Governance is critical to an alliance relationship as it aids in curbing opportunism and thus in achieving higher performance. While research suggests relational governance as well as formal control mechanisms as viable means to reduce opportunistic behavior in an alliance relationship, the effectiveness of the interplay of these governance forms remains an important issue. This research addresses this challenge by applying social contract theory to resolve the uncertainties surrounding whether relational governance, exercised by joint actions in the performance measurement process (PMP), can be effectively complemented by the formal control mechanisms of output and process controls. Based on a survey of 197 horizontal alliances of German logistics service providers and using structural equation modeling, we find that if formal control mechanisms are legitimized by underlying agreements, which are established through relational governance (i.e., joint actions), the two governance forms indeed complement each other. However, if no such legitimization through social contracts is present, the complementation is counterproductive. Furthermore, it is shown that opportunism in the setting of horizontal alliances is also detrimental to alliance success.

Engaging in horizontal cooperation is a prevalent strategy of logistics service providers (LSPs) to deal with the challenges they are confronted with by today's supply chain environment (e.g., complex and global supply chains, increased competition). These horizontal LSP alliances, for example, for providing a national less-thantruck-load network, are complex in nature and characterized by coopetition. This situation provides a fertile soil for conflict. The literature outlines that conflict, the experience that goals or interests are in opposition, emerges in areas of essential activities and that performance measurement is such an area. Yet, when these differences meet, they also become apparent and can potentially be eased. Against this background, we develop a theoretical model and test it with survey data from 193 horizontal LSP alliances. The results show that, in general, applying collaborative processes in the performance measurement reduces overall conflict in horizontal LSP cooperations. Further, based on resource dependency theory and social contract theory, this research identifies the power structure of the alliance as a relevant contingency factor and shows that joint action in PM is effective in reducing conflict in symmetrical power cooperations, while information sharing as less intense form of collaboration is effective in reducing conflict in asymmetrical power cooperations.