Bilateral versus Collective Governance: How Clients Promote Relational Norms in Multisourcing

Multisourcing—the delegation of interdependent tasks to multiple vendors—demands that vendors work together towards a shared goal despite their status as competitors. A key challenge for clients is therefore to promote relational norms, including solidarity, information exchange, and flexibility. Research on single-sourcing settings suggests that clients can promote relational norms through formal and informal governance. Yet, there is controversy about whether governance can promote relational norms in multisourcing, which are often characterized by competitive rivalry. Clients also face a governance choice specific to multisourcing: the choice between a bilateral focus of governance, where the client emphasizes individual governance activities with each individual vendor, and a collective focus of governance, where the client emphasizes joint governance activities that involve the vendors as a team. Drawing on social interdependence theory, we argue that a collective focus of governance helps promote relational norms, in particular under high task interdependence. In a survey of 189 multisourcing arrangements, relational norms were positively related to the amount of formal but not of informal governance. Moreover, in contrast to expectations, a bilateral (rather than collective) focus of informal governance was positively related to relational norms, while the focus of formal governance was unrelated. These results confirm the important role of formal governance for promoting relational norms, and they show that not only the amount but also the focus of governance matter in multisourcing.