اثر متقابل کنترل های قراردادی و اجتماعی روی عملکرد بنگاه به بنگاه

Marketing and Strategy studies have treated relational governance as a critical factor of business-to-business (B2B) performance. Extant studies offer contrasting views on whether formal or social control is a better control mechanism, with little known about their interaction effect. In this study, the authors aim to investigate the interaction effect of these two control mechanisms by dividing a B2B contract (formal control) into two provisions (transactional and relational) and to examine the specific interaction effect of social control on each provision. The authors also seek to investigate the moderating effects of environmental dynamism, prior ties, and buyer lock-in. The measure of B2B performance reflects relational quality and financial outcome. The results show significantly different interactions between each provision of the contract and social control depending on the level of environmental dynamism and buyer lock-in, and suggest that the environmental condition of the transactions is reflective of managers' optimal control mechanisms.

Relational governance is crucial because it influences a firm's exchange relationship performance (Dyer and Singh, 1998 and Moon and Tikoo, 2013). Liker and Choi (2004) emphasize that in today's global business environment, corporate competitiveness heavily depends on the firms' ability to manage their buyer–seller relationships effectively. Many scholars have studied the effects and problems of different types of governance mechanisms (Dyer and Singh, 1998, Ghoshal and Moran, 1996, Gulati, 1995, Li et al., 2010, Luo, 2002, Poppo and Zenger, 2002 and Wuyts and Geyskens, 2005). Extant research has identified two general categories of business-to-business (B2B) governance or control mechanisms: formal control based on Transaction Cost Analysis (TCA) and social control based on Social Exchange Theory (SET) (Dyer and Singh, 1998, Fryxell et al., 2002 and Uzzi, 1997). According to TCA, corporations need more specific and explicit contracts, that is, written legal agreements between two or more parties, to prevent opportunistic behavior (Williamson, 1985). Some studies also investigate weaknesses of formal control, which cannot reflect the historical characteristics of the ongoing relationship (Granovetter, 1985 and Zajac and Olsen, 1993) and the dilemma of efficiency, which involves high transaction cost for making and performing a concrete contract. In contrast, SET asserts that social control encourages desirable behaviors leading to joint problem solving and participatory decision making through information exchange and the fulfillment of promises if firms develop strong trust between them (Fryxell et al., 2002 and Luo, 2002). However, Jeffries and Reed (2000) criticize that the effect of social control has excessively positive assumption. Based on these studies about the effect of each control method, there are some attempts to examine the integrated effects of the two controls. However, previous studies provide contrasting results: substitutes vs. complements. The substitutes' perspective posits that corporations should employ only one control method (Dyer and Singh, 1998, Ghoshal and Moran, 1996, Gulati, 1995, Li et al., 2010 and Wuyts and Geyskens, 2005). In contrast, the complements' perspective asserts that firms should utilize both mechanisms together (Luo, 2002 and Poppo and Zenger, 2002). Both perspectives do not show a clear answer for these mixed results, and the complements' perspective gradually is being emphasized more in recent studies than the substitutes' perspective that dominated earlier studies. In this paper, the authors suggest three reasons for the conflicting viewpoints. First, previous B2B marketing and strategy studies have focused on SET and RM based on relational contract theory (RCT) (Macaulay, 1963, Macneil, 1978 and Macneil, 1980). Most of the substitutes' perspective studies conclude that social control is a more beneficial method after firms develop a sufficiently close relationship (Dyer and Singh, 1998, Ghoshal and Moran, 1996, Gulati, 1995, Li et al., 2010 and Wuyts and Geyskens, 2005), which leads to reduced costs. Moreover, while most of these studies have considered social control as a complicated and multi-dimensional mechanism (Li et al., 2010, Luo, 2002 and Poppo and Zenger, 2002), they have represented formal control only with a contract length (Poppo & Zenger, 2002) or completeness of underlying dimensions that could change according to the test sample (Li et al., 2010, Luo, 2002 and Wuyts and Geyskens, 2005). These inconsistent measurements show that the lack of understanding about B2B contracts may be an important reason for the contrasting view. Second, previous studies have not considered the moderating effects of various business conditions. Only Li et al. (2010) shows that the interaction effects of control methods are different between international and domestic transactions. Third, B2B studies have used a variety of performance measurements. Their results may vary depending on the performance variable. Therefore, the purpose of this study is to investigate the interaction effect of the two control mechanisms by considering these three issues. We organize the paper as follows: First, we explain how to understand B2B contract and describe performance variables. Second, we introduce the research model and build hypotheses by considering the moderating effects of various business conditions (three-way interaction), such as environmental dynamism, prior ties, and buyer lock-in. Third, we analyze a research model using a sample of Korean B2B exchange data and validate hypotheses. Finally, we discuss the study's results, contributions, and limitations (Fig. 1).

There is little consensus in the literature on the debate of the advantages of either the complements' or substitutes' perspectives with neither providing a definitive and general answer. Therefore, the authors aim to investigate the interaction effect between control methods by dividing the formal control into transactional and relational provisions and considering moderating variables. First key finding confirms that the common interaction effect is not the best way to manage B2B relationships. Our findings (H1(a), (b) and H2(a), (b)) suggest that we are not able to assert that the interaction of control types has a simple effect on business performance under normal business circumstances. These results support an alternative explanation for the prior contrasting views about interaction effect showing the importance for investigating moderating effects. While Williamson (1985) insists that environmental and transactional characteristics affect control mechanisms, and commitment and trust theory asserts that the relational factor acts as an effective control mechanism (Doney and Cannon, 1997 and Morgan and Hunt, 1994), there have been no studies that treat various moderating variables, except for the national boundary of transactions. Therefore, this study has theoretical implications because we explore the contrasting views regarding the interaction effect of social and formal control using the moderating effects of various exchange conditions instead of replicating prior studies. Second, the authors show that the interaction effect can show distinctions based on the characteristics of the contract terms and certain business conditions. The support for H3(a) shows that it may be harmful on relationship quality to develop transactional contract provisions and social controls together when environmental dynamism grows. However, the results for H4(a) shows that a synergy effect on relationship quality appears when firms have both well-designed relational contract provisions and high-levels of social control. Buyer lock-in shows that it not only has a positive effect on the transactional contract provision but also the relational one negatively interacts with social control on relationship quality if buyer has no alternative supplier in the market (H7(a) and H8(a)). This finding empirically verifies the theoretical arguments found in many studies and which is grounded in the logic of TCA, SET, and RM; the basis of the hypotheses. For example when using SET, we could explain that social controls supplement contract term incompleteness (e.g., adjustment and planning) when there are unpredictable future risks, customer preferences change frequently, there is fierce competition in the buyer's market. TCA also supports this result because there is an ex-post cost that not only disappears with the development of trust but also is prevented by relational contract terms (e.g., adjustment and planning). These finding results suggest that managers develop a certain control mechanism based on the environmental conditions of the transaction, particularly when corporations manage B2B relationships to limit costs. Thus, if the circumstance of the transaction is not stable, they have to concretize the relational provision at the beginning of the transaction. Moreover, if a buyer is locked-in to a particular supplier, specifying the transactional provision and activating social control will be helpful to the managers. Therefore, this study provides managers with valuable insights into how to allocate their budgets to develop control methods.