IDEAS home Printed from https://ideas.repec.org/a/eee/proeco/v182y2016icp293-303.html
   My bibliography  Save this article

Curbing opportunism in logistics outsourcing relationships: The role of relational norms and contract

Author

Listed:
  • Huo, Baofeng
  • Fu, Dijia
  • Zhao, Xiande
  • Zhu, Jingwen

Abstract

Logistics outsourcing, as a strategy to obtain competitive advantages, is prevalent in today's business world. However, we know little about logistics outsourcing, especially with regard to opportunistic behavior types and their relational antecedents (e.g., contracts and relational norms) of their opportunism in the third party logistics (3PL) user-provider relationships in emerging economies. Using China's developing 3PL industry as a research context, and social exchange theory and transaction cost economics as the theoretical lenses, we examine how three dimensions of relational norms (information exchange, flexibility, solidarity) influence two dimensions of contracts (detailed contracts, contract application), and how relational norms and contracts simultaneously influence 3PL providers’ opportunism. Using data collected from 247 manufacturing and service firms in China, we empirically test the proposed model and find that detailed contracts and solidarity are effective safeguards in reducing 3PL providers’ opportunistic behavior, while the contract application process leads to opportunism. Furthermore, flexibility is positively related to detailed contracts and the contract application process, which can influence 3PL providers’ opportunism negatively and positively, respectively. This study contributes to the logistics outsourcing, opportunism, and relationship management literature and provides managerial implications for 3PL practices in China.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:proeco:v:182:y:2016:i:c:p:293-303
    DOI: 10.1016/j.ijpe.2016.07.005
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0925527316301517
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ijpe.2016.07.005?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. 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.
    2. Kevin Zheng Zhou & Laura Poppo & Zhilin Yang, 2008. "Relational ties or customized contracts? An examination of alternative governance choices in China," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(3), pages 526-534, April.
    3. David A Griffith & Matthew B Myers, 2005. "The performance implications of strategic fit of relational norm governance strategies in global supply chain relationships," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 36(3), pages 254-269, May.
    4. C Zhang & S T Cavusgil & A S Roath, 2003. "Manufacturer governance of foreign distributor relationships: do relational norms enhance competitiveness in the export market?," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 34(6), pages 550-566, November.
    5. Tarun Khanna, 1998. "The Scope of Alliances," Organization Science, INFORMS, vol. 9(3), pages 340-355, June.
    6. Preet S Aulakh & Masaaki Kotabe & Arvind Sahay, 1996. "Trust and Performance in Cross-Border Marketing Partnerships: A Behavioral Approach," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 27(5), pages 1005-1032, December.
    7. Judd B. Kessler & Stephen Leider, 2012. "Norms and Contracting," Management Science, INFORMS, vol. 58(1), pages 62-77, January.
    8. Steven Tadelis & Oliver E.Williamson, 2012. "Transaction Cost Economics [The Handbook of Organizational Economics]," Introductory Chapters,, Princeton University Press.
    9. Luo, Yadong, 2006. "Opportunism in Inter-firm Exchanges in Emerging Markets[1]," Management and Organization Review, Cambridge University Press, vol. 2(1), pages 121-147, March.
    10. Jody Crosno & Chris Manolis & Robert Dahlstrom, 2013. "Toward understanding passive opportunism in dedicated channel relationships," Marketing Letters, Springer, vol. 24(4), pages 353-368, December.
    11. Kevin Zheng Zhou & Dean Xu, 2012. "How foreign firms curtail local supplier opportunism in China: Detailed contracts, centralized control, and relational governance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 43(7), pages 677-692, September.
    12. 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.
    13. William G. Ouchi, 1979. "A Conceptual Framework for the Design of Organizational Control Mechanisms," Management Science, INFORMS, vol. 25(9), pages 833-848, September.
    14. Preet S Aulakh & Masaaki Kotabe & Arvind Sahay, 1996. "Trust and Performance in Cross-Border Marketing Partnerships: A Behavioral Approach," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 27(4), pages 1005-1032, December.
    15. 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.
    16. Yigang Pan & David K Tse, 2000. "The Hierarchical Model of Market Entry Modes," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 31(4), pages 535-554, December.
    17. Ju, Min & Murray, Janet Y. & Kotabe, Masaaki & Gao, Gerald Yong, 2011. "Reducing distributor opportunism in the export market: Effects of monitoring mechanisms, norm-based information exchange, and market orientation," Journal of World Business, Elsevier, vol. 46(4), pages 487-496, October.
    18. Armstrong, J. Scott & Overton, Terry S., 1977. "Estimating Nonresponse Bias in Mail Surveys," MPRA Paper 81694, University Library of Munich, Germany.
    19. 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.
    20. Jacob G Birnberg, 1998. "Control in Interfirm Co‐operative Relationships," Journal of Management Studies, Wiley Blackwell, vol. 35(4), pages 421-428, July.
    21. Gary Hamel, 1991. "Competition for competence and interpartner learning within international strategic alliances," Strategic Management Journal, Wiley Blackwell, vol. 12(S1), pages 83-103, June.
    22. Yadong Luo, 2007. "An integrated anti-opportunism system in international exchange," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(6), pages 855-877, November.
    23. Wu, Qing & Mu, Yinping & Feng, Yi, 2015. "Coordinating contracts for fresh product outsourcing logistics channels with power structures," International Journal of Production Economics, Elsevier, vol. 160(C), pages 94-105.
    24. Fang Wu & Rudolf R Sinkovics & S Tamer Cavusgil & Anthony S Roath, 2007. "Overcoming export manufacturers’ dilemma in international expansion," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(2), pages 283-302, March.
    25. Yadong Luo, 2006. "Opportunism in Inter-firm Exchanges in Emerging Markets," Management and Organization Review, International Association of Chinese Management Research, vol. 2(1), pages 121-147, March.
    26. Patrick J. Kaufmann & Louis W. Stern, 1988. "Relational Exchange Norms, Perceptions of Unfairness, and Retained Hostility in Commercial Litigation," Journal of Conflict Resolution, Peace Science Society (International), vol. 32(3), pages 534-552, September.
    27. 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.
    28. 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. Davis-Sramek, Beth & Robinson, Jessica L. & Darby, Jessica L. & Thomas, Rodney W., 2020. "Exploring the differential roles of environmental and social sustainability in carrier selection decisions," International Journal of Production Economics, Elsevier, vol. 227(C).
    2. Gukseong Lee, 2022. "Matching Task Complexity With Supplier Management to Enhance Outsourcing Performance," SAGE Open, , vol. 12(3), pages 21582440221, September.
    3. 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.
    4. 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).
    5. Yin, Qiaoyi & Song, Dian & Lai, Fujun & Collins, Brian J. & Dogru, Ali K., 2023. "Customizing governance mechanisms to reduce opportunism in buyer–supplier relationships in the digital economy," Technological Forecasting and Social Change, Elsevier, vol. 190(C).
    6. Liu, Zuoming & Jayaraman, Vaidy & Luo, Yadong, 2017. "The unbalanced indirect effects of task characteristics on performance in professional service outsourcing," International Journal of Production Economics, Elsevier, vol. 193(C), pages 281-293.
    7. Iffat Abbas Abbasi & Hasbullah Ashari & Amin Jan & Ahmad Shabudin Ariffin, 2021. "Contract Farming towards Social Business: A New Paradigm," Sustainability, MDPI, vol. 13(22), pages 1-17, November.
    8. Amani Gration Tegambwage & Pendo Shukrani Kasoga, 2022. "Loan repayment among group borrowers in Tanzania: the role of relationship quality," Future Business Journal, Springer, vol. 8(1), pages 1-11, December.
    9. Wang, Kedi & Huo, Baofeng & Tian, Min, 2021. "How to protect specific investments from opportunism: A moderated mediation model of customer integration and transformational leadership," International Journal of Production Economics, Elsevier, vol. 232(C).
    10. Wei Fang & Lulu Tang & Pengxiao Cheng & Naveed Ahmad, 2018. "Evolution Decision, Drivers and Green Innovation Performance for Collaborative Innovation Center of Ecological Building Materials and Environmental Protection Equipment in Jiangsu Province of China," IJERPH, MDPI, vol. 15(11), pages 1-19, October.
    11. 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.
    12. 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.
    13. Yeo Amy Chu May & Lai Marcus Ee Ken, 2020. "The Influence of B2B Relationship Quality on Opportunism and Firm Performance," HOLISTICA – Journal of Business and Public Administration, Sciendo, vol. 11(3), pages 59-87, December.
    14. Huo, Baofeng & Gu, Minhao & Jiang, Bin, 2018. "China-related POM research: Literature review and suggestions for future research," International Journal of Production Economics, Elsevier, vol. 203(C), pages 134-153.

    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, 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.
    2. Pei-Li Yu, 2019. "Interfirm coopetition, trust, and opportunism: a mediated moderation model," Review of Managerial Science, Springer, vol. 13(5), pages 1069-1092, November.
    3. 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.
    4. Wang, Qingtao & Li, Julie Juan & Yang, Defeng, 2022. "Unequal participation in joint new product development: The roles of information opportunism concern and contract binding force," Journal of Business Research, Elsevier, vol. 145(C), pages 21-34.
    5. Ju, Min & Murray, Janet Y. & Kotabe, Masaaki & Gao, Gerald Yong, 2011. "Reducing distributor opportunism in the export market: Effects of monitoring mechanisms, norm-based information exchange, and market orientation," Journal of World Business, Elsevier, vol. 46(4), pages 487-496, October.
    6. 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.
    7. 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.
    8. Amankwah-Amoah, Joseph & Debrah, Yaw & Nuertey, Dorcas, 2018. "Institutional Legitimacy, Cross-Border Trade and Institutional Voids: Insights from the Cocoa Industry in Ghana," MPRA Paper 84393, University Library of Munich, Germany.
    9. Ghasem Zaefarian & Matthew J. Robson & Zhaleh Najafi-Tavani & Stavroula Spyropoulou, 2023. "Relationships of stressors and opportunism in cross-border exchange partnership contexts: When and how monitoring matters," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 54(3), pages 441-475, April.
    10. Zahoor, Nadia & Khan, Zaheer & Shenkar, Oded, 2023. "International vertical alliances within the international business field: A systematic literature review and future research agenda," Journal of World Business, Elsevier, vol. 58(1).
    11. Lumineau, Fabrice & Henderson, James, 2012. "The influence of relational experience and contractual governance on the negotiation strategy in buyer-supplier disputes," MPRA Paper 38510, University Library of Munich, Germany.
    12. 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.
    13. Ellegaard, Chris & Medlin, Christopher J., 2018. "Finding good relationships – intended and realized relational governance of international fine wine exchanges," Journal of World Business, Elsevier, vol. 53(6), pages 794-805.
    14. Maximilian Holtgrave & Mert Onay, 2017. "Success through Trust, Control, and Learning? Contrasting the Drivers of SME Performance between Different Modes of Foreign Market Entry," Administrative Sciences, MDPI, vol. 7(2), pages 1-24, May.
    15. 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.
    16. Ali, Tahir & Larimo, Jorma, 2016. "Managing opportunism in international joint ventures: The role of structural and social mechanisms," Scandinavian Journal of Management, Elsevier, vol. 32(2), pages 86-96.
    17. 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.
    18. Rudolf R. Sinkovics & Ruey-Jer Bryan Jean & Anthony S. Roath & S. Tamer Cavusgil, 2011. "Does IT Integration Really Enhance Supplier Responsiveness in Global Supply Chains?," Management International Review, Springer, vol. 51(2), pages 193-212, April.
    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. Kolloge, Konstantin, 2009. "Die Messung des Kooperationserfolges in der empirischen Forschung: Ergebnisse einer Literaturstudie," Arbeitspapiere 76, University of Münster, Institute for Cooperatives.

    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:182:y:2016:i:c:p:293-303. 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.