Much of the early research on inter-organizational relationships
used a TCE framework. The original assumption in
TCE was that the nature of the transaction (where the transaction
is the unit of analysis) determined which governance
form was most efficient (with the lowest transaction costs).
Later researchers have concluded that governance forms
that result in the lowest total cost (transaction costs plus
production costs) are efficient since they will endure. However,
in the extended TCE framework, recently developed
in the IOMC literature, institutional and relational factors
are also considered. In this paper, our three case studies
evolve within the same institutional framework and with
similar transactions. This allows us to analyse how control
packages develop within different relationships. Therefore
relationships (vertical and horizontal) are the units of analysis
in this paper.
To explain these relationships, the control packages
and their development over time, we chose the research
method of retrospective cases studies. This choice allows
us to map the interaction between relationships and control
packages. Thus we follow the recommendations for
process-oriented approaches based on longitudinal or retrospective
case studies (Otley, 1980; Groot and Merchant,
2000; Emsley and Kidon, 2007; Kamminga and van der
Meer-Kooistra, 2007; Langfield-Smith, 2008). For practical
reasons, we conducted retrospective studies rather than
longitudinal studies. Admittedly, the choice of retrospective
studies means the researcher to some extent must rely
on respondents’ recollections. Our strategy was to trace
the important events in the history of the three JV Companies
that have had, or should have had, an impact on
taxation, fees, service level, appropriations, access and organization structure.
The political executive unit consists of the municipality board and
its chairman.
the relationships and the control packages. To increase
the credibility of our research, we examined these events
using multiple interviews and reading available documentation
(e.g., JV contracts and owners’ directives4). While the
three case studies reveal little variation in terms of transaction
and institutional characteristics, they show interesting
variations and changes over time in the relationships. Thus
we believe these case studies suit the purpose of our paper.
We assigned the three municipal JV Companies the fictitious
names of North, South and West. (We also use
fictitious names for the municipalities and other entities.)
We chose the municipalities sequentially – our first case,
which provoked our curiosity about certain contingencies,
led us to search for a complementary case, and so on, to
the third case. In each case we interviewed actors at three
levels: the Parent (Municipal) level, the JV Board level and
the JV management level (cf. Emsley and Kidon, 2007). See
Table 2.
In general, we selected respondents because of their
positions at the municipalities or at the JV Companies. Two
additional respondents were selected after other respondents
described these respondents’ central roles. In total,
25 semi-structured interviews were conducted during the
spring of 2009. Extensive interview protocols were used
as checklists to guide these conversational interviews. The
protocols differed, depending on the position of the respondent,
but all interviews covered the following themes:
• The history of the JV Company.
• The horizontal relationship (reasons for the cooperation,
formal and informal controls, trust, fear of opportunism,
changes over time).
• The vertical relationship (how the JV CEO is controlled,
the efficiency of the controls, the trust in the JV CEO, the
role of the JV Board, changes over time).
The starting point for our studies varied in the three
cases. At North, our research begins in 1981 – the year of
North’s founding. We chose this year because various North
respondents had worked there for a long time and because
North has had the same CEO since its start-up. At South,
our research begins in 1996, the year the current CEO was
hired. In the subsequent 13 years, many interesting events
occurred. At West, our research begins in 1998, the year of
the merger of two organizations that resulted in the founding
of West. This is the year referred to as important by
many of the West respondents.
We examined the issue of trust through our direct questions
to the respondents and through our analysis of their
spontaneous descriptions of the relationships. The identification
of calculative trust and system trust was based on the
respondents’ narratives concerning the lack of cooperation
alternatives in the JV Companies and the existence of several
other co-operative activities among the municipality
parents.
Generally, two interviewers conducted the interviews,
but on some occasions only one interviewer was present.