Drawing on the Transaction Cost Economics (TCE) and taking the perspective of a developing economy, the study examined the impacts of governance mechanisms (GM-formal control and social control) on supply chain (SC) performance (operational efficiency and service & market performance). Data were collected using questionnaires from 152 firms operating in the most industrialized regions of Ghana. Structural equation modelling technique (using LISREL 8.5) was employed in estimating the study's model. The study finds significant positive associations between formal control and operational efficiency; and between social control and service & market performance. The study also finds that within the research context, social control is antecedent of (adherence to) formal control; and that the effect of social control on operational efficiency is fully channelled via formal control. These findings imply that firms' ability to institute and implement GMs would present them opportunities to enhance the performance of their SCs. Theoretically, the results suggest the potential mediating role of formal control in the link between social control and SC performance; which means that having in place formal controls is necessary for firms in this part of the world (who mostly rely on social control) to better experience benefits arising out of social relationships.
This work was carried out in collaboration between all authors. Author EKA designed the study and wrote the first draft of the manuscript. Author OFA managed the literature searches, all drawings, analysis and correspondents while author KOS was responsible for editing and led the interview sessions. All authors handled the discussion and conclusion, read and approved the final manuscript.
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