Inter-firm Relationships Research Articles

Competing and cooperating globally: how firms’ multimarket contact relates to joint price elevation in coopetition networks

PurposeThis study aims to draw attention to the familiarity effect among international multimarket contact (MMC) firms on coopetition in the global container shipping industry and to better understand the contingency model of structural holes and in-degree centrality on joint price elevation actions and subsequent performance.Design/methodology/approachDrawing on competitive dynamics and the literature on networks, a panel data model is developed from 6,489 competitive and 7,146 cooperative actions of the top 21 shipping firms in 18 global arenas with a structured content analysis method being applied.FindingsStronger MMC by firms requires increased levels of cooperative actions to elevate prices. This coopetition relationship is enhanced or weakened when the focal firm occupies a higher level of structural hole or position of competitive in-degree centrality.Practical implicationsShipping liners seeking to cooperate with joint action in oligopolistic markets are offered guidelines and strategies to increase their performance through their actions.Originality/valueThis study contributes to the literature on coopetition networks by further analyzing interfirm relationships and interactions that enhance performance, while exploring network positioning strategies to mitigate risks.

Organisational Routines and Interfirm Collaboration: Measurement Dilemmas and Recommendations for Further Research Steps

Purpose: The paper aims mainly to present the results and consequences of measurement inaccuracies and to make recommendations for further research. Design/Methodology/Approach: We began our research by providing studies on the theoretical origins of constructs in survey questions. Specifically, we studied the theorems and related constructs. We then reviewed the measurement of the constructs, selecting reliable scales. We conducted an initial study on 101 firms in Poland randomly selected from the high-technology sector, specifically the IT sector. We selected an industry in which inter-firm relationships are common. They are distinguished by high innovation, short product and process life cycles and therefor require many relationships to meet customer expectations. The respondents were top managers. The inclusive criterion was their employment of at least five employees. Collected data were analysed with Statistica 13 software (TIBCO Software Inc. (2017). Findings: After solving measurement dilemmas we made methodological recommendations regarding population structure and scales revealing particular constructs. Originality/Value: The implementation of the recommendations aforementioned would allow to formulate and verify hypotheses resulting from the propositions we have formulated while proposing our research framework. Additionally, we obtained a new Propensity to Collaborate scale as the questions referred to particular dimensions joined in quite different groups. Hence, one item has been deleted and the dimensions have been combined. We propose to check the new scale (without dimensions) in the future research.

A comprehensive framework of technology in marketing: Theory and applications

The goal of this paper is to conduct a detailed review of research on foreign market entry alliances mediated by information technology (IT). This paper offers the conceptual structure of cross- border IT interactions and performance effects that is technically aware. It combines resource-based view (RBV) viewpoints and transaction cost economics (TCE), arguing that developing IT interface capabilities improves the commercial efficiency by enhancing interfirm relationship governance in the host location of the foreign partner. More relevant modulators are often known as IT-related threats and contextual limitations. It proposes concepts of IT capabilities, enhanced IT interfirm governance and improved IT marketing efficiency. Building from RBV and TCE, IT capital, relevant human resources, and IT integration, the capacity of companies to better manage the connection through joint control, interfirm collaboration, organizational formalization and hybrid centralisation is improved by the combination of RBV and TCE. These advantages contribute to increased marketing efficiency at the host place upstream and downstream. IT capabilities also lead to mitigating potential contextual constraints and threats. The paper presents a range of research ideas based on theory and literature that will be empirically evaluated in future studies. Top managers of companies currently or intend to enter into foreign market entry partnerships should consider carefully improving inter-company IT capabilities with regard to hardware and software preparation, human resources and organizational assets.

A comprehensive framework of technology in marketing: Theory and applications

The goal of this paper is to conduct a detailed review of research on foreign market entry alliances mediated by information technology (IT). This paper offers the conceptual structure of cross- border IT interactions and performance effects that is technically aware. It combines resource-based view (RBV) viewpoints and transaction cost economics (TCE), arguing that developing IT interface capabilities improves the commercial efficiency by enhancing interfirm relationship governance in the host location of the foreign partner. More relevant modulators are often known as IT-related threats and contextual limitations. It proposes concepts of IT capabilities, enhanced IT interfirm governance and improved IT marketing efficiency. Building from RBV and TCE, IT capital, relevant human resources, and IT integration, the capacity of companies to better manage the connection through joint control, interfirm collaboration, organizational formalization and hybrid centralisation is improved by the combination of RBV and TCE. These advantages contribute to increased marketing efficiency at the host place upstream and downstream. IT capabilities also lead to mitigating potential contextual constraints and threats. The paper presents a range of research ideas based on theory and literature that will be empirically evaluated in future studies. Top managers of companies currently or intend to enter into foreign market entry partnerships should consider carefully improving inter-company IT capabilities with regard to hardware and software preparation, human resources and organizational assets.

Leveraging Interfirm Relationships in China: Western Relational Governance or Guanxi? Domestic Versus Foreign Firms

With the growing importance of strategic alliances and supply chains as competitive units, academics and practitioners are interested in understanding the techniques used by firms to leverage interfirm relationships to gain a competitive advantage. Studies conducted in the Western context underline the role of relational governance (i.e., the modern Western way), whereas works in the Chinese context highlight the importance of guanxi (i.e., the traditional Chinese way). Today’s Chinese economy operates as a hybrid of the Western modern business model and traditional Chinese patterns with the coexistence of Western relational governance and guanxi. Therefore, this study addresses two issues: (1) whether these two types of governance interact as substitutes or complements in leveraging interfirm relationships and (2) whether and how foreign firms differ from their Chinese domestic counterparts in the use of these two types of governance to improve performance. Drawing on data collected from 132 third-party logistics providers in China, this study shows that Western relational governance and guanxi function as substitutes in improving performance. Moreover, while guanxi contributes to performance in a similar manner in Chinese domestic firms and foreign firms, Western relational governance is more effective for foreign firms than for Chinese domestic firms. Furthermore, the joint role (i.e., interaction effect) of Western relational governance and guanxi in improving performance also differs: these two forms of governance function as substitutes in foreign firms, whereas they have no significant interaction in Chinese domestic firms.

Risk Prevention Mechanisms in Asymmetrical Inter-Company Situations: An Exploratory Study in Smes in the BTP in Cameroon

While it is true that asymmetrical inter-firm relations offer many opportunities to the various partners and to the SME in particular, they are nonetheless the source of a number of risks. So, how do SMEs protect themselves from the risks associated with inter-firm relations? To answer this question, we have adopted a methodology based on a qualitative approach based on semi-directive interviews with four (04) SMEs in the construction industry. In order to identify and classify the different risk prevention mechanisms mobilized by SMEs. The results obtained show that these SMEs mobilize both contractual and extra-contractual mechanisms. However, they give more priority to extra contractual or relational mechanisms in the prevention of risks.

Alliance portfolio management capabilities, corporate entrepreneurship, and relative firm performance in SMEs

ABSTRACT This article shows how small- and medium-sized enterprises (SMEs) can enhance the level of corporate entrepreneurship through alliance management capabilities. The findings from a sample of 272 suppliers to the mining industry demonstrate that the constituting dimensions of alliance portfolio management capability (that is, partnering proactiveness, relational governance, and portfolio coordination) positively affect corporate entrepreneurship. Moreover, corporate entrepreneurship mediates the effects of these dimensions on firm performance. These findings improve our understanding of how organizational capabilities enable SMEs to mitigate their lack-of-resources problem while engaging in interfirm relationships to better utilize corporate entrepreneurship for increasing firm performance.

Reviewing interfirm relationship quality from a supply chain management perspective

With the overlap of the interfirm relationship quality and supply chain management research in mind, this paper reviewed 100 recent, scientific, English-language papers on interfirm relationship quality based on a categorisation schema derived from a conceptual framework of supply chain management. We aim to contribute to the existing supply chain management literature by providing an insight into the connections of supply chain performance with buyer–supplier relationship quality from the relationship quality scholars’ perspective. Through content analysis, frequency and contingency analysis, we evaluated how the three relationship quality dimensions—information, operational, and relational dimensions—and the three types of supply chain performance—financial and market, operational, and relational performance have been reflected in the current interfirm relationship quality papers and how the scholars have tended to link them to each other. The results reveal that relational dimension plays a key role in SC relationship management and influences performance significantly. Information dimension will affect performance indirectly through relational dimension. However, the impact of the operational dimension on performance varies. In addition, buyers’ and suppliers’ perspectives on the relational drivers of their financial performance may differ. Based on the findings, we suggest promising avenues for future investigation of supply chain relationship and performance.

Influence of Inter-Firm Network Relationships on Circular Economy Eco-Innovation Adoption

Research has shown that inter-firm networks and relationships play a key role in innovation adoption; however, these concepts have not specifically been applied to study their role in the adoption of circular economy eco-innovations. This paper considers whether the embedded relationships within inter-firm networks also influence circular economy eco-innovation adoption. Using a historical case study of the REALCAR closed-loop recycling initiative, by Jaguar Land Rover, from 2013 to 2017, the paper conducted qualitative interviews to reconstruct the structure and nature of the relationships between Jaguar Land Rover and its suppliers. This was complemented with a network regression analysis to determine the influence of these relationships on the adoption and implementation decisions of the closed-loop recycling process by the suppliers of Jaguar Land Rover. The results show that Jaguar Land Rover’s relationship as a key customer, facilitation of knowledge sharing among peer suppliers, and resistance from suppliers impacted by changing supply chain relationships played a role in the adoption decisions and adoption timeframe of the REALCAR closed-loop recycling innovation. This has implications for companies and supply chains to consider leveraging the inter-firm relationships embedded in their supply chain networks to accelerate the adoption of circular economy eco-innovations.

Achieving relational governance effectiveness: An examination of B2B management practices in Taiwan

This study examines the antecedents of relational governance effectiveness in a country context where the prevalence of Confucian values is expected to create a culturally ingrained preference for relational governance. We also explore whether different management practices are better predictors of relational governance effectiveness under different collaborative inter-firm relationship configurations. Results from an analysis of 182 alliance relationships in Taiwan, a dynamic newly developed economy, reveal that, generally, demonstrating trustworthiness, establishing just and fair procedures, and building effective platforms for connectivity are management practices that are good predictors of relational governance effectiveness. The multi-group analysis provided more nuanced insights. The findings suggest that different inter-firm relationship configurations require different subsets of management practices. Building effective platforms for connectivity is a strong predictor of relational governance effectiveness in equity-based alliances with foreign partners. In equity-based alliances with domestic partners, establishing fair and just procedures is emphasized. In contractual alliances with foreign partners, ensuring contractual clarity and building effective platforms for connectivity are found to be facilitators of relational governance effectiveness. Last, contractual alliances with domestic partners seem to rely on a portfolio of management practices encompassing demonstrating trustworthiness, establishing just and fair procedures, and building effective platforms for connectivity.

Structure of State-owned Corporation’s Value Chain: Strategic Analysis

Relevance. The article discusses the structural and substantive aspects of state-owned corporations from the perspective of internal and external environment. The role of state-owned corporations in the Russian economy is growing more and more, individual industries are almost completely functioning on the basis of state-owned corporations, which makes a strategic analysis of such economic actors an urgent problem. The article provides a strategic analysis of the activities of state-owned corporations based on the value chain management methodology. Analysis of the external and internal environment of a state corporation allows us to conclude that despite the fact that economic actors that are legally dependent on a state-owned corporation operate on the basis of market principles, the state corporation itself, as a non-profit organization, performs the functions of the state to institutionalize relations between individual economic actors. The purpose of the study is to demonstrate the institutionalizing role of state-owned corporations in relation to individual sectors of the economy. The objectives of the research are to identify trends in the development of state-owned corporations in modern Russia as agents of the state in embedding and coordinating links between economic actors in the strategic sectors of the Russian economy, as well as developing a model for the value chain of a state-owned corporation. The results of the research. Using the methodology of institutional and strategic analyses, the specific functions of state-owned corporations in coordinating inter-firm, intra-industry and inter-industry relations of economic actors in the strategic sectors of the Russian economy under the control of state-owned corporations have been identified. Despite criticism of the mechanism of manual administration of the economy, the article shows the need to establish links between economic actors by administrative methods and the establishment of legal control.

Managing Digital Transformation: Scope of Transformation and Modalities of Value Co-Generation and Delivery

The diffusion of digital technologies has enabled a notable transformation in the firms’ boundaries, processes, structures, roles, and interactions. It is now clear that digital transformation is not just a traditional IT back-end process; rather it affects the organization as a whole, redefining strategies, entrepreneurial processes, innovation, and governance mechanisms. This permeation has led to the emergence of new ways of organizing firms’ value chains and interfirm relationships, which now increasingly occur in digital ecosystems and marketplaces. The scope of transformation as well as the modalities of value co-generation and delivery are here used to introduce the content of this Special Issue of California Management Review on Digital Transformation.

The Fit Between Social Media Use and Functions of Contracts: A Contingent Perspective

Recent studies suggest that the multiple dimensions of contract governance and its context moderators deserve more empirical scrutiny. By distinguishing between task and tie related interaction enabled by social media, this study explores the fit between the two distinctive interactions and multifunction of contracts, modeled as an interaction effect. Empirical results based on a sample of 504 Chinese manufacturers show that contract complexity negatively affects opportunism serving as safeguarding mechanisms, and positively affect collaborative activities serving as coordination mechanisms. More importantly, we find that compared with tie related interaction, task related interaction strengthens the positive effect of contract complexity in facilitating collaborative activities, suggesting task related interaction is more effective in promoting the coordination function; compared with task related interaction, tie related interaction increase gains of contract complexity in curbing opportunism, reflecting a salience fit between tie related interaction and the safeguarding function. By showing how social media enabled interaction promotes the relative effectiveness of contracts in inhibiting opportunity versus facilitating the performance, the study enriches the literature on the complex roles of contracts and social media use in governing inter-firm relationships.

Mechanisms for Business Model Innovation: A Role for Cooperation and Industry Associations

Business models have been shown to be important for a firm’s survival and competitiveness. But because business models encompass interfirm relationships, they also have the potential to affect the survival and performance of whole industries or ecosystems. This paper uses an historical case to examine business model innovations—where they come from and how they spread. We study the rise of venture capital, which underwent decades of business model experimentation, starting in the 1950s, before becoming an overnight success in the 1980s. We document a number of surprising and almost forgotten aspects of the experimentation period in California’s Silicon Valley, including cooperation among the venture capitalists there, and their formation of an industry association, the Western Association of Venture Capital (WAVC), which helped to rapidly develop and establish the successful model we know today. We argue that these mechanisms of cooperation can be applicable to firms in other industries, especially those that benefit from variety.

Enabling SMEs’ Learning from Global Value Chains: Linking the Logic of Power and the Logic of Embeddedness of Interfirm Relations

Small-and-medium-sized enterprises (SME) often need to draw on the knowledge of their supply chain partners to remain innovative and competitive in the marketplace. In the context of global value chains (GVC), this study examines the factors enabling the learning of SMEs from their GVC dependence by applying the logic of power and the logic of embeddedness. Specifically, we identify the technical adaptation of SMEs in the GVC as a response to their interdependence on the GVC following the logic of power, and an action that heightens information exchange and interorganizational learning at the dyad level following the logic of embeddedness. Linking these logics, we hypothesize that the technical adaptation of an SME mediates the relationship between its GVC dependence and its learning outcome from the GVC, namely the knowledge transfer it receives. Furthermore, this mediating role is stronger when the SME has a longer history of transactional relationship with its GVC partners which amplifies the logic of power, and when it possesses a higher level of financial slack which strengthens the logic of embeddedness. Using multi-sourced survey data from 292 Thai manufacturing SMEs, we find substantial support for the hypothesized relationships. Our findings offer theoretical and practical implications in terms of enabling and supporting the learning pathway of SMEs participating in the GVC.

Predicting Labor Market Competition: Leveraging Interfirm Network and Employee Skills

Human capital is a key component of the knowledge economy. Firms compete not only for consumers in the product market but also for human capital in the labor market. In this study, we perform an interfirm labor market competitor analysis using the online profiles of more than 89,000 employees and their career histories that span more than 3,000 public firms. Using these profiles, we characterize firms through the granular skill distribution of their employees. Also, using employee migrations across firms, we derive and analyze a human capital flow (HCF) network. Such information allows us to measure the interfirm human capital overlap in terms of similarity in their employees’ skills and HCF network structure. We show that our proposed human capital overlap metrics have superior predictive power over conventional firm-level measures in predicting future labor market competitors. We further demonstrate how our proposed metrics and the prediction framework can be incorporated into a comprehensive two-dimensional competitor analysis that includes both product and labor overlap between firms. By evaluating interfirm relationships in the product and labor markets simultaneously, this two-dimensional competitor analysis framework can help managers make strategic decisions beyond human resources, such as product development and customer relationship management.

The differential effects of government support, inter-firm collaboration and firm resources on SME performance in a developing economy

PurposeNotwithstanding that there has been increasing attention on factors that enhance SME performance in developing economies, there is a dearth of studies explicitly investigating the roles of government support systems and inter-firm collaboration. Drawing on the resource-based view (RBV) of the firm and institutional theories, this study aims to model and examine how government support, inter-firm collaboration and managerial ties affect SME performance and further explores how firm specific resources mediate the relationships.Design/methodology/approachA quantitative research design was used. Data were collected using a structured questionnaire from 438 SMEs operating in Zambia, a developing Sub-Saharan African country. Hierarchical linear regression and SPSS PROCESS macro were used to test the hypotheses.FindingsFindings indicate that managerial ties have both a direct and indirect effect, through firm resources, on financial performance. Also, the relationship between inter-firm collaboration and financial performance is fully mediated by firm resources. Surprisingly, results reveal that government support does not have a significant effect on SME financial performance.Practical implicationsThe study has important implications for SME managers and policy makers. It demonstrates that inter-firm collaborations and managerial ties enhance a firm’s financial performance. It also highlights the view that SMEs need to have firm specific resources to transform external resources, accessed from inter-firm relationships, into superior performance. SME policy makers are advised to focus more on policies and support mechanisms that promote inter-firm relationships at firm and managerial levels.Originality/valueThis study is one of the few studies to empirically show that the differential effects of inter-firm collaboration and managerial ties on SME performance are channeled through firm resources, in an under-researched developing Sub-Saharan African economy context. The study is also one of the few studies to reveal that government support is not significantly related to SME performance. Therefore, it provides valuable insights which could be applied to other developing countries with characteristics similar to Zambia.

Sustainable supply network structure: Understanding impact of inter-firms’ relations as drivers of supply network complexity

This study examined the Inter-Firm Relation (IFR) as one of the elements to enhance Sustainable Supply Network Structure (SSNS) management in Malaysian maritime industry supply network. IFR has been an interesting research area for academics and businesses practices due to its relevance in determining the best practices and impacts to encourage SSNS. The Social Network Analysis (SNA) method was adopted to develop valid attribute for the measurement process and the embeddedness theory was used to evaluate IFR among the proposed attributes. These methods enable the researcher to transform relational data in the form of network matrix and produce reliable results for theoretical and industrial applications which have not been discovered in previous studies. A total of 37 managers in a maritime industry supply network were approached to participate in this study. Result revealed that IFR has different effects on the formation of SSNS. The finding provides useful insight in formulating the importance of IFR towards improving and understanding SSNS, particularly, in the Malaysian maritime industry. The contribution of this research extends to the literature and put forward solutions for the industry since previous studies are neglecting IFR, which is highlighted as a source of supply network complexity. Keywords: complexity, inter-firm relation, social network analysis, supply network, sustainable supply network

Investing in IT: a new method for improving the efficiency of contract governance in interfirm relationships

PurposeThis study aims to enhance our understanding of how advanced IT improves the efficiency of contract governance in mitigating partners' opportunistic behaviors in interfirm cooperation and the moderating effects of boundary spanners' personal relationships and cooperative orientation.Design/methodology/approachContract governance is divided into two subdimensions: contract completeness and contract execution safeguards. Then, the hypotheses are examined using partial least squares–based structural equation modeling based on survey data collected from manufacturers in supply chain relationships.FindingsThe results first demonstrate that advanced IT can improve efficiency in both the design of complete contracts and the provision of contract execution safeguards. Second, the results also show that both the personal relationships between boundary spanners and the cooperative orientation of the firm have different moderating effects. Finally, contract execution safeguards are effective in mitigating partners' opportunistic behaviors, whereas contract completeness is not.Originality/valueThis study enriches the contract governance literature in two ways. First, it unveils how advanced IT improves the efficiency of contract governance and the effects of two contingent factors (i.e. personal relationships and cooperative orientation), thus extending the research on contract governance. Second, it reveals the different effects of contract completeness and contract execution safeguards on partners' opportunistic behaviors, thus deepening our understanding of the role of contracts in interfirm cooperation.

Technological Capabilities, Upgrading, and Value Capture in Global Value Chains: Local Apparel and Floriculture Firms in Sub-Saharan Africa

abstract Many local firms in sub-Saharan African countries are failing to enter and upgrade in new manufacturing and agribusiness export sectors. This article argues that we need to look more closely at the costly, risky, and uncertain firm-level processes of building capabilities in order to understand this challenge. However, local firm agency is constrained and has to be situated in asymmetric structures that are determined by transnational interfirm relations in global value chains (GVCs) as well as the country and region in which local firms are embedded. The article presents a new framework for researching how firms build capabilities in GVCs, and demonstrates how it can be applied using the cases of apparel and floriculture export sectors in Ethiopia, Kenya, and Madagascar. The cases show that firms build specific capabilities linked to export strategies, leading to uneven capability-building, specific upgrading paths, and value capture trajectories. Variations in local firms’ export strategies and success with those strategies are explained by differences in the financial capital, tacit knowledge, and social networks that they can leverage in building capabilities. The nature and extent of these intrafirm resources, especially in the early period of export industry development, are shaped by shared networks between local and foreign supplier firms, regional proximity to existing supplier countries, strategic interests of global buyers, and government industrial policy.