The Influence of Contractual Governance Mechanisms, Buyer–Supplier Trust, and Supplier Opportunistic Behavior on Supplier Performance

2014 ◽  
Vol 15 (2) ◽  
pp. 85-99 ◽  
Author(s):  
Arthur Ahimbisibwe
Keyword(s):  
Opportunistic Behavior ◽  
Governance Mechanisms ◽  
Supplier Performance ◽  
Contractual Governance

Closeness or opportunistic behavior? Mediating the business ecosystem governance mechanisms and coordination relationship

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Wisdom Wise Kwabla Pomegbe ◽  
Wenyuan Li ◽  
Courage Simon Kofi Dogbe ◽  
Charles Oduro Acheampong Otoo
Keyword(s):  
Strategic Alliances ◽  
Ordinary Least Squares ◽  
Relational Exchange ◽  
Opportunistic Behavior ◽  
Validity And Reliability ◽  
Governance Mechanisms ◽  
Cross Sectional Survey ◽  
Content Type ◽  
Business Ecosystem ◽  
Contractual Governance

PurposeBusiness ecosystem is described as a web of loose relationships, thereby posing some challenges to coordination. In attempt to ensure coordination in business relationships, scholars have proposed relational and contractual governance mechanisms. Hence, this study aims to examine the effects of governance mechanisms on coordination in the pharmaceutical business ecosystem (BE), with the potential mediating effects of closeness and opportunistic behavior.Design/methodology/approachThe study adopted quantitative approach with cross-sectional survey research design to collect data from the business ecosystem of pharmaceutical company X in Ghana. A structured questionnaire based on a five-point Likert scale was employed to collect data. Analysis was based on 173 institutions (both local and international) selected from pharmaceutical BE. Various validity and reliability checks were conducted before the presentation of the actual analysis, which was conducted using ordinary least squares (OLS) regression in Statistical Product and Service Solutions (SPSS).FindingsThe results of the study revealed that both relational and contractual governance have a direct positive effect on coordination between pharmaceutical BE members and the focal firm. The effect of contractual governance on coordination is however, partially mediated by opportunistic behavior. Finally, closeness also fully mediated the effect of relational governance on coordination.Originality/valueThe study builds on the governance mechanisms in exchange relationship, which was hitherto largely limited to the dyadic and triadic business network, partnerships and strategic alliances studies. The contribution to BE literature provides further understanding into transaction cost economics and relational exchange theory, which was dominantly applied in dyadic relationships ties such as partnerships, alliances and networks.

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.

Dynamic changes of governance mechanisms in mega construction projects in China

2019 ◽  
Vol 26 (4) ◽  
pp. 723-735 ◽  
Author(s):  
Dedong Wang ◽  
Shaoze Fang ◽  
Kaili Li
Keyword(s):  
Construction Projects ◽  
Positive Impact ◽  
Project Performance ◽  
Equation Modeling ◽  
Governance Mechanisms ◽  
Relational Governance ◽  
Dynamic Changes ◽  
Content Type ◽  
Positive Effects ◽  
Contractual Governance

Purpose The purpose of this paper is to study the mechanisms governing dynamic changes in relational and contractual governance at different stages of government-funded mega construction projects (MCPs) by studying their different effects on project performance and participants’ opportunism. Design/methodology/approach Partial least squares structural equation modeling was used to test eight hypotheses based on data collected from 147 respondents in different participating organizations in Chinese MCPs. Findings First, contractual governance has a stronger positive impact on project performance than relational governance in the early stage of MCPs, while relational governance exerts more positive effects on project performance than contractual governance in the middle and late stages. Second, opportunism is a mediator variable between governance mechanisms and project performance, and relational governance is more effective than contractual governance in restricting opportunism. Originality/value In contrast to a static analysis of project governance mechanisms, this study examines dynamic changes in the governance mechanisms of MCPs in the Chinese context by considering the mediating role of opportunism as well as guanxi as an element of relational governance, thus filling in gaps in the literature on MCP governance and contributing to the development of MCP management theory.

A transaction cost economics model for estimating performance effectiveness of relational and contractual governance

2016 ◽  
Vol 36 (11) ◽  
pp. 1551-1575 ◽  
Author(s):  
John G. Wacker ◽  
Chenlung Yang ◽  
Chwen Sheu
Keyword(s):  
Problem Solving ◽  
Transaction Cost ◽  
Transaction Cost Economics ◽  
Relative Effectiveness ◽  
Asset Specificity ◽  
Governance Mechanisms ◽  
Relational Governance ◽  
Content Type ◽  
Contractual Governance ◽  
Supplier Contracts

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.

Does Corporate Governance Curb Managers’ Opportunistic Behavior of Exploiting Inside Information for Early Exercise of Executive Stock Options?

2016 ◽  
Vol 19 (01) ◽  
pp. 1650006 ◽  
Author(s):  
Chin-Chen Chien ◽  
Cheng-Few Lee ◽  
She Chih Chiu
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Stock Options ◽  
Executive Stock Options ◽  
Opportunistic Behavior ◽  
Governance Mechanisms ◽  
Inside Information ◽  
Early Exercise ◽  
Corporate Governance Mechanisms

This paper aims to investigate the role of corporate dividend policy and corporate governance in managerial timing decisions with regard to large exercise of executive stock options (ESOs). The findings indicate that the motivations behind managers’ decisions to exercise abnormally large ESOs vary depending on the strength of the related corporate governance mechanisms. Managers of weakly governed companies exploit abnormal earnings management when timing large exercises of ESOs. In contrast, managers of well-governed companies behave rationally in timing large exercises of ESOs, carrying them out in years in which their companies significantly raise dividend payouts.

The dynamics of relational and contractual governance mechanisms in knowledge sharing of collaborative R&D projects

2010 ◽  
Vol 17 (4) ◽  
pp. 188-204 ◽  
Author(s):  
Heidi Olander ◽  
Pia Hurmelinna-Laukkanen ◽  
Kirsimarja Blomqvist ◽  
Paavo Ritala
Keyword(s):  
Knowledge Sharing ◽  
Governance Mechanisms ◽  
Contractual Governance

scholarly journals Governance Mechanisms for Green Supply Chain Partnership

2018 ◽  
Vol 10 (8) ◽  
pp. 2681 ◽  
Author(s):  
Chen-lung Yang ◽  
Suyuan Lien
Keyword(s):  
Supply Chain ◽  
Environmental Performance ◽  
Green Supply Chain ◽  
Supply Chain Collaboration ◽  
Governance Mechanisms ◽  
Mediation Effects ◽  
Significant Performance ◽  
Contractual Governance ◽  
And Performance ◽  
Green Supply Chains

The literature has recognized the value of green supply chain management in achieving the goals of environmental management. Yet developing and fostering sustainability partnerships among supply chain organizations remains challenging. Bounded rationality and opportunistic behaviors are likely to hinder joint sustainability collaboration and performance. The literature has called for a better understanding of the governance of green supply chain collaboration. This study applies transactional cost economics as a conceptual framework to investigate the relationships among transaction features, governance mechanisms, and environmental performance. Using the data collected from 969 plants in 17 countries, the statistical analysis compares and validates the effectiveness of three alternative governance mechanisms: contractual governance, problem-solving cooperation governance, and information-sharing governance. The statistical results reveal significant performance differences in how firms apply alternative governance mechanisms to mitigate opportunism, manage adaptation problems, and improve green supply chain collaboration and performance. Overall, this study makes research contributions by confirming the mediation effects of governance mechanisms on green supply chain practices. For green supply chains to be a viable practice, firms should apply governance mechanisms in proper alignment with the nature of the collaborative and environmental conditions.

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