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"Choice and performance of governance mechanisms: matching contractual and relational governance to sources of asset specificity"

Glenn Hoetker and Thomas Mellewigt


First Author :

Glenn Hoetker
Business Administration
University of Illinois
University of Illinois at Urbana-Champaign
College of Business
1206 S. Sixth Street
Champaign, IL 61820

(217) 265-4081
(217) 244-7969 (Fax)

Second Author :

Thomas Mellewigt
University of Paderborn
University of Paderborn
Department of Management
Warburger Strasse 100
D-33098 Paderborn

+49-5251-603242 (Fax)

Abstract :
We examine the relationship between the nature of assets involved in an alliance and the optimal configuration of contractual and relational governance mechanisms. Examination of governance choice and performance in the German telecommunications industry indicates that physical assets are more suited to contractual controls, while knowledge assets are best governed via relational mechanisms. Relational governance actually harms alliance performance in the presence of physical assets. Implications for the study and management of alliances are discussed.
Footnotes & Acknowledgements :
The authors gratefully acknowledge the helpful comments of Rajshree Agarwal, Anoop Madhok, Scott Masten, Joanne Oxley, Jeff Reuer, Sonali Shah, Charlie Williams and attendees at the 2004 meeting of the Academy of Management. Any remaining errors are the authors’ responsibility. Both authors contributed equally to the paper.
Manuscript Received : 2004
Manuscript Published : November 16, 2004
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