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Examining the Conditional Limits of Relational Governance: Specialized Assets, Performance Ambiguity, and Long‐Standing Ties

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  • Laura Poppo
  • Kevin Zheng Zhou
  • Todd R. Zenger

Abstract

abstract Despite recognition of the benefits of relational governance in inter‐organizational exchanges, factors that may erode its value have received little examination. We extend the literature by asking whether self‐interested opportunities and long‐standing ties erode the positive association between relational governance and performance. Consistent with transaction cost and moral hazard logics, exchange hazards, particularly asset specificity and difficult performance measurement, dampen the positive association of relational governance and performance. We further find, consistent with recent inquiries into the dark side of embedded ties that the performance benefits associated with relational governance decline when parties rely on repeated partnerships.

Suggested Citation

  • Laura Poppo & Kevin Zheng Zhou & Todd R. Zenger, 2008. "Examining the Conditional Limits of Relational Governance: Specialized Assets, Performance Ambiguity, and Long‐Standing Ties," Journal of Management Studies, Wiley Blackwell, vol. 45(7), pages 1195-1216, November.
    • Handle: RePEc:bla:jomstd:v:45:y:2008:i:7:p:1195-1216
    DOI: 10.1111/j.1467-6486.2008.00779.x
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