Contractual governance, relational governance, and the performance of interfirm service exchanges: The influence of boundary-spanner closeness

Academics and managers are confronted with reconciling the social and economic aspects of business-to-business exchanges. In a service context, the authors investigate the relative importance of contractual and relational governance on exchange performance and the influence of the boundary spanner on the implementation of these governance mechanisms and on exchange performance. They test a model of the governance of commercial banking exchanges using interview data with both parties to the exchange (the account manager as the bank’s boundary spanner and the business client). Relational governance is the predominant governance mechanism associated with exchange performance. Contractual governance is also positively associated to exchange performance, but to a much lesser extent. The closeness of the account manager to the client company in terms of information gathering is also positively associated to exchange performance. However, this is mediated through both contractual and relational governance mechanisms with relational governance being the stronger mechanism.

[1]  David Finegold,et al.  Adding Value in Banking: Human Resource Innovations for Service Firms , 1996 .

[2]  Gregory T. Gundlach,et al.  The Structure of Commitment in Exchange , 1995 .

[3]  B. Uzzi,et al.  Embeddedness in the Making of Financial Capital: How Social Relations and Networks Benefit Firms Seeking Financing , 1999, The New Economic Sociology.

[4]  Diana L. Haytko.  Firm-to-firm and interpersonal relationships: Perspectives from advertising agency account managers , 2004 .

[5]  John R. Nevin,et al.  Relationship marketing and distribution channels: Exploring fundamental issues , 1995 .

[6]  Jagdip Singh.  Performance Productivity and Quality of Frontline Employees in Service Organizations , 2000 .

[7]  O. Williamson,et al.  The mechanisms of governance , 1996 .

[8]  Charles C. Nielson.  An empirical examination of the role of “closeness” in industrial buyer‐seller relationships , 1998 .

[9]  Gareth R. Jones,et al.  Transaction Cost Analysis of Service Organization-Customer Exchange , 1986 .

[10]  Alan G. Sawyer,et al.  The Significance of Statistical Significance Tests in Marketing Research , 1983 .

[11]  Robert E. Spekman,et al.  Social Exchange Theory and Research on Business-to-Business Relational Exchange , 2001 .

[12]  A. Parasuraman,et al.  SERVQUAL: A multiple-item scale for measuring consumer perceptions of service quality. , 1988 .

[13]  C. Fornell,et al.  Evaluating structural equation models with unobservable variables and measurement error. , 1981 .

[14]  P M Bentler,et al.  Determinants of sexual and dating behaviors among adolescents. , 1986, Journal of personality and social psychology.

[15]  Joseph P. Cannon,et al.  Buyer–Seller Relationships in Business Markets , 1999 .

[16]  Patrick E. Murphy,et al.  Ethical and Legal Foundations of Relational Marketing Exchanges , 1993 .

[17]  Dena S Cox,et al.  Beyond first impressions: The effects of repeated exposure on consumer liking of visually complex and simple product designs , 2002 .

[18]  James C. Anderson,et al.  STRUCTURAL EQUATION MODELING IN PRACTICE: A REVIEW AND RECOMMENDED TWO-STEP APPROACH , 1988 .

[19]  Kendall Artz,et al.  Buyer–Supplier Performance: The Role of Asset Specificity, Reciprocal Investments and Relational Exchange , 1999 .

[20]  S. Hunt,et al.  The Commitment-Trust Theory of Relationship Marketing , 1994 .

[21]  Gary L. Frazier,et al.  The Severity of Contract Enforcement in Interfirm Channel Relationships , 2001 .

[22]  F. Dwyer,et al.  Developing Buyer-Seller Relationships: , 1987 .

[23]  木下 毅.  Ian R.Macneil:The New Social Contract--An Inquiry into Modern Contractual Relations,1980 , 1985 .

[24]  G. Day.  Managing market relationships , 2000 .

[25]  G. Zinkhan,et al.  The Interface Between Marketing and Finance: Integrated Management in an Unstable World , 1997 .

[26]  K. Tyler,et al.  Marketing financial services to businesses: a critical review and research agenda , 1999 .

[27]  John Hattie,et al.  Methodology Review: Assessing Unidimensionality of Tests and ltenls , 1985 .

[28]  Michèle Paulin,et al.  Relational contract norms and the effectiveness of commercial banking relationships , 1997 .

[29]  George R. Franke,et al.  Structural Equation Modeling with EQS and EQS/Windows , 1995 .

[30]  Jeffrey H. Dyer,et al.  The Relational View: Cooperative Strategy and Sources of Interorganizational Competitive Advantage , 1998 .

[31]  R. Bagozzi,et al.  A general approach to representing multifaceted personality constructs: Application to state self‐esteem , 1994 .

[32]  P. Kaufmann,et al.  Relational Exchange Norms, Perceptions of Unfairness, and Retained Hostility in Commercial Litigation , 1988 .

[33]  Benjamin Schneider,et al.  Serving multiple masters: role conflict experienced by service employees , 2002 .

[34]  A. Parasuraman,et al.  The Behavioral Consequences of Service Quality , 1996 .

[35]  Gilbert A. Churchill.  A Paradigm for Developing Better Measures of Marketing Constructs , 1979 .

[36]  Gregory T. Gundlach,et al.  Legal and social safeguards against opportunism in exchange , 1999 .

[37]  A. Parasuraman.  Customer service in business‐to‐business markets: an agenda for research , 1998 .

[38]  Brendan Burchell,et al.  Trust, business relationships and the contractual environment , 1997 .

[39]  Lance A. Bettencourt,et al.  Role stressors and customer-oriented boundary-spanning behaviors in service organizations , 2003 .

[40]  Thomas H. Brush,et al.  Asset Specificity, Uncertainty and Relational Norms: An Examination of Coordination Costs in Collaborative Strategic Alliances , 2000 .

[41]  Barton A. Weitz,et al.  Relationship marketing and distribution channels , 1995 .

[42]  M. Sobrero,et al.  Structuring Inter-firm Relationships: A Metaanalytic Approach , 1998 .

[43]  Jan B. Heide,et al.  Transaction Cost Analysis: Past, Present, and Future Applications , 1997 .

[44]  S. Sengupta,et al.  Organizing Successful Co-Marketing Alliances , 1993 .

[45]  Michèle Paulin,et al.  Business effectiveness and professional service personnel Relational or transactional managers , 2000 .

[46]  R. Bagozzi,et al.  Representing and testing organizational theories: A holistic construal. , 1982 .

[47]  Joseph P. Cannon,et al.  Understanding the Influence of National Culture on the Development of Trust , 1998 .

[48]  Stewart Macaulay.  Non-contractual relations in business: a preliminary study , 1963 .

[49]  John R. Nevin,et al.  Performance Outcomes of Purchasing Arrangements in Industrial Buyer-Vendor Relationships , 1990 .

[50]  Jan B. Heide,et al.  Do Norms Matter in Marketing Relationships? , 1992 .

[51]  Peter M. Bentler,et al.  EQS : structural equations program manual , 1989 .

[52]  G. Zinkhan.  Relationship Marketing: Theory and Implementation , 2002 .

[53]  Michèle Paulin,et al.  Effectiveness of Relational and Transactional cultures in commercial banking: putting client‐value into the competing values model , 2000 .

[54]  James R. Brown,et al.  Interdependency, Contracting, and Relational Behavior in Marketing Channels: , 1996 .

[55]  Joseph O. Rentz,et al.  A measure of service quality for retail stores: Scale development and validation , 1996 .

[56]  Gregory T. Gundlach,et al.  Governance in Exchange: Contract Law and Its Alternatives , 1993 .

[57]  F. Reichheld.  Loyalty-based management. , 1993, Harvard business review.

[58]  S. Arnold,et al.  How relational norms affect compliance in industrial buying , 1998 .

[59]  David Courpasson.  The French Deposit Bank: Managerial Professions Between Rationalization and Trust , 1997 .

[60]  Venkatesh Shankar,et al.  Customer value, satisfaction, loyalty, and switching costs: An illustration from a business-to-business service context , 2004 .

[61]  J. Barnes.  Closeness, strength, and satisfaction: Examining the nature of relationships between providers of financial services and their retail customers , 1997 .

[62]  Jagdip Singh,et al.  Consumer Trust, Value, and Loyalty in Relational Exchanges , 2002 .

[63]  Ian R. Macneil.  The new social contract: An inquiry into modern contractual relations , 1980 .

[64]  R. Peterson.  A Meta-analysis of Cronbach's Coefficient Alpha , 1994 .

[65]  James C. Anderson,et al.  An approach for confirmatory measurement and structural equation modeling of organizational properties , 1987 .

[66]  Jan B. Heide.  Interorganizational Governance in Marketing Channels , 1994 .

[67]  J. F. Gaski.  The Theory of Power and Conflict in Channels of Distribution , 1984 .

[68]  Daniel C. Bello,et al.  The antecedents and performance consequences of relationalism in export distribution channels , 2003 .

[69]  H. Marsh,et al.  Application of confirmatory factor analysis to the study of self-concept: First- and higher order factor models and their invariance across groups. , 1985 .

[70]  O. Williamson.  Markets and Hierarchies , 1975 .

[71]  James R. Brown,et al.  Managing Marketing Channel Opportunism: The Efficacy of Alternative Governance Mechanisms , 2000 .

[72]  R. Bachmann,et al.  Contract Law, Social Norms and Inter-firm Cooperation , 1997 .

[73]  Robert E. Spekman,et al.  Interimistic relational exchange: Conceptualization and propositional development , 2000 .

[74]  Richard P. Bagozzi,et al.  Assessing Construct Validity in Organizational Research , 1991 .

[75]  G. Zinkhan,et al.  The Marketing/Finance Interface: Two Divergent and Complementary Views of the Firm , 2000 .

[76]  P. Bentler,et al.  Significance Tests and Goodness of Fit in the Analysis of Covariance Structures , 1980 .

[77]  Christian Grönroos,et al.  Service Management: A Management Focus for Service Competition , 1990 .

[78]  D. Harrison.  Is a Long-term Business Relationship an Implied Contract? Two Views of Relationship Disengagement , 2004 .

[79]  Rodney L. Stump,et al.  Transaction Cost Analysis: Integration of Recent Refinements and an Empirical Test , 1999 .

[80]  Joseph P. Cannon,et al.  Contracts, norms, and plural form governance , 2000 .

[81]  W. Dugger.  The Economic Institutions of Capitalism , 1987 .

[82]  R. Bagozzi,et al.  On the evaluation of structural equation models , 1988 .

[83]  Benjamin Schneider,et al.  Winning the service game , 1995 .

[84]  M. Eisenberg.  Why There Is No Law of Relational Contracts , 1999 .