Exploring the governance mechanisms of quasi-integration in buyer-supplier relationships

This article deals with quasi-integration governance mechanisms in the context of business-to-business buyer-seller relationships. Based on transaction cost analysis and resource dependence theory, the authors identify four key elements of quasi-integration: legal contract, joint problem solving, joint planning, and collaborative communication. From the perspective of resource dependence theory, the authors examine the effects of interdependence on these four elements. Empirical evidence derived from a study of 398 Chinese companies indicates that (1) the four governance mechanisms of quasi-integration are driven by inter-firm dependence; and that (2) legal contract serves as an important foundation of joint problem solving. In addition, the authors examine the distinct effects of the four elements on two critical exchange outcomes: supplier performance and buyer commitment. Their analysis shows that legal contract, joint planning, and collaborative communication positively affect supplier's performance, while joint problem solving and collaborative communication significantly enhance the buyer's commitment to the relationship. (C) 2008 Elsevier Inc. All rights reserved.