Governing Embedded Partner Networks: Certification and Partner Communities in the IT Sector

Storey, C., Kocabasoglu-Hillmer, C., Roden, S. & de Ruyter, K. (2018). Governing Embedded Partner Networks: Certification and Partner Communities in the IT Sector. International Journal of Operations and Production Management, doi: 10.1108/IJOPM-12-2016-0708

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Abstract

Purpose
The complexity of supplier-partner networks in the Information Technology (IT) sector where large suppliers utilize thousands of authorized partners, requires that organizations reconsider their approach to governing and managing the relationships involved. Traditional dyadic approaches to governance are likely to prove inadequate. This paper investigates the relationship between network governance mechanisms and relationship performance. Specifically, we examine the contingent effect of certification of partners and the use of partner communities (as formal and informal mechanisms of network governance, respectively), on complex and embedded networks of relationships.

Design/methodology/approach
A model examining the effect of formal and informal network governance on the relationship between embeddedness (structural and relational) and relationship performance is developed. Data was collected from a sample of partners of leading IT suppliers in the United Kingdom and Ireland. Three-way interactions assess the contingent effect of certification and partner communities on the relationship between embeddedness and relational performance.

Findings
Results support the use of a combination of certification and partner communities to strengthen the link between network structure (structural embeddedness) and relational embeddedness, as well as relationship performance. Certification requires the sharing of explicit knowledge with partners whereas partner communities aid the creation and dissemination of more tacit, contextual knowledge. Furthermore, partner communities reinforce positive perceptions of fairness in suppliers’ network management practices, overcoming any perceptions of lock-in or coercive control that certification may suggest.

Practical implications
Certification, despite all its procedural and reputational benefits, damages partner relationships and needs to be supported by partner communities, which themselves show particularly strong benefits in enhancing network relationships.

Originality/value
Despite the emerging prevalence of certification and partner communities in business-to-business relationships, to date there is a paucity of research on their effects on partner relationships and performance. Organizations with an extensive network of similar partners may suffer network overload. This research shows that such organizations can manage their partner network more effectively through network governance mechanisms, thereby addressing the challenge of overload.

Item Type: Article
Uncontrolled Keywords: Governance; Partner Networks; Certification; Communities
Divisions: Cass Business School > Faculty of Management
URI: http://openaccess.city.ac.uk/id/eprint/18795

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