Disentangling the Theories of Firm Boundaries: A Path Model and Empirical Test
Organization Science
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It is well known that transaction-specific investments (TSIs) made in customers by account managers makes them vulnerable to opportunism by customers (i.e., the targets of the investments). The present research shows that TSIs made in customers by account managers can also lead them to be concerned about internal opportunism by nontargets of the investments (e.g., information technology or finance specialists in their own teams). Furthermore, it shows that concern about internal opportunism leads account managers to engage in internal blocking of their own team members (i.e., restricting their access to customers and to customer information), which results in lower performance with customers. This phenomenon is a conundrum in that account managers interested in stronger performance with customers appear to block the very functional specialists who can help them attain better performance. This research also identifies two types of continuities (account manager--customer continuity and specialist--customer continuity) that moderate the relationship between TSIs and concern about internal opportunism. Building on the literature in economics and organization theory, our research suggests that cross-functional teams that are designed to bring different functional areas together are more complex to manage than previously believed. This paper was accepted by Pradeep Chintagunta and Preyas Desai, special issue editors. This paper was accepted by Pradeep Chintagunta and Preyas Desai, special issue editors.