Offshoring Business Process Services and Governance Control Mechanisms: An Examination of Service Providers from India

As emerging markets increasingly rely on service businesses through offshore outsourcing, we examine the role of governance control mechanisms in improving performance among business process outsourcing (BPO) service providers in India. Using data collected from 205 emerging market‐based BPO service providers in India, we examine the antecedents and consequences of establishing governance control mechanisms in BPO service providers. Specifically, we examine how structural (use of contracts with the client), administrative (effective allocation and demarcation of responsibilities within the firm), and relational (collaboration and information sharing with the client) mechanisms drive the performance of a BPO service provider operating in an emerging market. We also examine how key task‐related (task connectivity and task security) and client‐related (end customer orientation and global control) antecedents influence the use of different governance control approaches in this environment. Our analysis finds that both task connectivity and task security significantly impact use of structural and administrative mechanisms, whereas end customer orientation is significantly associated with the strength of the relational mechanisms governing the emerging market‐based BPO service provider and its client. Further global control significantly influences the strength of the structural mechanisms between the client and the BPO service provider. Finally, the three mechanisms have a complementary influence in driving the BPO service provider's performance.     

Contract functions in service exchange governance: evidence from logistics outsourcing

The logistics outsourcing literature emphasises relational governance mechanisms and has underplayed the role of formal contractual provisions. This paper empirically examines the multiple functions that contracts perform in the governance of service exchanges. Codification, safeguarding, coordination and adaptation functions are linked to contract specification schedules, payment mechanisms, (early) termination rights, performance review and communication provisions, service variations clauses and renegotiation provisions. Contracts may also embody exchange- or partner-specific learning, albeit to a limited extent. Overall, the empirical findings lend support to the functional view of contracting. The functionality of contracts extends beyond safeguarding against opportunism and financial losses. In addition to offering economic and legal safeguards, contracts are used to coordinate and adapt service exchanges in the face of complexity and uncertainty.     

动态环境下联盟竞合、治理机制与创新绩效的关系研究

本文从竞合视角审视联盟组合,结合动态关系观探讨有效的联盟治理机制,揭示了联盟组合中竞合关系(横向竞合、纵向竞合)、治理机制(契约治理、关系治理)和创新绩效之间的关系,并考察了动态环境特征(技术波动、竞争强度)的二次调节作用。在不同的竞合关系中,由于合作和竞争的强度不同,契约治理与关系治理机制的作用也存在差异,同时,治理机制与创新绩效之间的关系也受到两种不同环境动态性特征的影响。研究结果显示,在纵向竞合中,运用关系治理比运用契约治理能更好地提升创新绩效,技术波动正向调节契约治理、关系治理与创新绩效间的关系。在横向竞合中,运用契约治理比运用关系治理有效,竞争强度加强了契约治理对创新绩效的影响,即关系治理在波动的环境中更有效,契约治理在竞争的环境中更有效。本文为企业开展研发联盟组合管理提供了新的视角和管理对策。     

Inter-organizational governance: a review,conceptualisation and extension

Abstract

Although the concepts of relational and contractual governance in inter-organizational relationships have attracted academic and practitioner interest over the last decades, to date there have been limited comprehensive and systematic efforts to review, analyse and synthesise extant literature. We review and analyse 1,415 publications identified from a wide range of management disciplines and journals from 1990 to 2018. We deploy bibliographic and content analyses to offer a comprehensive literature analyses and synthesis and subsequently develop and position a multidimensional framework of exchange governance. The proposed framework covers existing conceptualisations of exchange governance and its diverse mechanisms, environmental dimensions influencing the use of exchange governance mechanisms and performance implications. We uncover areas that are currently under-studied and draw out fruitful future research avenues.     

Transaction‐Specific Investments,Relational Norms,and ERP Customer Satisfaction: A Mediation Analysis*

Integrating the perspectives of transaction cost economics, the resource‐based view, and resource dependency theory, this study analyzes the institutional settings of enterprise resource planning (ERP) implementations in China. Specifically, it examines how bilateral transaction‐specific investments (TSIs) and relational governance mechanisms influence customer satisfaction with ERP implementations. The model is empirically tested using data from on‐site interviews with 208 ERP customers in China. The results demonstrate that the effects of vendors’ and customers’ TSIs on customer satisfaction are facilitated by multiple‐stage micromediational chains. The influence of TSIs on customer satisfaction is mediated by relational norms, and the impact of relational norms on customer satisfaction is bridged by perceived service quality and customer trust. Furthermore, the influence of vendors’ TSIs is stronger than the influence of customers’ TSIs. The findings contribute to business research and practice by providing valuable insights into how ERP vendors and customers should strategize TSIs to enhance relationship performance.     

Effect of Formal Contracts,Relational Norms and Trust on Performance of Joint Research and Development Projects

This paper examines the effect of governance mechanisms – formal contracts, relational norms and trust – on the performance of exploration and exploitation joint research and development (R&D) projects. While the authors acknowledge the need for a twofold approach, transactional and relational, to understand the interfirm exchange governance, the joint action of formal contracts and relational governance has been caught between the complementary or substitutive forces involved in interorganizational relationships. Using survey data on joint exploration and exploitation R&D projects developed by the European biotechnology companies, the synergies of both mechanisms and their effects in improving project performance are investigated. The analysis suggests that contracts and relational norms and trust act as complementary mechanisms, but while contracts are more effective in exploitation projects, relational norms and trust are more powerful in improving the performance of exploration projects.     

An Exploratory Study of Procurement Strategies for Multi‐Item RFQs in B2B Markets: Antecedents and Impact on Performance

This research explores procurement strategies for multi‐item requests for quotation (RFQs) in business‐to‐business (B2B) markets using responses from 825 purchasing professionals. The study first establishes procurement strategies that differ based on their level of strategic emphasis, i.e., the importance that is placed on the pursuit of four strategic objectives. Underlying objectives, which are obtained via factor analysis, include the focus on price, security of supply, internal procurement efficiencies, and bundle building. Next, cluster analysis is used to derive prototypical strategic approaches. The three cluster groups that emerge possess the same relative ranking of the four objectives, but differ based on the intensity with which these objectives are pursued. The clusters are labelled as the three strategic groups of strategists, opportunists, and responders. The research then explores, using an industrial buyer behavior lens, the impact of environmental antecedents in determining a particular strategy. Environmental variables include purchase importance, market uncertainty, supply base availability, buyer bargaining power, item experience, and supply base experience. Finally, the study tests the impact of procurement strategy on the buyer's perceived performance, suggesting that strategists, placing more emphasis on the pursuit of strategic sourcing objectives, achieve better performance than opportunists and responders.     

Managing Multiple Facets of Risk in New Product Alliances*

The trend of forming alliances to develop new products continues; however, many of these new product alliances fail. As such we explore how key risk types intrinsic in new product alliances, performance, relational, and knowledge appropriation risks, influence alliance success. Further, we theorize that different alliance governance mechanisms can reduce the negative impact of risks on alliance success. To disentangle possible heterogeneous factors across firms that may affect the interplay of risk assessments and the use of governance mechanisms, we employ latent class regression analysis on survey data collected from 128 new product alliance firms and find support for a two‐regime solution. Longer alliance relationships and lower technological turbulence are factors for some firms (regime one), while the opposite are factors for other firms (regime two). These two regimes show different patterns in the interplay of risk assessments and governance for alliance success. Our theory and results support viewing risk as a multiple‐factor concept and by understanding the different impacts of the risk types in new product alliances and how governance mechanisms mitigate such effects, we aid managers' decision making regarding the balance of contractual versus normative governance in new product alliances. Understanding the heterogeneous factors inherent in these complex relationships enables managers to understand the conditions in which various governance mechanisms promote new product alliance success.     

Family Business Performance from a Governance Perspective: A Review of Empirical Research

Given the complexity of the family business phenomenon, empirical research has still reached no consensus on whether family control is beneficial or detrimental to firm performance. To shed new light on this issue, this paper covers more than 350 articles published in 37 top finance and management journals. More specifically, it provides an in‐depth analysis of the family business governance system in three steps. First, after examining the various family business definitions and measures of performance used in empirical research, the authors discuss the findings on the direct effect of family control on performance in different geographical regions. Second, the authors pay special attention to the choice of ownership structures by business families and analyse how family owners influence strategic decisions faced by their corporations, including the succession process. Finally, the authors explore the interaction of family control with other governance devices to gain a better understanding of family firms' corporate decision‐making and performance. The holistic approach highlights the need to contemplate the multiple relations that exist among the various governance dimensions of family firms to explain their unique performance. In addition to enhancing understanding of family business conduct, the authors emphasize the need to go beyond the borders of the family firm to identify its external antecedents and consequences. By integrating the finance and management perspectives and analysing the theoretical frameworks and methodologies used in these disciplines, the review highlights the need for interdisciplinary collaboration to advance family business research and thus to consolidate it as a distinctive academic field.     

The Dark Side of Stakeholder Reactions to Corporate Social Responsibility: Tensions and Micro‐level Undesirable Outcomes

With a review of literature on corporate social responsibility (CSR) and its micro‐level impacts, this paper proposes an integrative framework to map undesirable relational outcomes of CSR activities on internal (employees) and external (customers) stakeholders. By adopting a paradox‐based perspective, the authors determine that unexpected, adverse stakeholder reactions to CSR are driven primarily by either performing or belonging tensions, related to exchange‐ and identity‐based stakeholder concerns, respectively. Specifically, contextual and personal influences can trigger and explain undesirable relational outcomes of CSR. On this basis, this paper offers a research agenda for developing a more refined understanding of CSR‐related tensions and a more nuanced perspective on the business case for CSR.     

Adoption of e‐Processes by Service Firms: An Empirical Study of Antecedents

This paper investigates empirically antecedents of the adoption of web‐based processes (e‐processes) by service providers. We examine whether rational efficiency (expressed by expected performance benefits and access to new markets), the bandwagon effect (expressed by external pressure), and barriers (both internal and customer related) influence Internet use for transactions (e‐transactions) and/or to extend the relationships between service providers and their customers (e‐CRM). The findings, based on a sample of 338 service firms, show that rational efficiency and the bandwagon effect drive both types of e‐processes. Conversely, only internal barriers have a negative impact on adoption of e‐processes, while barriers related to customers do not have a significant impact. These findings have important academic and managerial implications, given the limited evidence regarding the implementation of e‐processes in services.     

Converging and Diverging Governance Mechanisms: The Role of (Dys)Function in Long‐term Inter‐organizational Relationships

This paper explores the dynamic interplay of formal/informal governance mechanisms, in terms of functional and dysfunctional consequences for both sides of the dyad, in long‐term inter‐organizational relationships. Using two longitudinal cases of UK defence sector procurement (warship commissioning) we move beyond notions of complementarity and substitution in governance towards a more nuanced view where the governance mix of inter‐organizational relationships can be convergent or divergent. Our findings, showing that relationships can exhibit functional and dysfunctional behaviour simultaneously, lead us to conclude that mismatches in governance mechanisms can be positive as well as negative. In building a context‐dependent understanding of governance we both summarize the (dys)functions associated with formal and informal governance mechanisms and explore their impact on relationship exchange performance over time.     

The process of value realization in asymmetric new venture development alliances: Governing the transition from exploration to exploitation

Based on a case study of three asymmetric new venture development (ANVD) alliances, we examine the governance of transitions from exploration to exploitation. We propose that role deficiencies, technological asymmetry, and the presence of a separate venture unit at established firms constitute important initial conditions influencing value realization in ANVD alliances. We further show that role-specific investments act as more appropriate mechanisms than contractual incentives to govern transitions from exploration to exploitation. Jointly, these findings provide new insights into the impact of structural and relational governance mechanisms on value creation in interfirm relationships.     

Cooperation and Knowledge Transfer within Buyer–Supplier Relationships: The Moderating Properties of Trust,Relationship Duration and Supplier Performance*

This paper examines the effect of relational factors on knowledge transfer within strategic buyer–supplier exchange. Prior research examining inter‐firm knowledge transfer has focused almost exclusively on horizontal forms of governance such as strategic alliances and joint ventures, whilst research on vertical forms, such as buyer–supplier relationships, is limited. We test the effect of four important relational properties: cooperation, trust, relationship duration and supplier performance. Quantitative data, gathered from 104 UK manufacturing firms in eight industry sectors, are used to analyse the hypothesized relationships through a moderated hierarchical regression model. Our study provides support for the importance of considering relational factors in the transfer of knowledge at the inter‐organizational level. In particular, the results indicate that knowledge transfer is positively influenced by the extent of cooperation, but that this relationship is moderated by the level of trust and the performance of the supplier firm. Managerial implications for these findings and future directions for research are then offered.     

Evaluating Application Service Provisioning Using System Dynamics Methodology

Despite the hype surrounding the value‐added potential of e‐business for contemporary firms, the recent technology downturn was marked by poor customer satisfaction from investment in e‐business initiatives. An apparent mismatch between customer expectations and vendor offerings suggested a lack of appropriate methods and techniques for evaluating e‐business. This article draws from a longitudinal research study on the deployment, hosting and integration of application service provisioning (ASP), an e‐business model targeted mainly at small and medium‐sized businesses (SMBs). Using system dynamics as a methodology that addresses the inherent complexity of the ASP model, the article demonstrates how a series of complex inter‐relationships between key performance indicators (KPIs) will impact the business value for customers from ASP vendor products and services. The lessons from this research will be particularly relevant for existing and future ASP vendors and customers.     

The Effect of Socialization Mechanisms and Performance Measurement on Supplier Integration in New Product Development

This article examines the effect of socialization mechanisms and supplier performance measurement on the level of supplier integration in new product development and subsequent firm performance outcomes. Prior research has found socialization mechanisms and performance measures to be effective in managing supplier relationships, though research examining their impact within a product development context has been limited. Socialization mechanisms, such as supplier conferences and on‐site visits, help establish communication and information‐sharing routines necessary to achieve supplier integration in the product development process. Using performance measures to evaluate a supplier helps focus managerial attention on areas such as innovation and communication that are important to integration success. A structural equation model, using a sample of 142 manufacturing firms based in the United Kingdom, indicates that the level of supplier integration in new product development is positively influenced by socialization mechanisms and innovation‐focused measures of supplier performance, but not significantly associated with the use of communication measures. In turn, increased levels of supplier integration led to improvements in both collaboration outcomes and business performance. Socialization mechanisms were also found to have a direct effect on collaboration outcomes achieved by the firm. Managerial implications and future research directions are discussed.     

渠道中不同机会主义的管理:合同的双维度与关系规范的作用研究

本文将机会主义区分为积极的和消极的,将合同细分成包容性和约束力两维度,研究合同的双维度与关系规范在治理不同渠道机会主义时各自及其交互的作用。实证研究表明:①合同的包容性会同时增加渠道成员积极和消极机会主义;合同的约束力会减少渠道成员的积极机会主义;②关系规范可降低积极和消极机会主义;③关系规范可强化合同的约束力在降低积极机会主义、弱化合同的包容性在增加消极机会主义方面的作用,但在弱化合同的包容性增加积极机会主义方面并无显著效果。本文对于机会主义表现形式、治理机制设计及效力的实证研究有突出的理论启示,也为企业诊断具体的渠道机会主义、设计适宜的治理机制提供了指导性建议。     

Collaboration outcomes in a public sector: impact of governance,leadership, interdependence and relational capital

Collaboration between public agencies is critical to address social issues effectively. The main objective of this research was to identify the factors that lead to successful achievement of desired collaboration outcomes that could eventually lead to societal outcomes. The factors identified were: transformational leadership, governance, interdependence, and relational capital. An integrated framework was developed based on collaboration governance framework (CGF) of Ansell and Gash (J Public Adm Res Theory 18:543–571, 2008). The CGF framework has integrated the following four broad variables that are responsible for achieving the desired collaboration outcomes: starting conditions, institutional design, leadership, and collaborative process. The study was conducted in Malaysia by sending questionnaires to 500 officers in various ministries who were involved in planning, formulating, and implementing public policies. The main findings of this study are: (1) transformational leadership influences governance, interdependence, relational capital, and collaboration outcomes; (2) governance has impact on relational capital, interdependence, and collaboration outcomes; (3) relational capital and interdependence result in positive collaboration outcomes; (4) dimensions of governance are inter-related; and (5) interdependence and relational capital are strongly correlated. This research adds significantly to the literature on collaborative governance. The implications and limitations of the study are discussed.     

The General Manager's Perspective On How Factionalism Can Impact the Behaviors and Effectiveness of Top Managers Inside A Shared Management Joint Venture

This research is focused on joint ventures that are operated with a shared management governance structure. It is argued that the effectiveness of top management inside such a joint venture will be significantly determined by the nature of relations between the managers transferred from the different parent firms. Within that context, emphasis is placed on relational factors that can have an important bearing on the quality of decision making inside the joint venture. Data is collected from top executives at seventy-five shared management joint ventures and the results suggest several significant linkages. First, a growing sense of ``us' versus ``them' factionalism between managers from different parent companies is associated with a heightened propensity for the use of power in an impersonal and manipulative way. Second, those attitudes and behaviors undermine the openness of communications and information exchanges between the managers. Third, as those attitudes and behaviors intensify they have increasingly dysfunctional consequences for the development and execution of high quality decisions, and management effectiveness deteriorates. Moreover, interdependence between the managers aggravates this phenomenon because it strengthens the link between negative attitudes and dysfunctional behavior. The implications for joint venture performance are evident.     

Home–Host Country Distance in Offshore Governance Choices

This paper studies the effect of home–host country distance on the choice of governance mode in service offshoring. Using a Transaction Cost Economics approach, we explore the comparative costs of the hierarchical and contractual models to show that different dimensions of distance (geographic, cultural and institutional), because they generate different types of uncertainties, impact offshore governance choices in different ways. Empirical results confirm that, on the one hand, firms are more likely to respond to internal uncertainties resulting from geographic and cultural distance by leveraging the internal controls and collaboration mechanisms of a captive offshore service center. On the other hand, they tend to respond to external uncertainties resulting from institutional distance by limiting their foreign commitment and leveraging the resources and local experience of third party service providers. Finally, we find that the temporal distance component (time zone difference) of geographical dispersion between onshore and offshore countries plays a dominant role over the spatial distance component.