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Informal Governance and Its Impact on Transactional Uncertainty of Transnational Companies: The Case of Social Relatedness


  • Kim-Leong Chung

    () (University of Bremen - Faculty of Business Studies and Economics)

  • Jörg Freiling

    () (University of Bremen - Faculty of Business Studies and Economics & ZenTra)

  • Sven M. Laudien

    () (Otto von Guericke University Magdeburg & ZenTra)


Due to their particular characteristics, transnational companies (TNC) face numerous challenges, in particular dealing with uncertainty in both external and internal transactions. In this paper, we investigate whether and how far individual and inter-personal interactions among members of the internal units of TNC influence their transactional relationships. We develop the proposition that social relatedness is a crucial means to cope with transactional uncertainty in cross-border relationships within organizational boundaries. Our empirical study provides first support of this causality.

Suggested Citation

  • Kim-Leong Chung & Jörg Freiling & Sven M. Laudien, 2013. "Informal Governance and Its Impact on Transactional Uncertainty of Transnational Companies: The Case of Social Relatedness," ZenTra Working Papers in Transnational Studies 15 / 2013, ZenTra - Center for Transnational Studies, revised Apr 2013.
  • Handle: RePEc:zen:wpaper:15

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    More about this item


    informal governance; social relatedness; transactional uncertainty; transnational companies;

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • M16 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - International Business Administration

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