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Corporate acquisitions have received less attention than the “make-versus-buy” paradigm problem within transaction cost economics. However, recent research that has been conducted on acquisitions is a valuable source of ideas that can be put to use in organizational governance studies more broadly. In this paper, I provide a brief review of the M&A literature with the aim of developing two arguments. First, information economics has provided important theoretical underpinnings for this literature and complements transaction cost economics by emphasizing the ex ante exchange hazards that economic actors face. Second, research using information economics offers the potential to enrich the organizational economics research agenda in strategic management and vice versa.

Transaction cost economics (TCE) has received extensive attention from a variety of disciplines, but it holds a particularly central place in strategic management. The focal issues examined by TCE, vertical integration and interfirm governance (including contract design), are important determinants of firm performance – the central issue in the field of strategy. While several extensive reviews of empirical work in TCE have been undertaken, one key issue has received relatively little attention – construct validity in TCE empirical research. The purpose of this chapter is to highlight some of the challenges of operationalizing key transaction cost predictions and provide some ideas for better measuring core constructs such as asset specificity, uncertainty, and frequency.

This study aims to explore the overall relationship between a boundary spanner and a partner firm, i.e. boundary spanner closeness to partner firm. Drawing on consumer-service provider relationship literature and the tripartite model of affect-behavior-cognition, the authors identify three key dimensions of such closeness, namely, boundary spanners’ relational ties, customer-specific capabilities and accommodative behaviors, and examine their effects on exchange outcomes in turbulent versus stable environments.

The paper examines the effects of three dimensions of boundary spanner closeness on various exchange outcomes (i.e. retailers’ cooperation, satisfaction and willingness for investment) using two industries as exemplars, characterized by distinct levels of environmental turbulence – the retailing networks of a major cell phone company and a petroleum company in China.

The results indicate that the three dimensions individually and jointly affect exchange outcomes and the interplay of customer-specific capabilities and relational ties affect exchange outcomes differently across industry turbulence.

The existing literature lacks a comprehensive understanding of the function of boundary spanners, which serve as a key relational interorganizational governance component. By identifying three key dimensions of boundary spanner closeness and examining their effectiveness in promoting exchange outcomes, this study advances the understanding of the role of boundary spanners in interorganizational governance.

This paper aims to determine the essential “collective goods” which a foreign multinational enterprise (MNE) must have before production can start in a remote area of an emerging economy, and to consider the alternative governance modes available to procure or create these goods.

This purpose is examined conceptually and theoretically. First, the concept of “collective goods” is presented, followed by a consideration of the traditional “buy, ally or make” contractual approaches available to obtain goods and services. These approaches are repositioned in the context of an “emerging economy” so that alternative “ordering systems” as well as “non-contractual” means of obtaining things have to be considered in the context of internalization and reciprocity theories.

It is difficult to obtain collective goods in remote areas of emerging economies where private ordering prevails and even succeeds but at high transaction costs and with substantial government intervention. However, the use of non-contractual modes of exchange such as reciprocity is available to facilitate exchanges between market MNEs and nonmarket state offices and civil-society associations such as non-governmental organizations with which collaboration is necessary but which cannot be acquired or controlled by MNEs. However, market firms can use philanthropy and lobbying to obtain the help of these nonmarket actors who know how to operate under private and state-ordering systems.

Theoretical implications: Internalization theory explains why MNEs are able to obtain collective goods by providing them “in-house”, while reciprocity theory exemplifies how non-contractual modes of exchange can substitute for the traditional but contractual “buy, ally and/or make”.

Managerial implications: In terms of the organizational structure of the subsidiary of an MNE operating in an emerging economy, it appears that the line functions of procurement, engineering and production may rely more on contractual exchanges with foreign suppliers, while the staff functions of public affairs, government relations and human resources may be more adept at using reciprocal exchange with local suppliers.

The provisioning of the collective goods when a firm builds its facilities in a remote and underdeveloped part of an emerging economy has hardly received any research attention nor have the non-contractual ways – such as reciprocity – available in the context of private ordering to obtain these goods.

Based on a survey study of 138 software buyers in Turkey, this study examines conditional indirect effects of requirements uncertainty on supplier opportunism where buyer dependence, a proxy for relation-specific investments, undertakes a mediator role. The authors consider a two-level moderation effect of trust and contract in buyer–supplier relationships throughout the software project lifecycle.

A survey-based empirical study was conducted, and conditional process analyses were run using PROCESS macro in SPSS. The present study tests a two-stage moderated mediation model in which competence-based trust with a detailed contract setting moderates the mediational path from requirements uncertainty to buyer dependence.

The data obtained from the buyer side in the Turkish software industry showed that a relationship in which the buyer is structurally dependent begins at a high level of trust. On the other hand, the authors found that contractual rigidity fosters supplier opportunism ex-post in evolving process of the relationship.

This study contributes to project management literature by testing a two-level moderation effect of governance and the mediator role of buyer dependence in the relationship between requirements uncertainty and supplier opportunism. Moving differently from the previous studies, this study integrates contributions of both economic perspectives, such as resource dependence theory and transaction cost analysis, and relational perspectives into the information processing view.

A successful relationship between manufacturer and supplier is vital for the pursuit of mutual benefits, which can be affected by one of the partners’ opportunistic behavior, causing disequilibrium in the existing relationship. The extant research has mainly focused on opportunism as a single phenomenon rather than the detectable strong form and unnoticeable weak form of opportunistic behavior in an exchange relationship that affects the relational outcomes in various ways. This study aims to contribute toward explaining the effect of economic and social forces on a strong and a weak form of opportunism and, in turn, its impact on relational outcomes in manufacturer-supplier relationships.

A sample of 361 manufacturers was drawn randomly using a sampling frame from the western part of India. The authors used covariance-based structural equation modeling to support the proposed model empirically. The authors examined the effect of social capital and transaction cost dimensions on different forms of a supplier’s opportunism.

All three dimensions of social capital have a different impact on both the forms of a supplier’s opportunism in the relationship. The authors found that social capital moderates the relationship between transaction-specific investments on a weak form of opportunism, while social capital is more valuable in curbing opportunism due to the effect of environmental uncertainty and behavioral uncertainty. The authors found that the supplier’s weak form of opportunism than the strong form has a more amplifying effect on governance costs.

This research contributes in three different ways. First, it inquires about the direct effect of transaction cost dimensions and social capital dimensions on a supplier’s multifaceted opportunism (strong form and weak form) in the manufacturer-supplier relationship. Second, it investigates the moderating effect of social capital on the relationship between transaction cost dimensions and forms of supplier opportunism. Third, the weak form of a supplier’s opportunism affects more significantly than the strong form of opportunism on governance costs.

To enhance the value of servitization in customers’ problem-solving, this study aims to examine and compare the effects of manufacturers’ service breadth and depth strategies on their customer-based performance. It also explores how these effects are influenced by technological turbulence and a manufacturer’s supply chain position.

Based on data collected from 208 Chinese manufacturers, this study uses a three-stage least square approach to test the hypotheses focusing on the effects of manufacturers’ service strategies on customer-based performance and the moderating roles of technological turbulence and supply chain position.

The study reveals that manufacturers’ service depth has a significant positive effect on their customer-based performance. However, service breadth has an insignificant effect on the performance. Furthermore, technological turbulence positively moderates the effects of both service breadth and depth, and supply chain position only positively moderates the effect of service depth.

Manufacturers should focus on increasing service depth to improve their customer-based performance. Manufacturers in technically turbulent environments can attain ample benefits from both service breadth and depth, and those located downstream in a supply chain can benefit more from service depth.

By bringing a problem-solving perspective into the servitization literature, this study adds empirical insights to the impact of manufacturers’ service breadth and depth strategies on customer outcomes. The study also answers calls for insights into the environmental and structural contingencies of servitization.

Legacy organizations, particularly government departments, have always remained focused on technology acquisition at a low cost. However, they must balance their quest for better financial performance with a commitment to social obligations and inclusiveness. This study aims to analyze the issues faced by a public sector department, India Post, in its digitization process.

This study takes a case-based approach to analyze India Post’s digitization journey through the theoretical prism of the technology, organization and environment framework.

The organization’s ability to benefit from innovative technology is constrained by its outdated structure and business processes. The other constraints include the limited technological know-how within the organization and the lack of intricate organizational process knowledge of today’s vendors.

This study portends important implications for policymakers and provides a base for several inquiries for future research. This study attempted to identify the facilitators and inhibitors of digitization initiatives of a legacy government organization with extensive outreach in rural economy which policymakers can consider while rolling out digitization initiatives for public sector organizations.

There are very few studies available as published literature which examined the digitization journey of a legacy government organization in a developing economy. To the best of the authors’ knowledge, there was no published literature available on India Post’s digital transformation process.

Corporate scandals at Enron, Tyco, and MCI highlight the issue of opportunistic management behavior. The US Congress responded to these scandals by passing the Sarbanes‐Oxley Act of 2002 (SOX). SOX imposes additional management responsibilities and corporate operating costs on companies trading under SEC regulations. This paper examines three options for US corporations responding to SOX: compliance with SOX, taking a company private, or moving to a non‐ SEC‐regulated exchange, such as an international exchange. The paper then examines potential corporate governance options using Transaction Cost Economics (TCE; Williamson 1985) to develop propositions regarding which options firms may select.

The purpose of this paper is to consider the management of hazards arising from the make-buy choice in the face of radical technological change. This sourcing choice can lead to distinctive exchange and hierarchical hazards. This study’s main interest is in investigating the research question “How can firms reduce those distinctive exchange and hierarchical hazards arising from the make-buy sourcing strategy when dealing with radical technological change?”

The author develops hypotheses that the in-house retention of outsourced component knowledge will likely reduce exchange hazards arising from the buy strategy choice. And prior exploratory technological experience will likely reduce hierarchical hazards arising from the make strategy choice. The author explores the US mountain bicycle industry from 1980 to 1992 to test the developed hypotheses. For endogeneity arising from the make-buy sourcing decision, the author uses Heckman’s two-stage switching regression model.

The major findings are that the in-house retention of outsourced component knowledge and prior exploratory technological experience is distinctive moderating factors improving performance of a buy strategy and a make strategy, respectively.

Since the extant literature tends to focus on which of the two sourcing strategies provides the greatest performance advantages in the face of radical technological change, there is a strong implication to suggest that if a firm performs poorly with one sourcing decision, the firm should switch to an alternative one. Different from the expositions of the literature, this study elevates the understanding regarding how firms can improve the performance of their current sourcing orientation rather than whether they should switch from one sourcing strategy to another.