Past decades have witnessed the struggle of the automotive industry with ever more structural complexity challenges due to the vertical systemic disintegration of production across geographically dispersed locations/networks (Jullian and Pardi, 2013). It is evident that industrial reorganisation has been driven by irreversible technological changes underlying economic transformation. Evolution of global economy under rapid technological advances has required structural adjustments at all levels of socio-economic systems. The old economic institutions of industrialised societies have failed in adjusting their strategies and structures to the changing market dynamics of the emerging knowledge society. On the one hand, traditional hierarchical structure provides weak incentives to create new knowledge depending on the limitations of information flow and processing between an organisation and its environment. On the other hand, market-based interactions without control over intellectual products lead to the dissemination of technical information among industrial partners and hence produce knowledge transaction costs under opportunism risk (Lin, 2009; Gurcaylilar-Yenidogan, 2014). This situation shows that neither price nor authority provides a relatively efficient mechanism to deal with knowledge-based assets as modern economies are becoming increasingly knowledge intensive. Consequently, technology-enhanced collaborative learning supported by growing consumer preferences for product variety has accelerated the spread of a new paradigm for industrial organisations widely embedded in common sense of flexible production networks in higher value-added activities. In other words, traditional forms of inter-organisational relationship based on arm’s length contracts have begun to evolve into new governance structures such as inter-firm partnering and networking (Dilk et al., 2008; Müller, 2009).
The new formation refers to the shift towards more integrated and interdependent economic activities throughout global value chains. This paradigm triggers a transformation of inter-organisational governance modes (Helper, 1991) characterised by the “exit” strategy, which is based on mutual distrust, limited information exchange and short-term commitments associated with an explicit written agreement, to inter-organisational relationships characterised by the “voice” strategy of inter-firm cooperation as a response to market failure by establishing a close and deeply committed relationship with the network partners. Apart from the static efficiency of the value chain activities, inter-firm cooperation is needed for advancing innovation-based competitiveness resulting in dynamic efficiency (Dolan and Lindsay, 1988; Kasper and Streit, 1998). Consistent with the dynamics of competition and survival, co-development of competencies between network partners allows for continuous technological improvement in achieving product and process innovations (Joshi and Stump, 1999; Wang and Wei, 2007).
For example, the value of an OEM is augmented by component suppliers’ specific investments in complementary assets that increase the partner’s capacity for developing differentiated products. Accordingly, automotive manufacturers are reducing their supply base and assigning more design and innovation functions to them (Dunning, 1998; Koufteros et al., 2007). Despite the use of more market-like coordinating mechanisms through contracts and sector-based standards (i.e. QS and VDA series for automotive industry) for managing inter-organisational relationships in automotive networks, allocation of authority over knowledge-based assets for operations in design, logistic and quality links remains problematic because the interest of the network parties may not always align with the achievement of cooperative behaviour (Jensen and Meckling, 1992). Codifying and transferring component suppliers’ strategic knowledge (i.e. design and process FMEA, production and cost details) facilitates coordination of interdependent tasks in a way that negatively impacts knowledge creation and emergence of innovations requiring suppliers’ investments in firm-specific assets.
Consequently, according to the proactive adaptation approach to the external changes through the development of firm-specific assets, the fundamental transaction cost (TC) problem for hybrid or network forms (Williamson, 1985) is how to coordinate interdependent tasks under high-powered incentives without losing the advantages of decentralised decision making (Gurcaylilar-Yenidogan and Windsperger, 2013, 2015). Whereas there is a tradeoff between control and adaptation issues of hybrid governance forms from the TC-perspective, in Powell’s view (1990) networks are distinctive forms of coordinating economic activity that relieve the tension between incentive misalignment and maladaptation through social mechanisms (i.e. relational norms and trust) that foster collective action.
Papers to be included in this special issue should focus on one or more of the topics mentioned below with a special emphasis on inter-firm networks in the automotive industry. We invite authors to submit high quality manuscripts as both empirical and theoretical contributions which will be considered for publication in this special issue. Papers based on empirical data with a strong theoretical background are preferred.
Dilk, C., Gleich, R., Wald, A. and Motwani, J. (2008) 'Innovation networks in the automotive industry: an empirical study in Germany', International Journal of Automotive Technology and Management, Vol. 8, No. 3, pp. 317-330.
Dolan, E.G. and Lindsey, D.E. (1988) Economics, The Dryden Press, Chicago.
Dunning, J.H. (1998) 'Reappraising the eclectic paradigm in an age of alliance capitalism', In The Changing Boundaries of the Firm: Explaining Evolving Inter-firm Relations (pp. 29-59), Eds. M.G. Colombo, Routledge, London.
Gurcaylilar-Yenidogan, T. and Windsperger, J. (2015) 'Complementarity between formal and relational governance mechanisms in inter-organizational networks: combining resource-based and relational governance perspectives', In Interfirm Networks (pp. 229-248), Eds. J. Windsperger, G. Cliquet, T. Ehrmann and G. Hendrikse, Springer International Publishing.
Gurcaylilar-Yenidogan, T. (2014) 'A multidimensional typology of automaker-supplier relationships: the knowledge sharing dilemma', International Journal of Automotive Technology and Management, Vol. 14, No. 1, pp. 1-24.
Gurcaylilar-Yenidogan, T. and Windsperger, J. (2013) 'Centralization of decision making authority in inter-organizational networks: evidence from the Austrian automotive industry', Journal of Global Strategic Management, Vol. 7, No. 1, pp. 184-194.
Helper, S. (1991) 'How much has really changed between US automakers and their suppliers?' Sloan Management Review Summer, Vol. 324, pp.15-28.
Jensen, M.C. and Meckling, W.H. (1992) 'Specific and general knowledge and organizational structure', In Contract Economics (pp. 251-274), Eds. L. Werin and H. Wijkander, Blackwell, Oxford.
Joshi, A.W. and Stump, R.L. (1999). 'The contingent effect of specific asset investments on joint action in manufacturer-supplier relationships: an empirical test of the moderating role of reciprocal asset investments, uncertainty, and trust', Journal of the Academy of Marketing Science, Vol. 27, No. 3, pp.291-305.
Kasper, W. and Streit, M.E. (1998) Institutional Economics: Social Order and Public Policy, Edward Elgar, Northampton, MA.
Koufteros, X.A., Cheng, T.C.E. and Lai, K.H. (2007) 'Black-box and gray-box supplier integration in product development: antecedents, consequences and the moderating role of firm size', Journal of Operations Management, Vol. 25, pp. 847-870.
Jullian, B. and Pardi, T. (2013) 'Structuring new automotive industries, restructuring old automotive industries and the new geopolitics of the global automotive sector', International Journal of Automotive Technology and Management, Vol. 13, No. 2, pp. 96-113.
Lin, L.H. (2009) 'The impact of integration strategy on organisational innovation and growth in the global automotive industry', International Journal of Automotive Technology and Management, Vol. 9, No. 1, pp. 54-68.
Müller, H.E. (2009) 'Supplier integration: an international comparison of supplier and automaker experiences', International Journal of Automotive Technology and Management, Vol. 9, No. 1, pp. 18-39.
Powell, W.W. (1990) 'Neither market, nor hierarchy: network forms of organization', Research in Organizational Behaviour, Vol. 12, pp. 295-336.
Wang, E.T.G. and Wei, H.L. (2007) 'Interorganizational governance value creation: coordinating for information visibility and flexibility in supply chains', Decision Sciences, Vol. 38, No. 4, pp. 647-674.
Suitable topics include, but are not limited to, the following:
- Coordinating interdependent tasks: the control-adaptation paradox
- Examining the relationship between transactional and relational mechanisms
- Governance of innovations (product, process and business model innovation)
- Organisational ambidexterity and inter-firm networks
- Strategic knowledge management
- Allocation of decision-making authority
- Managing global value chains
- Ownership and control in inter-firm networks
- Re-examining the traditional approach to operational efficiency and performance: Resources, capabilities, transaction costs and rents
- Completeness and complexity of contracts in inter-firm networks
- Combining different theoretical perspectives to explain inter-firm networks
Deadline for full paper submission online: 30 June, 2016