Hybrid Governance Structures Research Articles

Managing resources for digital transformation in supply chain integration: The role of hybrid governance structures

Digital transformation (DT) plays a crucial role in shaping operations and supply chain management. Through real-time data sharing and automated decision-making systems, DT fosters supply chain integration (SCI), facilitated by key digital technologies like Internet of Things (IoT), cloud computing, big data, and artificial intelligence. Effective DT necessitates managing organizational digital resources encompassing technical domains such as software, hardware, and data science, alongside financial resources and managerial capabilities. Navigating the complexities of DT requires strategic decisions in supply chain governance regarding the management of these digital resources. While in-house development offers control and differentiation, it entails organizational and financial risks. Conversely, outsourcing digital activities reduces risks but increases technological dependence. Hybrid governance (concurrently sourcing in-house and outsourcing activities) presents a reconciliatory approach that can be valuable for DT in SCI. This study investigates the contribution of hybrid governance for DT, focusing on its effects on SCI and delivery performance. Through quantitative analysis of 379 manufacturing companies, our findings reveal that hybrid governance positively influences the digitalization of SCI and contributes to delivery performance through a digitalized SCI. Our research contributes to the theoretical understanding of hybrid governance in DT, offering insights into strategic digital resource management for SCI. It underscores the importance of balancing internal and external resources to optimize supply chain performance in the digital era.

How to indigenise the blue economy in Aotearoa New Zealand

ABSTRACT Māori, as substantial stakeholders in the fishery sector, must play a major role in any imagined or proposed transition to a blue economy. This paper provides the results from a project examining how to indigenise the blue economy in Aotearoa New Zealand, outlining the underlying theory and providing results from five case studies. The paper explores three key thematic constraints identified in consultation with the Māori fishing sector, namely: centralisation of power; quota fragmentation; and product commodification. It concludes that there is a need to focus on: redressing the imbalance between iwi and hapū by providing quota for hapū while providing wrap around financial and capacity support, incorporating local experts in decision making, and creating community clusters; overcoming fragmentation through joint ventures and hybrid governance structures and a focus on quota optimisation; and increasing market differentiation through research, innovation, and branding and marketing initiatives.

Social capital in transactions: The role of economic and social trust in the specialty beef production system in Brazil

Abstract This study aims to understand the social capital inherent in agents and the role of social and economic trust in transactions between beef cattle producers and slaughtering cooperatives in the specialty beef production system in Paraná state, Brazil. This qualitative research involved 31 semi-structured interviews with beef cattle producers, cooperatives, and key agents. Results revealed that social capital, comprising networks and informal norms, favors the condition of trust, enabling the construction of a hybrid governance structure under a complex institutional environment. Social and economic trust between agents facilitates transactions, reduces behavioral and market uncertainties, enables ex-post adaptations, and consequently, reduces monitoring costs and transaction costs. Trust based on social aspects, i.e., social trust, was more relevant for the construction of arrangements, while trust based on economic aspects, i.e., economic trust, had a greater impact on the continuity of arrangements. This reveals that looking at only one of them is not enough to understand contractual arrangements. Thus, this study highlights that unfolding the concept of trust and investigating whether it comes from an economic or social basis is important to understand the complexity of such arrangements, which may influence specialty beef production system design and coordination efficiency.

Modularity, Adaptation Problems, and the Governance and Problem-Solving Capabilities of Core Firms in Ecosystems

Building on transaction cost economics and the literature on capabilities, we provide a new, integrative lens on core firms in ecosystems. Specifically, we characterize ecosystems with core firms as a hybrid governance structure and describe the externally-oriented capabilities of core firms as means to reduce ecosystem-level transaction costs. The starting point for our analysis is the identification of three adaptation problems that stem from limitations to modularity in ecosystems (interoperability, customization, and availability), and we argue that each is associated with observable characteristics of the technology prevalent in an ecosystem. Thus, the core firm's externally-oriented capabilities are geared towards solving the respective adaptation problems. We further distinguish between governance capabilities, which serve to influence other ecosystem participants in ways that mitigate the above-mentioned adaptation problems, and problem-focused capabilities, which are targeted at making sure that adaptation problems are solved or do not arise in the first place. Overall, our focus on adaptation problems and transaction costs allows us to provide a theoretically unified view on core firms in ecosystems while simultaneously showing how their capabilities systematically differ in different types of ecosystems.

Informality as an approach to claiming the right to resettlement and achieving inclusive rural-to-urban resettlement for landless villagers: The case of Hangzhou, China

ABSTRACT This article discusses how to achieve inclusive resettlement for landless villagers amid China’s promotion of urbanization through resettlement. This research conceptualizes the right to resettlement in China by synthesizing the literature on resettlement, the right to the city, and informality. This research captures four subsets of rights to resettlement based on a review of existing resettlement literature, including rights to economic enhancement, spatial adaptation, social stability, and political inclusiveness. While state-led resettlement policies should have prioritized inclusive resettlement, our case study reveals the significant role played by villagers’ bottom-up approaches, utilizing informality and collective strategies, in enhancing inclusiveness. The research adopts an explanatory-sequential approach that uses principal component analysis, semi-structured interviews, and questionnaire surveys to investigate post-resettlement adaptation in 12 resettlement communities in Hangzhou, China. The empirical evidence suggests informal economic activities, spontaneous spatial transformation, hybrid governance structures, and non-institutionalized participation have contributed significantly to villagers claiming their right to resettlement. We conclude with recommendations for achieving inclusive resettlement.

Outcome-based contracts – Linking technology, ownership and reputations

Outcome-based contracts (OBC) in information technology outsourcing have attracted much attention, but literature is relatively scarce on this topic. Though firm theories prefer hierarchy as the most protective form of governance for such transactions, the practice moves forward with many hybrid governance structures underpinned by automation and digital transformation technologies. The objective of this paper is to develop a conceptual framework that explains the preference for inter-firm arrangements in OBCs and exhibits the capabilities of these technologies in mitigating contract inefficiencies. The proposed framework narrows the gap in the literature for a concurrent view of the latitudinal (ex-post, ex-ante) and longitudinal (reputation) dimensions of the contract. We represent the OBC as a concurrent stochastic game in a probabilistic model checker. Testing of our propositions revealed that these technology assets are complementary and joint ownership is desirable under reputation effects, reputation transfers take place between the contracting parties in the same direction, and continuous reallocation of ownership is required to maintain joint ownership. Rapid technological advancement and industry maturity can gravitate the transaction towards common ownership. The reputation function using Fermi probability distribution in our model is a novel performance measure for the industry.

Capacity Development-oriented Service Delivery Structures and Programmes: Case Study of a Mineral-rich District Municipality

Bojanala Platinum District Municipality (BPDM), in the North-West Province, South Africa, is endowed with an extractive economy. The District experiences challenges of capacity development of service delivery structures and programmes. It is in this context that this paper examines how local government responses to challenges of capacity development and explores ways in which organisational structures and programmes can be used to overcome these challenges for enhanced service delivery. The theoretical framing of this study underpins capacity development as an enabler of service delivery and incorporates human capital, performance improvement and collaborative participation in the context of local government. The research employed a single case qualitative research approach with a component of descriptive statistics and a sample of 30 municipal senior managers and a social development mine manager. Key findings are that organisational learning and skills development play important roles in enhancing the capacity development of service delivery structures and programmes. It is against these findings that the study recommends the creation of supportive monitoring and evaluation systems to advance the strengthening of functional hybrid governance structures and an organic communication model within a transparent and accountable administrative-political environment.

The Standards Association: A Hybrid Governance Structure Between Market and Network

Since the beginning of the 20th century, many standards associations have emerged. The purpose of this theoretical article is to demonstrate that standards associations can be seen as a governance structure, and to position this structure in the transaction cost theory. A standards association is defined as any formal organization set up to develop common standards. The operating logic of the standards association is for associates to design common standards, and then to make the adoption of these standards a criterion for entering into a transaction. The article shows that it is a hybrid structure between market and network.

INSTITUTIONAL ENVIRONMENT AND THE STRATEGIES OF THE FIRMS OF THE BRAZILIAN ELECTRICITY INDUSTRY

The main goal of this paper is to analyze how the evolution of the institutional environment of the Brazilian Electricity Industry (BEI) has influenced the strategies of the firms. The main characteristics of the BEI are: almost 90% the electricity is generated from hydroelectric plants; central coordination is required to minimize costs, optimize the operation of the system and mitigate risks; hybrid governance structure, where private firms compete with public owned firms; specific assets; and a complex and uncertain business environment. Since 1996, the BEI has faced two distinct reforms. The first, more market oriented, was characterized by the privatization of 80% of distribution firms and 20% of generation assets. But in 2001 Brazil faced its worse electricity crisis in history, so the new government in 2003 proposed a new model for the BEI. This model re-established the role of the government as a planner and tried to create a more competitive market through auctions. We analyze the long term contracts to buy energy and new investments in generation in the BEI. We show that in Brazil there were risks of gaming and it is difficult to allocate the residual rights perfectly and this has an influence in the fact that firms are buying electricity from firms of the same economic group. We conclude that the industry characteristics, the evolution of its governance structure and the transition between institutional models lead to an elevated potential for vertical integration.

Actor-Network Theory Contract Theory

Abstract Firms increasingly use complex hybrid governance structures to manage value generation networks. Empirical evidence demonstrates that the structures contain soft, “enforcement-challenged” contractual devices. Existing contract theories, however, fail to recognize and explain how these soft contract devices work as legal devices. The article seeks to address this failure. The article uses a conceptual innovation by Schepker et al to construct an actor-network theory (ANT) inspired contract theory. Schepker et al argued that contracts are best understood as often concurrently serving safeguarding, coordination, and adaptation goals. The article argues that combined with ANT the functional contracting frame allows us to recognize that contracts work and gain efficacy in multiple ways. To understand how the soft, “enforcement-challenged” contract devices work, the article traces the efficacy mechanisms the devices perform and enact. The tracings lead the article to propose an ANT contract theory that builds on three intertwined ideas: 1) contract devices have no core efficacy networks but multiple parallel efficacies, 2) contracts should be understood as bricolage collages of small-scale contractual point intervention devices that each deploy and rely on their own efficacy mechanisms and patterns, and 3) the force of contract resides in the socio-material assemblages contracts are capable of creating and sustaining.

ANÁLISE ECONÔMICA DA PRODUÇÃO AVÍCOLA DE CORTE POR GÊNERO EM DIFERENTES ESTRUTURAS DE GOVERNANÇA

A avicultura de corte brasileira sustenta-se sobre a estrutura de governança híbrida estabelecida entre empresas integradoras e unidades de produção rural. Contudo, algumas empresas ainda investem na manutenção e aquisição de instalações próprias para criação das aves. Objetivou-se avaliar o desempenho zootécnico de frangos de corte de acordo com o gênero alojado e analisar o resultado econômico da atividade sob diferentes mecanismos de governança. Estudos de caso foram utilizados como procedimentos de pesquisa para avaliação da atividade em núcleos de criação da empresa integradora e de produtores rurais integrados. Dados primários sobre custos, receitas e indicadores zootécnicos foram coletados em 24 unidades de produção de aves pertencentes a uma empresa integradora e cinco produtores rurais integrados, localizados no estado de Minas Gerais. Foram utilizadas informações provenientes de 144 lotes de frangos de corte COBB® produzidos entre agosto de 2015 e agosto de 2016. Indicadores zootécnicos de lotes exclusivos para machos foram melhores que os observados para criação mista de aves e para lotes de fêmeas, respectivamente. Entretanto, na comparação dos resultados com os valores esperados para a linhagem, o potencial genético das aves poderia ter sido melhor aproveitado pelas unidades de produção rural. Independente do gênero das aves, análises econômicas indicaram que somente a criação de frangos de corte no modelo de integração foi capaz de conferir lucro econômico à atividade. Constatou-se que, para qualquer estrutura de governança avaliada, a criação de aves não se sustenta financeiramente sem receitas secundárias provenientes da venda de cama dos aviários.

Beyond government-led or community-based: Exploring the governance structure and operating models for reconstructing China's hollowed villages

Discussions of China's hollowed village reconstruction (HVR) program tend to divide initiatives into community-based model (CBM, led by local actors which is also called bottom-up model) and government-led model (GLM, driven by policy makers which is also called top-down model). In this paper, we propose a theoretical framework, which goes beyond these two models. Then, we take three typical villages which experienced different models of HVR in recent years as case studies, exploring the intersection of the process of decision-making, the structure of governance and the performance of projects. Both theoretical analysis and case studies show that a hybrid governance structure (HGS), with limited range of reconstruction in the distribution and functions of rural land, is most in line with China's background for HVR and rural vitalization. The participatory process is very important for these three modes, with villages and communities as the important carriers for participation and interaction. Not only villagers can truly participate in the planning and decision-making process in the HGS's approach, which enables villagers to have more autonomy, but also enhanced the project's performance by integrating villagers' interests and willingness with government proposals, matching the subjective and the objective conditions. This research indicates that we can integrate diverse driving forces of village revitalization, pay more attention to the governance's structure and operating models of reconstructing. More importantly, this study responds to Elinor Ostrom's common-pool resource theory and suggests a way forward in the public governance of rural vitalization in contemporary China.

Negotiating Urban Redevelopment: Exploring the Neighborhood Council Planning Model

This paper analyzes the redevelopment of a residential compound in Jerusalem from a justice perspective. It focuses on the role of the Neighborhood Council (NC) in negotiating representation and recognition of local residents in the planning process. Based on analysis of interviews, planning documents, focus group meetings, and court appeals, we argue that as a hybrid governance structure, which mediates between the residents and the municipality, the NC is uniquely positioned to promote more just and inclusive planning process and outcomes at the neighborhood scale. However, the NC still faces substantial challenges due to its intermediary position.

Asset specificity, intensity of coordination, and the choice of hybrid governance structures

Purpose The purpose of this paper is to discuss the relationship between the existence of asset specificity and the architecture of the hybrid governance structures adopted by horticultural smallholders from the Brazilian region of Serra Fluminense. Design/methodology/approach This paper uses a negative binomial regression model to analyze 567 transactions carried out by horticultural smallholders from the Brazilian region of Serra Fluminense. Starting from the insights of Oliver Williamson’s transaction cost economics, an indicator is constructed with the goal to capture the degree of intensity of coordination from the adoption of diverse bundles of coordination mechanisms in a governance structure. Findings The results show that higher levels of human and physical asset specificity affect the intensity of coordination of the transactions in the sample, leading to the adoption of hybrid forms with more complex bundles of coordination mechanisms. Research limitations/implications This paper adds to a growing literature that studies the architecture of complex governance structures. However, its empirical conclusions are exploratory. Originality/value The contribution of this paper is twofold. First, quantitative empirical studies that analyze the diversity of hybrid forms in the same industry are relatively rare. This contribution also presents a theoretical discussion that might inform scholars dealing with similar research challenges.

How do a buyer’s political ties affect the market-based selection of suppliers?

PurposeAlthough the differential roles of political and business ties are recognized in the literature, the interplay between political and business ties remains unclear. This study aims to explore how political ties affect the formation of business ties with unfamiliar partners by analyzing how a buyer’s political ties affect the market-based selection of suppliers, an important channel through which the buyer forms business ties with unfamiliar suppliers.Design/methodology/approachA survey of 204 Chinese manufacturing firms was conducted to elucidate the relationship between political ties and the market-based selection of suppliers.FindingsThe findings suggest that buyers with strong political ties are more likely to engage in the market-based selection of suppliers; this positive relationship is diminished when social control is preferred over contractual control in the buyer’s supplier governance and is enhanced when technological uncertainty is high.Originality/valueFirst, this study sheds light on the interplay between political and business ties by revealing how the buyer’s political ties affect the formation of business ties with unfamiliar suppliers, as represented by the market-based selection of suppliers. Second, it uncovers the boundary conditions of the effect of political ties by revealing the moderating effect of social control preference and technological uncertainty. Third, it extends the interorganizational governance structure literature from its focus on the complement-substitute debate on social control and contractual control to examine the contingent effect of a hybrid governance structure.

Hybrid governance structure between public company and private partners: the case of Infraero in the Brazilian airline sector

Abstract A public-private partnership (PPP) model has been adopted in Brazil for the modernization of its main national airports. Until 2017, the institutional setup imposed the public company Infraero to participate with 49% in the joint venture for the management of the airports subject to PPP. The remaining 51% shares belong to private companies, namely those that constitute the consortium group that won the correspondent public tender. This paper analyses this hybrid governance structure, including the main advantages and disadvantages, for both government and private parties, in maintaining a state-owned enterprise with a mandatory 49% share in the winner consortium. It focuses on five main aspects: access to knowledge; government influence on decisions, funding, and risk-sharing; cross subsidization and competition. The paper also summarizes its main findings and recommendations for future rounds of airport concessions in Brazil, in particular to underline overall inconveniences of the mandatory rule that imposes to Infraero a 49% share in all winner consortiums.

The Role of Homogeneity and Heterogeneity Among Resource Users on Water Governance: Lessons Learnt from an Economic Field Experiment on Irrigation in Uzbekistan

The governance of common-pool resources, such as irrigation systems, is a highly debated topic in research. Numerous studies suggest that actors can successfully manage these resources through cooperation, especially in hybrid governance structures, if they are able to design and enforce their own rules. Thereby, certain factors, such as the composition of a group of resource users, influence the likelihood of cooperation and the performance of self-managed resource systems. This study employed an economic framed field experiment to compare the effects of externally imposed and self-set rules of water distribution on homogeneous and heterogeneous groups of irrigation users who differ in their economic endowment. The experiment was conducted with 20 farmers in an Uzbek community. Furthermore, questionnaires, group discussions and interviews complemented the analytical method. The results show that groups, homogeneous in their economic endowment are more inclined to comply with self-designed rules than groups that are economically heterogeneous. Thus, homogenous groups achieve a better performance in terms of resource maintenance and water harvest under self-governance. However, water distribution was more equal and the illegal activities decreased in both the homogeneous and heterogeneous groups with self-implemented rules. It was found that trust was a crucial factor regarding both greater individual rule adherence and more cooperative behavior within homogeneous entities compared to heterogeneous groups of irrigation users. Finally, the results support the argument that economic heterogeneity among resource users lowers the likeliness of cooperation in self-governed common-pool resource systems.

Result-oriented Agri-Environmental Climate Schemes as a means of promoting climate change mitigation in olive growing

The climate change mitigation potential of olive farming has been widely acknowledged. It has particular relevance in regions such as Andalusia (southern Spain) where olive growing is a key land use activity with significant social, economic and environmental implications. This potential of olive farming, however, is not adequately embodied in current Agri-Environmental Climate Schemes (AECS), which often fail to deliver the expected outcomes. The present article proposes an alternative strategy based on a result-oriented approach to AECS for enhancing soil carbon sequestration in Andalusian olive growing. After reviewing the current legal and institutional situation which forbids the wide application of result-oriented agri-environmental schemes, we suggest the use of alternative territorial governance arrangements, such as hybrid governance structures (HGS), as a framework to support the implementation of a result-oriented approach in the specific case of olive growing. Results indicate that the application of HGS can provide valuable benefits in terms of soil carbon storage. The information provided may be useful in the proposed new legislative framework, at both European and regional level, to promote more sustainable farming systems.

Estruturas de governança híbridas em redes de cooperativas de crédito brasileiras e canadenses sob a ótica da teoria dos custos de transação

This paper aims at building a theoretical model that characterizes the influence of Hybrid Governance Structures (HGS) in Transaction Costs (TC) of credit cooperatives networks in Brazil and Canada. From the characterization of the variables that influence the TC, it's possible to perform a discrete analysis of hybrid forms of governance which is characteristic of strategic networks of credit cooperatives canadian Desjardins and brazilian Sicredi. The case studies analysis proved that the evolution of HGS was simultaneous with the evolution of the legal and institutional environment, in a dialectical process. However, one can see that while evolving from different legal and institutional environments, there is a tendency to homogeneity in these networks, at least in the creation of ad hoc institutions to deal with the most significant TC. An equation was inferred at the final section of the work, to perform the comparison of the costs of HGS with the transaction of financial intermediation of credit cooperatives networks. The model can be used to compare the analysed TC with the correpondent costs of lean financial institutions. According to this equation, the cost to carry out internal transactions to the network, in addition to the costs arising from the political and social pressures present in this type of institution, must be less than or equal to TC of financial institutions with hierarchical governance structures. This not only corroborates the discriminating alignment hypothesis of Williamson (2005), but adds elements for classification and analysis of these costs.

The Variety of Governance Structures Beyond Market and Hierarchy

While research has identified a variety of hybrid governance structures, it has described and sought to explain this variety from different theoretical perspectives that are not readily reconcilable. This limits our ability systematically to compare different types of hybrids and on this basis to further theoretical understanding. Results of an empirical survey of transactions in buyer–supplier relations in the German construction industry provide novel insights into three distinct, widely employed types of hybrid governance structures. The study systematically compares the found hybrid governance structures and explores their rationales. As its main theoretical contribution, this study offers an empirically based typology of hybrid governance structures that complements earlier theorizing. It suggests that embeddedness and transaction cost arguments complement one another in explaining different and previously theoretically unspecified types of hybrid governance structures.