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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 governance…

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

Keywords

Article
Publication date: 7 January 2019

Lu Shen, Chuang Zhang and Wenbo Teng

This study aims to examine the double-edged effects of guanxi on opportunism and the moderating effects of legal enforceability and partner asset specificity. It thus differs from…

Abstract

Purpose

This study aims to examine the double-edged effects of guanxi on opportunism and the moderating effects of legal enforceability and partner asset specificity. It thus differs from the current literature, which primarily focuses on the benevolent effects of guanxi.

Design/methodology/approach

Based on matched data collected from 268 sales manager and salesperson dyads, this study tested hypotheses using hierarchical regressions.

Findings

The empirical test supports the conceptual model and demonstrates two findings. First, guanxi between boundary spanners follows an inverted U-shaped relationship with inter-firm opportunism. Second, both the benefits and drawbacks of guanxi are stronger under the condition of low legal enforceability and high partner asset specificity.

Research limitations/implications

The study did not untangle guanxi into different dimensions and did not investigate how firms should make trade-offs between the benefits and drawbacks of guanxi. Therefore, future research could further explore this question by using a multidimensional approach.

Practical implications

The study alerts managers that guanxi is a double-edged sword, so they should complement it with formal control mechanisms, particularly when they are operating in legally inefficient regions or when their partner firm’s asset specificity is high.

Originality/value

The study offers a more balanced view of guanxi by showing both its positive and negative effects on opportunism. It also uncovers legal enforceability and partner asset specificity as two boundary conditions that influence the curvilinear effects of guanxi on opportunism.

Details

Journal of Business & Industrial Marketing, vol. 34 no. 6
Type: Research Article
ISSN: 0885-8624

Keywords

Article
Publication date: 16 January 2023

Aoran Hong, Xia Li, Yonggui Wang and Mengting Shi

Export manufacturing firms from emerging markets can better meet customer needs by providing customization, which leads to competitive advantages. Although both practice and…

Abstract

Purpose

Export manufacturing firms from emerging markets can better meet customer needs by providing customization, which leads to competitive advantages. Although both practice and academic research have deeply discussed customization, the question of whether customization promotes export manufacturing firms' product innovation in the global B2B market is largely unexplored. The purpose of this paper is to address this issue.

Design/methodology/approach

This paper collects survey data from 2,248 export manufacturing firms in China and uses hierarchical moderated regression to explore the relationship between customization and product innovation in the global B2B market and their boundary conditions.

Findings

This research shows that customization positively affects export manufacturing firms' product innovation in the context of the global B2B market, and it shows that internal governance structure (contract governance and relationship governance) and external governance structure (legal enforceability) can be used as boundary conditions that affect the relationship. Specifically, contract governance has an inverted U-shaped moderating effect on the relationship between customization and product innovation; moreover, relationship governance and legal enforceability can strengthen the positive relationship between customization and product innovation.

Originality/value

The study explores the relationship between customization and product innovation in the global B2B market and examines the moderating effect of internal and external governance structures. In addition, the study enriches the research related to customization and product innovation in the context of the global B2B market and provides essential practical insight into the survival of export manufacturing firms from emerging markets.

Details

International Marketing Review, vol. 40 no. 4
Type: Research Article
ISSN: 0265-1335

Keywords

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 whether…

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

Keywords

Article
Publication date: 15 July 2019

Kristijan Mirkovski, Robert M. Davison and Maris G. Martinsons

Drawing on transaction cost economics (TCE) and social exchange theory (SET), the purpose of this paper is to explain why and how external environment, governance structures and…

Abstract

Purpose

Drawing on transaction cost economics (TCE) and social exchange theory (SET), the purpose of this paper is to explain why and how external environment, governance structures and interpersonal relationships influence information and communication technology (ICT)-enabled information sharing in supply chains (SCs) of small- and medium-sized enterprises (SMEs) from developing economies.

Design/methodology/approach

The authors adopt a theory-building approach using a multiple case study design, including four SMEs operating in SCs from two developing economies (i.e. Republic of North Macedonia and People’s Republic of China), in which the authors conduct both within-case and cross-case analyses.

Findings

Social bonds (known as vrski in Macedonian and guanxi in Chinese) were found to govern buyer–supplier exchanges by supporting the establishment of personal trust and the reduction of distrust. These social bonds compensate for the institutional deficiencies in developing economies and thus encourage ICT-enabled information sharing by SMEs in their SCs.

Research limitations/implications

By applying the theoretical perspectives of TCE and SET to the cross-case analysis, the authors develop nine propositions to explain ICT-enabled information sharing and its interdependencies with external environment, governance structures and interpersonal relationships in developing economies. Further research is recommended to refine and test the generalizability of the theoretical model.

Practical implications

Firms have to develop and nurture social bonds with their suppliers from developing economies to reduce risks related to the environmental uncertainty and institutional voids. This can increase trust and decrease distrust associated with ICT-enabled information sharing.

Originality/value

The study examines why and how external environment (environmental uncertainty and institutional environment), social bonds (vrski and guanxi) and interpersonal mechanisms (trust and distrust) influence ICT-enabled information sharing of SMEs operating in developing economies.

Details

The International Journal of Logistics Management, vol. 30 no. 3
Type: Research Article
ISSN: 0957-4093

Keywords

Content available
Book part
Publication date: 4 April 2022

Abstract

Details

Public Sector Leadership in Assessing and Addressing Risk
Type: Book
ISBN: 978-1-80117-947-8

Article
Publication date: 1 January 1993

J.R. Carby‐Hall

In this essay it is proposed first to draw the important distinction which exists in practice between the collective and procedure agreements and explain briefly the respective…

Abstract

In this essay it is proposed first to draw the important distinction which exists in practice between the collective and procedure agreements and explain briefly the respective functions of each of these. An examination will then follow of the current legal status of the collective agreement in Great Britain where a discussion and analysis of various aspects of legal non‐enforceability will take place.

Details

Managerial Law, vol. 35 no. 1/2
Type: Research Article
ISSN: 0309-0558

Book part
Publication date: 19 May 2009

Thomas W. Joo

Marriage is often compared to a “contract.” This analogy purports to proceed from a settled concept called “contract,” under which legitimate obligations derive from consent. The…

Abstract

Marriage is often compared to a “contract.” This analogy purports to proceed from a settled concept called “contract,” under which legitimate obligations derive from consent. The analogy creates confusion when applied in the legal context. In law, “contract” refers to a broad category of legal obligation. Many legal theorists believe “contractual” enforceability should be based solely on consent. But as a matter of positive legal doctrine, consent is neither necessary nor sufficient to establish enforceability. A contract's enforceability also depends on its relationship to public welfare.

Thus the “contract” analogy does not constitute a legal justification for an approach to marriage based solely on the consent of the parties. It merely expresses a normative preference for a consent-based approach. The chapter illustrates this point using examples of current marriage-related issues, such as covenant marriage, prenuptial agreements, and same-sex marriage.

Details

Law & Economics: Toward Social Justice
Type: Book
ISBN: 978-1-84855-335-4

Article
Publication date: 12 November 2020

Zakariya Mustapha, Sherin Binti Kunhibava and Aishath Muneeza

The purpose of this paper is to review the literature on Islamic finance vis-à-vis legal and Sharīʿah non-compliance risks in its transactions and judicial dispute resolution in…

Abstract

Purpose

The purpose of this paper is to review the literature on Islamic finance vis-à-vis legal and Sharīʿah non-compliance risks in its transactions and judicial dispute resolution in Nigeria. This is with a view to putting forward direction for future studies on the duo of legal and Sharīʿah non-compliance risks and their impact in Islamic finance.

Design/methodology/approach

This review is designed as an exploratory study and qualitative methodology is used in examining relevant literature comprising of primary and secondary data while identifying legal risk and Sharīʿah non-compliance risks of Nigeria’s Islamic finance industry. Using the doctrinal approach together with content analysis, relevant Nigerian laws and judicial precedents applicable to Islamic finance practice and related publications were examined in determining the identified risks.

Findings

Undeveloped laws, the uncertainty of Sharīʿah governance and enforceability issues are identified as legal gaps for Islamic finance under the Nigerian legal system. The gaps are inimical to and undermine investor confidence in Nigeria’s Islamic finance industry. The review reveals the necessity of tailor-made Sharīʿah-based regulations in addition to corresponding governance and oversight for a legally safe and Sharīʿah-compliant Islamic finance practice. It brings to light the imperative for mitigating the legal and Sharīʿah non-compliance risks associated with Islamic finance operations as crucial for Islamic finance businesses, Islamic finance institutions and their sustainable development.

Research limitations/implications

Based on content analysis, the review is wholly doctrinal and does not involve empirical data. Legal safety and Sharīʿah compliance are not to be compromised in Islamic finance operations. The review would assist relevant regulators and investors in Islamic financial enterprises to understand and determine the impact and potential ramifications of legal safety and Sharīʿah non-compliance on Islamic Finance Institutions.

Practical implications

This study provides an insight into the dimensions and ramifications of legal and Sharīʿah non-compliance risks of Nigeria’s Islamic finance industry. This study is premised on the imperative for research studies whose outcome would inform regulations that strike a balance between establishing Islamic financial institution/business and ensuring legal certainty and Sharīʿah compliance of their operations. This study paves way for this kind of research studies.

Originality/value

The findings and discussions provide a guide for regulators and researchers on the identification and mitigation of legal and Sharīʿah non-compliance risks in Islamic finance via a literature review. This study, the first of its kind in Nigeria, advances the idea that research into legal and Sharīʿah non-compliance risks of Islamic financial entities is key to mitigating the risks and fostering the entities and their businesses.

Details

International Journal of Law and Management, vol. 63 no. 2
Type: Research Article
ISSN: 1754-243X

Keywords

Book part
Publication date: 19 May 2009

Liang Song and Haizhi Wang

In practice, it is increasingly common for companies to use NON-COMPETITION covenants in employment contracts that put restrictions on post-employment activities. Making use the…

Abstract

In practice, it is increasingly common for companies to use NON-COMPETITION covenants in employment contracts that put restrictions on post-employment activities. Making use the variation of legal enforcement of NON-COMPETITION agreements in different states (NON-COMPETITION index) across the U.S., this chapter empirically examines whether and to what extent labor market concern will affect firm payout policy when managers are bound to their firms by NON-COMPETITION agreements. We find that the likelihood for a firm to pay DIVIDEND or conduct repurchasing is positively related to NON-COMPETITION index. We directly measure PAYOUT RATIO and find a significant positive relation between firm PAYOUT RATIO and NON-COMPETITION index. Our results indicate that managers with increased stability and reduced job opportunity in the external labor market are more likely use cash payout as a pre-commitment device and send a signal that they will not entrench themselves.

Details

Corporate Governance and Firm Performance
Type: Book
ISBN: 978-1-84855-536-5

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