The authors draw on emerging research in organization theory to suggest how different firm-level identity orientations (individualistic, relational, or collectivistic) impact governance choice. They develop a conceptual framework that focuses on the relationship between a focal firm’s own identity orientation and that of a value chain partner. The framework identifies a series of match and mismatch scenarios, where the latter represent unique governance problems that are not accounted for by existing theory. Some of the mismatch scenarios involve pseudo-matches that resemble convergent orientations between parties but actually represent governance problems. Theoretically, this framework advances the governance literature by providing a comprehensive and nuanced account of (1) the orientations that parties bring to bear on a relationship, and (2) how their effects vary depending on the interdependence structure between the parties. The authors also advance the general literature on identity orientation by connecting it to concrete governance practices, by showing how multiple internal identity orientations create unique internal governance challenges, and by delineating two possible solutions to these challenges. They rely on the framework to develop managerial guidelines for governance choice.

We introduce a model of interorganizational governance within regional clusters. Drawing on the “new institutional economics” literature, we show how firms' governance designs are shaped by the relationship between transaction-level characteristics and the cluster macroculture. We then consider how subsequent transaction-level governance designs are affected by path dependencies from past governance choices. Finally, we suggest that intertransactional path dependencies exhibit directional asymmetries, and we draw implications for the literature on clusters, on transaction costs, and on interorganizational relationships.

The authors draw on the sociological theories of the “liability of newness” and the “liability of adolescence” to generate new insights into relationship evolution. First, they show how a new relationship in its “honeymoon” phase exhibits a unique constellation of two conditions, namely information asymmetry and forbearance. Next, they explain how a relationship evolves along two processes that involve passive learning and decay, respectively. In themselves, these processes will move a relationship toward a long-term “transactional” state and possibly termination, but the processes can also be actively shaped using various governance mechanisms. Doing so, however, requires a nuanced account of types of governance mechanisms and the particular conditions they are intended to induce. The authors consider how the general mechanisms of (1) incentives and (2) information sharing can be deployed in standardized or customized fashions, respectively. Next, they suggest how different manifestation of governance mechanisms impact a relationship's underlying evolutionary processes and evolved relationship states. In general, their framework represents a new perspective on relationship evolution—one that involves the purposeful management of initial conditions and their related evolutionary processes.