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Safeguarding Interorganizational Performance and Continuity Under Ex Post Opportunism

  • Sandy D. Jap

    ()

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

  • Erin Anderson

    ()

    (INSEAD, 77305 Fontainebleau Cedex, France)

Registered author(s):

    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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    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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    1. Klein, Benjamin, 1996. "Why Hold-Ups Occur: The Self-Enforcing Range of Contractual Relationships," Economic Inquiry, Western Economic Association International, vol. 34(3), pages 444-63, July.
    2. Williamson, Oliver E, 1983. "Credible Commitments: Using Hostages to Support Exchange," American Economic Review, American Economic Association, vol. 73(4), pages 519-40, September.
    3. Erin Anderson & Barton Weitz, 1989. "Determinants of Continuity in Conventional Industrial Channel Dyads," Marketing Science, INFORMS, vol. 8(4), pages 310-323.
    4. Sethuraman, Rajagopalan & Anderson, James C. & Narus, James A., 1988. "Partnership advantage and its determinants in distributor and manufacturer working relationships," Journal of Business Research, Elsevier, vol. 17(4), pages 327-347, December.
    5. Anderson, Erin, 1988. "Transaction costs as determinants of opportunism in integrated and independent sales forces," Journal of Economic Behavior & Organization, Elsevier, vol. 9(3), pages 247-264, April.
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