Interorganizational Governance Research Articles

The Enactment and Evolution of Interorganizational Strategy

We extend prior research that has taken a cross-sectional approach to understanding interorganizational governance strategies and examine how and why formal and informal governance approaches funct...

CloudLive: a life cycle framework for cloud services

Cloud computing has evolved as a common practice to provide enterprise 2.0 technologies such as online collaboration and communication. Integration of externally provisioned cloud services enables flexible, on-demand sourcing of IT resources but introduces new challenges, as organizations must redefine their business processes, establish inter-organizational governance structures, and engage in ongoing, inter-organizational service relationships with providers. This article aims to provide guidance on sourcing activities by developing a cloud sourcing life cycle framework. Based in the literature and 13 semi-structured expert interviews, we develop a life cycle framework for cloud services, identify key challenges within each life cycle phase for providers and customers, and derive recommendations for overcoming those challenges. By developing a cloud sourcing life cycle that incorporates cloud-specific and inter-organizational aspects, we provide a novel approach to structuring research on cloud computing and support practitioners in mitigating challenges during specific phases of a cloud service’s life cycle.

The Economic Development Role of Regional Logistics Hubs: A Cross‐Country Study of Interorganizational Governance Models

As global competition intensifies, the geographic fragmentation of supply chain activities is creating a concentration of trade at regional freight gateways or hubs. This has significant implications for the economic prosperity of the specific gateway regions. The study explores the deliberate governance efforts of regional economic development agencies and the communities they support in their attempts to exploit location‐specific logistics assets to deliver economic productivity gains. Drawing on the new institutional economics’ body of literature, the research explores prevalent governance models which represent the proactive attempts by these agencies to transform regional logistics capability into cohesive hub strategies. By adopting exploratory cluster‐mapping procedures, web content analysis, and Delphi panels, study findings suggest a typology of multijurisdiction, and multiagency governance models representing the collaborative efforts between public sector and government agencies, academic institutions, and private sector organizations within selected European and U.S. logistics hubs. Each governance type is defined in accordance to specific economic organization and proficiency characteristics.

How Contracts Influence Trust and Distrust

Despite the scholarly interest in contracts and trust governing interorganizational relationships, an understanding of how contracts influence trust remains limited by the way in which the interaction between the two constructs is conceptualized. By bringing together recent advances in the literature on interorganizational governance, I consider (a) the controlling and the coordinating dimensions of formal contracts, (b) trust and distrust as two distinct constructs, and (c) both the calculative and noncalculative aspects behind the development of trust and distrust. Drawing upon information-processing theory, I develop a series of propositions about how each contractual dimension influences the development of trust and distrust by inducing specific information-processing and decision-making mechanisms. My theoretical analysis leads me to discuss the trade-offs inherent in governance choices, and I discuss the implications of my propositions for the literature on interorganizational governance mechanisms.

A cognitive approach to trust management in construction

There is a growing body of literature on trust in construction management but only a few studies have focused on how outcomes of the trustworthiness estimation process influences trust development during project execution. Based on an extensive critique of the extant literature, this study aims to explore whether the estimation of contractor's trustworthiness in construction usually aligns with a cynical, realist or gullible outcome and further how such outcomes influence inter-organisational governance and trust development during project execution. It is argued that in construction, cynical outcomes are usually the case and hence the starting point of contractual relationships. Cynical outcomes – conscious underestimation of contractor's trustworthiness so as to safeguard the transaction – impose starting conditions which often result in negative rather than positive spirals of trust during project execution. In practice, such positions could result in over-allocation of resources to safeguard against opportunism while foregoing potential benefits of trust-induced co-operation. Reaching a realist outcome could inform the selection of appropriate control and managerial strategies. This could also help to improve cost performance by reducing the excessive transaction costs involved in establishing and maintaining control-induced co-operation.

Contractual and Consensual Profiles for an Interorganizational Governance of Information Technology

Two profiles of interorganizational governance of IT were obtained from interviews conducted with leaders involved in setting the governance mechanism needed to support successful IT collaboration with their business partners. Three attributes, based on literature from network governance streams, were used to uncover those profiles. They are the IT governance structure, the processes put in place to make decisions, and the roles of participants involved in setting the interorganizational governance mechanisms. Observed profiles share a continuum where the Contractual profile is at one end, and the Consensual profile is at the other end. Some performance variations among the two profiles exist, yet both profiles contribute to successful interorganizational relationships. These profiles were uncovered from seven case studies conducted in Canadian organizations. Through fifteen interviews with senior interorganizational IT governance committee members and IT executives, the critical IT governance mechanisms they employed were identified. Two cases are reported in this article, each one illustrating respectively the Contractual and the Consensual profiles.

Evolving Functions of Interorganizational Governance Mechanisms

Through a longitudinal case study, this article examines the evolution of the twofold function of formal governance mechanisms, for control and coordination, as an interorganizational relationship evolves. We ask whether all formal governance tools develop simultaneously, or whether each mechanism is designed and used for only one function; whether different mechanisms' attributes foster one function rather than the other; and whether different mechanisms are developed over time in order to provoke both functions' evolution. Finally, we explore whether the interorganizational relationship evolution in part explains the evolution of the two functions, or vice versa. Copyright © 2012 John Wiley & Sons, Ltd.

Gouvernance interorganisationnelle imbriquée et stratégie orientée client

Resume L’article presente les resultats d’une recherche qualitative sur la gouvernance a adopter pour mener a bien une strategie orientee client. L’etude d’une entreprise aeronautique met en evidence les particularites d’une « gouvernance imbriquee » pour structurer les relations de cooperation sur le long terme avec les fournisseurs. Cette gouvernance interorganisationnelle repose tout d’abord sur une structure hierarchique dans laquelle le niveau intermediaire, occupe par les responsables achats, joue un role pivot. Elle s’appuie ensuite sur des dispositifs de controle des fournisseurs adaptes a chacune des phases des relations. L’etude revele enfin que si la gouvernance imbriquee repond bien aux besoins d’une strategie orientee client, elle laisse aussi penser que ses effets vertueux ne seront durables qu’avec les bases d’une solide confiance interorganisationnelle etablie entre les partenaires d’echange a tous les niveaux.

Dependency-based IT Governance practices in inter-organisational collaborations: A graph-driven elaboration

In an ever more globalised world IT (Information Technology) managers increasingly have to support value creation within inter-organisational collaboration settings. Such organisational forms with their inherent complexity require specific approaches for their IT management within. Especially important for unleashing the chances of networked arrangements is the right form of IT Governance. Choosing the right arrangement for IT Governance is heavily dependent on understanding the concepts on which such business constellations are built. In this paper we provide therefore first a systematically derived, graph-based perspective on the key terms of inter-organisational collaboration. Based on this understanding of concepts and structured representations of inter-organisational dependencies we present interorganisational governance practices for IT. Specifically, we assign accountabilities to top executive roles from both IT and business. By keeping a holistic perspective, the insights gained in this study are highly relevant for strategic information management in terms of Business-IT Alignment as well as monitoring and controlling of inter-organisational information infrastructures in a rapidly changing business environment.

Inter-Organizational Governance of Information Technology

There is little research available that specifically looks at how organizations define and implement their inter-organizational governance of information technology. The challenge in such environments is also observed in large organizations where multiple business units and activities often have separate strategies and investment priorities. This paper provides both practitioners and academics with an enriched understanding of how the international airline company KLM introduced IT related governance principles and practices tailored for a multi-business-unit global organization. Insights from this exploratory single case study can contribute to further theory building and practitioner guidance regarding the crafting of both intra- and inter-organisational governance frameworks.

Managing Software Outsourcing Relationships in Emerging Economies: An Empirical Study of the Chinese Small- and Medium-Sized Enterprises

Small- and medium-sized enterprises (SMEs) are facing great challenges in their information systems (IS) outsourcing relationship management, especially with customized software outsourcing under conditions of technological uncertainty and transaction-specific investments. The problem may be even critical for Chinese SMEs in emerging economies characterized by institutional instability. This article draws on multiple theories to examine antecedents and consequences of the effectiveness of three important interorganizational governance mechanisms, namely, contractual-based and relational-based governance and vendor-specific investments. The results of a survey on 83 software outsourcing projects indicate some interesting patterns that Chinese SMEs use to manage their outsourcing relationships. We found that contractual governance is found to be the only effective mechanism when the outsourcing firm (client) perceives technological uncertainty. On the other hand, with the transaction-specific investments, relational governance, and reciprocal-specific investments by IS vendor would be preferred as effective mechanisms by the outsourcing firm. Our analyses also show that Chinese SMEs in emerging economies would rely on multiple governance mechanisms to enhance outsourcing success. Overall, the findings are in line with the studies stressing the importance of building partnership-style relationships and seeking reciprocal actions in sourcing exchanges.

Can Western interorganizational governance mechanisms be applied to a guanxi‐based market?

PurposeThe emergence of “interorganizational marketing” as a hot topic leads to one key question: can interorganizational governance mechanisms (socialization, incentives, and monitoring) offered by marketing theory be applied to China, an emerging economy characterized by the Chinese guanxi relationship? The purpose of this paper is to seek to answer this question by introducing the importance of guanxi roles and by illustrating how to apply proper governance mechanisms to roles activation in Chinese business practice. The paper finds that the answer is “yes” and develops a theoretical model to show such interactions.Design/methodology/approachThe paper applies interorganizational strategies to interpersonal relationships. Guanxi was categorized into three categories – family members, helpers and business partners – which meet each of the three governance mechanisms (in addition to favoring exchange as a special and typical Chinese governance mechanism) in the model.FindingsThrough ex post role activation, the paper argues that guanxi is a dynamic balance and the ways in which various governance mechanisms can set roles will lead to the roles either changing (reinforcement or dilution) or switching (helper to business partner, and vice versa). It seems futile to implement external governance mechanisms on family ties (the main category of guanxi) that have been firmly rooted in Chinese culture. On the other hand, applying the four mentioned governance mechanisms could reinforce, maintain, or dilute helper and business partner roles, or even make it possible to switch from one to another.Originality/valueThe paper proposes a new concept regarding relationship marketing, namely the application of governance mechanisms to interpersonal relationships, which provides people doing business in China with a new perspective for reference.

Governance mechanisms for mobile service innovation in value networks

Service innovation often requires multiple organizations to work together in complex, dynamic networks. Existing literature shows that mechanisms like trust, power and contracts govern activities in organizational networks. Scholars rarely study how such a mix of mechanisms evolves over time, especially not in relation to different stages of service innovation. This paper connects a phasing model on service innovation to concepts of inter-organizational governance in value networks, by examining what governance mechanisms are in use during service development, implementation and commercialization. This study analyzes an international survey among operators, content providers and application developers in the Mobile Internet services domain, which is noted for its complex inter-organizational networks. The findings suggest that power-based governance is in use in the early stages of developing service concepts and technologies, while trust-based governance is in use during implementation, roll-out and commercialization. Contract-based governance is most common during implementation and roll-out.

Interorganizational governance and global strategy

A wide range of interorganizational relationshipsfalls on the global market to multinational hierarchyspectrum, ranging from supplier relationships (Dyerand Chu, 2000) to multinational business groups(Colpan, Hikino, and Lincoln, 2010; Granovetter,1994). Concurrently, as firms increasingly deepenand widen their cross-border value chains, the struc-ture and content of their foreign location portfoliosbecome more critical to their global competitivepositions (Dunning, 1998). In pursuing foreigndirect investment (FDI) and establishing managerialcontrol across borders, multinational enterprise(MNE) managers have become progressively moreable to slice global value chain activities into finerpieces and allocate them across multiple locations.Global strategy studies these competitive cross-national dynamics and how ‘a firm’s competitiveposition in one national market is significantlyaffected by its competitive position in other nationalmarkets’ (Ghoshal, 1987: 425). Thus, decisions onthe location (where) and degree/form of control(how) (Buckley and Ghauri, 2004) are criticalsources of competitive advantage in managingMNEs. When firms decide to go international forvarious strategic objectives, they might choose tohave full managerial control and acquire a firm ordevelop a new wholly owned subsidiary, but alterna-tively they might engage in different degrees ofcooperation with other firms (Kogut and Singh,1988). Generally, firms get involved in interorgani-zational relationships abroad to minimize firm costs,create discriminating alignment between hostcountry uncertainties and firm control, and learnfrom its partners. The two articles that I discuss hereexplore interesting questions within interorganiza-tional networks.Contractor, Woodley, and Piepenbrink’s (2011)article distinguishes among three cross-nationalinterorganizational relationships: licensing agree-ments, non-equity relational contracting (e.g.,supply chain relationships), and equity joint ven-tures. Reuer

Costs and Benefits of Learning through Alliances for Entrepreneurial Firms

A firm that lacks the specialized complementary assets necessary to commercialize an innovation faces a trade-off between contracting with an incumbent to access those assets and integrating downstream into commercialization. According to the framework developed in the prior literature, under a strong appropriability regime the innovator is likely to be better off contracting with an incumbent (as long as it can negotiate reasonable terms). However, we argue that if the innovator can learn from its experience in product commercialization, and thereby build its own commercialization capabilities, then the benefits of integrating downstream may outweigh the opportunity costs of learning and foregone profits. Alternatively, by engaging in joint commercialization, the innovator may be able to avoid these opportunity costs, albeit at the expense of higher inter-organizational governance costs. We illustrate the relationship between the choice of commercialization mode, commercialization experience, and performance in the context of the pharmaceutical industry. Specifically, we study how commercialization mode and experience affects the likelihood of drug approval. We find that when innovators lacking commercialization experience participate in the commercialization process though either joint commercialization or by commercializing alone, the product is less likely to be approved. However, innovators that have participated in the commercialization process in the past are more likely to successfully commercialize subsequent innovations under joint commercialization than those which have only contracted the commercialization to an incumbent. The results suggest that in some circumstances participating in the commercialization process, either through self-commercialization or by engaging in joint commercialization, may be the optimal strategy even for firms without the requisite complementary assets.

What Level of Analysis is Most Salient for a Global Theory of Corporate Governance?

What Level of Analysis is Most Salient for a Global Theory of Corporate Governance?

Governance of mobile service innovation after the walled gardens

PurposeThis paper seeks to study how interorganizational governance mechanisms within mobile eco‐systems are affected by the end of the walled gardens and what this implies for developing mobile internet services.Design/methodology/approachStarting from concepts on interorganizational governance, the paper conducts an extensive case study on how the Dutch walled garden i‐mode portal evolved in an open WAP‐based portal.FindingsThe transition of walled garden to open portals dramatically changes governance mechanisms between operator and content providers. Authority‐based governance in the form of operator rules, contracts‐based governance in the form of formalized agreements, and trust‐based governance in the form of close collaboration all reduced following the end of the walled garden.Research limitations/implicationsThe author demonstrates that theoretical concepts of interorganizational governance are relevant for actors within the mobile ecosystem to understand, next to regulatory, technical and market mechanisms, if they are to provide value to the customers as well as to the eco‐system itself.Originality/valueAlthough scholars often agree that the choice between walled gardens and open models will influence service innovation, existing studies do not systematically study how governance between operators and content providers changes when the mobile eco‐system is transforming from walled gardens to open models. Although this paper focuses on the relation between operators and content providers, the power shift to hardware and platform providers implies that governance is still highly relevant. As walled gardens also emerge in other areas of ICT‐enabled services, for instance in the Smart Living domain, the insights will be valuable for studies on ICT‐enabled service industries as well.

Reciprocity and interorganizational governance—A multicase analysis of exchange systems

Summary Exchange is regarded as the fundamental activity in every economic context. Seeking a, theoretical conceptualization of interorganizational exchange, we conduct interpretative analysis of, venture capital organizations in Germany and their portfolio companies to develop an exchangerelated, perspective centered on reciprocity in interorganizational relations. We identify two types of, exchange—economic exchange reciprocity and social obligation reciprocity which differ, considerably in their exchange cultures, modes, structures, and resources. The theoretical perspective, might help make the rediscovered concept of reciprocity useful in other organizational and, interorganizational relations.

Shaping Sustainable Value Chains: Network Determinants of Supply Chain Governance Models

Although the characteristics and advantages of interorganizational governance models based on extensive collaboration are well established in the literature, inquiry has only recently extended to sustainable supply chain management, highlighting the potential benefits of combining the integration of social and environmental issues concerning the supply chain with governance models based on joint decision making and extensive cooperation. Yet, firms still differ in both the pervasiveness of such collaborative approaches along the value chain and the extent to which sustainability issues are addressed to the advantage of all parties involved. In an attempt to predict variety in the governance models related to sustainability along the value chain, we propose a theoretical model that identifies and frames four sustain- able supply chain governance (SSCG) models, resulting from combinations of supply chain network density and centrality of the focal organizations. We show how, as centrality increases, firms are able to exert influence over their network, coordinating integrated approaches along the value chain. Moreover, as high centrality combines with increasing interconnectedness of the actors within a supply chain network, instrumental approaches are progressively replaced by more relational attitudes aimed at joint value creation among partners. Conditions for SSCG models’ success and the main benefits gained by firms in different structural contexts are also discussed.

The Organization of Regional Clusters

We introduce a model of interorganizational governance within regional clusters. Drawing on the “new institutional economics” literature, we show how firms' governance designs are shaped by the relationship between transaction-level characteristics and the cluster macroculture. We then consider how subsequent transaction-level governance designs are affected by path dependencies from past governance choices. Finally, we suggest that intertransactional path dependencies exhibit directional asymmetries, and we draw implications for the literature on clusters, on transaction costs, and on interorganizational relationships.