Vertically coordinated ties are purportedly effective responses to the uncertainties of fastchanging purchasing environments. Building on transaction costs arguments, and related work in marketing, we analyze vertical coordination as a response to external uncertainty. We show that its effectiveness is highly contingent on the magnitude of the safeguarding problem present. Indeed, its beneficial effects can be overwhelmed by the consequential increase in trading hazards. We use survey data from a sample of 161 industrial buyers to test our hypotheses. When specific investments are modest, greater vertical coordination diminishes transaction difficulties in adapting to high environmental uncertainty. On the other hand, vertical coordination increases transaction difficulties in adapting to high environmental uncertainty when specific investments are substantial. We discuss the importance to these results for transaction cost theory. We develop our results into a managerial decision framework for designing purchasing ties that balances safeguarding and adaptation. 2 When Does Vertical Coordination Improve Industrial Purchasing Relationships?

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Firms seek products, processes, and technologies that add value to their offerings in an effort to remain competitive. The purpose of this research is to explore Extranet linkages between business partners, how they impact business practices and how they add value in business relationships. Extranets are extended Intranets connecting multiple

Increasingly, buyers are turning to the use of online, reverse auctions in their negotiation activities with suppliers. How does the use of these price competition mechanisms impact buyer-supplier relationships? We consider this question in the context of a quasi-experiment involving six reverse auctions conducted in the supply base of a major industrial buyer. The results indicate that online, reverse auctions increase both new and incumbent suppliers ’ beliefs that the buyer would act opportunistically toward the supplier, particularly when open bid auctions are used. Paradoxically, the supplier’s response to online auctions is to increase its willingness to make dedicated investments toward the buyer; this is true of both new and incumbent suppliers regardless of the auction type. Although these auctions can yield costsavings, the savings are category specific and not systematically related to an open or sealed bid format. Implications for the use of reverse auctions in industrial sourcing activities are

In this paper, we incorporate the concept of fairness into the conventional dyadic channel to investigate how fairness may affect the interactions between the manufacturer and the retailer. We show that channel coordination in a channel where partners care about fairness does not require any nonlinear pricing scheme such as a two-part tariff and quantity discount. The manufacturer can use a simple wholesale price above its marginal cost to coordinate this channel. We also show that a two-part tariff or a quantity discount schedule can still coordinate the fair channel. However, the manufacturer cannot use either mechanism to take away all of the channel profit. Indeed, the manufacturer need not even claim the largest share of the channel profit when the channel is so coordinated. (Keyword: Distribution Channels; Fairness; Channel Coordination; Behavioral Economics) “Even profit-maximizing firms will have an incentive to act in a manner that is perceived as fair if the individuals with whom they deal are willing to resist unfair transactions and punish unfair firms at some cost to themselves...willingness to enforce fairness is common.”

This article examines consumers' reactions to the provision of direct access to uncensored competitor price information within an electronic store. Based on notions derived from signaling theory, prior research on trust, and attribution theory, we propose that the facilitation of such access may have a positive impact on consumer preference for an online retailer. Furthermore, we predict that this effect will be moderatedby how attractive a vendor's prices are. The results of a laboratory experiment demonstrate the possibility that a retailer's act of providing access to uncensored competitor price information may result in enhanced long-term preference for that vendor, especially if the latter's prices are neither clearly superior nor obviously inferior to those of its competitors. Finally, this positive effect of facilitating access to competitors' prices on consumer preference is mediated by the perceived trustworthiness of the online retailer.

Commitment is as an essential ingredient for successful long-term relationships. Developing a customer's commitment in business relationships does pay off in increased profits, customer retention, willingness to refer and recommend. Relationship marketing literature suggests customer satisfaction and trust as major determinants of commitment. Recently, practitioners and scholars have identified customer value as a pivotal issue in the management of business relationships. In this article the authors theorize (1) customer satisfaction, (2) customer trust, (3) customer relationship value, and (4) customer commitment as key variables for successful business relationship management. A framework for the interrelationships of these key variables is provided. Drawing upon a database of 230 customer-supplier relationships, this study shows that trust and relationship value are powerful predictors of commitment. The influence of customer satisfaction on commitment is mediated by trust and relationship value. Some theoretical and managerial implications are given. At present researchers as well as practitioners report changes in the nature of industrial customer-supplier relationships. Customers and their suppliers tend to believe that long-term

anonymous reviewers and editors for comments on earlier versions of the manuscript. SAFEGUARDING INTERORGANIZATIONAL

Existing studies on IT outsourcing have mainly examined partnership factors that influence IT outsourcing effectiveness. This stream of IT outsourcing research has largely ignored how to foster and manage necessary attributes of partner relationships that promote relationship quality, leaving the role of the formal contract in the context of managing outsourcing relationships untouched. This research extends such studies and integrates the extant views that contracts and relational governance function as a complement and that relationship commitment and trust are the key attributes in relational governance impacting on the interorganizational performance. Using service level agreements (SLA) we examine how specific elements of formal contracts help firms to shape their relational attributes such as trust and commitment that leads to the success of IT outsourcing. The results show that the effects of well-structured SLA in managing the relational aspects of IT outsourcing contracts are significant. This paper also provides insight into the development of relational governance through a contractual mechanism in IT outsourcing engagements. 1.

Chain coordination is growing in importance for those in the food industry to maintain access to global markets and competitive advantage. Information communication facilitates coordination and is seen as the glue that holds organisational chain relationships together. This paper describes how Australian food processors have been exchanging information to coordinate customers and suppliers in their chains along with changes over time. The most frequent information exchanged was to resolve problems. Operational issues were only discussed when exceptions arose and this was decreasing over time, as problems were resolved and processes improved. For the organisations studied, they were increasingly formalising processes to review progress and performance. A wide range of organisational departments were involved in communications with customers and suppliers, especially to resolve problems and develop new products. While the traditional telephone and face-to-face communication methods were the most popular, e-mails were replacing faxes. There were also moves to increasing use of reports, electronic data interchange and intranets for more well developed relationships with larger customers and suppliers. These changes in communication systems were the source of some increased satisfaction with information systems by improving timeliness and depth of information shared. However, there was perceived to be some room for further improvement.