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History
Publishing Programs
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Robert Dahlstrom, University of Kentucky
F. Robert Dwyer, University of Cincinnati
Murali Chandrashekaran, University of Cincinnati
"Environment, Structure and Performance in Interfirm Exchange"
Abstract
This paper uses transaction
cost analysis and contingency theory to present a model of interfirm
relationship management. The conceptual model maintains the opportunism and
effectiveness that emerge through the interaction of specific assets and
technological uncertainty with formalization and participation. The model is
tested in working relationships between buyers and sellers of capital equipment.
The results suggest that formalization and limited participation reduce
opportunism under conditions of high asset specificity and low technological
uncertainty. Nevertheless, formalized procedures and vendor participation in
decision making raise effectiveness where asset specificity is high and
technological uncertainty is low. These results suggest that managers institute
operating procedures to control specific assets in stable technological
environments. Vendor participation should be monitored to limit opportunism
while simultaneously raising effectiveness.
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