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Safeguarding Interorganizational Performance and Continuity Under Ex Post Opportunism

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Author Info

  • Sandy D. Jap

    ()
    (Goizueta Business School, Emory University, Atlanta, Georgia 30322-2710)

  • Erin Anderson

    ()
    (INSEAD, 77305 Fontainebleau Cedex, France)

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    Abstract

    Opportunism is a central construct in exchange theory. Economists contend that despite the firm's best efforts to erect governance structures that reduce opportunism and preserve outcomes, there is always some opportunism that remains once the transaction is in place. Despite this, there are few studies that systematically investigate the safeguarding efficacy of relationship attributes in the presence of such ex post opportunism. In this research, we develop a theoretical framework and provide a longitudinal test of the ability of various relationship safeguards to preserve performance outcomes and future expectations given varying levels of ex post opportunism in the relationship. Our survey results from over 300 buyers and suppliers indicates that given lower levels of opportunism, bilateral idiosyncratic investments and interpersonal trust enhance performance outcomes and future expectations, while goal congruence has no discernable effect. However, at higher levels of opportunism, goal congruence becomes a more powerful safeguard, while interpersonal trust becomes less effective. Bilateral idiosyncratic investments continue to preserve performance outcomes and future expectations even at higher levels of opportunism. Implications for the long-term management of interorganizational alliances are discussed.

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    File URL: http://dx.doi.org/10.1287/mnsc.49.12.1684.25112
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    Bibliographic Info

    Article provided by INFORMS in its journal Management Science.

    Volume (Year): 49 (2003)
    Issue (Month): 12 (December)
    Pages: 1684-1701

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    Handle: RePEc:inm:ormnsc:v:49:y:2003:i:12:p:1684-1701

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    Keywords: Interorganizational Performance; Opportunism; Relational Safeguards; Goal Congruence; Trust; Contracts; Idiosyncratic Investments; Transaction Costs;

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    Cited by:
    1. Weseen, Simon & Hobbs, Jill & Kerr, William A., 2014. "Reducing Hold-up Risks in Ethanol Supply Chains: A Transaction Cost Perspective," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IAMA), vol. 17(2).
    2. Steven Globerman & Aidan Vining, 2004. "The Outsourcing Decision: A Strategic Framework," International Trade 0404007, EconWPA.
    3. Lee, Peter K.C. & Lau, Antonio K.W. & Cheng, T.C.E., 2013. "Employee rights protection and financial performance," Journal of Business Research, Elsevier, vol. 66(10), pages 1861-1869.
    4. Gary Lilien & Rajdeep Grewal & Douglas Bowman & Min Ding & Abbie Griffin & V. Kumar & Das Narayandas & Renana Peres & Raji Srinivasan & Qiong Wang, 2010. "Calculating, creating, and claiming value in business markets: Status and research agenda," Marketing Letters, Springer, vol. 21(3), pages 287-299, September.
    5. Mooi, Erik A. & Frambach, Ruud T., 2012. "Encouraging innovation in business relationships—A research note," Journal of Business Research, Elsevier, vol. 65(7), pages 1025-1030.
    6. Noordhoff, C.S. & Kyriakopoulos, K. & Moorman, C. & Pauwels, P. & Dellaert, B.G.C., 2011. "The Bright Side and Dark Side of Embedded Ties In Business-to-Business Innovation," ERIM Report Series Research in Management ERS-2011-008-MKT, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus Uni.
    7. Gerrit Rooks & Werner Raub & Frits Tazelaar, 2006. "Ex Post Problems in Buyer–Supplier Transactions: Effects of Transaction Characteristics, Social Embeddedness, and Contractual Governance," Journal of Management and Governance, Springer, vol. 10(3), pages 239-276, September.
    8. Adobor, Henry, 2006. "The role of personal relationships in inter-firm alliances: Benefits, dysfunctions, and some suggestions," Business Horizons, Elsevier, vol. 49(6), pages 473-486.
    9. Scott Colwell & Michael Zyphur & Marshall Schminke, 2011. "When does Ethical Code Enforcement Matter in the Inter-Organizational Context? The Moderating Role of Switching Costs," Journal of Business Ethics, Springer, vol. 104(1), pages 47-58, November.
    10. Radkevitch, U.L. & van Heck, H.W.G.M. & Koppius, O.R., 2006. "Buyer Commitment and Opportunism in the Online Market for IT Services," ERIM Report Series Research in Management ERS-2006-046-LIS, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus Uni.
    11. Kyu Kim, Kyung & Yul Ryoo, Sung & Dug Jung, Myung, 2011. "Inter-organizational information systems visibility in buyer-supplier relationships: The case of telecommunication equipment component manufacturing industry," Omega, Elsevier, vol. 39(6), pages 667-676, December.
    12. Zhang, Cheng & Dhaliwal, Jasbir, 2009. "An investigation of resource-based and institutional theoretic factors in technology adoption for operations and supply chain management," International Journal of Production Economics, Elsevier, vol. 120(1), pages 252-269, July.
    13. Zhan, Lingjing & He, Yanqun, 2012. "Understanding luxury consumption in China: Consumer perceptions of best-known brands," Journal of Business Research, Elsevier, vol. 65(10), pages 1452-1460.
    14. Lui, Steven S. & Wong, Yin-yee & Liu, Weiping, 2009. "Asset specificity roles in interfirm cooperation: Reducing opportunistic behavior or increasing cooperative behavior?," Journal of Business Research, Elsevier, vol. 62(11), pages 1214-1219, November.
    15. Aric Rindfleisch & Kersi Antia & Janet Bercovitz & James Brown & Joseph Cannon & Stephen Carson & Mrinal Ghosh & Susan Helper & Diana Robertson & Kenneth Wathne, 2010. "Transaction costs, opportunism, and governance: Contextual considerations and future research opportunities," Marketing Letters, Springer, vol. 21(3), pages 211-222, September.
    16. 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.
    17. Radkevitch, U.L. & van Heck, H.W.G.M. & Koppius, O.R., 2007. "Portfolios of Exchange Relationships: An Empirical Investigation of an Online Marketplace for IT Services," ERIM Report Series Research in Management ERS-2007-035-LIS, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus Uni.
    18. Griffith, David A. & Zhang, Chun & Cavusgil, S. Tamer, 2006. "Attributions of noncooperative incidents and response strategies: The role of national character," Journal of World Business, Elsevier, vol. 41(4), pages 356-367, December.

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