Understanding Strategic Decision-Making in Interorganizational Relationships
(A2025-125701)

AUTHORS

Anna Stepanova, University of Groningen; MRINAL GHOSH, University of Arizona; Sudha Mani, Monash University; Amrita Mitra, University of Melbourne

ABSTRACT

The special session focuses on the role of strategic decision-making in various B2B and B2G contexts. Specifically, the studies investigate (i) relational contracts mitigating the negative effects of third-party opportunism, (ii) when client firms opt to vertically integrate with suppliers, (iii) tone of communication affecting franchise expansion, and, (iv) drivers and outcomes of franchised outlet transfers. The participants include four presentations from marketing scholars representing universities from the US, Canada, Norway, Australia, Netherlands, and Saudi Arabia. The included projects rely on archival data collection, and surveys and employ cutting-edge research methods to arrive at valid causal inferences. Each of the studies addresses a real-world marketing problem and provides findings of significant managerial relevance. Yilmaz, Sande and Stepanova explore the role of third-party opportunism (TPO) in business-to-government relationships, emphasizing its disruptive impact on public procurement, and highlight the distinct challenges posed by external third parties who may opportunistically challenge transactions. Using survey data from 258 public procurement projects, the authors demonstrate that relational contracts, relying on trust and self-enforcement, mitigate the negative effects of TPO while fostering service innovation. This protective effect diminishes under high complexity and technological uncertainty. Wang and Ghosh examine client firms’ decision to vertically integrate with suppliers amidst industry consolidation and how the quality of a client firm's existing supplier relationship and their proprietary investments in firm-specific intangible assets influence this choice. Leveraging a unique dataset of 21,583 firm-year observations, they find that the likelihood of vertical integration increases with upstream industry consolidation, but firms with long-standing supplier relationships are less likely to pursue mergers; this moderating impact is even more pronounced for client firms with proprietary investments in firm-specific intangible assets. Alshamrani, Mani, and Wang examine how positive and negative communication tone individually and jointly affect franchise expansion. They also study how incentives and monitoring moderate the impact of franchisor communication tone on expansion. They analyze franchise disclosure documents of 345 U.S. business format franchisors from 2016 to 2019. Correcting for endogeneity in franchisor communications and governance, they infer that positive communication increases franchise expansion, while negative communication reduces it. Mitra, Mooi and Antia study franchise outlet transfers, which influence both franchisors and franchisees decision-making about outlet viability and performance outcomes. Relying on archival data from a North American franchisor on 302 outlets (354 owners, 42% of outlets experiencing at least one transfer), and using monthly sales data pre- and post-transfer, they find that ownership structure, ownership team composition, system age, outlet location clustering, and sales trends predict the likelihood of outlet transfers. Also, pre-transfer sales trends significantly impact post-transfer sales performance. Given the eclectic range of topics covered, we anticipate our proposed session be of significant interest to B2B and B2G academics interested in causal inference, text mining, supply chain, and franchising.