• The Journal of Industrial Distribution & Business
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• v.10 no.1
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• pp.51-58
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• 2019

Purpose - Manufacturers in uncertain environments need to depend on governance mechanisms to reduce the inherent risk in these environments. However, few studies have examined which governance mechanisms a given manufacturers will develop in uncertain environments for managing the relationships with its vertical partner. This study explores how different governance mechanisms function under uncertain environmental circumstances. We also try to investigate the contextual effect of interfirm benevolence as moderator. Research design, data, and methodology - This research provide the conceptual framework of interfirm benevolence on which this research's propositions are predicted. The theoretical background for environmental uncertainty, governance mechanisms and interfirm benevolence will be discussed. Results - The expected results are as follows. Manufacturers in an uncertain environments rely on different governance mechanisms under conditions of high and low interfirm benevolence. In terms of role of interfirm benevolence, interfirm benevolence provides a better understanding of how governance mechanisms can develop in an uncertain supply markets. Conclusions - This research suggests several theoretical and practical implications between channel partners, particularly, this research offers that interfirm benevolence is a crucial competitive factor under environmental uncertainty situation. In future studies, it is necessary to investigate the effect of each governance mechanism structure on performance in an uncertain environment and various level of interfirm benevolence.

• The Journal of Industrial Distribution & Business
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• v.13 no.9
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• pp.11-26
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• 2022

Purpose: Manufacturers rely on interfirm governance mechanisms to reduce the risks inherent in uncertain environments; however, it is unclear which governance mechanisms are developed to manage relationships with suppliers. This study sought to enhance knowledge of how environmental uncertainty affects interfirm governance mechanisms under conditions reflecting varying levels of structural holes. To this end, the study investigated the relationships between manufacturers and major first-tier and sub-suppliers. In particular, the moderating effect of structural holes is examined. Research design, data and methodology: A questionnaire survey was conducted with a major first-tier supplier of a Korean engineering firm. Proposed hypotheses were tested using structural equation modeling. Results: The results show that while the relationship between environmental uncertainty and unilateral governance is positive but statistically insignificant, with bilateral governance is negative and statistically significant. The study also demonstrates that when structural holes are considered, the effects between environmental uncertainty and governance mechanisms are attenuated. Conclusions: This study suggests some theoretical and managerial contributions between exchange partners, especially, the results suggest that structural holes have a critical competitive advantage in uncertain environments. Therefore, manufacturers should carefully consider how they deal with environmental uncertainty when they make a business decision under structural holes situations.

• Asia Marketing Journal
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• v.19 no.1
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• pp.19-34
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• 2017

Despite the importance of the impact of network structure on the relationships between firms and firm performance, few studies have investigated these effects. This study investigates how network openness influences the relationships between TSI, opportunism, technological uncertainty, and supplier performance. We also try to figure out how network openness functions as a governance mechanism.

• International Area Studies Review
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• v.12 no.3
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• pp.89-109
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• 2008

Using hybrid channel affords the benefits of achieving control through the direct channel and achieving flexibility through the indirect channel. However, using a hybrid channel also poses special challenges to a manufacturer, including the problem of managing multiple channel members with disparate goals and priorities. The purpose of this study is to enhance our understanding on the management of hybrid channel. We study marketing channels for fashion apparel to examine governance challenges and solutions of a hybrid channel. We have two objectives to fulfill that purpose. First, we aim to tie two largely separate research streams of salesforce management and marketing channel management together by examining both intrafrim governance and interfirm governance issues under one conceptual framework. Second, we aim to lay a ground work for rigorous further research on this topic by tying two major theoretical approaches of governance together under one conceptual framework. Our predictions were tested with data from the survey of apparel manufacturers and retailers. The analysis results support the predictions moderately.

• Journal of Korea Society of Digital Industry and Information Management
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• v.6 no.4
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• pp.251-265
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• 2010

Recently, with increasing interest in the subject of interfirm relationship mechanism, some information systems researchers point out that existing outsourcing theories are limited in explaining the choice of governance mechanisms in interfirm relational exchanges. Recognizing the importance of trust-commitment, this study focuses on the relationship of between control mechanism and commitment. Especially the role of trust as mediator is mainly researched. A mediation model was suggested on the basis of theoretical linkages from prior relevant studies. The research model was empirically tested with 73 IS outsourcing projects. The findings have significant impactions for further research and practice. Findings are as follows: First, outcome control, process control, social control had positive effects on trust and commitment. Second, inter-organizational trust played as a partial mediator on the relationship between control mechanisms and commitment. Based on these findings, the implication and the limitation of the study were presented including some directions for future studies.

• Journal of the Korean Geographical Society
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• v.51 no.5
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• pp.667-690
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• 2016

This paper reviews the evolution process of global production network(GPN) discourse, from its origin to the recent theorization, namely GPN 2.0. In so doing, the discursive formation of global production networks is introduced in comparison with a competing discourse global commodity/value chains, with particular attention to conceptual and analytical lacunae in the latter. This article also outlines how the global production network perspective has become a useful discursive and practical tool that allows the examination of the nexus of global economy, transnational corporations, and regional development. Subsequently, a theoretical dearth in the approach is discussed in reference to key critiques, and in this context Yeung and Coe's recent theorization GPN 2.0, which is centered on casual mechanisms and network configurations is reviewed. This paper suggests that the theory adequately addresses the problem of casuality lacking in its precedented conceptual framework, and that it helps exploring the formation and evolution processes of varied production networks(including intrafirm coordination, interfirm control, strategic partnership, and extrafirm bargaining) in connection with competitive dynamics and risky environments. As a result of the theorization, the difference between GPN and the chain approaches has become more apparent, and the idea of extrafirm bargaining is particularly important in the differentiation. Extrafirm bargaining is seen to be a comprehensive networking form inclusive of such GPN 1.0 analytical concepts as value, embeddeness, and power, and research attentive to, and engaging with, the extrafirm networks is expected to help transcending the chain governance approaches' analytical excess of interfirm linkages and industry-centeredness.

• Journal of Distribution Science
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• v.10 no.2
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• pp.29-41
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• 2012

This paper undertakes a conceptual review of transaction cost to broaden the understanding of the transaction cost analysis (TCA) approach. More than 40 years have passed since Coase's fundamental insight that transaction, coordination, and contracting costs must be considered explicitly in explaining the extent of vertical integration. Coase (1937) forced economists to identify previously neglected constraints on the trading process to foster efficient intrafirm, rather than interfirm, transactions. The transaction cost approach to economic organization study regards transactions as the basic units of analysis and holds that understanding transaction cost economy is central to organizational study. The approach applies to determining efficient boundaries, as between firms and markets, and to internal transaction organization, including employment relations design. TCA, developed principally by Oliver Williamson (1975,1979,1981a) blends institutional economics, organizational theory, and contract law. Further progress in transaction costs research awaits the identification of critical dimensions in which transaction costs differ and an examination of the economizing properties of alternative institutional modes for organizing transactions. The crucial investment distinction is: To what degree are transaction-specific (non-marketable) expenses incurred? Unspecialized items pose few hazards, since buyers can turn toalternative sources, and suppliers can sell output intended for one order to other buyers. Non-marketability problems arise when specific parties' identities have important cost-bearing consequences. Transactions of this kind are labeled idiosyncratic. The summarized results of the review are as follows. First, firms' distribution decisions often prompt examination of the make-or-buy question: Should a marketing activity be performed within the organization by company employees or contracted to an external agent? Second, manufacturers introducing an industrial product to a foreign market face a difficult decision. Should the product be marketed primarily by captive agents (the company sales force and distribution division) or independent intermediaries (outside sales agents and distribution)? Third, the authors develop a theoretical extension to the basic transaction cost model by combining insights from various theories with the TCA approach. Fourth, other such extensions are likely required for the general model to be applied to different channel situations. It is naive to assume the basic model appliesacross markedly different channel contexts without modifications and extensions. Although this study contributes to scholastic research, it is limited by several factors. First, the theoretical perspective of TCA has attracted considerable recent interest in the area of marketing channels. The analysis aims to match the properties of efficient governance structures with the attributes of the transaction. Second, empirical evidence about TCA's basic propositions is sketchy. Apart from Anderson's (1985) study of the vertical integration of the selling function and John's (1984) study of opportunism by franchised dealers, virtually no marketing studies involving the constructs implicated in the analysis have been reported. We hope, therefore, that further research will clarify distinctions between the different aspects of specific assets. Another important line of future research is the integration of efficiency-oriented TCA with organizational approaches that emphasize specific assets' conceptual definition and industry structure. Finally, research of transaction costs, uncertainty, opportunism, and switching costs is critical to future study.