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- Title
Plural Governance in Industrial Purchasing.
- Authors
Heide, Jan B.
- Abstract
This article examines the phenomenon of plural governance, a firm's simultaneous use of market contracting and vertical integration for the same basic transaction. The author studies two particular aspects of plural governance, namely the conditions that motivate firms to deploy plural governance and the manner in which one governance form influences the other when the two coexist in a joint structure. Drawing on agency theory and information economics, the author develops a set of research hypotheses and tests them empirically in the context of industrial purchasing decisions. The results suggest that the plural governance phenomenon can be understood from the perspective of solving information asymmetry problems between buyers and suppliers. The author discusses the implications of a make and buy approach to extant theory of interfirm governance, relationship management, and marketing strategy in business-to-business settings.
- Subjects
INDUSTRIAL procurement; MARKETING strategy; VERTICAL integration; CORPORATE governance; CORPORATE purchasing; INDUSTRIAL management; INFORMATION asymmetry; BUSINESS-to-business transactions; AGENCY theory; MARKETING management; MARKETING research
- Publication
Journal of Marketing, 2003, Vol 67, Issue 4, p18
- ISSN
0022-2429
- Publication type
Article
- DOI
10.1509/jmkg.67.4.18.18689