency levels of a circular economy (CE) with an emphasis on transaction costs. It examines the governance aspect of CE activities in comparison to the predominant linear value creation. Extant CE research in business studies tends to be descriptive and lacks a theoretical foundation, particularly in understanding CE management. Transaction cost theory explains efficiency in economic organizing, lending itself to the study of arrangements that maximize resource efficiency at continued economic virtue. The conceptualization proposes that CE transaction costs are greater than those within the linear economy (LE), primarily due to the uncertainties about reciprocal dependencies, looping material complexities, exchanging novel information, and increased contracting efforts. Geographically bounded and institutionally homogeneous CE initiatives may curb these rising costs. By bringing efficiency concerns into CE analysis, the chapter demonstrates the applicability of transaction cost theory and highlights CE relevance to international business by pointing out spatial choice implications.

Sustainability has long been known to present an epistemic challenge. In the corporate setting, this challenge translates into the difficulties experienced by managers not only in devising solutions to corporate sustainability problems, but even in developing the awareness of the latter. The paper explores how these difficulties may be overcome by corporate stakeholder management policies.

The paper develops a conceptual framework that reconstructs the Hayekian theory of market process in the context of Williamson's (1996) distinction between autonomous and cooperative adaptation.

Applying the Hayekian theory of market process to the process of engagement and collaboration of corporate stakeholders, the paper shows how the latter process may address the epistemic challenge of corporate sustainability and derives implications for the design of business models for sustainability.

The paper informs stakeholder theory in two ways: first, stakeholder theory is given a novel justification in terms of reflecting the growing prominence of cooperative adaptation and second, corporate stakeholder management is shown to be crucial for maximizing not only economic but also sustainability performance.

Indirect knowledge leakage to rivals located near alliance partners represents a significant risk that has received limited scholarly attention. Hence, the question of how to manage this risk – which the authors term “partner-rival co-location risk” – in nonequity alliances remains unanswered, and this study aims to suggest establishing a steering committee to oversee the partnership.

Drawing on the agglomeration economies and alliance governance literatures, the authors develop a set of hypotheses and perform a series of empirical tests on 470 nonequity alliances in the US biopharmaceutical industry.

The authors propose that there is a positive linkage between partner-rival co-location risk and the formation of a steering committee in a nonequity alliance, which receives strong empirical support. Further, this relationship is significantly moderated by the breadth (alliance scope) but not the depth (reciprocal interdependence) of interaction between the partnering firms.

This paper is a pioneer to shed light on “partner-rival co-location risk” and how partner-rival co-location risk affects the governance decision of whether to establish a steering committee in a nonequity alliance, thus offering important theoretical and practical insights into competition and cooperation in alliance management.

This study examines the effect of relational investments (e.g. supplier involvement and commitment, customer involvement and commitment) on supply chain quality integration (e.g. supplier and customer quality integration), which leads to financial performance. Moreover, the authors explore the moderating effects of legal bonds on the relationship between relational investments and supply chain quality integration.

A survey study of manufacturing firms is presented to illustrate the conceptual model. The authors use the data from 213 manufacturing firms to test the hypotheses by structural equation modeling.

The results show that supplier and customer quality integration are positively related to financial performance. Supplier involvement and commitment are positively related to supplier quality integration. Customer involvement is positively related to customer quality integration, but customer commitment is not significantly related to customer quality integration. Additionally, on the supplier side, legal bonds negatively moderate the relationship between supplier involvement and supplier quality integration but positively moderate the relationship between supplier commitment and supplier quality integration. On the customer side, legal bonds do not moderate the relationship between customer involvement and customer quality integration, but negatively moderate the relationship between customer commitment and customer quality integration.

This study provides novel insights into supply chain quality management from relational perspectives, as well as the contingent role of legal bonds between them.

This paper contributes to studies on the relationship between dynamic capabilities (DCs) and performance by showing how domain-specific DCs – international dynamic marketing capabilities (IDMCs) – affect the international performance of exporting firms in the context of extreme environmental dynamism – during the COVID-19 pandemic.

The authors focus on a sample of 277 exporting manufacturers from the post-transition economy of Poland. The authors use hierarchical multiple regression analysis to test this study's hypotheses.

This study's findings show that deployment of IDMCs by export manufacturers in the context of environmental jolts contributes to better performance, and this relationship is mediated by adaptation to foreign markets and product development capability. Additionally, this study's results reveal that the significant and positive indirect effect of IDMCs on international performance (through mediators) is, however, weakened under conditions of extreme environmental dynamism.

The limitations pertain to the cross-sectional nature of this study and the research sample, characterised by the dominance of export manufacturers of final products, the dominance of manufacturers operating in the business-to-business sector, or in the business-to-business and business-to-customer sectors simultaneously.

The study provides suggestions to managers on how to build resilience in international markets during turbulent times. These activities involve investments in IDMCs that support activities centred around product development and adaptation to foreign markets.

The novel construct of IDMCs is introduced and operationalized. The study empirically tests the direct and indirect relationship between IDMCs and performance contingent upon extreme environmental dynamism. The results demonstrate the boundary conditions for the effectiveness of these domain-specific DCs in such a research setting.

This paper aims to examine how collaborative supplier development (SD) activities, supplier capabilities and buyer–supplier relationship interrelate in technology-based, luxury product business contexts characterized by small volumes, difficult targets and resource constraints relative to those targets.

Using inductive case research method, the authors investigate multiple embedded cases involving six dyadic buyer–supplier relationships of two luxury product manufacturers in the motorcycle and automotive industries. Each dyad represents an important sub-system for which the buying firm committed significant SD efforts to help the supplier successfully achieve difficult targets.

The analysis reveals how paradoxical tensions might emerge as the firms engage in successful SD activities, which could lead to decreasing relationship commitment ultimately resulting in the termination of the relationship. The authors utilize the “value co-creation and value capture” paradox framework to understand the SD and relationship dynamic and characterize it as developing-leveraging paradox to explain its dualities, i.e. commitment-based SD efforts (increasing value co-creation), and unilateral leveraging of the newly acquired capabilities (increasing value capture) by both the buyer and the supplier. Overemphasis on value capture by one of the exchange partners spurs a detrimental vicious cycle leading to the decline of the relationship.

The study explains the paradoxical dynamics that may emerge in SD activities of innovative, technologically complex, luxury product firms. The findings contribute to the SD literature by highlighting how learnings from SD activities could contribute to the dark sides of buyer–supplier relationship. The technologically complex, luxury product contextual characteristics of the study may limit the generalizability of the study findings.

The study provides novel insights into the emergence and management of paradoxes in buyer–supplier relationships, in terms of virtuous and vicious dynamics of developing-leveraging.