No abstract

The organization of interfirm exchanges has become of critical importance in today’s business environment. Many scholars have criticized the inadequacies of legal contracts as mechanisms for governing exchange, especially in the face of uncertainty and dependence. Other scholars argue that it is not the contracts per se but the social contexts in which they are embedded that determine their effectiveness. This study investigates the performance implications of governance structures involving contractual agreements and relational social norms, individually and in combination (plural form) under varying conditions and forms of transactional uncertainty and relationship-specific adaptation. Hypotheses are developed and tested on a sample of 396 buyer-seller relationships. The results provide support for the plural form thesis—increasing the relational content of a governance structure containing contractual agreements enhances performance when transactional uncertainty is high, but not when it is low. Implications for theory and future research are discussed.

Commitment is an essential part of successful long-term relationships. Whereas commitments by both parties in an exchange can provide the foundation for development of relational social norms, disproportionate commitments can lead to opportunism by the less committed partner. The authors study the effect of the credibility and proportionality of commitment inputs in an exchange upon the development of relational social norms, opportunism, and long-term commitment intentions. They also investigate longitudinal effects of the credibility of long-term commitment intentions, relational social norms, and opportunism in one time period on commitment inputs and long-term commitment intentions in later periods. Data gathered from a behavioral simulation suggest that (1) the credibility of commitment inputs in exchange is positively related to the development of relational social norms, (2) and is positively related to long-term commitment intentions in the same time period, (3) relational social norms may be undermined by opportunistic conduct, and (4) the presence of relational social norms in one time period is positively related to commitment inputs and long-term commitment intentions in later periods.