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Article
Publication date: 14 July 2020

Jing Zhang, Ya Zhang and Mingfei Du

This paper aims to investigate how relative contractual and relational governances impact seller’s value appropriation via buyer’s trust, perceived justice and opportunism in the…

Abstract

Purpose

This paper aims to investigate how relative contractual and relational governances impact seller’s value appropriation via buyer’s trust, perceived justice and opportunism in the context of industrial buyer–seller relationships.

Design/methodology/approach

Survey data from 232 matched buyer-seller dyads of Chinese business-to-business (B2B) firms was used to test the conceptual model and research hypotheses. The confirmatory factor model and structural equation model were tested by using Lisrel 8.80.

Findings

The findings show that relative contractual governance and relative relational governance have opposite consequences on B2B relationship and value outcomes. Relative contractual governance generates higher level of buyer’s opportunist behavior because it reduces buyer’s trust and perceived justice, therefore harms seller’s value appropriation. By contrast, relative relational governance enhances buyer’s trust and perceived justice, therefore curbs buyer’s opportunism and improves seller’s value appropriation.

Originality/value

This study makes significant contributions to theory development of value appropriation and inter-firm governance mechanism by extending dyadic view to network view. It proposes the concept of relative governance and explores its role in shaping a business partner’s perception and behavior. It also provides insightful implications for B2B companies on capturing more benefits from the relationship with buyers by leveraging relative governance strategies.

Details

Journal of Business & Industrial Marketing, vol. 36 no. 2
Type: Research Article
ISSN: 0885-8624

Keywords

Article
Publication date: 29 June 2021

Hua Liu and Shaobo Wei

Drawing on the transactional cost economics (TCE) perspective, we aim to investigate the effects of the balance and imbalance between contractual and relational governance on a…

Abstract

Purpose

Drawing on the transactional cost economics (TCE) perspective, we aim to investigate the effects of the balance and imbalance between contractual and relational governance on a firm's bridging responses to supply chain disruptions. By adopting the institutionally contingent perspective, we further examine the moderating effect of cultural distance on the relationship between governance mechanisms and bridging responses.

Design/methodology/approach

Based on data collected from 183 firms in China, we use polynomial regression and response surface analyses to test our research model.

Findings

The bridging responses increase along with an increasing balance level between contractual and relational governance and decrease along with an increasing imbalance level between contractual and relational governance. Moreover, the positive effect of balance between contractual and relational governance is strengthened by a large cultural distance. We also find that a large cultural distance amplifies the negative effect of the combination of high relational governance and low contractual governance yet weakens that of the combination of high contractual governance and low relational governance.

Originality/value

Our study provides nuanced insights into the effects of the balance and imbalance between contractual and relational governance on bridging responses and into the cultural boundary conditions under which these effects vary.

Details

International Journal of Operations & Production Management, vol. 41 no. 8
Type: Research Article
ISSN: 0144-3577

Keywords

Article
Publication date: 24 March 2021

Xuan Bai, Shibin Sheng and Julie Juan Li

This paper aims to examine alliance governance at different hierarchical levels.

Abstract

Purpose

This paper aims to examine alliance governance at different hierarchical levels.

Design/methodology/approach

The data is collected from both top-level and operating-level managers in 286 strategic alliances in China (a total of 572 managers). Hierarchical moderated regression models are adopted to test the hypotheses and two-stage regression analyzes are used to correct for endogeneity.

Findings

This paper finds that relational governance has a greater impact on alliance performance than contract utilization at the top level. Furthermore, the simultaneous use of relational governance at the top and operating levels have a detrimental impact on alliance performance. Finally, top-level contract utilization has a negative interaction with operating-level relational governance but a positive interaction with operating-level contract utilization.

Research limitations/implication

First, the cross-sectional nature of the data collection approach provides only a snapshot of how each type of governance mechanism and its interactions affect alliance performance. Second, the sample is limited to firms located in emerging markets.

Practical implications

Managers should realize that the effectiveness of contract and relational governance mechanisms varies across different management levels and they should be cautious about the cross-level governance mechanism alignment.

Originality/value

This study advances the interfirm governance literature in that this paper examined alliance governance at different hierarchical levels and provides new insights into the ongoing debate on whether the contract and relational governance mechanisms function as complements or substitutes by exploring the governance alignment across different alliance hierarchies.

Article
Publication date: 30 June 2014

Jan Hendrik Schumann, Ed Nijssen and Patrick Lentz

Enhancing customer participation behaviour (CPB) is critical for service firms. However, in a global context, cultural and local market factors are relevant. The purpose of this…

Abstract

Purpose

Enhancing customer participation behaviour (CPB) is critical for service firms. However, in a global context, cultural and local market factors are relevant. The purpose of this paper is to detail how and why global service firms can and should account for such factors. Prior research relied predominantly on cultural value differences to account for cross-national variation. The present study uses an index of consumers’ institutional logics of market action (CILMA) as an alternative approach to segment international markets.

Design/methodology/approach

In total, 1,910 customers of financial services in 11 countries were surveyed on their CILMA as well as on costomer participation behaviour intentions (CPBI) and cognitive and affective trust as drivers. The 11 countries are then grouped according to their levels in the CILMA index. Finally a structural equations model on the drivers of CPBI is tested for direct and moderating effects of the CILMA index by comparing the two segments with a relation- vs contract-dominated CILMA.

Findings

The study reveals that the CILMA index explains differences in consumer participation behaviour intention and moderates relational mechanisms; in particular, in more relational vs contractual markets, CPBI is higher, and also the effect of cognitive trust on CPBI is stronger in such settings. Global marketing managers thus should adjust CPB strategies according to observed CILMA index scores. Segmentation for CPB approaches could rely on CILMA index variations.

Originality/value

The newly proposed CILMA index combines both relation- and contract-based governance dimensions to describe complex institutional fields. This index differentiates relation- from contract-dominated markets and supports the application of the CILMA scale to many nations at the same time. The CILMA index can be applied to segment international markets to explain customer cocreation behaviour and its drivers.

Details

International Marketing Review, vol. 31 no. 4
Type: Research Article
ISSN: 0265-1335

Keywords

Article
Publication date: 15 December 2022

Stephane Bignoux, David Gray and Anna Tudehope Booth

Psychotherapy is often used to treat dysfunctional inter-personal relationships, but it is rarely used to treat dysfunctional B2B relationships. Yet many of the variables found in…

Abstract

Purpose

Psychotherapy is often used to treat dysfunctional inter-personal relationships, but it is rarely used to treat dysfunctional B2B relationships. Yet many of the variables found in inter-personal relationships are also found in B2B relationships and both types of relationships have similar fail rates. The authors take a multi-disciplinary approach by adapting an instrument from marriage therapy into a new measure called the Business Relationship Health Index (BRHI). In the process we re-evaluate the drivers of B2B relationships.

Design/methodology/approach

The authors apply the Global Assessment of Relational Functioning (GARF) psychiatric system to B2B relationships. The GARF instrument incorporates three components: interaction/problem solving, organization/structure and emotional climate. Using US panel data of 500 B2B relationships based in the USA, the authors use partial least squares analysis and develop a structural equation model to test the validity and reliability of the BRHI with some well-known relationship measures including, satisfaction, trust, commitment and performance.

Findings

The findings support a strong link between the BRHI (emotion, interaction and organization) and relationship performance. The proposed measure shows a strong link between BRHI and relationship performance (R2 = 0.54).

Originality/value

The GARF instrument has never been applied to a B2B context. BRHI is a holistic instrument used for assessing the specific relational characteristics of B2B relationships. The BRHI can benefit relationship stakeholders when used as a diagnostic tool to prioritize B2B investment strategies. Managers can use BRHI to determine the extent to which the relationship is healthy or needs repair, re-evaluation, re-commitment, or repositioning.

Details

Asia Pacific Journal of Marketing and Logistics, vol. 35 no. 8
Type: Research Article
ISSN: 1355-5855

Keywords

Article
Publication date: 7 November 2016

John G. Wacker, Chenlung Yang and Chwen Sheu

As outsourcing continues to grow, supplier management becomes critical to the success of manufacturing firms. Transaction cost economics (TCE) suggests that firms should choose…

3346

Abstract

Purpose

As outsourcing continues to grow, supplier management becomes critical to the success of manufacturing firms. Transaction cost economics (TCE) suggests that firms should choose supplier governance mechanisms to ensure fulfillment of contractual obligations and safeguard against opportunism for their outsourcing activities. Accordingly, the purpose of this paper is to examine how buying organizations govern supplier contracts to improve manufacturing competitiveness and financial performance. The relative effectiveness of two primary governance mechanisms, contractual governance (CG), and relational governance, are examined.

Design/methodology/approach

Expanding upon previous studies, this study delineates three relational governance mechanisms (negotiation efficiency (NE), problem solving relations, and information sharing (IS)) that are conceptually, statistically and pragmatically different. Based on the TCE literature, a conceptual model is developed to decipher the relationships between pre-contract conditions (supplier asset specificity and environmental uncertainty (EU)), governance mechanisms, performance ambiguity (PA), and performance. Using the data collected from 987 firms, the statistical results present several important findings that would advance current theory and practice in outsourcing.

Findings

The authors find empirical support for the effects of contractual and relational governance in improving manufacturing and financial performance. The governance of supplier contracts clearly facilitates manufacturers’ ability to leverage their resources to improve performance. The relative effectiveness of these two governance mechanisms is related to the levels of EU and supplier asset specificity. Relational governance displays greater influence on performance than CG does. However, CG appears to be complementary to relational governance.

Research limitations/implications

The interplays between supplier asset specificity and EU should be examined in the future. The relationships among NE, IS, and problem solving should also be examined to facilitate the development of relational governance.

Practical implications

Managers should be aware of the situational performance of governance mechanisms. Moreover, it is important to realize how differently each of the three relational governance mechanisms and CG contribute to performance.

Originality/value

This study extends the academic discussion of supplier governance by investigating the alignment of governance mechanisms (relational governance and CG) with pre-contract conditions to reduce PA and, thereby, enhance manufacturing performance. Under the theoretical framework of TCE, the direct and indirect effects of pre-contract conditions and governance variables are fully examined and discussed. Moreover, relational governance involves multiple mechanisms that are conceptually and pragmatically different, and future studies should not treat it as one single construct.

Details

International Journal of Operations & Production Management, vol. 36 no. 11
Type: Research Article
ISSN: 0144-3577

Keywords

Article
Publication date: 6 May 2014

David A. Griffith, Hannah S. Lee, Chang Seob Yeo and Roger Calantone

The purpose of this paper is to explore the marketing “processes” of governing multiple export relationships under the theoretical framework of governance value analysis (GVA)…

4953

Abstract

Purpose

The purpose of this paper is to explore the marketing “processes” of governing multiple export relationships under the theoretical framework of governance value analysis (GVA). Specifically, this work examines the internal exchange attributes of transaction-specific investments and psychic distance on the adaptation/standardization of relational behavior and detailed contracting and how process adaptation/standardization influences new product outcomes and jointly created value in the focal export relationship.

Design/methodology/approach

A survey was conducted of 151 US manufacturers regarding their relationship with their primary foreign buyers. Data were analyzed with partial least squares estimation.

Findings

The results indicate that high levels of transaction-specific investments lead to the adaptation of relational behaviors whereas high levels of psychic distance lead to less adaptation of detailed contracting. The adaptation of relational behaviors and detailed contracting reflect differential direct effects on export performance. Furthermore, the results indicate that there is a significant positive interaction effect between the adaptation of relational behavior and detailed contracting on jointly created value in the focal export relationship.

Practical implications

The findings of the study reveal that adaptation of the marketing process related to relationship governance strategies can play an important role in the export marketing process, but managers must proceed with caution in balancing relational behavior and detailed contract adaptation. The results also point to the importance of understanding the underlying source of uncertainty and adapting appropriate aspects of governance for enhancing jointly created value in the export relationship.

Originality/value

The value of this research lies in its goal to highlight the issue of marketing process adaptation across multiple export relationships. Less attention has been paid to the marketing “processes” of governing multiple export relationships in the international marketing strategy literature relative to “program” standardization/adaptation. This is one of the first empirical studies on marketing process adaptation of governance employing the theoretical framework of GVA.

Details

International Marketing Review, vol. 31 no. 3
Type: Research Article
ISSN: 0265-1335

Keywords

Book part
Publication date: 24 August 2011

Breda Kenny and John Fahy

The study this chapter reports focuses on how network theory contributes to the understanding of the internationalization process of SMEs and measures the effect of network…

Abstract

The study this chapter reports focuses on how network theory contributes to the understanding of the internationalization process of SMEs and measures the effect of network capability on performance in international trade and has three research objectives.

The first objective of the study relates to providing new insights into the international market development activities through the application of a network perspective. The chapter reviews the international business literature to ascertain the development of thought, the research gaps, and the shortcomings. This review shows that the network perspective is a useful and popular theoretical domain that researchers can use to understand international activities, particularly of small, high technology, resource-constrained firms.

The second research objective is to gain a deeper understanding of network capability. This chapter presents a model for the impact of network capability on international performance by building on the emerging literature on the dynamic capabilities view of the firm. The model conceptualizes network capability in terms of network characteristics, network operation, and network resources. Network characteristics comprise strong and weak ties (operationalized as foreign-market entry modes), relational capability, and the level of trust between partners. Network operation focuses on network initiation, network coordination, and network learning capabilities. Network resources comprise network human-capital resources, synergy-sensitive resources (resource combinations within the network), and information sharing within the network.

The third research objective is to determine the impact of networking capability on the international performance of SMEs. The study analyzes 11 hypotheses through structural equations modeling using LISREL. The hypotheses relate to strong and weak ties, the relative strength of strong ties over weak ties, and each of the eight remaining constructs of networking capability in the study. The research conducts a cross-sectional study by using a sample of SMEs drawn from the telecommunications industry in Ireland.

The study supports the hypothesis that strong ties are more influential on international performance than weak ties. Similarly, network coordination and human-capital resources have a positive and significant association with international performance. Strong ties, weak ties, trust, network initiation, synergy-sensitive resources, relational capability, network learning, and information sharing do not have a significant association with international performance. The results of this study are strong (R2=0.63 for performance as the outcome) and provide a number of interesting insights into the relations between collaboration or networking capability and performance.

This study provides managers and policy makers with an improved understanding of the contingent effects of networks to highlight situations where networks might have limited, zero, or even negative effects on business outcomes. The study cautions against the tendency to interpret networks as universally beneficial to business development and performance outcomes.

Details

Interfirm Networks: Theory, Strategy, and Behavior
Type: Book
ISBN: 978-1-78052-024-7

Keywords

Article
Publication date: 29 July 2014

Yong Long, Peng Li and Bo You

The purpose of this paper is to identify the relationship between knowledge transfer characteristics in alliance and alliance governance mechanisms, the influence of alliance…

1165

Abstract

Purpose

The purpose of this paper is to identify the relationship between knowledge transfer characteristics in alliance and alliance governance mechanisms, the influence of alliance governance mechanisms on knowledge transfer consequences and investigate the role of environmental uncertainty in knowledge transfer of alliance.

Design/methodology/approach

Survey data were collected mainly in high-tech industries of China, the firms in which often establish alliance for the purpose of learning and knowledge transfer often takes place in that alliance. Finally, 293 usable samples were included in subsequent analysis. Multiple regression analysis was used to examine the hypotheses.

Findings

The extent of relational (/formal) governance mechanism used in alliance has a stronger positive relationship with the extent of tacit (/explicit) knowledge transfer in alliance than with the extent of explicit (/tacit) knowledge transfer in alliance between them; environmental uncertainty impairs relational governance mechanisms and enhances formal governance mechanisms used in alliance; both relational and formal governance mechanisms could facilitate knowledge transfer in alliance; environmental uncertainty hinders knowledge transfer and negatively moderates the relationship between alliance governance mechanisms and knowledge transfer.

Originality/value

This paper finds the relationship between knowledge transfer in alliance and alliance governance mechanisms, and the role of environmental uncertainty, providing managers with direct implications about how to manage alliance with different knowledge transfer characteristics for the purpose of facilitating knowledge transfer in alliance; provides managers more details about the dark side of the environmental uncertainty in knowledge transfer, also reminds public policy-makers paying enough attention for the improvement of institutional environment to deal with uncertainty.

Details

Chinese Management Studies, vol. 8 no. 3
Type: Research Article
ISSN: 1750-614X

Keywords

Article
Publication date: 22 June 2020

Franciele Bonatto, Luis Mauricio Martins de Resende and Joseane Pontes

The goal of this research is to establish which contextual factors influence the selection of relational governance instruments in supply chains (SCs) and how these factors impact…

Abstract

Purpose

The goal of this research is to establish which contextual factors influence the selection of relational governance instruments in supply chains (SCs) and how these factors impact the expected performance.

Design/methodology/approach

A systematic literature review (SLR) identified 103 conceptual, empirical and analytical studies between 2007 and 2017.

Findings

A conceptual framework is developed from the categorization of contextual factors, relational governance instruments and expected SC performance. The conceptual framework provides three propositions: (1) The choice for relational governance instrument is influenced differently by the contextual factors; (2) the impact that the contextual factors have on the governance instruments and SC performance is mediated by trust; (3) The SC performance is affected differently by the instruments of flexibility, solidarity and information sharing.

Practical implications

The findings of this research can help business managers better govern and know the contextual factors and use different relational governance instruments and trust dimensions to drive the expected results of the SC.

Originality/value

The synthesis reveals contingencies of relational governance instruments in SCs for performance expected in different contexts and proposes a standpoint for further research in the area.

Details

Benchmarking: An International Journal, vol. 27 no. 6
Type: Research Article
ISSN: 1463-5771

Keywords

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