Relationship Governance Dynamics: The Roles of Partner Selection Efforts and Mutual Investments

The article studies interfirm governance in the context of supplier–reseller relationships. Using a longitudinal study, the authors examine the roles of supplier selection efforts and mutual specific investments with respect to (1) motivating a supplier to make incremental investments and (2) safeguarding these investments from supplier ex post transaction costs. The authors also examine the joint effects of selection efforts and mutual investments on supplier ex post transaction costs. From a practical standpoint, the findings suggest guidelines for channel strategy. Theoretically, they provide new insights into relationship dynamics, including evidence regarding the effects of a firm’s governance choices over time.

SOLVING THE ALLY-VERSUS-ACQUIRE DILEMMA THROUGH THE DUAL LENSES OF SUBJECTIVE AND OBJECTIVE VIEWS

Nowadays many firms seek hard-to-imitate assets via allying with or acquiring other firms that own desired resources. As such, how to choose between alliances and acquisitions becomes a critical decision, and one important determinant is interfirm factors. This study probes three crucial yet underexplored interfirm differences, and develops scales to capture managers’ perceptions of the differences that, based on managerial cognition literature, dictate the ally-versus-acquire choice. Further, we argue that managers adjust their judgement across varying objective conditions. Each perceived difference is thus paired with a moderator identified respectively from the resource-based view, competitive dynamics, and collaborative capability literature. Evidences on Taiwanese firms show that a larger resource-deployment difference enhances acquisition likelihood, while greater differences in marketing praxis and human resource management increase alliance formation. Moreover, the resource-deployment difference leads to alliances for relatively younger partners, and the difference in human resource management favors acquisitions when focal firms have more interfirm governance experience.

The Effect Of Buyer Governance Structures On Performance: Contextual Effects Of Interfirm Benevolence

<p>Researchers identify two types of organizational governance: unilateral governance and bilateral governance. Although interfirm governance is at the core of interfirm relationships, little research exists on mechanisms that strengthen the weak spots in the dynamics of interfirm governance and multiple governance structures. This study introduces the concept of interfirm benevolence, and attempts to enhance our understanding of the conditions under which buyers rely on interfirm governance. The results indicate that the interfirm governance practices of a buyer tend to produce higher levels of supplier performance when a supplier trusts in the benevolence of the buyer. Also, this study shows that when a benevolent buyer uses both unilateral and bilateral governance simultaneously, suppliers perform positively. </p>