Research On The Underlying Mechanism Of Contract Governance On Supplier Performance

Along with the increasing degree of work specialization and labor division,cooperative channel relationship has become an important competitive advantage for enterprises.In this process,good supplier performance is the key factor in the enterprise's efforts to develop and maintain its long-term sustainability and profit objectives.However,in the real cooperation process of buying and selling,suppliers often break promises,and sell defective goods at high prices to maximize their own interests.These behaviors seriously jeopardize cooperative channel relationship,and even bring huge losses to manufacturers.Therefore,how to effectively improve the supplier performance becomes a major challenge for manufacturers.Contractual channel governance has always been an important mechanism in governing channel relationship,and is an important means of ex ante governance and ex post control.As the basis of contractual channel governance,the design of contract content is directly related to the success of channel governance.In recent years,an increasing amount of attention has been paid to the design of contract content.Therefore,how do contractual terms affect the supplier performance? How do contractual terms influence cooperative behavior of both parties? Can the existence of contract promote the positive cooperative behavior of both parties besides restraining opportunistic behavior?Although previous studies have examined the effect of contract content,less attention has been paid to the impact of different dimensions of contractual terms on the supplier performance.Therefore,the solution of these problems has both theoretical and practical significance.This research adopts a combination of qualitative and quantitative method to study the effect of contractual channel governance.Based on a thorough literature review home and abroad,this research integrates transaction cost theory(TCT),social exchange theory(SET)and resource-based theory(RBT)to investigate the effect of contractual channel governance on supplier performance.To be specific,firstly,on the basis of the existing research on the design of different categories of contractual terms,we identified the dimensions of contractual terms.Secondly,we conducted in-depth interview with top-level managers in enterprises,further clarified the research questions and related research content,and revised the theoretical model and scale.On such a basis,a preliminary survey was carried out,and the questionnaire was further improved.Finally,we collected data from top-level managers in manufacturing industry with the help of professional research companies.We finally collected 318 questionnaires,and got 280 valid questionnaires after data screening.The hypotheses were tested with SPSS 25.0and Smart PLS 3.0.Theoretical contribution and managerial implication were then summarized.From the perspective of contractual terms,this study divides contractual terms into three dimensions: the task specification term,the contingency term and the contractual obligation term.Based on transaction cost theory,social exchange theory and resource-based theory,this research explores the effect of the three terms on the supplier performance.The results suggest that,firstly,the contingency term and the contractual obligation term have significant positive effect on the supplier performance,while the task specification term has no significant effect on the supplier performance.Secondly,the opportunistic behavior and the knowledge transfer mediate the effect of the three dimensions of contractual terms on the supplier performance.The opportunistic behavior and the knowledge transfer play a complete mediating role in the relationship between the task specification term and the supplier performance.However,the contractual obligation term has no significant effect on the knowledge transfer.The Knowledge transfer plays a partial mediating role between the contingency term and the supplier performance,while the opportunistic behavior plays a partial mediating role between the contingency term and the supplier performance,as well as the contractual obligation term and the supplier performance.Thirdly,the relationship conflict plays a positive moderating role between the task specification term,the contractual obligation term and the opportunistic behavior,while playing a negative moderating role between the contingency term and the opportunistic behavior.Meanwhile,relationship conflict plays a negative moderating role between the contingency term and the knowledge transfer.Fourthly,the task conflict plays a positive moderating role between the task specification term and knowledge transfer,as well as the contingency term and knowledge transfer.Task conflict plays a positive moderating role between the task specification term and the opportunistic behavior,as well as the contractual obligation term and the opportunistic behavior,while playing a negative moderating role between contingency term and opportunistic behavior.Fifthly,the technological turbulence plays a negative moderating role between the contingency term and the opportunist behavior,while playing a positive moderating role between the contingency term and the knowledge transfer.In addition,the technological turbulence plays a negative moderating role between the contractual obligation term and the opportunistic behavior.This research has three contributions.Firstly,based on the specific terms of the contractual terms and by reference to the previous research on the dimensional distinction of the contractual terms‘ nature,this research proposes three dimensional concept of contractual terms,and discusses the mechanism of these three dimensions on cooperative behavior in marketing channels.Specifically,on the basis of the division of contractual terms,this research proposes three dimensions of contractual terms from the perspective of specific conditions of contractual terms,namely,the task specification term,the contingency term and the contractual obligation term.Then,this research examines their effects on cooperative behavior(i.e.the opportunistic behavior and the knowledge transfer)between the buyer and the seller in channel relationship.Secondly,this research examines the influence of contractual terms on the supplier performance from both negative cooperative behavior perspective(i.e.the opportunistic behavior)and positive cooperative behavior perspective(i.e.the knowledge transfer).Literature review reveals that prior studies based on transaction cost theory primarily focus on the effect of contract on restraining negative cooperative behavior(i.e.the opportunistic behavior).However,despite these advances,we know little about the effect of contract on positive cooperative behavior between the buyer and the seller.For that reason,this research introduces positive cooperative behavior(i.e.the knowledge transfer)into contractual governance literature based on TCT,explores the effect of contract on positive cooperative behavior,and discusses the effects of the three dimensions of contractual terms on knowledge transfer between the buyer and the seller in channel relationship.Finally,from the perspective of context characters,the internal cooperative condition(i.e.the task conflict and the relationship conflict),and the external environment(i.e.the technical uncertainty)are incorporated as important moderators into the model.These internal and external contingencies reveal the boundary condition of the three dimensions of contractual terms on partner‘s behaviors(i.e.the opportunistic behavior and the knowledge transfer)in marketing channels.