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How to Govern Business Services Exchanges: Contractual and Relational Issues

Author

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  • D. VANDAELE
  • D. RANGARAJAN
  • P. GEMMEL
  • A. LIEVENS

Abstract

With firms concentrating on core competencies, more emphasis has been placed on outsourcing and the dealing with external sourcing agents. This has lead to a stronger academic focus on buyer-seller exchanges and the corresponding mechanisms for governing these exchanges. This paper gives an overview of previous research investigating the exchange governance phenomenon based on transaction cost theory or cooperative interorganizational relationships. The results reveal that few research studies have investigated the overall picture of exchange governance, including both contractual and relational governance and taking into account antecedents as well as performance outcomes of the governance mechanisms involved. Moreover, despite the service-dominant logic shift, limited attention is given to specific service characteristics and their impact on exchange governance. In this paper, we attempt to meld economic and social related antecedents into a model with regard to exchange governance in business services settings. Contractual and relational governance issues and their impact on performance outcomes are also considered. The resulting model indicates that to efficiently govern business services exchanges, more emphasis should be placed on behavioral uncertainty, human and process asset specificity and contractual governance. We conclude the paper by discussing several directions for future research.

Suggested Citation

  • D. Vandaele & D. Rangarajan & P. Gemmel & A. Lievens, 2007. "How to Govern Business Services Exchanges: Contractual and Relational Issues," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 07/446, Ghent University, Faculty of Economics and Business Administration.
    • Handle: RePEc:rug:rugwps:07/446
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    File URL: http://wps-feb.ugent.be/Papers/wp_07_446.pdf
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    Cited by:

    1. Patricia Everaert & Gerrit Sarens & Jan Rommel, 2010. "Using Transaction Cost Economics to explain outsourcing of accounting," Small Business Economics, Springer, vol. 35(1), pages 93-112, July.
    2. Fang, F., 2019. "When performance shortfall arises, contract or trust? A multi-method study of the impact of contractual and relational governances on performance in public – private partnerships," Other publications TiSEM 473840ee-6945-4a93-9326-5, Tilburg University, School of Economics and Management.
    3. Jim Rooney & Suresh Cuganesan, 2009. "Contractual and Accounting Controls in Outsourcing Agreements: Evidence from the Australian Home Loan Industry," Australian Accounting Review, CPA Australia, vol. 19(2), pages 80-92, June.
    4. Gölgeci, Ismail & Murphy, William H. & Johnston, David A., 2018. "Power-based behaviors in supply chains and their effects on relational satisfaction: A fresh perspective and directions for research," European Management Journal, Elsevier, vol. 36(2), pages 278-287.
    5. Huo, Baofeng & Ye, Yuxiao & Zhao, Xiande, 2015. "The impacts of trust and contracts on opportunism in the 3PL industry: The moderating role of demand uncertainty," International Journal of Production Economics, Elsevier, vol. 170(PA), pages 160-170.
    6. Pei Chun-Lai & Tomás F Espino-Rodríguez & Tom Baum, 2019. "Do relational norms matter in outsourcing relationships? Lesson learned from hotel sectors," Tourism Economics, , vol. 25(2), pages 189-212, March.
    7. Benjamin. R Tukamuhabwa & Moses Muhwezi & Sarah Eyaa & John Saturday, 2012. "Explaining Outsourcing Performance in Uganda’s Commercial Banks," Information Management and Business Review, AMH International, vol. 4(1), pages 18-29.
    8. Chikako Oka, 2010. "Channels of buyer influence and labor standard compliance: the case of Cambodia's garment sector," Post-Print hal-02952274, HAL.
    9. Thulani Mandiriza & David Johannes Fourie, 2023. "The Role of Stakeholders in the Adoption of Public–Private Partnerships (PPPs) in Municipal Water Infrastructure Projects: A Stakeholder Theory Perspective," World, MDPI, vol. 4(3), pages 1-15, July.

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