The governance of strategic networks: how do different configurations influence the performance of member firms?

Abstract

The purpose of this paper is to analyze how different configurations of network governance influence the performance of member firms. To achieve this objective, we surveyed 338 Brazilian firms participating in strategic networks (SNs). We addressed our research question by employing cluster analysis and the Kruskal–Wallis test. We focus the literature review on formal and relational governance of SNs and their interplay. We found three clusters that illustrate different configurations of governance. One cluster is characterized by relatively high levels of formal and relational governance in small and young SNs. A second cluster is characterized by low levels of formal governance and relatively high levels of relational governance, but surprisingly in larger and older SNs. The third cluster is characterized by relatively low levels of formal and relational governance in small and young SNs. Our main results illustrate different configurations of governance of SNs. Small and young SNs that combined high levels of formal and relational governance also present the highest levels of firm performance. Surprisingly, larger and older SNs followed a governance configuration based on high levels of relational governance and low levels of formal governance. These findings direct to new configurations of network governance that are controversial to existing literature and also offer managerial contributions. We contribute to the debate about formal and relational governance by adding two new variables to the analysis—network size and network age. Results show that SNs with different size and age may adopt distinct governance configurations.