Closeness or opportunistic behavior? Mediating the business ecosystem governance mechanisms and coordination relationship

PurposeBusiness ecosystem is described as a web of loose relationships, thereby posing some challenges to coordination. In attempt to ensure coordination in business relationships, scholars have proposed relational and contractual governance mechanisms. Hence, this study aims to examine the effects of governance mechanisms on coordination in the pharmaceutical business ecosystem (BE), with the potential mediating effects of closeness and opportunistic behavior.Design/methodology/approachThe study adopted quantitative approach with cross-sectional survey research design to collect data from the business ecosystem of pharmaceutical company X in Ghana. A structured questionnaire based on a five-point Likert scale was employed to collect data. Analysis was based on 173 institutions (both local and international) selected from pharmaceutical BE. Various validity and reliability checks were conducted before the presentation of the actual analysis, which was conducted using ordinary least squares (OLS) regression in Statistical Product and Service Solutions (SPSS).FindingsThe results of the study revealed that both relational and contractual governance have a direct positive effect on coordination between pharmaceutical BE members and the focal firm. The effect of contractual governance on coordination is however, partially mediated by opportunistic behavior. Finally, closeness also fully mediated the effect of relational governance on coordination.Originality/valueThe study builds on the governance mechanisms in exchange relationship, which was hitherto largely limited to the dyadic and triadic business network, partnerships and strategic alliances studies. The contribution to BE literature provides further understanding into transaction cost economics and relational exchange theory, which was dominantly applied in dyadic relationships ties such as partnerships, alliances and networks.