Material and accompanying logistics transactions: Collaboration and coordination issues

Governance mechanisms are examined within the context of material transaction (vendor-manufacturer governance form) and logistics transactions (vendor-third-party-logistician-manufacturer governance form). Using arguments from dynamic capability proponents, the effect of governance mechanisms (trust, commitment, and flexibility) on logistics capability is found to be contingent on the interactive governance forms. Sampling organizations from material and logistics transactions in a business-to-business setting, financial performance outcomes are a joint function of the governance mechanisms deployed in these transactions.