Closeness or opportunistic behavior? Mediating the business ecosystem governance mechanisms and coordination relationship

Abstract

PurposeBusiness ecosystem is described as a web of loose relationships, thereby posing some challenges to coordination. In attempt to ensure coordination in business relationships, scholars have proposed relational and contractual governance mechanisms. Hence, this study aims to examine the effects of governance mechanisms on coordination in the pharmaceutical business ecosystem (BE), with the potential mediating effects of closeness and opportunistic behavior.Design/methodology/approachThe study adopted quantitative approach with cross-sectional survey research design to collect data from the business ecosystem of pharmaceutical company X in Ghana. A structured questionnaire based on a five-point Likert scale was employed to collect data. Analysis was based on 173 institutions (both local and international) selected from pharmaceutical BE. Various validity and reliability checks were conducted before the presentation of the actual analysis, which was conducted using ordinary least squares (OLS) regression in Statistical Product and Service Solutions (SPSS).FindingsThe results of the study revealed that both relational and contractual governance have a direct positive effect on coordination between pharmaceutical BE members and the focal firm. The effect of contractual governance on coordination is however, partially mediated by opportunistic behavior. Finally, closeness also fully mediated the effect of relational governance on coordination.Originality/valueThe study builds on the governance mechanisms in exchange relationship, which was hitherto largely limited to the dyadic and triadic business network, partnerships and strategic alliances studies. The contribution to BE literature provides further understanding into transaction cost economics and relational exchange theory, which was dominantly applied in dyadic relationships ties such as partnerships, alliances and networks.

How do keystones govern their business ecosystems through resource orchestration?

“…Donada and Attias (2015) proposed that embedded governance promoted radical innovation in the business ecosystem by facilitating interaction among stakeholders. Governance mechanisms have been regarded as a balance of control in network exchanges (Pomegbe et al, 2021). Thus, scholars have focused on the balanced governance of ambidexterity.…”

“…• Building a governance mechanism to keep balance among stakeholders to ensure the health of the business ecosystem (Abdul-Rasheed et al, 2017). • Making different governance strategies to be adopted for the diverse relationships (Pomegbe et al, 2021).…”

“…By reviewing the literature on business ecosystem governance and resource orchestration, first, it is found that existing research mainly focuses on the roles (Iansiti and Levien, 2004b), patterns (Lee et al,2017;Pomegbe et al, 2021), and benefits (Baars and Jansen, 2012) of business ecosystem governance (i.e., the "what" problem), but not pay further attention to how keystones should govern business ecosystems (i.e., the "how" question). Second, existing research has a common default premise when emphasizing the benefits of resource sharing (Huber et al, 2017;Colombo et al, 2019); that is, the keystones have sufficient resources.…”

“…It plays a critical role in helping stakeholders acquire complementary resources (Adner, 2006;Mukhopadhyay and Bouwman, 2019), maintain a stable value network (Peltola, et al, 2016;Xu, 2019), reduce transaction costs (Williamson and De Meyer, 2012), and gain competitive advantages (Williamson and De Meyer, 2012;Rong, et al, 2013). A keystone, as the organizer of a business ecosystem, plays an important role in effectively governing the business ecosystem and helping stakeholders obtain the above benefits (Pomegbe et al, 2021). However, in practice, a large number of keystones, such as BlackBerry (Jacobides, 2013) and LeEco, encountered failure in the governance process.…”

An Evolutionary Analysis of Relational Governance in an Innovation Ecosystem

“…In innovation ecosystems, informal relationships can indispensably link actors, maintain cross-organizational collaboration, further promote health, and evolution of ecosystem (Jacobides et al, 2018). From another perspective, relationships can be drawn on to be informal adjustment mechanism since they may lead to potential opportunism (Pomegbe et al, 2021), even included in formal contracts (Ryall & Sampson, 2009; Shaikh & Levina, 2019). Focal firms and other complementors often involve voluntarily in innovation ecosystems without formal contracts, which desiderates heavily good relationships between actors (Dahlander & Magnusson, 2005; Dedehayir et al, 2018), and openness of innovation ecosystems requires ecosystem governance to prefer relational governance over other types (Cenamor & Frishammar, 2021; Dedehayir et al, 2018; Felin & Zenger, 2014; Lin, 2018).…”