Effective Interfirm Collaboration: How Firms Minimize Transaction Costs and Maximize Transaction Value

This study of automotive transaction relationships in the U.S.A. and Japan offers data which indicate that transaction costs do not necessarily increase with an increase in relationship-specific investments. We empirically examine the conditions under which transactors can simultaneously achieve the twin benefits of high asset specificity and low transaction costs. This is possible because the different safeguards which can be employed to control opportunism have different set-up costs and result in different transaction costs over different time horizons. We examine in detail the practices of Japanese firms which result in effective interfirm collaboration

Nationalist Transformations: Music, Ritual, and the Work of Memory in Cambodia and Thailand

Drawing on fieldwork conducted in Cambodia and its diaspora since 2004, this article explores tensions that arise when individuals and institutions impose nation-state ideologies on music and ritual that predate the nation-state concept and transcend official state boundaries. In numerous contexts, musicians and dancers in Cambodia and Thailand perform offerings and blessings that honor their teachers and initiate artistic lineages. Due to broad influence from India and centuries of conflict and borrowing, these rituals—though not necessarily their musical content—have proliferated in these two countries. I describe these nearly identical rituals—called thvāy grū in Khmer and wai khruu in Thai—and their contexts before outlining the historical narratives that have led to their attainment of political and nationalist significance. Today, individuals and institutions in both nations claim that these rituals effect a continuity that reflects each country’s unique national identity. Using Paul Ricoeur’s essay on “Memory and Forgetting,” I argue that these rituals fulfill a “duty to remember” that, in Cambodia’s case, counteracts a colonial narrative of decline. However, this remembering works against an equally essential task, what Ricoeur calls “the duty to forget.” I argue that the prioritizing of memory over forgetting, enacted by the thvāy grū and wai khruu, contributes to the continuing animosity and violence between Cambodia and Thailand. In making this argument, I attempt to show how ethnomusicology can move beyond consideration of how ritual reflects social structures to explore music and ritual’s role in inculcating political thought

Creating and Managing a High Performance Knowledge-Sharing Network: The Toyota Case

This study offers a detailed case study of how Toyota facilitates interorganizational knowledge transfers among within its production network. In particular, we identiify and examine six key institutionalized knowledge sharing routines developed by Toyota and its suppliers. By examining how Toyota facilitates knowledge-sharing with, and among, suppliers we are able to identify the key variables which influence interorganizational and network learning. Moreover, since Toyota is early in the process of creating a learning network with U.S. suppliers, we explore the creation and evolution of Toyota?s new learning "network" in the United States. We attempt to extrapolate from Toyota?s experience by developing a series of propositions regarding creating and designing a high performance knowledge-sharing network. We believe our analysis provides at least a partial explanation for why Toyota has been able to maintain its productivity and quality advantages long after the principles of the Toyota Production system have diffised throughout the industry (Knowledge Sharing, Interorganizational Learning, Competitive Advantage)

The Determinants of Inter-Firm trust in Supplier-Automaker Relationships In the U.S., Japan, and Korea

In this paper we examine the determinants of supplier trust in the buyer in 453supplier-automaker relationships in the U. S., Japan, and Korea. We define trust and derive a model of its determinants drawing upon (1) an embeddedness (relationship-based) perspective, (2) a processbased perspective, and an (3) economic (hostage-based) perspective. Our findings indicate strong support for the process-based perspective in all countries; embeddedness (e.g., length of relationship) was only important as a determinant of trust in Japan, and the hostage-based variable (stock ownership) was not important in any country. More specifically, we found that high supplier trust emerges when (1) automakers have developed supplier-selection routines that favor incumbents and which maintain a continuing (repeated) exchange relationship with the supplier, and (2) automakers have developed assistance-giving routines to help suppliers solve problems and improve. Although there were some differences across institutional environments, notably higher trust in Japan, the findings are quite robust across the institutional environments. Indeed, in a sample of U.S. suppliers selling to both U.S. and Japanese automakers in the United States, we found that Japanese automakers were more effective than U.S. automakers at building trusting relations with U.S. suppliers. The ability of Japanese automakers to build high levels of trust with suppliers in the United States suggests that the institutional environment may be less important than firm-level practices in the production of inter-organizational trust

The Economic Value of Trust in Supplier-Buyer Relationships

In this paper we investigate the relationship between supplier trust in the buyer and transaction costs, information sharing, and re[ation-specific investments in a sample of 453 supplier automaker exchange relationships in the U. S., Japan, and Korea. Our findings indicate that trust reduces transaction costs and increases information sharing in supplier-buyer relationships. Moreover, the findings suggest that the economic value created for transactors, in terms of lower transaction costs, may be substantial. In particular, we found that the automaker with the least trusting supplier relations spent twice as much of its face-to-face interaction time with suppliers on ex ante contracting and ex post haggling when compared to the most trusted automakers. This translated into procurement (transaction) costs which were as much as five times higher for the least trusted automaker compared to the most trusted automaker. Finally, we argue that trust is unique as a governance mechanism because it not only minimizes transaction costs, but also has a mutually causal relationship with other behaviors (i.e. information sharing. buyer technical assistance) that create value in the exchange relationship. Other governance mechanisms (e. g.. contracts. financial hostages) are necessary costs incurred to prevent opportunistic behavior but do not create value beyond transaction cost minimization. Thus, our findings indicate that trust in supplier-buyer relations can create economic value and may be an important source of competitive advantage

The Determinants and Economic Outcomes of Trust in Supplier-Buyer Relations

In this paper we examine the antecedents and outcomes of supplier trust in 453 supplier-automaker relationships in the U.S., Japan and Korea. Our findings indicate that high supplier trust emerges when (1) automakers have developed assistance-giving routines to help suppliers improve, and (2) automakers maintain a continuing (repeated) exchange relationship with the supplier. We also found that trust reduces transaction costs and increases information sharing in supplier-buyer relationships. Moreover, the findings suggest that the economic value created for tmnsactors may be substantial as evidenced by the fact that the automaker with the least trusting supplier relations had five times the procurement costs and spent tice as much of its face-to-face interaction time with suppliers on ex ante contracting and ex post haggling when compared to the most trusted automakers. Thus, our findings suggest that trust in supplier-buyer relations can create economic value and may be an important source of competitive advantage

The Influence of Customer Scope on Supplier Learning and Performance in the Japanese Automobile Industry

Most studies on Japanese supplier-automaker relationships have focused on the nature of the dyadic inter-firm relationship and the performance of the assembler. We examine the relationship between a Japanese supplier's "customer scope strategy" (i.e. number of customers) and the supplier's performance. By analyzing data on 125 suppliers, we found that a supplier with broad automotive customer scope tends to be more profitable and is better off with less exclusive ties. This relationship held even after controlling for supplier size, product type, and the underlying competitiveness/efficiency of each supplier. We argue that a broad customer scope strategy Ieads to superior performance primarily due to learning opportunities. This finding highlights a key liability of vertical integration since integration of inputs often limits the ability of in-house divisions to access new customers. However, there is a limit to the advantages of a broad customer base, since sales to 'unrelated customers' (e.g., non-automotive) did not have a significant impact on performance. In short, there appear to be diminishing returns to customer scope as suppliers add 'dissimilar' customers with requirements farther from their core knowledge domain. Thus, these findings offer empirical support for the knowledge based view of the firm which suggests that the efficient boundaries of firms are driven by knowledge domains/considerations. Our findings also suggest that studies that focus only on the advantages of long-term cooperative relationships may be misleading if interpreted to mean that an exclusive supplier-assembler relationship is the optimal solution for the supplier

The Determinants of Interfirm Trust: Evidence from Supplier Automaker Relationships in the U.S., Japan and Korea

This paper has been accepted for presentation at the Academy of Management Meetings, Cincinnati, 1996.The determinants of interfirm trust are examined in 453 supplier automaker relationships in the U.S., Japan, and Korea. The findings indicate high supplier trust emerges when (1) suppliers receive assistance from the automaker, (2) the automaker has a track record of maintaining a continuing (repeated) exchange relationship with the supplier. Although there were some differences across institutional environments, notably higher trust in Japan, the findings are robust across the three institutional environments. Indeed, in a sample of U.S. suppliers that worked with both U.S. and Japanese automakers in the United States, we found that Japanese automakers were more effective than U.S. automakers at building trusting relations with U.S. suppliers. Thus, firm level practices appear to be more important than the institutional environment in the development of interfirm trust. A central issue in the literature on strategic alliances and interfirm cooperation is how firms create trust and control opportunism, particularly when the transactors have made investments in transaction specific assets. Under these conditions, trust has been described as an important antecedent to interorganizational cooperation and economic efficiency (Sako, 1991; Smith, Carroll, and Ashford, 1995). In fact, recent research suggests that trust in supplier buyer relations may be an important source of competitive advantage because it: (1) lowers transaction costs and allows for greater flexibility to respond to changing market conditions (Dore, 1983; Sako, 1991; Barney & Hansen, 1995; Dyer, forthcoming), (2) facilitates investments in special purpose assets and technologies which enhance productivity (Asanuma, 1989; Lorenz, 1988; Dyer, 1994), and (3) leads to superior information sharing routines which improve coordination and joint efforts to minimize inefficiencies (Fruin, 1992; Clark & Fujimoto, 1991; Nishiguchi, 1994). Moreover, some scholars claim that national economic efficiency is highly correlated with the existence of a high trust institutional environment (North, 1990; Casson, 1991; Hill, 1995; Fukuyama, 1995). For example, Fukuyama (1995:7) argues that the economic success of a nation, "as well as its ability to compete, is conditioned by the level of trust inherent in the society." The findings from these, and other, studies have increased our attention on the important role of trust in economic exchanges. A natural response to these studies has been to exhort companies to build trust with their trading partners (Business Week, 1986, 1992) and to call for increased research on the role of trust in coordinating economic activity (Smith, Carroll, and Ashford, 1995). However, before an explicit strategy for developing trust can be developed, or considered feasible, the determinants of trust must be identified. Despite considerable academic and managerial interest in trust between trading partners, to date there has been little empirical research on the antecedents or determinants of interorganizational trust (i.e. between supplier buyer). Further, there has been little research on whether the determinants of trust differ in different institutional (i.e. country) environments. The purpose of this paper is to examine the determinants of supplier trust in a sample of supplier/automaker relationships in the United States, Japan, and Korea. Given the recent attention on the importance of trust in exchange relationships, an examination of the determinants of trust is, by itself, a valuable undertaking. However, due to the globalization of industries and a dramatic increase in international joint ventures, a study of the determinants of trust in different institutional environments is particularly valuable. Such a study is useful because it allows for an examination of those factors that are important determinants of trust both within, as well as across, countries.The International Motor Vehicle Program at MI

Crafting A Human Resource Strategy To Foster Organizational Agility: A Case Study

A decade ago, the CEO of Albert Einstein Healthcare Network (AEHN), anticipating a tumultuous and largely unpredictable period in its industry, undertook to convert this organization from one that was basically stable and complacent to one that was agile, “nimble, and change-hardy”. This case study briefly addresses AEHN’s approaches to business strategy and organization design, but focuses primarily on the human resource strategy that emerged over time to foster the successful attainment of organizational agility. Although exploratory, the study suggests a number of lessons for those who are, or will be, studying or trying to create and sustain this promising new organizational paradigm

A note on the field of decision analysis

This note provides a short overview of some history, context and concepts in the field of decision analysis. In particular, we describe the connection between normative, prescriptive and descriptive decision theory, and the connection between several different approaches to value and utility