- Oliveira N. & Lumineau F. Forthcoming. “How Coordination Trajectories Influence the Performance of Interorganizational Project Networks.” Organization Science.
This study examines how the joint use of integrators and contracts either enables or hampers coordination and, in turn, the performance of interorganizational project networks. Using extensive qualitative analyses and socio-metric techniques, we investigated coordination among organizations during seven small and medium-sized building projects. Our longitudinal study reveals how integrators develop connecting functions that, together with contracts’ steering functions, largely drive coordination dynamics. Further data analyses provide insight into how coordination hinges on the prevalence of connecting or steering, which may more or less fit with coordination needs in various project phases. Given these findings, we theorize the contingent nature of the interplay between the use of integrators and contracts throughout projects. Our findings are integrated into a process model of how coordination trajectories lead to different performance levels of interorganizational project networks. Our study has theoretical implications for the literature on project-based organizing and, more broadly, the literature on interorganizational coordination.
- Cao Z., Li Y., Jayaram J., Liu Y., & Lumineau F. Forthcoming. “A Meta-Analysis of the Exchange Hazards – Interfirm Governance Relationship: An Informal Institutions Perspective.” Journal of International Business Studies.
The literature on how exchange hazards influence interfirm governance remains ambiguous. Drawing on institutional theory, this study revisits this relationship by examining the moderating effects of national culture. By meta-analyzing 167 articles involving 38,183 interfirm relationships in 35 countries, we found support for the moderating effects of three facets of national culture: collectivism, power distance, and uncertainty avoidance. We discuss the implications of the findings for theory and practice.
- Schilke O. & Lumineau F. Forthcoming. “The Double-Edged Effect of Contracts on Alliance Performance.” Journal of Management.
Despite substantial scholarly interest in the role of contracts in alliances, few studies have analyzed the mechanisms and conditions relevant to their influence on alliance performance. In this paper, we build on the information-processing view of the firm to study contracts as framing devices. We suggest that the effects of contracts depend on the types of provisions included and differentiate between the consequences of control and coordination provisions. Specifically, control provisions will increase the level of conflict between alliance partners whereas coordination provisions will decrease such conflict. Conflict, in turn, reduces alliance performance, suggesting a mediated relationship between alliance contracts and performance. We also contribute to a better understanding of contextual influences on the consequences of contracts and investigate the interactions of each contractual function with both internal and external uncertainties. Key informant survey data on 171 alliances largely support our conceptual model.
- Lumineau F. & Oliveira N. Forthcoming. “A Pluralistic Perspective to Overcome Major Blind Spots in Research on Interorganizational Relationships.” Academy of Management Annals.
Interorganizational relationships have attracted much scholarly attention in the last two decades. Despite the significant advances made in this field, the literature still largely relies on assumptions that overlook core features of interorganizational relationships. We build on the organizational research on pluralism to evaluate and identify opportunities to extend the literature on interorganizational relationships. Drawing on a synthesis of the last 20 years of research (1996-2016) on interorganizational relationships, we discuss four major “blind spots” concerning (1) the assumption of symmetry between parties or the focal party’s perception is taken to reflect the whole relationship (single party focus), (2) the assumption of uniform relationships between parties (single valence focus), (3) the assumption of an interorganizational phenomenon within one level of analysis (single level focus), and (4) the assumption of universal time (focus on a single conceptualization of time). Through an analysis of exemplary studies, we discuss how and when overcoming each of these blind spots provides novel insights to revisit theoretical mechanisms concerning the functioning of interorganizational relationships. We also identify a coherent set of strategies to address each blind spot. We advance the literature by articulating a pluralistic perspective to guide future research into core questions about interorganizational relationships.
- Lumineau F. 2017. “How Contracts Influence Trust and Distrust.” Journal of Management, 43(5): 1553-1577.
Despite the scholarly interest in contracts and trust governing interorganizational relationships, our understanding of how contracts influence trust remains limited by the way in which the interaction between the two constructs is conceptualized. By bringing together recent advances in the literature on interorganizational governance, I consider (1) the controlling and the coordinating dimensions of formal contracts, (2) trust and distrust as two distinct constructs, and (3) both the calculative and noncalculative aspects behind the development of trust and distrust. Drawing upon information-processing theory, I develop a series of propositions about how each contractual dimension influences the development of trust and distrust by inducing specific information processing and decision-making mechanisms. My theoretical analysis leads me to discuss the trade-offs inherent in governance choices and I discuss the implications of my propositions for the literature on interorganizational governance mechanisms.
- Guo S. L., Lumineau F., & Lewicki, R.J. 2017. “Revisiting the Foundations of Organizational Distrust.” Foundations and Trends in Management, 1(1): 1-88.
Parallel to the very large scholarly interest in trust, scholars in management and related disciplines have made the case for the importance of distrust as a related but distinct construct. This paper critically assesses current literature on distrust in organizational settings. We first take stock of the extant research on organizational distrust and suggest an integrative framework. Second, to underpin research on organizational distrust, we examine the different scholarly perspectives on the conceptual relationship between trust and distrust. In turn, we discuss key issues to position research on trust and distrust. Third, we highlight empirical evidence on the role of distrust as opposed to that of trust. We specifically discuss alternative approaches and implications about how distrust and trust can be empirically distinguished. Fourth, we make suggestions to integrate distrust research into relationship repair literature. Fifth, we summarize our review and point to specific areas for new theoretical and empirical research on distrust, particularly at the organizational level. Finally, we discuss specific empirical challenges in this growing literature. Based on our systematic discussion of the organisational distrust literature, we believe that we have opened up prospective avenues to advance distrust research in strategic management.
- Bertrand O. & Lumineau F. 2016. “Partners in Crime: The Effects of Diversity on the Longevity of Cartels.” Academy of Management Journal, 59(3): 983-1008.
Despite the importance of organizational misconduct, we still do not know much about coordinated misconduct between firms. In this study, we get a better understanding of how the profile of the partners involved in cartels affects the longevity of their joint misconduct activities. Drawing upon diversity theory, we leverage a distinction between three types of diversity—i.e., variety of age-based experience, separation in uncertainty avoidance, and power disparity—in collective organizational misconduct between firms and we study their respective influence on the longevity of cartels. Our empirical analysis gives support to our main arguments: the longevity of cartels tends to be increased by the level of variety of age-based experience and power disparity between partners but reduced by their level of separation in uncertainty avoidance. Implications for the literature on organizational misconduct are discussed.
- Lumineau F. & Verbeke A. 2016. “Let’s Give Opportunism the Proper Back Seat.” Academy of Management Review, 41(4): 739-741.
Nicolai Foss and Libby Weber (2016) propose to augment the micro-foundations of transaction cost economics (TCE) through enriching the bounded rationality concept. The authors suggest to do so by coopting insights from applied psychology in the form of frames and biases. However, we raise three additional issues, which somewhat challenge Foss and Weber’s perspective on how to extend TCE, and we suggest an alternative path forward, thereby indeed giving opportunism ‘the proper back seat.’
- Duplat V. & Lumineau F. 2016. “Third Parties and Contract Design: The Case of Contracts for Technology Transfer.” Managerial and Decision Economics, 37: 424-444.
Given the challenges associated with drafting technology-transfer contracts, we examine decisions to involve third parties offering technical or legal support in the contract-drafting process. We first argue that the attributes of the transaction are key drivers of third-party involvement. We then draw on the behavioral theory of the firm to develop arguments regarding the influence of third parties on contract complexity. Our results reveal that the involvement of legal third parties tends to magnify the contract’s overall complexity. In contrast, the involvement of technical third parties reduces the inclusion of monitoring provisions and increases the inclusion of coordination provisions.
- Cao Z. & Lumineau F. 2015. "Revisiting the Interplay between Contractual and Relational Governance: A Qualitative and Meta-Analytic Investigation." Journal of Operations Management, 33-34: 15-42.
Although extant literature has shown that formal contracts and relational governance play a key role in interorganizational relationships, the nature of their interplay still remains equivocal. To better understand the relationships between contractual and relational governance, we conducted a qualitative review and meta-analysis of the existing literature. Meta-analytic results from 33,051 interorganizational relationships across 149 empirical studies have indicated that contractual governance is positively related to both sides of relational governance—trust and relational norms. Our results have also indicated that contracts, trust, and relational norms jointly improve satisfaction and relationship performance and jointly reduce opportunism. These findings provide strong evidence for the complementarity arguments of the contractual-relational governance relationships and their joint impacts on performance. We also found that the mutual relationships between contractual and relational governance are moderated by the institutional environments, the interorganizational relationship type and length, and the construct measurement of contracts. Overall, this study provides new insights on when contractual and relational governance complement or substitute each other. We discuss the implications of our study for theory and practice and propose a research agenda for future research on governance in interorganizational relationships.
- Lumineau F., Eckerd S,, & Handley S. 2015. "Interorganizational Conflict: Overview, Challenges, and Opportunities." Journal of Strategic Contracting and Negotiation, 1(1): 42-64.
While inter-personal conflicts have attracted much attention from scholars and practitioners over the last two decades, our understanding of inter-organizational conflicts remains limited. This paper critically assesses current literature on inter-organizational conflicts. We first discuss the specific features of conflicts at the inter-organizational level. Second, we provide an overview of both qualitative and quantitative research conducted in the field. Third, we make suggestions for future research on inter-organizational conflicts. We specifically suggest opportunities to develop theoretical bridges with other streams of literature and to build multi-level models of conflict management. We then discuss important empirical issues associated with doing research on conflicts between organizations and provide recommendations to overcome these challenges.
- Bertrand O., Lumineau F., & Fedorova E. 2014. "The Supportive Factors of Firms' Collusive Behavior: Empirical Evidence from Cartels in the European Union." Organizational Studies, 35(6): 881-908.
While cartels can be highly detrimental to society and create important economic and social costs for different stakeholders, the literature on organization studies has focused very little on cartels to date. In particular, we still do not know much about firms’ reasons for taking part in cartels. In this study, we build on the rational choice perspective in organizational misconduct to investigate the conditions supporting firms’ collusive behavior. We organize our theoretical arguments around the factors related to motivation and opportunity. Using a sample of cartels in the European Union, our empirical analysis gives evidence for our main arguments: the propensity to participate to a cartel is supported not only by the characteristics of the firm, but also by internal factors interacting with the attributes of the environment in which the firm is embedded. Implications for firms and policy makers are discussed.
- Lumineau F. & Oxley J. 2012. "Let's Work It Out (Or We'll See You in Court): Litigation and Private Dispute Resolution in Vertical Exchange Relationships." Organization Science, May/June 23: 820-834.
In this paper with Joanne Oxley (Rotman School of Management – University of Toronto), we examined how partners in vertical exchange relationships actually resolve disputes that are sufficiently serious to get lawyers involved. Reaching beyond the usual domain of organizational and management research, we leveraged findings from law and economics to offer a novel organizational perspective on litigation and private dispute resolution, and we developed hypotheses about the likelihood of litigation in different exchange settings. Our empirical analysis generated three sets of new findings: First, counter to the received wisdom, we saw that the involvement of lawyers did not necessarily signal the bitter end of an exchange relationship, because firms frequently manage to avoid litigation and resolve their disputes privately, and they do so in a manner that accords with our theoretical predictions. Second, we saw that familiarity with exchange partners does not automatically lead to an increased willingness to work things out; rather, our empirical results suggest that the impact of exchange duration on parties’ willingness to resolve disputes privately is contingent on the development of norms of cooperation: in the event that such norms do not develop, the probability of a litigated outcome actually increases over time. Finally, we saw that the firms’ willingness to work things out privately was also influenced positively by the shadow of the future. These findings are suggestive of a “discriminating alignment” between exchange characteristics and the choice of dispute resolution procedure, and they thus inject important new evidence into ongoing discussions about the legal underpinnings of different governance forms.
- Lumineau F. & Henderson, J. E. 2012. "The Influence of Relational Experience and Contractual Governance on the Negotiation Strategy in Buyer-Supplier Disputes." Journal of Operations Management, 30(5): 382-395.
This paper with James E. Henderson (IMD International) theoretically refines and empirically extends the debate on the type of interplay between relational experience and contractual governance in an under-researched area: supply chain disputes. We define relational experience as either cooperative or competitive; distinguish between control and coordination functions of contractual governance; and assess their interplay on the negotiation strategy used in disputes. Using a unique data set of buyer–supplier disputes, we find, in particular that increasing contractual control governance weakens the positive effect of cooperative relational experience on cooperative negotiation strategy. However, increasing contractual control governance for a buyer–supplier dyad with competitive relational experience will increase cooperative negotiation strategy. Contractual coordination governance reinforces the positive effect of cooperative relational experience. Through this study, we reach a better understanding of how and when contractual and relational governance dimensions interact; rather than whether they act as substitutes or complements as has been studied in prior research. We discuss the implications of these findings for the field of supply chain management.
- Lumineau F. & Quelin B. V. 2012. "An Empirical Investigation of Interorganizational Opportunism and Contracting Mechanisms." Strategic Organization, 10(1): 55-84.
This study with Bertrand V. Quélin (HEC Paris) investigates contracting mechanisms in situations of opportunistic disputes between organizations. We specifically explore the relationships between the formal versus informal nature of opportunism and the formal versus informal nature of contractual governance. We use a unique data set of 102 buyer-supplier disputes to explore in depth different types of opportunism—that is, strong form versus weak form opportunism—and different types of contracting mechanisms—that is, the controlling and coordinating functions of formal contracts and the cooperative and competitive sides of relational contracts. Our detailed empirical analysis suggests distinct relationships between the different contracting mechanisms, the different types of opportunism, and the level of legal fees necessary to deal with the dispute. These findings enable us to derive implications for research on the role of contractual mechanisms in dealing with interorganizational opportunism.
- Lumineau F. & Malhotra D. 2011. "Shadow of the Contract: How Contract Structure Shapes Inter-Firm Dispute Resolution." Strategic Management Journal, 32(5): 532-555.
In this paper with Deepak Malhotra (Harvard Business School), we investigated how contract structure influences interfirm dispute resolution processes and outcomes by examining my dataset consisting of over 150,000 pages of documents relating to 102 business disputes. We found that the level of contract detail affects the type of dispute resolution approach that is adopted when conflict arises, and that different approaches are associated with different costs for resolving the dispute. We also found that the effect of contract choice on dispute resolution approach is moderated by the degree of coordination required in the relationship, and that the effect of the dispute approach on costs is moderated by the degree of power asymmetry between the parties. Thus, even after controlling for various attributes of the exchange relationship and the dispute, the choice of contracting structure has important strategic implications.
- Malhotra D. & Lumineau F. 2011. "Trust and Collaboration in the Aftermath of Conflict: The Effects of Contract Structure." Academy of Management Journal, 54(5): 981-998.
In this second paper with Deepak Malhotra, leveraging my longitudinal dataset concerning 102 inter-firm disputes, we evaluated the effects of contract structure on trust and on the likelihood of continued collaboration. We theoretically refined and empirically extended prior research by (a) distinguishing between control and coordination functions of contracts, (b) separating goodwill-based and competence-based trust, and (c) evaluating the effects of contract structure on relational outcomes in the context of disputes. We found that control provisions increase competence-based trust, but reduce goodwill-based trust, resulting in a net decrease in the likelihood of continued collaboration. Coordination provisions increase competence-based trust, leading to an increased likelihood of continued collaboration.
- Lumineau F., Frechet M., & Puthod D. 2011. "An Organizational Learning Perspective on Contract Design." Strategic Organization, 9(1): 8-32.
In this paper with Marc Fréchet (University of Toulouse) and Dominique Puthod (University of Savoie), we began from the observation that the contracting process is a crucial step in alliance development and its success. However, the existing literature surprisingly reveals little investigation into how organizational learning relates to the process of contract making. We therefore conducted an in-depth longitudinal study of the alliance contracting process in the animated film industry. First, the study’s findings suggested that during the contracting process, firms can learn about the way to deal with the contracting process, about themselves and their partner, and about the transaction features. Second, the case analysis indicated a combination of experiential, vicarious and inferential learning mechanisms. Combining these insights into the objects and the mechanisms of learning during the contracting process, we discussed how contracting and learning processes were related and analyzed the role of the contracting process in supporting organizational learning. The findings showed that the drafting of contractual clauses fosters learning and, in turn, this learning triggers new contractual negotiations. Hence we suggested that the alignment between transaction features and the choice of contractual governance results from learning during the contracting process. We then proposed avenues for future research.
- Bertrandias L., Frechet M., & Lumineau F. 2010. "The Role of Contract Framing in the Emergence of Trust: Evidence from Franchise Contract Experiment." Academy of Management Best Paper Proceedings.
Contracts and trust are both seen as important aspects of successful collaboration between trading partners. However, the interplay between these two dimensions remains poorly understood. In this paper, we draw upon a framing-based perspective to study the influence of the nature of the contractual design on the level of trust. We suggest that the type of contract framing plays a key role in shaping the development of trust. Our empirical analysis uses a quasi-experiment to compare promotion-framed versus prevention-framed franchise contracts. Consistent with our hypotheses, our results indicate that promotion-framed contracts influence more positively trust than prevention-based contracts. We also find that perceived contract completeness and perceived control of the franchisor have different effects on trust according to the type of contract framing. We point out the importance of our study for the contract-trust relationship debate and discuss its implications for the contract design literature.
- Lumineau F. & Fréchet M. 2008. “Managing Discrepancies Between Formal and Psychological Sides of Alliance Contracting.” Academy of Management Best Paper Proceedings.
This study explores the formal and the psychological sides of alliance contracting. In interpreting the findings of a multiple-case study and interviews with juridical experts, we first show potential discrepancies between these two sides of alliance contracting. Our analysis of both formal and psychological aspects of contracting then highlights the need to extend the notion of alignment as developed in Transaction Cost Economics. Next, we suggest which contracting capabilities can be developed to reduce the discrepancies between formal and psychological sides of alliance contracting. These results enable us to derive implications for research on contractual governance, contracting capabilities, and management of strategic alliances.