Collaborative Performance Management in Interfirm Relationships
Posted: 9 Jun 2016 Last revised: 28 Oct 2017
Date Written: 2016
In this study we examine how firms’ collaborative objectives influence their use of performance management practices in interfirm relationships. We conceptualize collaborative performance management to include three interrelated practices: measurement of interfirm performance, information sharing, and interaction between boundary spanners of partner firms. Prior research has related firms’ interfirm control choices to transaction risk as proxied by ‘given’ transaction characteristics. We hypothesize that transaction characteristics are determined by the strategic importance of the collaboration (manifested by the importance of firms’ collaborative objectives), and in turn influence the use of firms’ performance management practices. Analysis of survey data supports our hypotheses that strategic importance of the collaboration is associated with transaction characteristics (i.e., with asset specificity, transaction scope, task interdependencies and environmental variability), which characteristics in turn mediate the influence of collaborative objectives on the use of performance management practices. We also find that performance measurement, information sharing and boundary spanner interaction are used as complementary practices in the management of interfirm relationships.
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