Inter-organizational governance: a review, conceptualisation and extension

Figures & data

Figure 1. Growth of articles on inter-organizational governance in management journals.

Figure 2. Summary of comprehensive review process (adapted from Rashman, Withers, and Hartley 2009, p. 5).

Figure 3. (a–c) Key characteristics of extant governance exchange research.

Figure 4. A multidimensional framework of inter-organizational governance.

Table 1. Key concepts and knowledge gaps for inter-organizational governance research.

Key concept	Exemplary key papers	Key takeaways	Knowledge gaps/blind spots for further research
Uncertainty	Geyskens, Steenkamp, and Kumar (2006); Rindfleisch and Heide (1997); Selviaridis (2016)	Behavioural and environmental sources of uncertainty influence contract design and the functionality of contract vis-à-vis relational governance mechanisms	Future studies should consider possible asymmetries between parties with regards to the impact of uncertainty. Future research needs to consider the viewpoints of a variety of different organizations across different sectors and countries. Moreover, changes of uncertainty over time need to be considered.
Prior ties/relationship length	Cao and Lumineau (2015); Reuer and Ariño (2007); Vanneste and Puranam (2010)	Prior ties/exchange experience influences the detail of contractual agreements and the degree of relational governance mechanisms; prior ties /relationship length moderates the interplay of contractual and relational governance	Further research needs to consider a more nuanced conceptualisation of time and the length of the relationship concerning governance interplay. Most prior studies conceptualised time linearly, but following Ancona, Okhuysen, and Perlow (2001), time could be conceptualized in other ways. For instance, time could be interpreted differently by both parties in the relationship (subjective time), it could be conceptualised as renewing or restarting after a period of time (cyclical time), and it could be used as a reference point around which activities are examined (event time). Prior studies offer limited insights into the impact of prior ties and its impact on the contracting process. There is a limited understanding of how the contracting process unfolds over time. In other words, future studies need to unpack how contracts are initially created and then enacted (Schilke and Lumineau 2018). Impact on promise of future business (shadow of the future) on the use of contract provisions needs to be explored (Schepker et al. 2014).
Asset specificity	Heide and John (1992); Williamson (1985)	High levels of asset specificity lead to reliance on contractual safeguards to mitigate opportunism; Relational norms can be necessary complements to manage risks related to asset specificity	There is a paucity of studies distinguishing between buyer and supplier asset specificity and exploring its influence on governance mechanisms (Vandaele et al. 2007). Future research needs to explore possible asymmetries (e.g. power, information, trust) between parties in the relationship and the impact of asset specificity to further heighten these asymmetries.
Power-dependency structure	Lusch and Brown (1996)	Power-dependency structure in inter-organizational relationships has an impact on the choice of governance mechanisms	There is a paucity of literature exploring how both organizations in a relationship appropriate more value through the negotiation of favourable contracts. Most prior research focuses on one organization’s bargaining power on the contract structure (Argyres and Bercovitz 2015). Future studies should also uncover how the interaction of power and contracting may contribute to achieve supply chain alignment (Selviaridis and Spring 2018).
Legal/institutional framework	Zhou and Poppo (2010)	Institutional set up (e.g. legal /regulatory framework) impacts on the effectiveness of governance mechanisms as it influences how contracts are enforced and which behaviours are (socially) acceptable	Further studies should explore the possible influence of institutional, legal and cultural contexts on the relationship between governance mechanisms and performance. Combining this macro unit of analysis with the inter-organizational level of analysis, studies could address the blind spot of focusing on a single level of analysis (Lumineau and Oliveira 2018).
Type of relationship/organization	Cao and Lumineau (2015); Mayer and Teece (2008)	Type of relationship (e.g. strategic alliances, buyer-supplier relationships; cross-border exchanges) or organization (e.g. public or private) influences the effects of governance mechanisms	Recent studies have called for more research that explore the differences between contracts with varied functional purposes across different organizational forms (Ranganathan, Ghosh, and Rosenkopf 2018). Partnering organizations with different types of organizational structures and objectives may have different assumptions with regards to governance mechanisms. Further research is needed to explore these possible asymmetries.
Relational and contractual governance and their interplay	Cannon, Achrol, and Gundlach (2000); Heide and John (1992); Klein-Woolthuis, Hillebrand, and Nooteboom (2005); Poppo and Zenger (2002); Zhou and Poppo (2010)	Both governance mechanisms are vital in inter-organizational relationships; the interplay of governance mechanisms is reliant on different antecedents; governance interplay will have an impact on performance	Future research needs to consider different types of trust (e.g. competence-based) and their impact on governance mechanisms interplay. Further research is required to also understand the impact of different types of contracts (and their specificity) such as performance-based contracts (Essig et al., 2016) and their impact on governance mechanisms interplay (e.g. Cao and Lumineau 2015; Selviaridis, 2016). Limited research has so far addressed the interplay of different governance functions and possible governance dysfunctions (e.g. Howard et al. 2019) and their development over time.
Exchange/relationship performance	Cao and Lumineau (2015); Liu, Luo, and Liu (2009)	Performance of the exchange and/or partners in terms of quality, cost and on time deliveries; Joint use of governance mechanisms may increase relationship performance	Impact of governance mechanisms (functions) interplay on performance is poorly explored. A particularly promising area is to understand the role and impact of contracting capabilities (e.g. Argyres and Mayer 2007) on exchange performance. The use of third parties in contract design and its subsequent influence on performance needs to be understood (e.g. Duplat and Lumineau 2016). Use of objective measures along with quasi-objective and perceptual measures (such as satisfaction) is required (Gulati and Nickerson 2008). Performance data consider often only one party’s perception/measurements, whereas both parties’ perceptions/measurements should be considered. Future research should examine the performance impact of coordination and adaptation functions of contracts (e.g. Schepker et al. 2014)
Opportunistic behavior	Cao and Lumineau (2015); Yang, Wacker, and Sheu (2012); Williamson (1985)	Self-interest seeking with guile; the relative effects of individual/joint governance mechanisms on opportunism reduction depending on exchange characteristics	Further research needs to explore the effect of opportunism on contract-performance link (e.g. Schilke and Lumineau 2018). Future studies should also explore how opportunistic behaviour changes over time based on the interplay of governance mechanisms.
Learning/joint problem solving	Lumineau and Malhotra (2011); Mayer and Argyres (2004); Selviaridis and Spring (2018); Vanneste and Puranam (2010)	Exchange partners over time learn to contract and to collaborate to solve problems or to (re)align their goals and incentives as exchange- and partner-specific knowledge accumulates and is also reflected in modified contracts	Further work is needed on how contract framing, in interaction with other contract design and management attributes, impacts on buyer-supplier relationships and how contracting parties might learn to frame contracts effectively (e.g. Selviaridis and van der Valk 2019). Future research should also examine the way frames are interpreted in relation to the dynamics of trust and learning (e.g. Weber 2017). Future work should also consider the possible asymmetry (between buyer and supplier) in ‘learning to contract/collaborate’ effects in inter-organizational relationships.

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