Making partner relationship management systems work: The role of partnership governance mechanisms

While the adoption of Partner Relationship Management (PRM) systems by suppliers to manage and monitor its network of partners (i.e. resellers) has been on the rise, the performance improvements have not been consistently realized. Governance theory suggests this may be due to how the PRM system builds on the mechanisms employed by the supplier to oversee their partners. This study investigates how the two capabilities of PRM systems (relationship and fulfillment capabilities) and two partnership governance mechanisms – formal (certification control) and informal (service support) – reinforce each other. These are then related to partner performance in terms of trust, commitment and customer satisfaction. Analysis of data collected from 192 partners in the information and communications technology (ICT) sector suggest a complex relationship. In terms of direct effects, a relationship capability increased trust yet, surprisingly, a fulfillment capability reduced commitment. In terms of moderating effects, certification control weakened the positive link between the relationship capability and performance. Service support, on the other hand, negated some of the detrimental impact of the fulfillment capability on performance. The results suggest the need of to tailor PRM systems in response to the specific performance expectations around them as well as a need to clearly understand how existing partnership governance mechanisms employed by the supplier will affect the performance of these systems.     

Encouraging extra-role behavior in a channel context: The role of economic-, social-, and justice-based sharedness mechanisms

In export businesses where overseas agents enjoy much better knowledge of customers, competitors and institutional environments, a major challenge facing export channel management is encouraging extra-role behavior in forms of agents' spontaneous, cooperative, and innovative actions when formulating and executing strategic decisions for export markets. This study addressed this major challenge by developing an integrated model of agents' extra-role behavior which proposed that the exercise of economic, social, and justice related sharedness mechanisms when making and executing strategic decisions of channel partnerships can be expected to have a positive effect on channel relationship performance. The model was tested by a sample of 353 exporting manufacturers. The empirical evidence showed that channel relationship performance was strongly and positively affected by exporters' perception over agents' extra-role behavior over strategy formulation and execution. Exporting firms are advised to enhance likelihood of agents' extra-role behavior over strategy formulation and execution by expanding inter-organizational sharedness mechanisms in the forms of agents' contract inclusiveness, agents' relationship trust, and agents' decision-making procedural justice.     

Sources of alliance partner trustworthiness: Integrating calculative and relational perspectives

Research on the sources of organizational trustworthiness remains bifurcated. Some scholars have adopted a calculative perspective, stressing the primacy of actors' rational calculations, while others have approached trustworthiness from a relational perspective, focusing on its social underpinnings. We help to reconcile these seemingly disparate views by adopting an integrative approach that allows us to clarify the boundaries of both perspectives. Based on dyadic survey data from 171 strategic alliances, we find that the calculative perspective (represented by contractual safeguards) has higher predictive power when the partner lacks a favorable reputation. In contrast, the relational perspective (represented by organizational culture) predicts trustworthiness more strongly when familiarity with the partner organization is high. Copyright © 2013 John Wiley & Sons, Ltd.     

The impact of transactional and relational strategies in business markets: An agenda for inquiry

The impetus for the special issue of Industrial Marketing Management is the importance of understanding the implications of transactional and relational strategies in business-to-business contexts. The objective of the special issue is to integrate conceptual and empirical research in this area. We highlight research that extends current thinking in the area to ensure that this special issue serves an impetus for future research on this important topic.     

Ownership strategy of Japanese firms: transactional,institutional, and experience influences

We compare the effects of transactional, institutional, and experience influences on the ownership strategies of Japanese investors. Our theoretical development suggests that the equity position of a foreign investor should increase as the specificity of the assets transferred to the foreign affiliate increases, but a lower equity position should be assumed when the foreign investor requires complementary assets to establish a foreign entry. International experience and a strong institutional environment also should lead to increases in the equity position of the foreign investor. These relationships were tested with data on more than 1000 Japanese investments in nine countries of East and South‐East Asia. The results demonstrate that experience and institutional factors were the most important influences on the ownership position taken in the foreign investment, while transactional factors had a much less important and a more ambiguous role. Copyright © 1999 John Wiley & Sons, Ltd.     

The determinants of relational governance and performance: How to manage business relationships?

It is the aim of this study to assess the influence of the determinants of the transaction, dyadic, and business environment level on relational governance and ultimately performance. We build an integrated framework for relationship management drawing from literature of transaction cost economics, marketing channels, and business networks. Dutch suppliers of potted plant and flower products (N=174) provided data for the empirical analysis. Our results show that joint planning, one of the constructs of relational governance, is positively influenced by interorganizational trust, information obtained from the network, physical transaction-specific investments (TSIs), and by fixed lines as the exchange mode. Joint problem solving, the other construct of the governance, is solely influenced by the two dimensions of trust. These two constructs of relational governance effect positively our performance measures. Managers should consider carefully each of the determinants of relational governance for the management of a relationship. As shown in our study, the success is dependent on some of the determinants of the three analytical levels of our integrated framework.     

Relational governance as an interorganizational strategy: An empirical test of the role of trust in economic exchange

We develop a model of relational governance as a specific form of interorganizational strategy that is distinct from the traditional modes of markets and hierarchies. We conceptualize this form of strategy in terms of structural and processual dimensions and derive a model of its determinants through arguments drawn from transaction cost economics and the sociological exchange literature. Hierarchical regression modeling is employed to test the theoretical model on data collected from a sample of 329 independent insurance agencies. We include the relational variable of trust and demonstrate that the combined model explains relational governance better than a model with the traditional determinants of governance form alone. Further, we observe that governance structure and process are related and discuss implications of the dynamic link between them. Directions for extensions are developed for strategic management research and practice.     

The role of relational orientation as measured by face and renqing in innovative behavior in China: An indigenous analysis

Following an indigenous approach, the relationship of the relational orientation of Chinese employees with their innovative behavior is evaluated in China with a cross-level design. Based on relevant research and theorizing, relational orientation is tapped by two core elements, face and renqing (compassion for others). As expected, relational orientation is positively related to fear of failure, but negatively related to innovative behavior. The positive relationship between relational orientation and fear of failure, and the negative relationship between fear of failure and innovative behavior, are weaker when innovative climate is high. Theoretical and applied implications of the findings are discussed.     

Achieving relational governance effectiveness: An examination of B2B management practices in Taiwan

This study examines the antecedents of relational governance effectiveness in a country context where the prevalence of Confucian values is expected to create a culturally ingrained preference for relational governance. We also explore whether different management practices are better predictors of relational governance effectiveness under different collaborative inter-firm relationship configurations. Results from an analysis of 182 alliance relationships in Taiwan, a dynamic newly developed economy, reveal that, generally, demonstrating trustworthiness, establishing just and fair procedures, and building effective platforms for connectivity are management practices that are good predictors of relational governance effectiveness. The multi-group analysis provided more nuanced insights. The findings suggest that different inter-firm relationship configurations require different subsets of management practices. Building effective platforms for connectivity is a strong predictor of relational governance effectiveness in equity-based alliances with foreign partners. In equity-based alliances with domestic partners, establishing fair and just procedures is emphasized. In contractual alliances with foreign partners, ensuring contractual clarity and building effective platforms for connectivity are found to be facilitators of relational governance effectiveness. Last, contractual alliances with domestic partners seem to rely on a portfolio of management practices encompassing demonstrating trustworthiness, establishing just and fair procedures, and building effective platforms for connectivity.     

Relational selling strategy and key account managers' relational behaviors: An exploratory study

Many companies see key account management as a potentially successful way to implement a relational strategy. Nevertheless, the literature suggests that strategy implementation at the sales force level is difficult to achieve, mainly because salespeople may not understand - nor accept - what they are requested to do. Despite their relevance, behaviors of key account managers have poorly been investigated. This article defines and tests a model of relational selling behaviors from the part of key account managers. Results show that the perception of the adoption of a relational selling strategy is associated with some specific key account managers' behaviors (customer-oriented selling, adaptive selling and team selling), but not with others (organizational citizenship behaviors). These findings suggest that potential discrepancies can exist between a relational selling strategy and its implementation at the key account manager level. Based on these results, theoretical and managerial implications are discussed.     

Enhancing performance in emerging-market-supplier/MNE-buyer relationships: An examination of the interplay between virtual and relational governance

Despite the emerging role of information technology (IT)-enabled interactions between exchange partners, few studies simultaneously examine IT-enabled governance (virtual governance) and relational governance. Drawing on the relational and IT-enabled governance literatures, this study develops and tests a contingent view of the interplay between virtual and relational governance in emerging-market-supplier/MNE-buyer relationships. The findings from a survey of 240 Taiwanese contracting suppliers show that the interaction between virtual and relational governance is negatively related to relationship performance. In addition, the negative interaction is stronger when the institutional distance is higher and the environment is changing rapidly. The results indicate the need for emerging-market suppliers to be aware of different uses of virtual and relational governance strategies according to differences in institutional environments and how the environment is changing.     

Capture,governance, and resilience: strategy implications from the history of Rome

Organizational resilience is a subject of great interest to management and strategy scholars. Drawing on over 1,000 years of historical data on the Republic of Rome, and focusing primarily on the period of its establishment (509 BC–338 BC), we identify two generic strategies, capture and governance, that together are essential for organizational resilience. Capture strategy relates to market expansions, while governance strategy refers to the capacity of an organization to assimilate, retain, defend, and increase its dominance within annexed markets. The history of Rome also reveals four supporting tactics—saving power, maintaining a stronghold base, isolating and weakening adversaries, and creating forward outposts—that shore up and reinforce the capture and governance strategies, to create a more enduring and resilient enterprise. Interestingly, a system‐wide view of the strategy‐tactic framework also offers insights on resilience through smallness, thus illustrating its conceptual utility to organizations of all sizes including small enterprises. Copyright © 2010 John Wiley & Sons, Ltd.     

Organizational governance and employee pay: how ownership structure affects the firm's compensation strategy

This research investigated how the ownership structure is related to the firm's overall compensation strategy. The findings extend previous research that focused primarily on CEO compensation strategy. We show that there are significant differences in the compensation practices that apply to all employees as a function of the ownership structure. The results show that for owner‐controlled firms and owner‐managed firms there is significant pay/performance sensitivity for all employees. In management‐controlled firms, changes in pay are related to changes in size of the firm. These findings lead us to conclude that ownership structure not only affects upper management's pay, but also the pay of all employees through substantial differences in the firm's compensation practices. Copyright © 2005 John Wiley & Sons, Ltd.     

Currencies of exchange and global LMX: How they affect employee task performance and extra-role performance

Two studies are presented in this research to integrate the unidimensional and multidimensional perspective of leader-member exchange (LMX). We posit that the dimensions of multidimensional LMX (LMX-MDM) are the exchange currencies of global LMX and investigate their joint effects on task performance and extra-role behaviors of employees. The results from Study One indicate that the affect, loyalty, contribution, and professional respect dimension of LMX-MDM influence overall level of leader-member relationship quality, and global LMX is positively related to task performance as well as organizational citizenship behaviors (OCB). Study Two partially replicates the results in Study One and demonstrates that global LMX is also associated with contextual performance of employees. Limitations and future research on LMX are discussed.     

The strategy/governance structure fit relationship: theory and evidence in franchising arrangements

Despite widespread recognition of the importance of strategy–structure fit, e.g., diversification and divisionalization, research has yet to address the possibility of similar fit issues for other structural forms of organization, such as the choice of franchised vs. company‐owned governance structures. In this study, we depart from the usual debates regarding the superiority of one governance structure over another and argue that performance differences between these two alternative governance structures may be attributable more to the matching of one structure with a correspondingly appropriate strategy. Specifically, we posit that stores will act in fit‐enhancing ways by pursuing strategies that are more congruent with their governance structure; i.e., that franchised stores, with their more flexible and decentralized structures, will be more likely to pursue strategies that emphasize flexibility and local adaptation, whereas company‐owned stores will tend to pursue strategies that emphasize predictability and control. We also argue that those stores acting in such a manner will enjoy subsequent performance benefits. We develop these ideas around strategy/governance structure fit and test our hypotheses using longitudinal data from over 6000 stores within one of the biggest U.S. restaurant chains from 1991 to 1997. Copyright © 2004 John Wiley & Sons, Ltd.     

Building trust in US-Japanese business relationships: Mediating role of cultural sensitivity

While evidence suggests trust plays a fundamental role in maintaining successful buyer-seller relationships in Japan, little is known conceptually as to how foreign sellers can best develop trust in the minds of their Japanese customers. In this research, we develop and test a multi-component model of US seller actions that manifest key trust-building processes (intentionality- and capability-processes) which sellers find effective in building trust with their Japanese buyers. In this unique cultural context, theory suggests trust develops when sellers demonstrate benevolent intentions toward the buyer and exhibit a strong capability to fulfill business promises. An analysis of 181 US sellers in Japan demonstrates that a combination of trust-building efforts is recognized as being critical in seller attempts to develop and sustain trust on the part of their Japanese customers. Importantly, cultural sensitivity mediates the impact of intentionality-based practices on buyer trust, while capability-based activities directly influence trust.     

Enabling relationship structures and relationship performance improvement: The moderating role of relational capital

Based on data from 248 asymmetric subcontractor–customer relationships in Finland, this study analyzes the direct impact of relationship structures, relational capital, and the subcontractor's relationship-specific investments on the improvement of operational relationship performance. In addition, the study investigates the moderating role of relational capital on the links between relationship structures, relationship-specific investments, and relationship performance improvement. We found that both relational capital and relationship-specific investments directly affect the relationship performance improvement, while relationship structures do not. However, relational capital positively moderates the link between relationship structures and relationship performance improvement by creating enabling structures. Thus, our findings contribute to the existing literature and discussion on enabling organizational and relationship structures by demonstrating how relational capital changes the role and impact of relationship structures.     

Environmental dynamism,industry 4.0 and performance: Mediating role of organizational and technological factors

Industry 4.0 (I4.0) has gained a lot of consideration as it can address the challenges of today's dynamic manufacturing environment. This paper empirically examines whether environmental dynamism (ED) can drive firms to implement I4.0 technologies, and mediating effect of critical factors on this relationship. We adopt “Human-Organization-Technology” (HOT) theory to categorize the critical factors for I4.0. The paper also examines the effect of I4.0 on environmental and market performance. The proposed framework is tested by partial least squares (PLS) using the survey data from Indian manufacturing industries. The results show that ED drives firms towards I4.0, and positive effect of I4.0 on performance outcomes. Further, organizational and technological factors mediate the relationship between ED and I4.0. The findings can be useful for firms considering to make a transition towards I4.0. It can aid managers to formulate specific strategies for transitioning to I4.0, contribute towards sustainable development, and improve market performance.     

Cooperative strategy and new venture performance: The role of business strategy and management experience

This paper reports the results of a study of new ventures which examine the relationships between performance and the experience of a new venture's management team, its choice of competitive strategy, and its use of various cooperative arrangements. The findings of the moderated regression analysis indicate that cooperative arrangements are most beneficial to those new ventures whose management teams possess the most experience.