Examining the Conditional Limits of Relational Governance: Specialized Assets, Performance Ambiguity, and Long-Standing Ties

22 Pages Posted: 20 Sep 2008

See all articles by Laura Poppo

Laura Poppo

University of Kansas - School of Business

Kevin Zheng Zhou

School of Business, The University of Hong Kong

Todd Zenger

University of Utah

Abstract

Despite recognition of the benefits of relational governance in inter-organizational exchanges, factors that may erode its value have received little examination. We extend the literature by asking whether self-interested opportunities and long-standing ties erode the positive association between relational governance and performance. Consistent with transaction cost and moral hazard logics, exchange hazards, particularly asset specificity and difficult performance measurement, dampen the positive association of relational governance and performance. We further find, consistent with recent inquiries into the dark side of embedded ties that the performance benefits associated with relational governance decline when parties rely on repeated partnerships.

Suggested Citation

Poppo, Laura and Zhou, Kevin Zheng and Zenger, Todd R., Examining the Conditional Limits of Relational Governance: Specialized Assets, Performance Ambiguity, and Long-Standing Ties. Journal of Management Studies, Vol. 45, Issue 7, pp. 1195-1216, November 2008, Available at SSRN: https://ssrn.com/abstract=1270878 or http://dx.doi.org/10.1111/j.1467-6486.2008.00779.x

Laura Poppo (Contact Author)

University of Kansas - School of Business ( email )

Lawrence, KS 66045
United States

Kevin Zheng Zhou

School of Business, The University of Hong Kong ( email )

Pokfulam HK
Hong Kong
(852) 2859-1006 (Phone)
(852) 2858-5614 (Fax)

HOME PAGE: http://www.fbe.hku.hk/~kevinzhou/

Todd R. Zenger

University of Utah ( email )

David Eccles School of Business
1655 East Campus Center Drive
Salt Lake City, UT 84112
United States
801 585-3981 (Phone)
801 581-7939 (Fax)

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