Modularity and Relational Mechanisms of Governance: An Analysis of Modular Consortium and Industrial Condominium

Abstract

This article analyzed the main mechanisms in inter-firm governance present in a modularconsortium as well as in an automotive industry industrial condominium, operating in Brazil.. The datacollection was carried out through interviews (in loco) in both automakers and suppliers. Modularconsortium and industrial condominium not only involve collaborative agreements in manufacturingwith suppliers but also embrace managerial aspects such as: trust, long-term contracts, reciprocity,reputation, channels of interdependence and formal and informal mechanisms of control. Thesecontemporary forms of governance have generated new ways of organizing production and coordinationin operations, based on cooperation, integration and inter-firm process control. For such, governancebased on company inter-relationship usually operates seeking cooperative agreements so that it wouldpermit quick access to information and technological innovations. These governance approachescontain structures to support exchange, resource interdependence, mutual lines of communication,economies of scale for research and joint production.DOI: 10.12660/joscmv6n1p74-90URL: http://dx.doi.org/10.12660/joscmv6n1p74-90