Conflict and its governance in horizontal cooperations of logistics service providers

Purpose - Horizontal cooperations of logistics service providers (LSPs) have become important for LSPs within the last decades. Owing to the high complexity of these cooperations as observed by Schmoltzi and Wallenburg, the potential for conflict is inherent. This research, therefore, aims to investigate how nature (dysfunctional vs functional) and extent of conflict impact the outcome of these cooperations. Further, the roles of formal and relational governance mechanisms in influencing conflict are analyzed. Design/methodology/approach - The research is empirical in nature and employs a theory-driven, confirmatory approach. It utilizes large-scale survey data of German LSPs, which are analyzed using multivariate statistical methods. Findings - The research shows that governance mechanisms impact the extent and functionality of conflict: relational governance lowers the extent of conflict and leads to higher functionality of conflicts, while formal governance increases the extent of conflict. Moreover, it is shown that conflicts decrease the overall cooperation performance, whereas when functional in nature they have a positive impact on the innovativeness of cooperations. Research limitations/implications - The impact of governance on conflicts and of conflicts on outcome may differ depending on the cultural and country-specific setting. Practical implications - The results allow mangers of LSP cooperations to adapt their set of applied governance mechanisms and conflict resolution approaches with regard to the improvement of cooperation performance and cooperation innovation. Originality/value - This is the first study that analyzes conflict and conflict resolution in horizontal LSP cooperations and shows their interrelation with both governance and performance.