We theorize on how institutional distance and interorganizational relationship (IOR) governance interact to produce corporate social irresponsibility (CSiR) in offshore outsourcing. Managers ...generally find it challenging to align practices with stakeholders’ responsibility expectations and more so when activities occur offshore and outside organizational boundaries. This is evident from Apple’s repeated problems in China but insufficiently understood in international business (IB) literature. Institutional distance increases the likelihood and severity of CSiR because it produces a gap in buyers’ and suppliers’ stakeholder expectations and leads to divergence between suppliers’ practices and buyers’ responsibility policies. Trust-based cooperative IORs reduce CSiR and lessen the effect of institutional distance on CSiR. Supplier dependence also reduces CSiR but increases the effect of institutional distance on CSiR and is therefore a double-edged sword. Our novel framework generates insights into CSiR, a dark side of IB, by uncovering the mechanisms that co-produce CSiR in the offshore outsourcing context. We enrich work on offshore outsourcing by suggesting that CSiR represents a hidden cost and advance multilevel theorizing in IB by showing how institutional distance interacts with IOR governance. Managers should consider the tradeoff between performance and CSiR in offshore outsourcing and the downside that comes from (over)exploiting supplier dependence.
Grounded in Social Exchange Theory (SET), this study is motivated by two unresolved issues. First, scholars find mixed results on how relationship duration facilitates business-to-business (B2B) ...trust. The lack of consensus results from the assumption that relationship duration is a measure of prior trust-building efforts. We contend that trust-building lies in exchanges between B2B partners, and relationship duration moderates the effects of reciprocal exchanges. Second, although Transaction Cost Analysis (TCA) is one of the most used theoretical lens in the study of B2B trust, TCA is criticized for neglecting the exchange process in B2B trust-building. To provide clarity to these issues, we validate the expectation that bilateral asset specificity constitutes social exchange processes, which communicate goodwill reciprocity and equivalence reciprocity. Empirical findings suggest that, within bilateral asset specificity: (1) achieving goodwill reciprocity always enhances trust, regardless of the duration contingency; and (2) violating equivalence reciprocity impairs trust over the duration.
Research on contractual governance has traditionally viewed exchange hazards as having mutual effects on contractual design at the transaction level. To advance our understanding of contracting ...decisions in interorganizational relationships, I depart from the traditional emphasis on the mutual aspects of interorganizational relationships by examining how exposure to idiosyncratic exchange hazards may impact the divergent contractual arrangement interests of each side of the dyad. Viewing the locus of exchange hazards and contract design as dyadic broadens the conventional emphasis on the add-on perspective of governing relationships to further emphasize how excluding contractual rights selectively may be an alternative way for controlling the threat of exchange hazards. Through an analysis of franchise disclosure documents and contracts for 136 restaurant franchise systems in the U.S., I found that, when confronted with exchange hazards, a firm can strengthen its own protection not only by enhancing contractual rights in its own interests but also by limiting contractual rights in favor of its partner. With a dyadic perspective, my paper sheds new light on the discriminating alignment principle and generates new insights into the strategic implications of intentionally leaving gaps in contracts.
Interorganizational spillover refers to the unintended impact of a focal organization’s event on the perceptions and decisions of peer organizations and their stakeholders. Research on ...interorganizational spillover has escalated in recent years when the academic community has drawn upon different theoretical perspectives and assumptions to understand (a) the types of events that can trigger interorganizational spillover, (b) the content of interorganizational spillover, and (c) the consequences of interorganizational spillover. Although scholars from different disciplines have generated a patchwork of studies that are insightful independently, we have not yet developed a comprehensive understanding into interorganizational spillover. Therefore, we systematically review and synthesize findings from leading business journals over the past three decades with a view toward identifying what we know and what we need to know about interorganizational spillover.
Channel management entails both the evaluating of incumbent business partners and simultaneously seeking potential new partners. In supplier–distributor exchanges, distributors can explore ...alternative suppliers while still committing to incumbent suppliers. While the current literature has demonstrated the importance of relationship commitment, the consequences of relationship exploration and whether that exploration is harmful to any incumbent relationships remain unclear. Drawing from relational governance and social network theories, this study thus examines how distributor dual relationship strategies of commitment and exploration influence their opportunistic behavior. The findings from a survey of 328 distributor firms indicate that relationship commitment leads to reduced opportunism; yet relationship exploration exerts no significant main effect on opportunism. More interestingly, these effects are subject to two types of uncertainty and two characteristics of distributor network wherein the focal exchange relationship resides. Specifically, behavioral uncertainty—an internal source of uncertainty—aggravates the opportunism that arises from both strategies, whereas, environmental uncertainty—an external source of uncertainty—alleviates both these effects. The distributor's network density weakens the effect of relationship commitment on opportunism, but network centrality strengthens this effect. By contrasting relationship commitment with relationship exploration under multiple moderating conditions, this study advances the extant channel relationship management literature and practice.
•A distributor's relationship commitment leads to reduced opportunism toward its incumbent supplier.•Relationship exploration of a distributor does not increase its opportunism.•Behavioral uncertainty aggravates the opportunism arising from both strategies, whereas environmental uncertainty alleviates both effects.•Network density weakens the effect of relationship commitment on opportunism, and network centrality strengthens this effect.
PURPOSE Inclusive leadership has become increasingly important in sport organizations. Accordingly, this study examines interorganizational inclusive leadership effects on organizational trust and ...affiliated organizations’ employees depending on power distance. METHODS A total of 250 affiliated sport organization employees participated, and latent moderated structural equation modeling with a bifactor structural model was employed to test the hypotheses. RESULTS The results indicated that macro inclusive leadership as well as its two components significantly enhance organizational trust. Interestingly, power distance positively moderated the macro effect of interorganizational inclusive leadership on organizational trust. Lastly, organizational trust enhanced job performance and well-being, and reduced turnover intention. CONCLUSIONS The results provide meaningful insight into the relationship between lead and affiliated organizations in the context of highly competitive and collaborative sport organizations.
Our study investigates how buyer power affects supplier relationship commitment. When a buyer exerts power on a supplier, the supplier response can be either simple compliance or commitment at a ...deeper level. Theoretically, the latter pertains to a supplier's intrinsic motivation. Building on cognitive evaluation theory, our model proposes the distinctive yet interactive nature of reward power and coercive power, commonly considered together as mediated powers. It also posits that nonmediated powers (expert, referent, and legitimate) amplify the influences of reward and coercive powers. An empirical investigation, based on large‐scale multinational survey data, provides support for our theoretical arguments. We discuss the practical implications for how buyers can use reward and coercive powers to improve supplier relationship commitment.
This article examines how firms in interorganizational relationships respond differently to active and passive opportunism and observes how these opportunism forms erode satisfaction with the ...performance of these relationships. The multimethod approach of two experiments and one longitudinal field study demonstrate that firms tolerate more passive opportunism than active opportunism (Study 1) and that transaction costs play a mediating role between opportunism form and satisfaction with performance of the relationship (Study 2). Finally, the field study reveals that, over time, passive opportunism has a more corrosive impact on satisfaction with performance than active opportunism (Study 3). Together, the findings underscore the importance of distinguishing passive and active opportunism and the need to develop a better understanding of its management and consequences.
With over half a trillion dollars in trade credit flowing between firms in the United States, it is critically important for managers to understand how the trade credit that their firm receives and ...provides affect its value. Trade credit is a strategic investment in supply chain relationships that allows the recipient to make payment later rather than at the time of the sale. A firm provides trade credit to its downstream business customers and also receives trade credit from its upstream suppliers. Although research has shown that provided trade credit builds a firm's shareholder value, it has not examined what effect, if any, received trade credit has on the firm's value. As a result, one might assume that received trade credit affects firm value in the same manner as provided trade credit. We argue otherwise and show that received trade credit and provided trade credit have differential effects on firm value. Received trade credit has a negative direct effect and a positive indirect effect (through profit), whereas provided trade credit has a positive direct effect and a negative indirect effect. The difference in direct effects hinges on the disparate nature of dependence in the supply chain. Provided trade credit increases customers' dependence on the firm, building the firm's value. In contrast, received trade credit increases the firm's dependence on its suppliers, destroying the firm's value. Empirical results using a sample of 2804 firms from 1986 to 2017 provide robust support for the hypotheses. They show that managers risk overestimating the value of a 1 SD increase in received (provided) trade credit by $284.74 ($74.95) million, on average, if they do not consider both the direct and indirect effects it has on their firm's value.
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