Performance impacts of interorganizational cooperation: a transaction cost perspective

This study builds on the transaction cost theory to examine the performance effects of interorganizational cooperation and develops an understanding of how different forms of cooperative relationships affect organizational performance within a major service sector, namely the healthcare industry. The authors study, in particular, two cooperative forms applied to hospitals: hospital-based health networks and health systems. An empirical investigation of 382 hospitals in Taiwan shows that interorganizational cooperation exerts positive effects on hospital performance. In addition, health systems have greater positive effects on hospital efficiency than health networks. Furthermore, this study finds that the positive impact of participation in health systems is especially significant for private hospitals, local community hospitals, and hospitals in highly competitive regions. The findings reveal that performance impacts of interorganizational cooperation are contingent on the cooperative arrangements in the healthcare industry.     

Productivity changes in Taiwanese hospitals and the national health insurance

In 1995 Taiwan launched the National Health Insurance (NHI) programme, which changed the method payment for hospital finances. This article examines the impact of this financial reform on hospital productivity during this period. Using the Malmquist productivity index approach, a hospital's change in productivity is decomposed into quality, efficiency, and technological change components. Factors affecting efficiency and productivity are also assessed. Results indicate that most hospitals experienced a significant productivity slowdown due to declines in technology and quality of service, but efficiency did significantly improve. The inception of the NHI programme does greatly improve a hospital's productivity and quality of service, but decreases efficiency. Public hospitals' efficiency improvements are significant.     

The evolution of interorganizational relationships in emerging ventures: An ethnographic study within the new product development process

Emerging ventures rarely have the resources they need, which often force them to reach beyond their boundaries to access these resources. While the field has acknowledged how critical external relationships are in the emergence process, we lack an understanding of how these relationships evolve. Drawing on fourteen longitudinal case studies, this article begins to fill that gap by examining how emerging ventures use interorganizational relationships to discover, develop, and commercialize new products. We found that emerging ventures tended to establish outsourcing relationships early and that many outsourcing relationships progressed into alliances. This suggests that these early relationships are dynamic, evolve through the emergence process, and may be critical to the successful emergence of a venture. We also discovered that many entrepreneurs developed strong socioemotional bonds with their alliance partners. Unexpectedly, our study revealed that in many cases these socioemotional bonds clouded the entrepreneur's judgment of the partner's abilities and led to problems that threatened the venture's survival.     

Trust,Decision Rights Delegation,and Performance—The Case of Franchising

Previous research has not examined the relationship between trust, decentralization, and franchisor performance. Complementary to the literature on autonomy and relational governance from franchisees’ perspective, this study focuses on the franchisor's perspective on the impact of decentralization and trust on performance. Consistent with the embeddedness view, the results show that trust is a facilitator of decentralization in franchise networks, thereby increasing the positive performance effect of decision rights delegation. Overall, the study offers a new perspective on the relationship between formal governance—through decision rights allocation—and trust as a relational variable in interorganizational networks.     

Partner Selection,Interorganizational Coordination,and New Service Development Success in the Financial Service Industry

This study aims to investigate the relationship between partner selection and new service development (NSD) success. We identified three partner selection factors based on partner selection theory: partner reliability, partner expertise, and partner compatibility, and suggested product‐market experience and technological experience as moderators. We developed a questionnaire and distributed it to 446 financial service companies in Taiwan. Overall, we received 122 usable pairs of responses from each firm's sales manager and marketing manager. The results indicate that interorganizational coordination contributes to NSD success. Among the three partner selection factors, partner reliability and partner compatibility were found to positively affect interorganizational coordination. In addition, product‐market experience enhances the positive effect of interorganizational coordination on NSD success. Copyright © 2018 ASAC. Published by John Wiley & Sons, Ltd.     

Reconsidering the venture capitalists' “value added” proposition: An interorganizational learning perspective

This study examines the interorganizational relationships among venture capitalists (VCs) and new venture teams (NVTs) for their contribution to long-term improvement in the performance of a venture. Research in (1) learning assistance, (2) NVT dismissal and (3) procedural justice provide important insights into the unique interorganizational relationship that exists among VCs and the NVTs they fund. We found the following: (1) no statistically significant support for strategic information, (2) a negative association for dismissals and (3) positive support for procedurally just interventions. These longitudinal findings suggest important future research on interorganizational relationships.     

Social signaling and interorganizational relationships: Lessons learned from the professional sports industry

In today’s connected economy, interorganizational relationships are increasingly important. Whether government-to-government, political party-to-political party, business-to-business, department-to-department, or some other interorganizational pairing, these relationships can provide organizations with signals used to identify and better respond to changes in their environment and in their interorganizational relationships. This enables astute organizations to not only understand how others will interpret the social signals they send, but also to shape those signals in ways that will improve their interorganizational relationships. We illustrate this herein, using the public and readily recognizable relationships involved with labor relations in the professional sports industry. We show how social signals can explain the way organizations change and adapt to their environments, and how these changes send messages to related organizations. Finally, we provide a set of recommended advice for managers based on this case analysis.     

Coping With Dependence: A Logistics Strategy Based on Interorganizational Learning for Managing Buyer–Supplier Relations

The rise of outsourcing has heightened interest in the role of logistics managers in coping with dependence in buyer–supplier relations. Buying firm dependence on a supplier potentially reduces supplier performance to expectations because the buying firm cannot leverage power to capture value in the relationship. Drawing from interorganizational learning theory, we advance a logistics strategy that consists of supplier cost analysis and supplier integration as a means to create value and thereby mitigate the negative effects of dependence. By facilitating the acquisition and use of knowledge, supplier cost analysis and supplier integration enable buying firms to identify improvement opportunities while engaging in collaborative supplier relations. Using survey responses from 222 buying firms, we find that while buyer dependence decreases the buyer's perceived supplier performance, supplier integration suppresses these negative effects. Furthermore, we show that supplier cost analysis is a valuable knowledge acquisition tool that logistics managers can use to enable supplier integration as a relational form of governance. As such, we provide new insights into interorganizational learning theory and suggest to logistics managers the important role supplier cost analysis plays in managing buyer–supplier relationships.     

The Emergence of Consolidated Service Centers in Health Care

Hospital supply chains can be conceptualized as complex systems with a large number of players and a high degree of interrelatedness among them, creating an environment that is difficult to optimize and manage. In recent years, a consolidated service center (CSC) strategy (sometimes also referred to as “self‐distribution” strategy), has emerged in some healthcare systems, showing a strong potential for reducing the complexity in a hospital's supply chain to achieve high levels of performance and innovation. We examine three CSCs using a qualitative case method to understand the unique characteristics of this supply chain strategy, and how CSCs move hospital supply chains toward a less complex state. We find that CSCs demonstrate characteristics that distinguish them from other supply chain strategies. These characteristics enable the CSC to orchestrate supply base rationalization and disintermediation initiatives in the hospital's supply chain to effectively reduce the number of components and interrelatedness in this complex system.     

Digital Systems,Partnership Networks,and Competition: The Co-Evolution of IOS Use and Network Position as Antecedents of Competitive Action

This study examines and tests a holistic model of relationships among interorganizational systems (IOS), partnership networks of firms, and firms' competitiveness. The model integrates concepts from these three areas of study to give a basis for more fully understanding and investigating issues inherent in IOS-intensive coopetition networks. Introducing social network analysis and competitive dynamics research into this study, we test the model using an automotive network comprised of the world's major competing sports car makers and their many value/supply chain partners. We collect and analyze data about these firms' network structures, usage of IOS, and competitive actions. Results support the holistic view that there are systematic associations between IOS use, competitive action, and network structure. Based on this view, we introduce a framework characterizing the roles of IOS in achieving firm competitiveness.     

Organizational and Interorganizational Determinants of EDI Diffusion and Organizational Performance: A Causal Model

Electronic data interchange (EDI), a specific form of interorganizational systems, has the potential to significantly influence business operations and the exchange of business documents in a number of industries and to provide substantive tangible and intangible benefits to the participating firms. However, successful implementation and diffusion of these systems innovations requires the cooperation and commitment of all participating member firms. A number of interorganizational as well as internal, organization-specific factors can influence both the extent to which EDI is diffused and used and the level of subsequent benefits that accrue to the firms.

Research from sociopolitical process framework in marketing, organizational theory, innovation theory, use of information technology for competitive advantage, and information systems (IS) implementation was used to identify 3 interorganizational variables (customer support, customer expertise, competitive pressure) and 4 organizational variables (internal support, EDI's benefits potential, EDI compatibility, resource intensity). In this study, we develop a multidimensional measure for EDI diffusion to capture both external integration and internal integration. We then examine the influence of these 7 variables on the extent to which EDI adopter firms pursue diffusion and whether more diffusion leads to superior organizational-level outcomes.

Two senior executives (the chief executive officer and a senior manager responsible for the IS function or EDI) from 83 firms in the motor carrier industry participated in a field survey. The results from a structural equation model (SEM), developed using LISREL, provide quite a strong support for the hypothesized relations. All 4 organizational variables and 2 of the 3 interorganizational variables (customer support and competitive pressure) influence EDI diffusion. The results also indicate that external integration dimension of diffusion enables adopter firms to achieve improved operational and market-oriented performance, whereas internal integration contributes only to operational performance.     

Friend or foe: Customer-supplier relationships and innovation

This study provides an empirical investigation of the impact of customer-supplier relationships on firm innovation in an interorganizational framework encompassing transaction cost economics, resource dependence theory, and the theory of incomplete contracts. Using a sample of U.S. firms for the period from 1980 to 2005, this study explores how customer concentration and customer bargaining power affect a supplier's process innovation and product innovation measured with R&D-to-assets ratio and patents (also citations), respectively. The findings imply that a concentrated customer base, which reflects a strong customer-supplier relationship as well as high switching costs, motivates suppliers to invest more in R&D and become more innovative. However, the evidence also suggests that strong customer bargaining power creates hold-up problems and forces suppliers to invest less in R&D and innovation. The results are robust to sophisticated econometric techniques that control for endogeneity and suggest heterogeneous effects of business partnerships on firm innovation.     

Exploring Supply Managers' Intrapreneurial Ability and Relationship Quality

This article examined the degree to which a supply manager's intrapreneurial ability influences the quality of individual-level relationships with internal customers and the supplier's account executive. The moderating influence of the buyer's firm-level commitment to the supplier and how these relationships subsequently impact supplier performance were explored. The study assessed the supply manager's intrapreneurial ability using survey data gathered from 110 supply managers across a variety of industries. In key supplier relationships, a supply manager's intrapreneurial ability positively influences the quality of internal and external relationships. The firm's commitment to the supplier weakens the relationship between intrapreneurial ability and relationship quality. The findings highlight the value of individual skills to enhance relationships The ability to behave intrapreneurially shapes the quality of internal and supplier relationships. However, only the supply manager's relationship with the supplier's account executive is related to supplier performance. By examining the impact of intrapreneurial ability on individual-level relationships with internal customers and supplier's account executive, a more comprehensive view of business-to-business relationship management in the supply chain is gained.     

Service Orientation: Its Impact on Business Performance in the Medical Service Industry

From the viewpoint of internal marketing, employees who are content in their job may be motivated to satisfy their customers better than ones who are not content. Another relevant premise is that the content employees, because of their work motivation, would eventually help improve the performance of their firm. To verify these relationships, some previous studies looked into the effects of organisational service orientation on employee's satisfaction. But only few of them investigated the mediating effects of variables such as service value and customer orientation for their role in linking service orientation to business performance. This study examines how an organisation's service orientation had an effect on its performance at hospitals. For this purpose, verification of the mediating role of service value perceived by employees as well as the role of customer orientation on the firm's performance was attempted. For this study, a total of 292 usable questionnaires were collected from hospital staffs located in metropolitan cities of Korea. The hypotheses concerning relationships among service orientation, service value, employee satisfaction and customer orientation were verified by covariance structural modelling, using SPSS 10.0 and AMOS 4.0 programs. The result is as follows. First, organisational service orientation had a positive effect on both employee satisfaction and service value perceived by hospital staff. Second, employee satisfaction had a positive impact on service value and customer orientation. Finally, service value as well as employee's customer orientation were found to exert positive influence on the medical firm's performance.     

Loving Outside the Neighborhood: The Conflicting Effects of External Linkages on Incremental Innovation in Clusters

The present study assesses the explanatory capacity of three levels of factors, namely, internal to the company, and internal and external to the cluster, in predicting firms' incremental innovative performance in cluster contexts. The empirical research conducted here focuses on a sample of 92 companies from the Spanish textile industrial cluster in Valencia. Findings reveal that the significant role played by firms' interorganizational ties as a moderating factor between absorptive capacity and their incremental innovative performance. Additionally, results reflect the differentiated roles developed by intra‐ and extra‐cluster linkages in these interaction processes.     

Using R&D cooperative arrangements to leverage managerial experience: A study of technology-intensive new ventures

During the past decade, increasing attention has been given to the widespread use of research and development (R&D) strategic alliances and cooperative interorganizational relationships. This research has addressed a variety of inter-firm relationships ranging from joint ventures to informal networking. However, most of this literature is based on research involving large established firms. More recently, researchers have recognized that small firms or new ventures are also adopting cooperative R&D strategies with increasing frequency. A variety of reasons for the increasing use of R&D cooperative arrangements in new ventures has been offered, including the need to complement a new venture's existing internal resources, the need to quickly gain the technical capabilities to compete in rapidly changing markets, and the desire to minimize the fixed costs associated with acquiring capital assets.This paper reports the results of a study of new high-technology ventures that examined the relationship between performance, the experience of a venture's management team, and its use of R&D cooperative arrangements. The central proposition of this research was that the effectiveness of R&D cooperative activities is associated with the level of combined expertise possessed by the new venture's management team. Specifically, it was anticipated that new ventures with management teams possessing more experience with the industry and/or with similar technologies would be better able to successfully engage in R&D cooperative activities.The primary data analysis technique was moderated regression. The data was collected from Security and Exchange Commission initial public offering registration statements and other archival documents filed by 210 new ventures in three high-technology manufacturing industries.The results of the regression analysis revealed that sales growth was associated with the use of R&D cooperative arrangements. More important, the results also indicated that this relationship was positive when the new venture's management team was relatively more familiar with the industry, markets, and/or with similar technologies. In other words, our results indicate that the relatively more experienced managers were more proficient at using R&D cooperative activities to strategically position their respective firms vis-à-vis their less experienced counterparts. Evidently, these managers were better able to identify the risks and benefits of engaging in such cooperative activities. Additionally, we provide preliminary evidence that the greater knowledge possessed by the management teams may have allowed the new ventures to reduce the costs associated with R&D market transactions.These findings are important because they suggest that prior managerial experience in similar industries and/or with similar technologies is an important prerequisite for the successful use of R&D cooperative arrangements by new high-technology ventures. Management's knowledge of customer needs, product characteristics, and/or the specific idiosyncracies of the industry and/or technology seems to significantly enhance a new technology-intensive venture's ability to effectively engage in R&D cooperative activities.     

Organizational Trust and Interfirm Cooperation: An Examination of Horizontal Versus Vertical Alliances

Over the past decade, trust has emerged as the central means of achieving cooperation in interorganizational relationships. Past empirical inquiries have largely focused on the role of trust within the context of vertical relations between channel members or service providers and their clients. Thus, little is known about the nature or the role of trust in horizontal relations. A number of interorganizational scholars suggest that the nature and the effect of behavioral norms such as trust may be widely different in horizontal versus vertical relationships. This study examines the effect of relationship form on organizational trust using data from a survey of 106 U.S. firms who have recently participated in either horizontal or vertical R&D alliances. The results of this survey indicate that participants in vertical alliances display higher levels of organizational trust than participants in horizontal alliances. In addition, while organizational trust enhances cooperation in vertical alliances, trust is unrelated to cooperation in horizontal alliances.     

Interorganizational Trust and Technology Complexity: Evidence for New Technology‐Based Firms

Integrating the transaction cost economics and relational perspectives, this paper puts forward that technology complexity within new technology‐based firms negatively influences the level of interorganizational trust in key partner relationships. Using a data set of 105 key partner relationships of 59 new technology‐based firms, we find that the new technology‐based firm's level of trust in its key partners is lower when the level of technology complexity is high. Findings further show that both relationship and partner characteristics moderate the technology complexity—trust relationship. These results show that technology complexity as an appropriability mechanism becomes endogenous to collaboration, thereby extending the Teece framework.     

The impact of salespeople's relational behaviors and organizational fairness on customer loyalty: An empirical study in B-to-B relationships

Although customer loyalty has proved to be a powerful determinant of firms' profits, the drivers of loyalty in B-to-B relationships are still unclear. Recognizing that both interpersonal and interorganizational level variables are needed to predict customer loyalty, the aim of this study is to investigate the combined effects of salespersons' relational behavior and organizational fairness in predicting customer satisfaction and loyalty. Results from a field survey in a B-to-B setting show that buyer loyalty is largely determined by the quality of the interpersonal relationship with the seller. Perceived fairness is central for building overall customer satisfaction and loyalty toward the supplier.     

The Struggle is Real: Insights from a Supply Chain Blockchain Case

Despite the anticipated benefits and the numerous announcements of pilot cases, we have seen very few successful implementations of blockchain technology (BCT) solutions in supply chains. Little is empirically known about the obstacles to blockchain adoption, particularly in a supply chain's interorganizational setting. In supply chains, blockchains' benefits, for example, BCT‐based tracking and tracing, are dependent on a critical mass of supply chain actors adopting the technology. While previous research has mainly been conceptual and has lacked both theory and empirical data, we propose a theory‐based model for interorganizational adoption of BCT. We use the proposed model to analyze a unique in‐depth revelatory case study. Our case study confirms previous conceptual work and reveals a paradox as well as several tensions between drivers for and against (positive and negative determining factors, respectively) of BCT adoption that must be managed in an interorganizational setting. In this vertical context, the adoption and integration decision of one supply chain actor recursively affects the adoption and integration decisions of the other supply chain actors. This paper contributes midrange theory on BCT in supply chain management (SCM), future research directions, and managerial insights on BCT adoption in supply chains.