The debate on how firms govern their inter-organizational relationships to foster their business performance is far from being settled. While several arguments suggest both transactional and relational mechanisms may act as complementary or substitutive forces, this paper explores and demonstrates how both mechanisms can be jointly exploited to enhance performance. Adopting the context of the US equity underwriting market, this paper reveals that an issuer adopting a transactional governance mechanism to manage its inter-organizational relationships with underwriters obtains a lower cost offering (cost performance) but may not entail price premium (price performance) of that offering. In contrast, an issuer taking a relational governance mechanism has superior price performance but worse cost performance. Nevertheless, this paper uncovers that an issuer adopting a synthesized mechanism obtains better cost performance and price performance by leveraging the advantages from both of the transactional and relational mechanisms.
Focusing on global offshoring, this paper adapts the dynamic capabilities perspective to analyze how the structuring of offshoring disaggregation and geographical dispersion affects firm performance. While previous studies show that the returns on offshoring remain unclear, we present three findings that explain how the structuring of offshoring disaggregation and geographical dispersion influences firm performance. First, the larger the level of offshoring disaggregation, the better the firm performs. Second, the more geographical dispersion, the better the firm performs. Third, the effect of offshoring disaggregation on firm performance is greater when the firm structures and offshores its disaggregated value chain activities to dispersed locations. While economies of scale and learning may guide firms to offshore many discrete activities of the value chain, firms are able to gain the most returns from the structuring of offshoring disaggregation when they reconfigure lots of offshoring projects implemented in dispersed locations where environmental dynamism concurs.Offshoring is an important strategic choice that has fascinated the scholars of transaction cost economics, the resource-based view, and international business (Boehe, 2010;
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