TY - JOUR
T1 - The dark side of B2B relationships in GVCs – Micro-foundational influences and strategic governance tools
AU - Verbeke, Alain
AU - Hutzschenreuter, Thomas
AU - Pyasi, Nishant
N1 - Publisher Copyright:
© 2021
PY - 2021/10
Y1 - 2021/10
N2 - Global value chains (GVCs) consist of “a large number of parts that interact in a non-simple way” (Simon, 1962: 468), and their governance is fraught with human behavioral challenges. Multinational enterprise (MNE) decision makers are cognizant of the complexity and challenges, and lead firms in GVCs attempt to address them with appropriate governance. Were that not the case, we would see more dark side outcomes of B2B relationships in GVCs. We use the New Internalization Theory (NIT) to explain and predict the governance choices made by lead MNEs and their GVC partners. Specifically, we take a micro-foundational perspective that builds upon the concepts of bounded rationality and bounded reliability. We point to three broad, non-mutually exclusive categories of governance tools – formal safeguards, relational tools, and entrepreneurship-oriented mechanisms – that can prevent, or at least mitigate, dark side outcomes. We illustrate with data from nine case studies of international GVCs.
AB - Global value chains (GVCs) consist of “a large number of parts that interact in a non-simple way” (Simon, 1962: 468), and their governance is fraught with human behavioral challenges. Multinational enterprise (MNE) decision makers are cognizant of the complexity and challenges, and lead firms in GVCs attempt to address them with appropriate governance. Were that not the case, we would see more dark side outcomes of B2B relationships in GVCs. We use the New Internalization Theory (NIT) to explain and predict the governance choices made by lead MNEs and their GVC partners. Specifically, we take a micro-foundational perspective that builds upon the concepts of bounded rationality and bounded reliability. We point to three broad, non-mutually exclusive categories of governance tools – formal safeguards, relational tools, and entrepreneurship-oriented mechanisms – that can prevent, or at least mitigate, dark side outcomes. We illustrate with data from nine case studies of international GVCs.
KW - Bounded rationality
KW - Bounded reliability
KW - Dark side
KW - Global Value Chain (GVC)
KW - Governance
KW - Multinational enterprise
UR - http://www.scopus.com/inward/record.url?scp=85110764798&partnerID=8YFLogxK
U2 - 10.1016/j.jbusres.2021.07.006
DO - 10.1016/j.jbusres.2021.07.006
M3 - Article
AN - SCOPUS:85110764798
SN - 0148-2963
VL - 135
SP - 816
EP - 828
JO - Journal of Business Research
JF - Journal of Business Research
ER -