The influence of inter-firm IT governance strategies on relational performance: The moderation effect of information technology ambidexterity

How to create value from information technology (IT) in multi-firm situations has attracted the notice of both researchers and practitioners. However, as a critical factor to enhance relational performance, the inter-firm IT governance strategy has not been sufficiently studied. Based on the contractual and relational governance literature, this paper presents two inter-firm IT governance strategies, namely, balancing (focusing on achieving a close match between the relational and contractual governance) and complementing (focusing on creating synergy between the relational and contractual governance) governance strategies. Using data collected from 200 firms, we examined the relationship between these two governance strategies and relational performance. Furthermore, we studied the influence of a contingent factor, IT ambidexterity (simultaneous pursuit of IT flexibility and IT standardization) on this value generation process. Our results indicate that both inter-firm IT governance strategies, but especially the balancing strategy, can help increase relational performance, and IT ambidexterity also can influence the choice of governance strategies of focal firms. Specifically, focal firms with low IT ambidexterity prefer using a balancing governance strategy rather than a complementing governance strategy. On the other hand, focal firms with high IT ambidexterity can reduce or mitigate the risks of unbalancing strategy (such as the contractual-dominant or relational-dominant governance strategy), and then enhance the synergy effects of contractual and relational governance. Implications for theory and practice are also discussed.