How to enhance supplier performance in China: interplay of contracts, relational governance and legal development
International Journal of Operations & Production Management
ISSN: 0144-3577
Article publication date: 27 August 2020
Issue publication date: 21 September 2020
Abstract
Purpose
Given the pivotal influence of institutional forces, an important yet underexplored question in supply chain management literature is how contractual and relational governance jointly affect supplier performance under weak legislative environments. This study tends to solve the debate by distinguishing contractual definability from contractual enforceability and by considering the contingent role of legal development in China.
Design/methodology/approach
Using a combined dataset of secondary data and a survey of 224 buyer–supplier dyads in China, this study examines how contractual definability and contractual enforceability interact with relational governance differently in driving supplier performance, and assesses the contingent role of legal development.
Findings
This study finds that contractual definability complements yet contractual enforceability substitutes relational governance in affecting supplier performance. Moreover, legal development weakens the complementary effect but strengthens the substitutive effect.
Originality/value
The study firstly enriches supply chain management literature by classifying the roles of contracts into contractual definability and contractual enforceability and showing their differential interplay with relational governance. Second, the study contributes to the complements–substitutes debate by revealing the shifting role of legal development. Third, the research enriches the understanding of supply chain management in the Chinese market.
Keywords
Acknowledgements
All authors contribute equally to this paper. The authors thank the editor and anonymous reviewers for their insightful comments and guidance. We also thank Prof. Kevin Zheng Zhou for his constructive comments and insightful suggestions on earlier versions of this paper. This study was supported by Shanghai Pujiang Program (No. 2019PJC102), National Natural Science Foundation of China (No. 71602173, No. 71872073, No. 71821002), Fundamental Research Funds for the Central Universities (No. 22120190122; No. 19JNYH02).
Citation
Zhang, Q., Jin, J.L. and Yang, D. (2020), "How to enhance supplier performance in China: interplay of contracts, relational governance and legal development", International Journal of Operations & Production Management, Vol. 40 No. 6, pp. 777-808. https://doi.org/10.1108/IJOPM-02-2020-0093
Publisher
:Emerald Publishing Limited
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