Governance Mechanisms as Substitutes and Complements – A Dynamic Perspective on the Interplay between Contractual and Relational Governance

2011 ◽  
pp. 46-65 ◽  
Author(s):  
Thomas L. Huber ◽  
Thomas A. Fischer ◽  
Jens Dibbern
Keyword(s):  
Governance Mechanisms ◽  
Relational Governance ◽  
Dynamic Perspective

scholarly journals Alliance Governance Mechanisms in the Face of Disruption

2021 ◽  
Author(s):  
Arne Keller ◽  
Fabrice Lumineau ◽  
Thomas Mellewigt ◽  
Africa Ariño
Keyword(s):  
Two Dimensions ◽  
Veterinary Drug ◽  
Governance Mechanisms ◽  
Relational Governance ◽  
Fine Grained ◽  
The Face ◽  
Dynamic Perspective ◽  
Alliance Partners ◽  
The Impact ◽  
Alliance Governance

Existing academic literature has discussed contracts and relational governance as the key mechanisms that help alliance partners address problems of cooperation and coordination. However, when an alliance undergoes disruption, the nature and extent of such problems may change and therefore the value of these mechanisms may change. This study advances a dynamic perspective on alliance governance by examining the impact of disruption and subsequent adjustment on the value of alliance governance mechanisms. To this end, we longitudinally studied a revelatory case of a research and development alliance in the veterinary drug industry that experienced disruption triggered by an internal restructuring at one of the partner companies. We approached the evidence with a fine-grained typology that builds on two dimensions that underlie governance mechanisms: the means to enforce their ruling principles (contractual versus relational) and the level of codification of these principles (formal versus informal). Based on our findings, we (1) show the significance of this revised typology, which suggests that contractual governance is not necessarily formal and relational governance is not necessarily informal; (2) provide a more systematic discussion of the tradeoffs that the various mechanisms entail and how these are altered through disruption and adjustment dynamics; and (3) analyze how the interplay between different types of governance mechanisms evolves following disruption and adjustment. Overall, our study brings the concept of disruption to the dynamic perspective of alliance governance and highlights the contingent value of alliance governance mechanisms.

The interplay between digital transformation and governance mechanisms in supply chains: evidence from the Italian automotive industry

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Emilio Paolucci ◽  
Elena Pessot ◽  
Riccardo Ricci
Keyword(s):  
Digital Technologies ◽  
Digital Transformation ◽  
Development Effort ◽  
Governance Mechanisms ◽  
Relational Governance ◽  
Firm Level ◽  
Digital Interface ◽  
Content Type ◽  
Automotive Suppliers ◽  
The Impact

PurposeThis paper aims to investigate the effect of specific subsets of digital technologies and governance mechanisms (i.e. relational and contractual) on the efficiency of the automotive supply chain (SC).Design/methodology/approachBuilding on the Transaction Costs Economic (TCE) theory, and on the literatures on the governance and Digital Transformation of SCs, the research employs a multi-respondent survey on a sample of 101 Italian automotive suppliers. It analyses the interplay between investments in network and physical–digital interface technologies and buyer–supplier relationship governance models in a joint product development effort. The related effects on costs, from the automotive suppliers' perspective, are considered.FindingsThe results confirm the TCE assumptions on governance mechanisms being appropriate to enhance cost performance, but in particular show that digital technologies shape the governance of buyer–supplier relationships with different patterns. The features of synchronisation and accessibility, as ensured by network technologies, are found to strengthen the impact of contractual governance, while the adoption of physical–digital interface technologies, and their enhanced features of virtualisation and traceability, further enhance the impact of relational governance on the efficiency improvements of suppliers.Practical implicationsSC actors need to recognise the importance of long-term collaboration and superior coordination through investments in specific subsets of digital technologies, to ensure a higher product and production data codifiability, transparency and thus integration at both an intra- and an inter-firm level.Originality/valueThis study is one of the first to have considered Digital Transformation in SCs from the suppliers' perspective and its implications on the efficiency of relationship governance with buyers.

scholarly journals Blockchain Governance—A New Way of Organizing Collaborations?

2020 ◽  
Author(s):  
Fabrice Lumineau ◽  
Wenqian Wang ◽  
Oliver Schilke
Keyword(s):  
Research Agenda ◽  
Turning Point ◽  
Organizational Outcomes ◽  
Historical Background ◽  
Governance Mechanisms ◽  
Relational Governance ◽  
Recent Emergence ◽  
Different Types ◽  
Other Information ◽  
Critical Turning Point

The recent emergence of blockchains may be considered a critical turning point in organizing collaborations. We outline the historical background and the fundamental features of blockchains and present an analysis with a focus on their role as governance mechanisms. Specifically, we argue that blockchains offer a way to enforce agreements and achieve cooperation and coordination that is distinct from both traditional contractual and relational governance as well as from other information technology solutions. We also examine the scope of blockchains as efficient governance mechanisms and highlight the tacitness of the transaction as a key boundary condition. We then discuss how blockchain governance interacts with traditional governance mechanisms in both substitutive and complementary ways. We pay particular attention to blockchains’ social implications as well as their inherent challenges and limitations. Our analysis culminates in a research agenda that explores how blockchains may change the way to organize collaborations, including issues of what different types of blockchains may emerge, who is involved and impacted by blockchain governance, why actors may want blockchains, when and where blockchains can be more (versus less) effective, and how blockchains influence a number of important organizational outcomes.

Locus of Uncertainty and the Relationship Between Contractual and Relational Governance in Cross-Border Interfirm Relationships

2016 ◽  
Vol 43 (3) ◽  
pp. 771-803 ◽  
Author(s):  
Majid Abdi ◽  
Preet S. Aulakh
Keyword(s):  
Interorganizational Relationships ◽  
External Environment ◽  
Interfirm Relationships ◽  
Governance Mechanisms ◽  
Relational Governance ◽  
Ongoing Debate ◽  
Cross Border ◽  
Effective Operation ◽  
Different Origins ◽  
The Relationship

The relationship between contractual and relational arrangements in interorganizational relationships has been subject to an ongoing debate. We propose that in the context of cross-border partnerships, the governance mechanisms can be both substitutes and complements depending upon contingencies posed by uncertainties of two different origins: environmental and behavioral. We argue that environmental uncertainty (i.e., instability and unpredictability of the external environment) drives the formal and relational arrangements into a more substitutive relationship by elevating the adaptation complications in which increasing reliance on either form of governance inhibits the effective operation of the other. Contrastingly, behavioral uncertainty (in the form of inadequate common grounds and shared frameworks among collaborating firms) encumbers the understanding of partner behavior and conduct and drives the governance mechanisms into a more complementary relationship in which contractual and relational mechanisms facilitate the effective operation of each other. Empirical results from 205 cross-border partnerships of large U.S. firms support our theorized relationships.

Governance of open innovation networks with national vs international scope

2017 ◽  
Vol 10 (1) ◽  
pp. 66-85 ◽  
Author(s):  
Thomas Clauss ◽  
Patrick Spieth
Keyword(s):  
Open Innovation ◽  
Structural Equation ◽  
Large Scale ◽  
Innovation Networks ◽  
Governance Mechanisms ◽  
Relational Governance ◽  
Content Type ◽  
International Scope ◽  
Positive Effects ◽  
Innovation Outcomes

Purpose The realisation of joint innovation outcomes in open innovation networks is closely related to an efficient utilisation of governance mechanisms, which coordinate joint processes (e.g. knowledge sharing) and eliminate undesired behaviours (e.g. opportunism). Hence, the purpose of this paper is to analyse the complex effects of multiple governance approaches on outcomes of open innovation networks with a national and an international scope. Design/methodology/approach The study draws on a large-scale survey-based study of 100 mechanical engineering firms involved in open innovation networks. Hypotheses are tested by means of PLS structural equation modelling. Findings The evidence shows that the three governance mechanisms: transactional governance, relational governance and institutionalised governance significantly foster innovation outcomes of open innovation networks. In national open innovation networks, only relational governance exerts positive effects, internationally transactional and institutionalised governance is necessary. Research limitations/implications The study contributes to research in multiple ways. First, it shows that governance of open innovation networks is crucial for their innovation performance, thereby providing some explanations for the performance differences between certain networks. Second, the results indicate that the effects of governance mechanisms depend on the scope of the network. By showing that the effect of governance mechanisms varies under different contextual conditions the study also contributes to the ongoing debate on combined effects of governance mechanisms. Originality/value The paper fills important gaps in the existing research on the link between governance and performance in open innovation networks and delineates interesting areas for further research.

scholarly journals A relational view of horizontal collaboration among micro and small enterprises: a study of the brewery sector in Wales

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Maryam Lotfi ◽  
Maneesh Kumar ◽  
Vasco Sanchez Rodrigues ◽  
Mohamed Naim ◽  
Irina Harris
Keyword(s):  
Focus Groups ◽  
Relational Theory ◽  
Small Enterprises ◽  
Small Companies ◽  
Governance Mechanisms ◽  
Relational Governance ◽  
Informal Governance ◽  
Content Type ◽  
Micro And Small Enterprises ◽  
Horizontal Collaboration

PurposeThis study aims to explore how horizontal collaboration can help small and micro enterprises within the drink sector through the relational theory lens.Design/methodology/approachThe use of qualitative research methods, including focus groups and interviews, facilitated understanding the horizontal collaboration in micro and small companies within the Welsh brewery industry. Data collection involved conducting three focus groups and 13 interviews within the Welsh brewery sector in the UK. The collaboration phenomena were explained using the three elements of relational theory: relational rents, relational capitals and relational governance.FindingsMicro and small enterprises in the drink sector use collaborative initiatives in building new capabilities to generate relational rents. In addition, relational capitals and relational governance mechanisms were identified to support the horizontal collaboration among these enterprises.Research limitations/implicationsThe focus is on only one part of the drinks industry, i.e. the brewery industry; therefore, this study could be extended to other industries within the drink sector or across manufacturing industries.Practical implicationsThe micro and small enterprises can collaborate to achieve relational rent, but this collaboration requires strong relational capitals, such as trust. These partners need to change informal governance mechanisms that already exist towards more contractual formal mechanisms.Originality/valuePrior research has largely focused on vertical collaboration, with limited studies using the relational theory lens to explicate horizontal collaboration phenomena and no previous research in the context of micro and small companies. Relational rents, relational capitals and relational governance mechanisms are studied to provide insights into an effective collaboration in this context.

scholarly journals Managing information asymmetry in public–private relationships undergoing a digital transformation: the role of contractual and relational governance

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Tom A.E. Aben ◽  
Wendy van der Valk ◽  
Jens K. Roehrich ◽  
Kostas Selviaridis
Keyword(s):  
Decision Making ◽  
Information Processing ◽  
Information Asymmetry ◽  
Digital Technologies ◽  
Digital Transformation ◽  
Information Uncertainty ◽  
Governance Mechanisms ◽  
Relational Governance ◽  
Information Requirements ◽  
Content Type

PurposeInter-organisational governance is an important enabler for information processing, particularly in relationships undergoing digital transformation (DT) where partners depend on each other for information in decision-making. Based on information processing theory (IPT), the authors theoretically and empirically investigate how governance mechanisms address information asymmetry (uncertainty and equivocality) arising in capturing, sharing and interpreting information generated by digital technologies.Design/methodology/approachIPT is applied to four cases of public–private relationships in the Dutch infrastructure sector that aim to enhance the quantity and quality of information-based decision-making by implementing digital technologies. The investigated relationships are characterised by differing degrees and types of information uncertainty and equivocality. The authors build on rich data sets including archival data, observations, contract documents and interviews.FindingsAddressing information uncertainty requires invoking contractual control and coordination. Contract clauses should be precise and incentive schemes functional in terms of information requirements. Information equivocality is best addressed by using relational governance. Identifying information requirements and reducing information uncertainty are a prerequisite for the transformation activities that organisations perform to reduce information equivocality.Practical implicationsThe study offers insights into the roles of both governance mechanisms in managing information asymmetry in public–private relationships. The study uncovers key activities for gathering, sharing and transforming information when using digital technologies.Originality/valueThis study draws on IPT to study public–private relationships undergoing DT. The study links contractual control and coordination as well as relational governance mechanisms to information-processing activities that organisations deploy to reduce information uncertainty and equivocality.

Governance Mechanism and Structural Power Fit: Evidence from an Information System Development Project

2020 ◽  
Vol 29 (04) ◽  
pp. 2050006
Author(s):  
Sojung Kim ◽  
Seonyoung Shim
Keyword(s):  
System Development ◽  
Development Project ◽  
Governance Mechanism ◽  
Governance Mechanisms ◽  
Relational Governance ◽  
Organizational Relationships ◽  
Structural Power ◽  
Quantitative Performance ◽  
Contractual Governance ◽  
Project Level

This study identifies how relational and contractual governance mechanisms differently influence the distinct output of information systems development (ISD) performance at the project level. This study also reveals how the consequence of two modes of inter-organizational relationships (IOR) governance mechanism is affected by the gap of a dyadic partner’s centrality within the network — the client’s structural power (CSP). We collected dyadic samples of clients and vendors for 107 ISD projects and explored their governance mechanisms and project performances, all of which were evaluated by both parties. Our results first reveal a positive relationship between relational (or contractual) governance and qualitative (or quantitative) performance, respectively, but not vice versa. Second, the results incorporating a structural position within the network reveal that CSP facilitates the efficacy of relational governance to lead the quantitative performance, but surprisingly, CSP also mitigates the efficacy of contractual governance.

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