The Safeguarding Effect of Governance Mechanisms in Inter‐firm Exchange: The Decisive Role of Mutual Opportunism (original) (raw)
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Opportunism, governance structure and relational norms: An interactive perspective
Journal of Business Research
Opportunism in inter-firm partnership has intrigued scholars and managers, and existing research has identified several governance structural dimensions as antecedents of opportunism. However, most have looked at these one by one. This study examines the effects of interactions between the dimensions of bureaucratic structure (formalization and participation) and relational norms (solidarity, role integrity, and mutuality) on opportunism among channel members. The results indicate that the interaction between formalization and solidarity enhances opportunism, while interaction between formalization and role integrity reduces opportunism. On the other hand, while the interaction between participation and solidarity reduces opportunism, participation's interaction with role integrity and mutuality seems to enhance opportunism. The implications of these findings are discussed in detail in the study.
International Journal of Research in Marketing, 2006
This empirical paper explores economic and social origins of relational governance. Previous empirical research has provided substantial support for the positive relationship between exchange hazards (such as transaction specific assets or decision uncertainty) and relational governance. In contrast, we use transaction cost economics to argue that exchange hazards might limit the use of relational governance when power asymmetry exists within a marketing channel. Moreover, from a sociological perspective, a governance mechanism is not determined solely by initial exchange conditions; the process in which the interorganizational exchange emerges and develops also influences it. We argue that the social contact that occurs through inter-organizational communication not only is a critical determinant of relational governance, but it also may moderate opportunism arising from exchange hazards, thus increasing the establishment of relational governance. Overall, the empirical results support our hypotheses.
Passive and Active Opportunism in Interorganizational Exchange
Journal of Marketing, 2013
This article examines how parties to interorganizational relationships respond differently to active and passive opportunism and how these opportunism forms erode satisfaction with performance in interorganizational relationships. The multi-method approach of two experiments and one longitudinal field study demonstrate that firms tolerate more passive opportunism than active opportunism (experiment one) and that transaction costs play a mediating role between opportunism form and satisfaction with performance of the relationship (experiment two). Finally, the field study demonstrates that passive opportunism has a more corrosive impact on satisfaction with performance than active opportunism over time. Together, the findings underscore the importance of distinguishing between passive and active opportunism and the need to develop a greater understanding of its management and consequences.
Safeguarding Interorganizational Performance and Continuity Under Ex Post Opportunism
Management Science, 2003
O pportunism is a central construct in exchange theory. Economists contend that despite the firm's best efforts to erect governance structures that reduce opportunism and preserve outcomes, there is always some opportunism that remains once the transaction is in place. Despite this, there are few studies that systematically investigate the safeguarding efficacy of relationship attributes in the presence of such ex post opportunism. In this research, we develop a theoretical framework and provide a longitudinal test of the ability of various relationship safeguards to preserve performance outcomes and future expectations given varying levels of ex post opportunism in the relationship. Our survey results from over 300 buyers and suppliers indicates that given lower levels of opportunism, bilateral idiosyncratic investments and interpersonal trust enhance performance outcomes and future expectations, while goal congruence has no discernable effect. However, at higher levels of opportunism, goal congruence becomes a more powerful safeguard, while interpersonal trust becomes less effective. Bilateral idiosyncratic investments continue to preserve performance outcomes and future expectations even at higher levels of opportunism. Implications for the long-term management of interorganizational alliances are discussed.
An Empirical Investigation of Bilateral Investments and Opportunism in Buyer-Supplier Relationships
Journal of Marketing Channels, 2016
Collaboration between buyers and their suppliers often requires both parties to dedicate specialized investments to the relationship. These bilateral idiosyncratic investments serve as mutual hostages and signal commitment to the relationship, yet they are susceptible to expropriation. Drawing on research in social psychology and transaction cost economics, we argue that the nature of the bilateral idiosyncratic investments influences perceptions of a supplier's opportunism that in turn influences retailer opportunism and relationship outcomes. Data collected from 120 Norwegian managers of consumer electronics retail stores provide an assessment of the proposed model. The results indicate that the total and asymmetrical nature of the bilateral idiosyncratic investments influence perceptions of supplier opportunism and these perceptions, in turn, influence the retailer's opportunism and commitment to the relationship. Implications of these findings and future research are discussed.
2011
This study seeks to understand the effect of transactional and relational governance mechanisms on opportunism induced by the buyer supplier relationship. Using panel data of 386 Tunisian export companies between 2003 and 2008, the analysis shows that transactional as well as relational governance mechanisms are negatively related to the opportunistic behavior of the customer. In order to focus on internal corporate characteristics, the level of debt and the size of the buyer are controlled. This study supports the role of contracts as formal governance tool in reducing inter-firm opportunism which corroborates transaction cost economics. It also confirms some main notions in social exchange theory. The role of trust as relational mechanism in governing the buyer-supplier relationship has been verified. Finally, the findings of this paper sustain the complementarity view toward relational and transactional governance mechanisms. The paper offers insights to executives of companies to govern the buyer-supplier relationship in order to dispel opportunism by using simultaneously transactional and relational mechanisms.
Journal of Operations Management, 2010
Inter-organizational exchange governance approaches are often characterized as two broad types: relational and transactional. However, in fast changing business contexts, the contextual contingencies do not present ideal conditions for practicing purely relational or transactional approach. Understanding the dynamic of key contextual factors and their effects on a firm's resource capabilities and interorganizational power structure is crucial for identifying the appropriate governance structure over time.