The role of monitoring in interfirm exchange: Effects on partner unilateral cooperation

Abstract

The study examines in an interfirm exchange setting the effects of monitoring efforts by a focal firm, in addition to those of trust and relative dependence, on the extent to which partner firms will display the three critical unilateral cooperation behaviors of flexibility, information sharing, and support. Monitoring is posited to have direct effects on all three organizational behaviors and to interact with trust and dependence as they jointly facilitate cooperation. Data are collected from suppliers of an international automobile manufacturer in Turkey. The results largely support the notions that monitoring facilitates cooperation and moderates the effects of trust and dependence on cooperation. The results further suggest that the extents and the directions of the moderating effects may differ across different forms of unilateral cooperation. (C) 2006 Elsevier Inc. All rights reserved.