The effects of brokered network governance on relational embeddedness in the triadic supply chains: is there a room for the “Coleman rent”?

Abstract

Purpose The purpose of this paper is to explore whether brokered network governance, run by the manufacturer, affects relational embeddedness and thus contributes to yielding the Coleman rent in the triadic supply chains. Design/methodology/approach Building upon the theoretical tenets of transaction cost analysis, complemented by the underpinnings of social capital theory, this study involves an empirical investigation that uses survey data collected from the triadic supply chains in Europe. The research covers a two-step analysis. In the first step, the Coleman rent was estimated through the regression analysis with the interaction effects. Then, partial least squares–structural equation modeling was used to estimate the reflective-formative nature of higher component model and test the research hypotheses. Findings The results of the study demonstrate that the distribution of three mechanisms in network governance is relatively even; however, market and hierarchy still emerge as the most impactful dimensions. Interestingly, though, this study shows that social capital can actually coexist with market and hierarchy in the triadic supply chains with the structural hole. Likewise, the research indicates that the impact of brokered network governance on the strength of network relational embeddedness is significant, but relatively weak, whereas network relational embeddedness has a strong and positive effect on the Coleman rent. Research limitations/implications This study makes three major contributions. First, this study is one of very few that explicitly considers brokered network governance, run by the manufacturer positioned on the structural hole in its triadic supply chain. Second, as the triadic perspective is still uncommon in the supply chain studies, this research investigates a triad with the structural hole within the manufacturing setting. Third, the paper seeks to investigate the ability to yield the Coleman rent in the triadic supply chains with the structural hole, although this type of rent is typically linked to another arrangement called closure. Originality/value Given the increasing attention paid to the role of social capital within supply chains, this study investigates how relational embeddedness can be used by the manufacturer, sitting on the structural hole and running the network governance mechanism, to yield the Coleman rent in the triadic supply chain.

Offshore outsourcing of innovation by SMEs: a 4F perspective of governance

“…It reflects the level of an SME’s confidence that its offshore supplier will choose collective gains over self-gains when the possibility for opportunistic behaviour is present (Gulati and Sytch, 2008; Archer et al , 2008). The relational trust provides an effective means to manage the interdependence between the two firms, allowing effective pooling of complementary tacit knowledge resources under reduced fears from opportunism (Dyer and Singh, 1998; Bordonaba-Juste and Cambra-Fierro, 2009; Swierczek, 2019). The relational trust also explains firms’ behaviour in making business decisions that impact their interfirm relationship outcomes beyond their contractual obligations (Saparito et al , 2004; Swierczek, 2019; Melander et al , 2014).…”

“…The relational trust provides an effective means to manage the interdependence between the two firms, allowing effective pooling of complementary tacit knowledge resources under reduced fears from opportunism (Dyer and Singh, 1998; Bordonaba-Juste and Cambra-Fierro, 2009; Swierczek, 2019). The relational trust also explains firms’ behaviour in making business decisions that impact their interfirm relationship outcomes beyond their contractual obligations (Saparito et al , 2004; Swierczek, 2019; Melander et al , 2014). For example, Bidault and Castello (2010) proposed that the interpersonal nature of relational trust highlights the role played by executives involved in managing interfirm innovation projects in how they adapt their decision-making process to accommodate various contingencies and risks of OOI activities.…”

“…Also, complex contracts of strategic outsourcing act as insurance policies, as they serve as legal safeguards against wrongdoing (Hoecht and Trott, 2006;Wiengarten et al, 2013). Scholars argue that complex contracts not only safeguard against ex-post performance issues but are also excellent facilitators of knowledge transfer and can improve innovation outcomes in buyer-supplier relationships (van der Valk et al, 2016;Swierczek, 2019). Besides, SMEs could use formal contracts in exploration innovation alliances as an essential control mechanism to compensate for their small-scale vulnerability in foreign markets and dependencies on external suppliers (Pittino and Mazzurana, 2013).…”

“…Therefore, there is a greater need for contract complexity to motivate tacit knowledge exchange and innovation investment decisions (Mirkovski et al, 2016;Gooroochurn and Hanley, 2007;Glas and Eßig, 2018). At the same time, as innovation is expensive, risky and uncertain, increased levels of relational trust emerge as a necessary condition to promote non-calculative investment behaviour (Kulangara et al, 2016;Swierczek, 2019). Contract complexity uses legal means in the specification of contingencies, adaptation and mitigation of opportunistic behaviour (Dyer and Singh, 1998).…”

Relational orientation of triadic supply chains with structural holes: an empirical comparison of rents derived from bridging the structural holes

“…Third, it offers a robust methodology and rigid criteria the company should meet to be included in the list (Asia News Monitor, 2018). Finally, data offered by Inc. 5000 Europe were successfully used in the previous research on triads (Swierczek, 2019b).…”