22 Years of Governance Structures and Performance: What Has Been Achieved in Agrifood Chains ...

32 Pages·2017·3.76 MB·English

agriculture
Review
22 Years of Governance Structures and Performance:
What Has Been Achieved in Agrifood Chains
and Beyond? A Review
JoanitaKataike1,2,* ID andXavierGellynck1
1 DepartmentofAgriculturalEconomics,FacultyofBioscienceEngineering,GhentUniversity;
B-9000Ghent,Belgium;[email protected]
2 SchoolofBusinessandManagementStudies,MountainsoftheMoonUniversity,Fort-portal,Uganda
* Correspondence:[email protected]@gmail.com;Tel.:[phone]
(cid:1)(cid:2)(cid:3)(cid:1)(cid:4)(cid:5)(cid:6)(cid:7)(cid:8)(cid:1)
(cid:1)(cid:2)(cid:3)(cid:4)(cid:5)(cid:6)(cid:7)
Received:12February2018;Accepted:27March2018;Published:31March2018
Abstract: Although the existing literature has shown that the choice of governance structure
plays a key role in inter-organizational performance, the nature of construct measurability still
remains equivocal. The diversity of terminologies used means that the full potential of most
studiesmaybelostintheconfusionofindistinctiveandmisappliedterms. Tobetterunderstand
therelationshipbetweengovernancestructuresandperformance,adescriptivesystematicreview
wasconductedontheextantliterature;essentially,toprovideacomprehensivepointofreferencefor
researchersinterestedinthisresearchareaandtoidentifyfutureresearchgaps. Asimpleanalytical
framework—Search,Appraisal,andSynthesis—wasusedtoextractdata.Atotalof110peer-reviewed
journal articles were identified and analyzed. The results indicated that different governance
structuresarepositivelyrelatedtoperformanceexceptforthespotmarket. Thefindingsprovide
strongevidencethatundercertaincircumstances,thecontractualgovernancestructureisnegatively
relatedtoperformance. Whereasinothercircumstances,thereisapositiveinteraction. Furthermore,
theresultsrevealedthatnumerousproxyindicatorshavebeenusedtomeasuregovernancestructures
andperformance. Overall,thisstudyprovidesnewinsightsontherelationshipbetweengovernance
structures and performance in the agrifood sector and beyond. The contribution of the study,
implications,andsuggestionsforfutureresearchoutlookarediscussedinrelationtogovernance
structuresandperformance.
Keywords: governancestructures;performance;agrifoodchains;systematicliteraturereview
1. Introduction
Several terms such as governance mechanisms, vertical coordination, collaboration,
distribution channels, or market arrangements have been used in the extant literature to refer to
chaingovernancestructures. Whichevertermisused,itreferstoasetofrulesthatgoverntransactions
between the buyer and the supplier. Whereas some rules in the transactions are defined by law,
others are informally designed. Similarly, Williamson [1] argues that governance structures are
institutional arrangements within which the integrity of a transaction is decided. The choice of
governance structure is an element in assessing the cost of transaction. It is not only to minimize
the costs of transaction required for coordination and control but also to make the relationship
between the buyer and supplier better-off by safeguarding specific assets and adaptation [2–4].
This is because the safeguarding problem arises when a firm setups specific assets and fears that
itspartnermayopportunisticallyexploittheseinvestments[5,6]. Therefore,governancestructuresare
safeguardswhichbusinesspartnersengageintocontrolinter-firmexchanges,minimizeexposureto
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Agriculture2018,8,51 2of32
opportunism[7],protecttransaction-specificinvestments,andpromotethecontinuanceofthebusiness
relationships[8].
Unfortunately, the above definition is at the macroeconomic level, where it is difficult for
noneconomic components such as social control or relational ties and trust to be incorporated in
thegovernanceofexchangerelationships. Sociallyembeddedpersonalrelationshipsplayanimportant
roleineconomicexchange[9–11]. Thesuitablewaytodefinegovernancestructuresisthroughthe
double bottom line which simultaneously considers the balance between formal and social issues
fromthemicroeconomicpointofview[12]. Consequently,governancestructuresareinstitutionalor
structural arrangements where formal and informal laws and norms are designed to determine
and influence the behavior of buyer-supplier relationships. Formal control emphasizes written
proceduresformonitoring,specifyingresponsibilitiestobeperformed,andoutcomesexpectedtobe
delivered[13–15]. Whereasinformalnorms(socialcontrol)meanthatthebusinessorganizationuses
sharedvalues,norms,andtrusttoencouragespecificbehaviorthatharmonizesthepartner’sinterests
andlimitopportunism[13,16–18]. Trustandcooperationareimportantaspectsinensuringbusiness
successamongbuyer-supplierrelationships[19]. Sincetheeconomicbehaviorsarecloselyembedded
insocialcontrolandeconomiclogic,weoughttoacknowledgetheirinfluenceonboththebuyerand
thesupplier[17,20].
Intheliterature,thereareseveraldistinctformsofgovernancestructuresthatexplicitlyregulate
business transactions. For instance, on the coordination continuum, governance structures range
from spot markets to vertical integrations [21,22]. On one hand, transactions are determined
by price incentives and on the other hand by the intensity of resource control and ownership.
Inbetweenthesetwoextremeslieseveralverticalcoordinationstrategies,namely,spot/cashmarkets,
specification contracts, relation-based alliances, equity-based alliances, and vertically integrated
structures[21]. Astheverticalcoordinationcontinuummovesfromthefar-leftspotmarkettothe
far-rightverticalintegration, thecharacteristicsofthe“invisiblehand”coordinationaregradually
replacedbythecharacteristicsofthe“managed”coordination[21,23,24]. However,thecentraldebate
isonwhatformofgovernancestructureperformsbetterthantheother. Williamson[25]suggeststhat
inordertounderstandgovernancestructures,wefirstneedtoappreciatethetheoryoftransactioncost
economics(TCE)andeconomicsoforganization[26,27].
Itiswellknownthatthefatherofnewinstitutionaleconomics,OliverWilliamson,incorporatedthe
theoryoftransactioncosteconomicsintotheeconomicorganizationtoexplaintheexistenceofalternative
forms of governance structures to minimize transaction costs [26]. Therefore, transaction cost
economics(TCE)ismainlyconcernedwithalternativeinstitutionalarrangements,particularlyaligning
governance structures with transactions [28]. TCE has been widely applied in buyer-supplier
relationships in industrial marketing, management, and strategic business research [8,29–31].
In agrifood chains, TCE has been presented by Sporleder [32], Henderson [33], Schulze and
Spiller[34],BanterleandStranieri[35],andmostrecentlybyWeverandWognum[36]andKileluand
Klerkx[37],inthecontextofchainmanagement[38,39]. AccordingtoTCE,oneofthedeterminantsof
governancestructureisthenatureandlevelofthetransactioncosts,whichisthedegreeofuncertainty,
assetspecificity,andfrequency[26]. Thisimpliesthatsimplegovernancestructuresshouldbeused
in conjunction with simple contractual relations and the complex should be reserved for complex
transactions[1,23]. Numerousstudieshaveconfirmedtheassumptionthattransactioncostsarethe
mainincentivesfortheverticallyintegratedformofgovernancestructures[34,40–42].
Onthecontrary,Mahoney[43]statesthatthemotivesforthechoiceofgovernancestructures
betweenbusinesspartnersgoevenbeyondTCE.Thisisbecausehequestionstheresultsderivedfrom
TCE on the potential advantages of a single ownership of all production assets along the chain,
conditional of uncertainty and asset specificity while underestimating the cost to the firm of
governinginternalexchanges[43]. Therefore,heclassifiedthoseotherdrivingforcesintofourmajor
categories: (i)transactioncostsconsideration;(ii)strategicconsiderations;(iii)output/inputprices
advantages; and (iv) uncertainty in prices or costs. Similarly, Bello and Gilliland [44] point out
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that transaction costs, production costs, and strategic considerations need to be considered while
governingbuyer-supplierrelationship. Thefirm’sdecisionsongovernancecanbemotivatedbypower
considerationsandsocialresponsibilities,ratherthansolelybytransactioncostminimizationorprofit
maximizationinterests[45]. Particularlyintheagrifoodsector, YoungandHobbs[46]identifieda
setofforcesdrivinggovernancestructureswhichcompriseoftransactionscharacteristicsandcosts;
product characteristics and their relationship with transaction characteristics; and technological,
regulatory,andsocioeconomicfactors. Thelattertwoincludewidespreadfoodsafetylegislationand
theresultingneedfortraceability,alongsideconsumerdemandforproductquality. Consequently,
the determinants identified in TCE, the strategic and sector-specific aspects need to be taken into
accountwhendiscussingpotentialattributesthatinfluencethechoiceofgovernancestructuresand
performanceoutcomeamongbusinesspartners[47]. Numerousreviewsontransactioncosteconomics
havebeensynthesized,forinstance,RindfleischandHeide[4],DavidandHan[48],andShelanskiand
Klein[49].
Therelationshipbetweengovernancestructuresandperformancehasalsoreceivedconsiderable
attention in previous studies such as those by Pyone and Smith [50], Delbufalo [51], Pilbeam and
Alvarez [52], Song and Liu [53], and Wilding and Wagner [52]. However, a few researchers have
partiallysynthesizedtheinteractionbetweengovernancestructuresandperformance. Forexample,
Zhang and Aramyan [23] identified two governance structures and their performance outcomes.
Nevertheless, knowledge of the relationship between governance structures and performance in
agrifoodchainsandbeyondhasnotbeencumulativeandconsistentconclusionsarefarfrombeing
reached. Thepurposeofthisstudyistoascertaintherelationshipbetweengovernancestructuresand
performanceandtoexplorethetheoriesthatunderpintheserelationshipswithasystematicreview.
By combining a qualitative and descriptive analysis, this study addresses the above limitations.
Therefore,themainresearchquestionsguidingthispaperare:
RQ1. How has the relationship between governance structures and performance in the agrifood sector and
beyondevolvedoverthelasttwodecades?
RQ2. What theories have been applied in investigating the relationship between governance structures
andperformance?
Followingtheaboveresearchquestions,thecontributionofthisstudytothegovernancestructure
and performance literature are twofold. First, by summarizing and categorizing the extensive
studies on the relationship between governance structure and performance, we develop a better
understandingofhowtheextantliteraturemeasuredanddefinedtheconceptsaswellashowthey
derivedtheirconclusions. Second,thedescriptivestatisticsrevealinsightfulfindingsontheinteraction
between governance structures, performance, and the theories applied. The findings extend our
understandingoftheboundaryoftheseconcepts. Inthefollowingsections,weproposeanoverview
oftheperformancemeasurementanditsinteractionwithgovernancestructures,thenwepresentthe
methodologyof thesystematicliterature review. This isfollowedbythe resultsor findingsofthe
synthesizedstudies. Finally,wediscussthetheoreticalcontributions,managerialimplications,and
futureresearchdirections.
2. PerformanceMeasurementinAgrifoodChainsandBeyond
Theperformancemeasurementhasproventobeadifficulttask,especiallyinagrifoodchains.
Despitethefactthatmanyresearchershavegeneratednumerousindicatorstomeasureperformance,
theresultsarestilldebatable[54]. Therearekeyissuestobeaddressedwhendefiningmeasuresof
performance[55–60]. Thediversityofperformancemeasurementindicatorsrangefromqualitative
indicatorslikecustomeroremployeesatisfactiontoquantitativeindicatorssuchasprofitmargins[54].
Forinstance,FattahiandNookabadi[61]measuredtheperformanceformeatsupplychainsusing
the indicators of financial gain, efficiency, flexibility, customer service, chain coordination, quality,
andsafety. AramyanandOudeLansink[54]investigatedtheperformanceofatomatosupplychain
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with four key performance indicators, namely efficiency, flexibility, quality, and responsiveness.
GellynckandMolnár[62]addedtotheperformanceindicatorsbyAramyanandOudeLansink[54]
bydefininggrowthintermsofmarketshare,traditionalism,andchainbalanceinagrifoodchains.
Thereisanoverlapintheoperationalizationofperformancemeasurementdespitethecontradiction.
Accordingly, performance measurement can be defined as “the process of quantifying the
efficiency and effectiveness of an action” [55,63]. Thus, the essence of selecting a given form of
governancestructuresshouldbedeterminedbyitsefficiencyandeffectiveness,giventhenatureof
thebusinessorganization. Inconstructioncompanies,forinstance,YangandYeung[64]suggeststhat
performancemeasurementistheprocesswherebyanorganizationestablishestheparameterswithin
whichprograms,investments,andacquisitionsreachthedesiredperformanceresults. Someofthe
populartechniquesforperformancemeasurementinconstructioncompaniesarespiderdiagramsand
‘Z’charts.Thesetechniquesaregraphicalinnatureandcanbeeasilyunderstoodbecausetheycanshow
multipledimensionssimultaneousness. JonesandKaluarachchi[65]introducedanimprovedspider
diagramtotheperformancemeasurementofconstructionprojectscalled“Bull’seye”todefinethekey
performanceindicators(KPIs),excellencemodels(Ems),andbalancedscorecards(BSC)inagrifood
chains. Theseperformancemeasurementframeworkshavebeentestedinseveralempiricalstudies,
forinstance,References[61,66–69].
Interestingly some scholars argue that in the context of governance structures, performance
measurementrelatestofourindicatorsdescribedasreducedopportunism(ZhouandXu[70],Liuand
Luo[17]),relationshipperformance(ChenandZhu[71],CannonandAchrol[72]),overallsatisfaction
(Poppo and Zenger [14], Jap and Ganesan [8]), and market performance (Abdi and Aulakh [73]).
Though,intheUKfoodsupplychainsinsteadofreducingopportunismtohencemarketperformance.
JackandFlorez-Lopez[74]ascertainthatUKsuppliersdrawattentiontoopportunistictradingand
value extraction by the UK retailers which led to horizontal and vertical disintegration because
everyonewastryingtopasstherisksandcostsontosomebodyelse. Thisdisintegrationwasdueto
thelackofformalcontractsinthefreshmeatsupplychains[74]. Inthisregard,governancestructures
are required to facilitate the interaction between exchange partners and create joint/relationship
performance[75]whichisgeneratedthroughrelationship-specificinvestments. Toavoideliminatinga
largenumberofstudiesbecauseofvariationsinqualitativeandquantitativeindicatorsofperformance
measurement,weconsiderawiderrangeofbothqualitativeandquantitativeperformanceindicators.
3. MaterialandMethods
According to Staples and Niazi [76], a systematic review is defined as a methodical way
of identifying, assessing, and analyzing published studies in order to investigate a specific
research question, in which there is a comprehensive search for the relevant studies on a specific
topic. Conductingacomprehensivecoverageoftheliteratureandensuringcomparability,thereare
fivemainstepstofollowassuggestedbyTranfieldandDenyer[77]andHigginsandGreen[78].
1. Planning;
2. Searching/paperidentification;
3. Screening/eligibilityandinclusioncriteria;
4. Extractionandsynthesis;
5. Reporting.
3.1. Planning
Duetotheextendeddiversityoftheconceptofgovernancestructuresandperformanceinvarious
research disciplines, the main research questions guiding the review were defined by the authors.
Therefore,thereviewwassteeredbyfoursub-researchquestionstodeconstructthemainresearch
questionbasingonthestrategybyPittawayandRobertson[79]andRashmanandWithers[80].
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1. Howhastherelationshipbetweengovernancestructuresandperformanceintheagrifoodsector
andbeyondevolvedoverthelasttwodecades?
2. Whattheoreticalmechanismsunderpintheoutcomerelationship?
3. What types of governance structures are being measured in agrifood chains, manufacturing
companies,orservicecompanies?
4. What performance measurement indicators have been proposed and observed in linking its
relationshiptogovernancestructure?
3.2. PaperIdentification/Searching
The search and identification of papers was guided by the process outlined by Tranfield and
Denyer[77]toprovidecomprehensiveanswerstotheaboveresearchquestions. Theidentification
of the main keywords used in the different databases of literature came first. These keywords
werelaterusedtobuildsearchstringswhichwereappliedintheacademicdatabases. Theselected
keywordswerethenusedtoconstructsearchstringswithBooleanconnectors(AND,OR,ANDNOT).
The definition of search terms aimed at generating a list of articles that would be wide enough to
recallsufficientquantitiesofreferencesandpreciseinformationexplosiontoeliminateunnecessary
materials[81]. Alternativewordswere foundfor differentkey termsto addressthe divergencein
terminologyusedbydifferentareasofliterature. Thefinalsearchstring—whichwasusedtosearch
for titles and abstracts containing these terms among scholarly peer-reviewed journal databases
includingEmerald,ScienceDirect,Webofscience,EBSCOBusinessSource,andWiley—wascompiled
asfollows. Inaddition,moredatabasessuchasGoogleScholar,ERIC,Agricola,AgEcon,andGreenfile
wereaddedtothelistofdatabasessearched.
(“Governance Structures” OR “Coordination Mechanisms” OR “Governance Mechanisms”
OR “Vertical Coordination” OR “Distribution Channels” OR “Governance Arrangements”
OR “Relational Governance” OR “Formal OR Contractual Governance”) AND (“Performance
Measurement” OR “Chain Performance” OR “Chain Enhancement” OR “Effectiveness” OR
“Business outcome” OR “Customer satisfaction” OR “Performance”) AND NOT (“Corporate
governance”OR“CorporatePerformance”),(“Agrifoodchain”).
3.3. Screening/EligibilityandInclusionCriteria
Theinitialsearchstringbasedontherelevanceofthetitletotheobjectivesofthestudygenerated
1169 papers from major databases. Other bibliographies produced 137, which made a total of
1306papers. Therelevantpaperswerethenselectedusinginclusionandexclusioncriteriaandquality
asrecommendedbyJadadandCook[82]andHigginsandGreen[78]. First,theselectionwascarried
outbyreviewingduplicatesandunwantedpapers;373papers,56bookchapters,and234conference
contributionswererejected,thusreducingthenumberofarticlesto643papers.Second,afterreviewing
thetitlesandabstractsoftheremainder,atotalof362paperswerealsoexcludedbecausetheyfocused
oncorporategovernancemechanismsandfirmperformance(Table1).
Table1.Thequalitycriteriaforinclusionandexclusion.
QualityCriteria ReasonforInclusion/Exclusion
Inclusioncriteria
Thepaperpublishedbetween1996and2017.Thescholarly
worksregardinggovernancestructuresandperformancein
Yearofpublication empiricalandconceptualperspectivessignificantly
increasedintheprevioustwodecadesbutseminalor
theoreticalpaperswerefrommuchearlierdates.
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Table1.Cont.
ArticlesintheEnglishlanguage MostacademicjournalsarepublishedinEnglish.
Focusongovernancestructuresandperformancetonarrow
Thematic
theresearchquestionandsynthesizeappropriatefindings.
Toprovidemorerigorousknowledgeinthefieldof
Scholarlypublishedarticles
governancestructuresandperformance.
ExclusionCriteria
Articlesthatdoaddresscorporategovernanceand Thepurposeofthesystematicreviewisgovernance
corporateperformance structuressuchascontractualandperformance.
Unpublishedarticles Peer-reviewedpublishedarticlesareofgoodquality.
Conferencepaper,books,workingpapers,and Toensurequalityandconsistency,allarticlesincludedare
technicalreports peer-reviewed
Third,169articlesthatwerenotpeer-reviewedwereeliminatedbasedonpeer-reviewcriteria,
leaving 112 papers. Fourth, three articles were also rejected because their year of publication was
before1996,namely,NoordewierandJohn[83],RingandVandeVen[10],RuekertandWalkerJr.[84],
and two other articles that were no longer accessible. During the review process, an anonymous
reviewer proposed to include the word “agrifood” by setting a constraint into the search syntax,
fromwhichwegenerated3morearticles. Thisresultedin110articleswhichwerethencodedand
analyzedinTable4asayardstickforthisreview. Consequently, severalqualitativeinclusionand
exclusioncriteriaareestablishedinTable1abovebasedonsimilarreviewsintheliterature[85,86].
3.4. ExtractionandSynthesis
A summary of the information contained in each article was prepared using the spreadsheet
formatorganizedunderthedescriptivemethods. Thedescriptivestatisticswereextractedbecause
ofthediversityofcontexts,mechanisms,andoutcomesconsideredbyindividualarticleratherthan
describingeacharticleindetail. Thestudyusedatextualnarrativesynthesisapproachwhicharranged
thestudiesintomorehomogeneousgroups. Ithasbeenproventobeusefulinsynthesizingevidence
from different research types (qualitative and quantitative) [87]. The study characteristics such as
yearofpublication,context,andkeyfindingsarereportedinTable2. Thestructuredsummariesare
developedinthesubsequentsectionstoelaboratethecharacteristicsoftheextractedstudies[88,89].
Table2.TheindustrySectors.
Sector Frequency Percentage
Agrifood 23 20.91%
Non-Agrifood 75 68.18%
Non-AgrifoodandAgrifood 7 6.36%
Environment 3 2.73%
Notstated 2 1.82%
Total 110 100%
Incontrast,thereareanumberofalternativeapproachestosynthesisinreviewingtheliterature
systematically. Forinstance,whereempiricaldatahavebeencollectedinthesamewaytoaddress
the same research question, the statistical procedure of meta-analysis is possible to increase the
reliabilityofsuchfindings[77]. However,heterogeneousdatawhichformthebasisofthisreview
are much less amenable to this type of aggregative synthesis [90]. To determine what works
for this study, we have followed the guidance of Rousseau and Manning [91] in adopting a
descriptive method of synthesis. The qualitative data assessed the main research issues from the
researchquestions;forinstance,whatismeasured—governancestructures,governancemechanism,
businessarrangements,verticalcoordination,verticalintegration,ordistributionchannels;howitis
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measured—predictingtheoutcome/performance;andwhattheoryunderpinstherelationship? Thisis
becausethereareaconsiderablenumberofarticlespublishedthatexploregovernancestructuresthat
arenotlinkedtoperformanceoutcome.
3.5. Reporting
The sub-research questions, as structured in Section 3.1, are used to report the findings of
thereview. Wefeltmoreconfidenttointegratethefindingswhentherewasbothaconceptualand
empiricalrelationshiptosupporttherelationshipbetweengovernancestructuresandperformances.
Furthermore,thetheoreticalparadigmpresentedinthereviewswereidentified,andtheanalysisof
thedatawasexecuted. Figure1summariesthemethodsappliedinthisreviewwhichconformstothe
PRISMAguidelines.
Figure1.Thesearch-appraisal-synthesischart.
4. Findings
Descriptivefrequencies,accordingtothethematicfindings,providequantifiablestatisticsonthe
finalsampleof110articlesinthissection.
4.1. IndustrySectorsandDistributionofResearchMethods
SimilartootherreviewsforinstancethatbyBeske-JanssenandJohnson[85],wefoundoutthat
thereviewedliteraturecoversanumberofdifferentindustrysectorsrangingfrommanufacturingto
agriculture. Thisdiversitymakesthesynthesisofthefindingsdifficult. Nevertheless,byprocessing
abstractionwecategorizedthesynthesisintofourcontextualsectors.Outofthe110articlessynthesized,
23 articles were from the agrifood sector (20.91%) [92–95]. Furthermore, seven studies were
cross-sectionalstudies,investigatingmultiplecasesfrombothagrifoodandnon-agrifoodsectors[96–99].
Asobservedfromthestatisticalevidence,thenon-agrifoodsector(68.18%)haswitnessedaboostin
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empiricalresearchareassuchasinformationsystem, apparelindustries, andelectronics[100–103].
Itisimportanttomentionthatnotallpaperswereorganizedintoonesinglenon-agrifoodsectoras
theycoveredseveralindustries. Incontrast,threepaperswerefoundinvestigatingtheinfluenceof
governancestructuresonenvironmentperformanceassummarizedinTable2.
The methodological contexts in which these studies have been investigated are presented
inTable3. Therangeofresearchmethodsappliedonthegovernancestructuresandperformance
extendsfromcasestudies(6.36%)—KoopmansandRogge[92],MooiandGhosh[104],andWever
and Wognum [36]—surveys (90%)—Hoetker and Mellewigt [105], Li and Xie [106], Han and
Trienekens [107], Lavie and Haunschild [108], Huang and Cheng [20]—conceptual papers
(2.72%)—Zhang and Aramyan [23], Whipple abd Frankel [109] Tachizawa and Wong [110]—to
experimentalresearchdesigns[111].
Table3.Thedistributionoftheresearchmethods.
Methods Frequency Percentage
CaseStudies 7 6.36%
Surveys 99 90.%
Experimental 1 0.9%
Conceptual 3 2.72%
Total 110 99.98%
Anotherbibliometricanalysisisthedistributionofpublicationssynthesizedindifferentjournals.
Notably, the number of publications in core journals is the same as the number of publications in
relatedjournals[112]. SupplementaryTableS1givesanoverviewofthejournalarticlefrequenciesand
thetypesofjournalsidentified. Intotal,49journalshavepublishedpapersontherelationshipbetween
governance structures and performance, of which most journals (39) have contributed 1–2 papers
on the topic. The top three journals are Strategic Management Journal (9), Journal of Operations
Management(8),andIndustrialMarketingManagement(9).
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Table4.Thesummaryofthekeyfindingsontherelationshipbetweengovernancestructuresandperformance.
Author(s) Theory Methods Industry/Sector Governancestructures Performance KeyFindings
Trustisinstrumentalinreducingtransactioncosts,improvinginvestments,
Informal improvingthestabilityinrelationsandinstimulatinglearning,
Horizontalcoordination knowledgeexchange,andinnovation.
[92] SNT Casestudy Agrifood Verticalcoordination Agriculturalefficiency Informalstructuresfacilitatecollaborationduetotheflexibilityintermsof
Hierarchal enrollingnewmembers.Intheabsenceofformalcontrol,informalnetworks
Trustandtransparency aremoreopen-endedandcansupportmultiplewaysofenvisioning
andoperationalization.
Qualitystandardsandotherobligationsarenotsettledinthecontract,
[93] TCT CaseStudy Agrifood Formalcontract Quality beingorallyagreedbetweenparties(relational).
Contractsimprovethesupplyofhigh-qualitymilk.
Farmersassociatedwithinformalstructuresearnmoreprofitthan
Formal Profitability privateprocessors.
[113] - Survey Agrifood
Informal Efficiency Formalstructuresuffersfromlowcomplianceratesprobablyduetopoor
governanceandenforcementmechanisms.
Trustplaysanimportantroleinenhancingcooperation.Trustisperceivedas
Cooperation(Trust) Relationship
[19] - Survey Agrifood animportantaspectforsolvingcommitmentproblemsthatmoreoftenresort
Informal Satisfaction
tocloseinterpersonalrelationstogoverncollaborativeactions.
Bothgovernancestructuresbybalancingorcomplementing,significantly
Contractual
[114] RBV Survey Non-Agrifood Relationship contributestorelationshipperformance.However,thecomplementing
Relational
dimensiononlyhasaweaksignificanteffectonrelationshipperformance.
Intheabsenceofformalcontrols,allianceperformanceseemstobenefitfrom
Formalcontrols highrelianceoninformalcontrols.
[115] OCT Survey Non-Agrifood Allianceperformance
Informalcontrols Atlowlevelsofinformalcontrols,theinteractionispositiveandmarginally
significantbutathighlevels,theinteractionisinsignificant.
Complementaryandsubstitutivedynamicsbetweengovernance
arrangementsdrivethemintomutuallystrengtheningormutually
Relational
[116] TCT Survey Non-Agrifood Mutualstrengthening debilitatingrelationships.
Contracts
Contractualarrangementscaninfusecross-culturalpartnershipswith
relationalnorms.
EnvironmentalandEconomic Relationalfactors,thatis,trustandcooperation,affectenvironmentaland
[117] - Survey Environment Relational
performance economicperformance.
Relationaltrustpositivelyandsignificantlyaffectsperformance
TCT, Contract cooperativeinnovation.
[101] Survey Non-Agrifood Innovation
RET Relational However,therelationshipbetweenformalcontractsandperformance
cooperativeinnovationwasinsignificant.
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Table4.Cont.
Spotmarket Price Contractedproductionimprovestheircapabilitiesandperformance.
Relational Volume Contractsassumedifferentpositionswithinthemarkethierarchycontinuum.
[118] TCT Survey Agrifood
Contracts Quality Thecooperativecombinesmarket-likeandhybridvaluesforprice,quality,
Miniintegration Resourceallocation andresourcesallocation.
Formal Theexistenceofinformalnormsmaydecreasetheprofitofthe
[119] - Survey Environment Economicvalue
Informal formalarrangement.
Relationalgovernancedisplaysagreaterinfluenceonperformancethan
Relational
[120] TCT Survey Agrifood Effectiveness contractual.However,contractualappearstobecomplementaryto
Contract
relationalgovernance.
Theverticallyintegratedstructurehassignificantlyhigheryieldsthan
Verticalintegration non-integratedfarms.
[121] - Survey Agrifood Yieldandrevenue
Contract Verticallyintegratedandcontractfarmshavehigheryieldsandrevenuethan
non-integratedfarms.
Contractualappearedmoreimportantthanrelationalin
On-timedelivery
affectingperformance.
Deliveryconsistency
Publicselectionandcontractualcontrolhaveanegativeeffecton
RET, Relational Quality
[122] Survey Non-Agrifood supplierperformance.
TCT Contract Costcontrol
Publicselectionandrelationalcontrolhaveapositiveeffecton
Volumeandschedulingflexibility
supplierperformance.
Competitionintensity
Contract Satisfaction Althoughrelationalnormsenhancesatisfactionmoreeffectivelythan
[100] TCT Survey Non-Agrifood
Relational Financial contracts,theeffectonfinancialperformanceisnotsignificantlydifferent.
Flexibility
[123] Channeltheory Survey Non-Agrifood Relational Relationalnormshaveapositiveimpactonanexporter'sperformanceresults.
Relationship
Socialenforcementpositivelyaffectscoordination.Yetnegativelyimpacts
Networktheory, Socialcontrol perceivedinequityandimprovesperformance.Contractspositivelyand
[124] Survey Non-Agrifood Relationshipperformance
Equitytheory Contracts significantlyimpactonperceivedinequitybuttheimpactoncoordination
andperformanceisnotsignificant.
Relationalgovernanceiseffectiveinrestrictingopportunismbecauseifthe
Quality,Satisfaction,Effective,
firmsseektoreduceopportunism,inter-firmtrustandrelationalnormsare
Contractual Efficiency,
[125] TCT Survey Non-Agrifood importantmeans.
Relational Responsive
Contractualgovernancehasastrongerimpactontheoverallproject
Reduceopportunism
performancethantherelationalgovernance.
Trustencouragescollaborationacrossthechain,althoughtheresultsrevealed
apositiveeffect,thedegreeofinterdependenceontherelationshipbetween
[111] - Experimental Non-Agrifood Trust(relational) Chainperformance
trustandperformanceinthechainshowsthatsuchaneffectisnot
statisticallysignificant.