IDEAS home Printed from https://ideas.repec.org/a/eee/proeco/v175y2016icp12-23.html
   My bibliography  Save this article

Improving logistics outsourcing performance through transactional and relational mechanisms under transaction uncertainties: Evidence from China

Author

Listed:
  • Yang, Qian
  • Zhao, Xiande
  • Yeung, Hoi Yan Jeff
  • Liu, Yanping

Abstract

Although previous studies have extensively examined the effectiveness of the two important control mechanisms in inter-firm relationship management – contracts and relational norms – their relative usefulness under different transaction constraints is still unclear. This study extends existing research on relationship management by exploring the effects of various transaction constraints on the use of contracts and relational norms. It also examines the effects of these two mechanisms on outsourcing performance. The analysis of data from 264 Chinese firms engaged in logistics outsourcing indicates that demand volatility has a negative effect on contracts but has no significant effect on relational norms. Supply volatility exerts an inverse U-shape effect on relational norms, but has no significant effect on contracts. When technology uncertainty prevails, firms are likely to increase their use of either contracts or relational norms. In contrast, when vendor contribution is highly unpredictable, firms will simultaneously reduce their use of contracts and relational norms. Furthermore, although relational norms enhance satisfaction more effectively than contracts, their positive effects on financial performance are not significantly different. These findings enrich relationship management research, especially with regard to control mode selection in situations of transaction uncertainty.

Suggested Citation

  • Yang, Qian & Zhao, Xiande & Yeung, Hoi Yan Jeff & Liu, Yanping, 2016. "Improving logistics outsourcing performance through transactional and relational mechanisms under transaction uncertainties: Evidence from China," International Journal of Production Economics, Elsevier, vol. 175(C), pages 12-23.
    • Handle: RePEc:eee:proeco:v:175:y:2016:i:c:p:12-23
    DOI: 10.1016/j.ijpe.2016.01.022
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0925527316000359
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ijpe.2016.01.022?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Sandeep Rustagi & William R. King & Laurie J. Kirsch, 2008. "Predictors of Formal Control Usage in IT Outsourcing Partnerships," Information Systems Research, INFORMS, vol. 19(2), pages 126-143, June.
    2. Laaksonen, Toni & Jarimo, Toni & Kulmala, Harri I., 2009. "Cooperative strategies in customer-supplier relationships: The role of interfirm trust," International Journal of Production Economics, Elsevier, vol. 120(1), pages 79-87, July.
    3. Amrit Tiwana & Mark Keil, 2007. "Does peripheral knowledge complement control? An empirical test in technology outsourcing alliances," Strategic Management Journal, Wiley Blackwell, vol. 28(6), pages 623-634, June.
    4. Amrit Tiwana, 2008. "Does technological modularity substitute for control? A study of alliance performance in software outsourcing," Strategic Management Journal, Wiley Blackwell, vol. 29(7), pages 769-780, July.
    5. Wang, Longwei & Yeung, Jeff Hoi Yan & Zhang, Min, 2011. "The impact of trust and contract on innovation performance: The moderating role of environmental uncertainty," International Journal of Production Economics, Elsevier, vol. 134(1), pages 114-122, November.
    6. Bhattacharya, Ananya & Singh, Prakash J. & Nand, Alka Ashwini, 2015. "Antecedents of buyer opportunistic behavior in outsourcing relationships," International Journal of Production Economics, Elsevier, vol. 166(C), pages 258-268.
    7. William G. Ouchi, 1979. "A Conceptual Framework for the Design of Organizational Control Mechanisms," Management Science, INFORMS, vol. 25(9), pages 833-848, September.
    8. Julie Juan Li & Laura Poppo & Kevin Zheng Zhou, 2010. "Relational mechanisms, formal contracts, and local knowledge acquisition by international subsidiaries," Strategic Management Journal, Wiley Blackwell, vol. 31(4), pages 349-370, April.
    9. Chong Ju Choi & Carla C. J. M. Millar & Caroline Y. L. Wong, 2005. "Knowledge and Exchange," Palgrave Macmillan Books, in: Knowledge Entanglements, chapter 0, pages 65-76, Palgrave Macmillan.
    10. Yadong Luo, 2007. "Private control and collective control in international joint ventures," Management International Review, Springer, vol. 47(4), pages 531-566, October.
    11. Kevin Zheng Zhou & Laura Poppo, 2010. "Exchange hazards, relational reliability, and contracts in China: The contingent role of legal enforceability," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 41(5), pages 861-881, June.
    12. Yang, Qian & Zhao, Xiande, 2016. "Are logistics outsourcing partners more integrated in a more volatile environment?," International Journal of Production Economics, Elsevier, vol. 171(P2), pages 211-220.
    13. Detmar Straub & Peter Weill & Kathy S. Schwaig, 2009. "Strategic Dependence on the IT Resource and Outsourcing: A Test of the Strategic Control Model," Springer Books, in: Rudy Hirschheim & Armin Heinzl & Jens Dibbern (ed.), Information Systems Outsourcing, pages 175-199, Springer.
    14. Tsai, Ming-Chih & Lai, Kee-hung & Lloyd, Alison E. & Lin, Hung-Ju, 2012. "The dark side of logistics outsourcing – Unraveling the potential risks leading to failed relationships," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 48(1), pages 178-189.
    15. Laura Poppo & Kevin Zheng Zhou & Todd R. Zenger, 2008. "Examining the Conditional Limits of Relational Governance: Specialized Assets, Performance Ambiguity, and Long‐Standing Ties," Journal of Management Studies, Wiley Blackwell, vol. 45(7), pages 1195-1216, November.
    16. Yadong Luo, 2007. "Are joint venture partners more opportunistic in a more volatile environment?," Strategic Management Journal, Wiley Blackwell, vol. 28(1), pages 39-60, January.
    17. Sandy D. Jap & Erin Anderson, 2003. "Safeguarding Interorganizational Performance and Continuity Under Ex Post Opportunism," Management Science, INFORMS, vol. 49(12), pages 1684-1701, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Soomin Shin & Meehee Cho, 2022. "Green Supply Chain Management Implemented by Suppliers as Drivers for SMEs Environmental Growth with a Focus on the Restaurant Industry," Sustainability, MDPI, vol. 14(6), pages 1-17, March.
    2. Huo, Baofeng & Fu, Dijia & Zhao, Xiande & Zhu, Jingwen, 2016. "Curbing opportunism in logistics outsourcing relationships: The role of relational norms and contract," International Journal of Production Economics, Elsevier, vol. 182(C), pages 293-303.
    3. Liu Liu & Hua Zhang, 2021. "How Does Inter-Organizational Relational Governance Propel Firms’ Open Innovation? A Conditional Process Analysis," Sustainability, MDPI, vol. 13(18), pages 1-18, September.
    4. Yuan, Yang & Chu, Zhaofang & Lai, Fujun & Wu, Hao, 2020. "The impact of transaction attributes on logistics outsourcing success: A moderated mediation model," International Journal of Production Economics, Elsevier, vol. 219(C), pages 54-65.
    5. Zhang, Xuemei & Zhou, Gengui & Cao, Jian & Wu, Anqi, 2020. "Evolving strategies of e-commerce and express delivery enterprises with public supervision," Research in Transportation Economics, Elsevier, vol. 80(C).
    6. Sanmugam Annamalah & Murali Raman & Govindan Marthandan & Aravindan Kalisri Logeswaran, 2020. "Embracing Technology and Propelling SMEs through Open Innovation Transformation," International Journal of Finance, Insurance and Risk Management, International Journal of Finance, Insurance and Risk Management, vol. 10(4), pages 95-122.
    7. Babbar, Sunil & Behara, Ravi S. & Koufteros, Xenophon A. & Wong, Christina W.Y., 2018. "Charting leadership in SCM research from Asia and Europe," International Journal of Production Economics, Elsevier, vol. 203(C), pages 350-378.
    8. Babbar, Sunil & Behara, Ravi S. & Koufteros, Xenophon A. & Huo, Baofeng, 2017. "Emergence of Asia and Australasia in operations management research and leadership," International Journal of Production Economics, Elsevier, vol. 184(C), pages 80-94.
    9. Ping Fang & Liang Wan & Wenpei Fang, 2023. "The Choice of Cooperative Governance Mechanism in Open Innovation Projects under the Synergy of the Electricity–Carbon Market," Energies, MDPI, vol. 16(17), pages 1-15, August.
    10. Huo, Baofeng & Ye, Yuxiao & Zhao, Xiande & Wei, Jiang & Hua, Zhongsheng, 2018. "Environmental uncertainty, specific assets, and opportunism in 3PL relationships: A transaction cost economics perspective," International Journal of Production Economics, Elsevier, vol. 203(C), pages 154-163.
    11. Yang, Qian & Geng, Ruoqi & Jiang, Yisa & Feng, Taiwen, 2021. "Governance mechanisms and green customer integration in China: The joint effect of power and environmental uncertainty," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 149(C).
    12. Um, Ki-Hyun & Kim, Sang-Man, 2019. "The effects of supply chain collaboration on performance and transaction cost advantage: The moderation and nonlinear effects of governance mechanisms," International Journal of Production Economics, Elsevier, vol. 217(C), pages 97-111.
    13. Wang, Lei & Jiang, Fuming & Li, Jun & Motohashi, Kazuyuki & Zheng, Xiaosong, 2019. "The contingent effects of asset specificity, contract specificity, and trust on offshore relationship performance," Journal of Business Research, Elsevier, vol. 99(C), pages 338-349.
    14. Tomás F. Espino-Rodríguez & Juan Carlos Ramírez-Fierro, 2018. "Outsourcing Performance in Hotels: Evaluating Partnership Quality," Sustainability, MDPI, vol. 10(8), pages 1-19, August.
    15. Amoako-Gyampah, Kwasi & Boakye, Kwabena Gyasi & Adaku, Ebenezer & Famiyeh, Samuel, 2019. "Supplier relationship management and firm performance in developing economies: A moderated mediation analysis of flexibility capability and ownership structure," International Journal of Production Economics, Elsevier, vol. 208(C), pages 160-170.
    16. Muhammad Waseem Bari & Qurrah-tul-ain & Muhammad Abrar & Meng Fanchen, 2022. "Employees’ responses to psychological contract breach: The mediating role of organizational cynicism," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 43(2), pages 810-829, May.
    17. Tran, Phuong Nguyen Thu & Gorton, Matthew & Lemke, Fred, 2021. "When supplier development initiatives fail: Identifying the causes of opportunism and unexpected outcomes," Journal of Business Research, Elsevier, vol. 127(C), pages 277-289.
    18. Xuesong Zhao & Jieyi Pan & Yongtao Song, 2018. "Dependence on Supplier, Supplier Trust and Green Supplier Integration: The Moderating Role of Contract Management Difficulty," Sustainability, MDPI, vol. 10(5), pages 1-14, May.
    19. Ali Abbas & Sahadah Hj. Abdullah* & Rosli Mohd Saad, 2018. "Affecting Factors to Intentions to Adoption of E-Commerce Technologies in SMEs of Pakistan," The Journal of Social Sciences Research, Academic Research Publishing Group, pages 147-155:4.
    20. Murilo Wohlgemuth & Carlos Ernani Fries & Ângelo Márcio Oliveira Sant’Anna & Ricardo Giglio & Diego Castro Fettermann, 2020. "Assessment of the technical efficiency of Brazilian logistic operators using data envelopment analysis and one inflated beta regression," Annals of Operations Research, Springer, vol. 286(1), pages 703-717, March.
    21. Zhu, Wenwen & Ng, Stephen C.H. & Wang, Zhiqiang & Zhao, Xiande, 2017. "The role of outsourcing management process in improving the effectiveness of logistics outsourcing," International Journal of Production Economics, Elsevier, vol. 188(C), pages 29-40.
    22. Pei Chun-Lai & Tomás F Espino-Rodríguez & Tom Baum, 2019. "Do relational norms matter in outsourcing relationships? Lesson learned from hotel sectors," Tourism Economics, , vol. 25(2), pages 189-212, March.
    23. Qiangqiang Zhang & Beibei Yan & Xuexi Huo, 2018. "What Are the Effects of Participation in Production Outsourcing? Evidence from Chinese Apple Farmers," Sustainability, MDPI, vol. 10(12), pages 1-15, November.
    24. Ying Wang & Fu Jia & Tobias Schoenherr & Yu Gong, 2018. "Supply Chain-Based Business Model Innovation: The Case of a Cross-Border E-Commerce Company," Sustainability, MDPI, vol. 10(12), pages 1-23, November.
    25. Joanita Kataike & Xavier Gellynck, 2018. "22 Years of Governance Structures and Performance: What Has Been Achieved in Agrifood Chains and Beyond? A Review," Agriculture, MDPI, vol. 8(4), pages 1-32, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Huo, Baofeng & Ye, Yuxiao & Zhao, Xiande & Wei, Jiang & Hua, Zhongsheng, 2018. "Environmental uncertainty, specific assets, and opportunism in 3PL relationships: A transaction cost economics perspective," International Journal of Production Economics, Elsevier, vol. 203(C), pages 154-163.
    2. Huo, Baofeng & Fu, Dijia & Zhao, Xiande & Zhu, Jingwen, 2016. "Curbing opportunism in logistics outsourcing relationships: The role of relational norms and contract," International Journal of Production Economics, Elsevier, vol. 182(C), pages 293-303.
    3. Um, Ki-Hyun & Kim, Sang-Man, 2019. "The effects of supply chain collaboration on performance and transaction cost advantage: The moderation and nonlinear effects of governance mechanisms," International Journal of Production Economics, Elsevier, vol. 217(C), pages 97-111.
    4. Huo, Baofeng & Ye, Yuxiao & Zhao, Xiande, 2015. "The impacts of trust and contracts on opportunism in the 3PL industry: The moderating role of demand uncertainty," International Journal of Production Economics, Elsevier, vol. 170(PA), pages 160-170.
    5. Wang, Longwei & Yeung, Jeff Hoi Yan & Zhang, Min, 2011. "The impact of trust and contract on innovation performance: The moderating role of environmental uncertainty," International Journal of Production Economics, Elsevier, vol. 134(1), pages 114-122, November.
    6. Fang, F., 2019. "When performance shortfall arises, contract or trust? A multi-method study of the impact of contractual and relational governances on performance in public – private partnerships," Other publications TiSEM 473840ee-6945-4a93-9326-5, Tilburg University, School of Economics and Management.
    7. Wang, Liwen & Sheng, Shibin & Wu, Shuilong & Zhou, Kevin Zheng, 2017. "Government role, governance mechanisms, and foreign partner opportunism in IJVs," Journal of Business Research, Elsevier, vol. 76(C), pages 98-107.
    8. Yang, Qian & Zhao, Xiande, 2016. "Are logistics outsourcing partners more integrated in a more volatile environment?," International Journal of Production Economics, Elsevier, vol. 171(P2), pages 211-220.
    9. White, George O. & Hemphill, Thomas & Weber, Thomas & Moghaddam, Kaveh, 2018. "Institutional origins of WOFS formal contracting: A judicial arbitrariness perspective," International Business Review, Elsevier, vol. 27(3), pages 654-668.
    10. Nullmeier, Fabian & Wynstra, Finn & van der Valk, Wendy, 2019. "Mitigating shirking: Contracting performance in buyer-initiated service triads," Other publications TiSEM cebcb590-5a85-4906-b8ec-1, Tilburg University, School of Economics and Management.
    11. Tao Zhang, 2019. "How Do Information Technology Resources Facilitate Relational and Contractual Governance in Green Supply Chain Management?," Sustainability, MDPI, vol. 11(13), pages 1-17, July.
    12. Xue, Jinjie & Yuan, Hongping & Shi, Benshan, 2016. "Investigating partners' opportunistic behavior in joint ventures in China: The role of transaction costs and relational exchanges," Journal of Business Research, Elsevier, vol. 69(12), pages 6067-6078.
    13. Zahoor, Nadia & Al-Tabbaa, Omar, 2021. "Post-entry internationalization speed of SMEs: The role of relational mechanisms and foreign market knowledge," International Business Review, Elsevier, vol. 30(1).
    14. Wang, Lei & Zhang, Chun & Jiang, Fuming, 2019. "Matching governance mechanisms with transaction-specific investment types and supplier roles: An empirical study of cross-border outsourcing relationships," International Business Review, Elsevier, vol. 28(2), pages 316-327.
    15. Lumineau, Fabrice & Jin, Jason Lu & Sheng, Shibin & Zhou, Kevin Zheng, 2022. "Asset specificity asymmetry and supplier opportunism in buyer–supplier exchanges," Journal of Business Research, Elsevier, vol. 149(C), pages 85-100.
    16. Liu, Shan & Wang, Lin & Huang, Wei (Wayne), 2017. "Effects of process and outcome controls on business process outsourcing performance: Moderating roles of vendor and client capability risks," European Journal of Operational Research, Elsevier, vol. 260(3), pages 1115-1128.
    17. Shibin Sheng & Kevin Zheng Zhou & Julie Juan Li & Zhaoyang Guo, 2018. "Institutions and opportunism in buyer–supplier exchanges: the moderated mediating effects of contractual and relational governance," Journal of the Academy of Marketing Science, Springer, vol. 46(6), pages 1014-1031, November.
    18. Liu, Shan & Deng, Zhaohua, 2015. "How environment risks moderate the effect of control on performance in information technology projects: Perspectives of project managers and user liaisons," International Journal of Information Management, Elsevier, vol. 35(1), pages 80-97.
    19. Sean M. Handley & Corey M. Angst, 2015. "The impact of culture on the relationship between governance and opportunism in outsourcing relationships," Strategic Management Journal, Wiley Blackwell, vol. 36(9), pages 1412-1434, September.
    20. Yadong Luo & Huan Zhang & Juan Bu, 2019. "Developed country MNEs investing in developing economies: Progress and prospect," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(4), pages 633-667, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:proeco:v:175:y:2016:i:c:p:12-23. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ijpe .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.