Governance mechanism alignment at the top and operating levels of alliance hierarchy: reconciling two competing schools of thought

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Xuan Bai ◽  
Shibin Sheng ◽  
Julie Juan Li
Keyword(s):  
Governance Mechanism ◽  
Governance Mechanisms ◽  
Relational Governance ◽  
Positive Interaction ◽  
Content Type ◽  
Alliance Performance ◽  
Operating Level ◽  
Hierarchical Levels ◽  
The Cross ◽  
Alliance Governance

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.

Effects of suppliers’ trust and commitment on customer involvement

2015 ◽  
Vol 115 (6) ◽  
pp. 1041-1066 ◽  
Author(s):  
Yi Li ◽  
Gang Li ◽  
Taiwen Feng
Keyword(s):  
Social Exchange ◽  
Structural Equation ◽  
Social Exchange Theory ◽  
Exchange Theory ◽  
Governance Mechanism ◽  
Relational Governance ◽  
Content Type ◽  
Customer Involvement ◽  
Specific Investment ◽  
The Relationship

Purpose – The purpose of this paper is to investigate the relationships among suppliers’ trust and commitment, transaction-specific investment, switching cost, and customer involvement within the context of relational governance mechanism and the social exchange theory. Design/methodology/approach – The authors use survey data from 214 Chinese manufacturing firms and employ the structural equation model to verify the conceptual model. Findings – Relational governance benefits customer involvement. Transaction-specific investment mediates the relationship between trust and commitment of suppliers. Switching costs negatively moderate the relationship between suppliers’ trust and customer involvement, but positively moderate the relationship between suppliers’ commitment and customer involvement. Research limitations/implications – The authors focus on two key elements of relationship, namely, trust and commitment of suppliers, but neglect other relational factors, such as relational norms and interdependence. Originality/value – These findings broaden the understanding and present new directions for the implementation of customer involvement from the perspective of relational governance and social exchange theory.

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.

Corporate governance and risk in cross-listed and Canadian only companies

2019 ◽  
Vol 57 (10) ◽  
pp. 2740-2757 ◽  
Author(s):  
Atreya Chakraborty ◽  
Lucia Gao ◽  
Shahbaz Sheikh
Keyword(s):  
Corporate Governance ◽  
Differential Effect ◽  
Composite Index ◽  
Governance Mechanism ◽  
Firm Risk ◽  
Governance Mechanisms ◽  
Content Type ◽  
Listed Firms ◽  
Corporate Governance Mechanisms ◽  
The Impact

Purpose The purpose of this paper is to investigate if there is a differential effect of corporate governance mechanisms on firm risk in Canadian companies cross-listed on US markets and Canadian companies not cross-listed (Canadian only companies). Design/methodology/approach Using a sample comprised of all Canadian companies included in the S&P/TSX Composite Index for the period 2009–2014, this study applies OLS and fixed effect regressions to investigate the effect of corporate governance mechanisms on firm risk. Interaction variables between governance mechanisms and the cross-listing status are used to examine if this effect is different for cross-listed firms. Findings Results indicate that the effect of board characteristics such as size, independence and proportion of female directors remains the same in both cross-listed and not cross-listed firms. CEO duality and insider equity ownership impact firm risk only in cross-listed companies, while institutional shareholdings, environmental, social and governance disclosure and family control affect firm risk in Canadian only firms. Overall, the empirical results indicate that some governance mechanisms impact firm risk only in firms that cross-list, while others are well-suited for Canadian only firms. Practical implications This study suggests that some of the differences between Canadian companies that cross-list and the Canadian companies that do not cross-list in US stock markets may change the impact of governance mechanisms on firm risk. Therefore, these findings have important implications for the design of governance mechanisms in Canadian firms. Since some of these differences are common to other economies, the conclusions can be extended to companies in other countries with similar governance structures. Originality/value Although previous studies have investigated the effect of governance mechanism on firm risk, this is the first paper that studies the differential effect for companies that cross-list in US markets. Specifically, differences in the ownership structure, firm control and in the regulatory and institutional environment, may explain this differential effect. Unlike most of the previous studies that focus on the effect of individual governance mechanisms, this study uses several mechanisms and their interactions at the same time.

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.

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.

Managing technology transfer between coopetitive firms: the roles of coopetition, asset specificity and justice

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ruijia Liu ◽  
Jianjun Yang ◽  
Feng Zhang
Keyword(s):  
Technology Transfer ◽  
Positive Impact ◽  
Exchange Process ◽  
Governance Mechanism ◽  
Governance Mechanisms ◽  
Informal Governance ◽  
Positive Role ◽  
Content Type ◽  
The Relationship

Purpose Prior studies have demonstrated the important role of coopetition in firms’ innovation. Based on the paradox perspective, this study aims to focus on technology transfer, the pre-innovation stage, to provide a supplementary understanding of the complementarity and contradictoriness of paradoxical coopetition, with the formal and informal governance mechanisms which are suitable with this understanding in coopetition. Design/methodology/approach This study conducted an original, multisource survey of 280 Chinese manufacturing firms. Hypotheses were tested through multiple regressions. Findings Coopetition has a positive impact on technology transfer between firms. Along with the increasing specificity of assets invested ex ante as a kind of formal governance mechanism, the relationship between coopetition and technology transfer becomes stronger. Meanwhile, inter-firm justice as an informal governance mechanism in the technology transfer process can be positively affected by coopetition between partners. Originality/value The study adds to the business-to-business coopetition literature on how to properly treat and use coopetition in technology transfer. Using the paradox perspective in the Chinese context, the findings emphasize the positive role of coopetition in the inter-firm technological exchange process, enriching the understanding of the complementary and contradictory features of paradoxical coopetition. To govern coopetitive relationships, the firms should also implement two fundamental governance mechanisms, that is, specialty asset and inter-firm justice.

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