Behaviour Transformation: An Examination of Relational Governance in Complex Engineering Service

Abstract

In the present study, we investigated two outcome-based maintenance, repair and overhaul (MRO) service contracts in the attempt to better understand the effect of relational governance on firms’ boundary-spanners behaviours in co- producing complex engineering service. Our field interviews indicate that managers are heavily dependent on interpersonal relationships to promote mutual cooperation in service delivery. The role of legal contracts in monitoring behaviours seems insignificant. Furthermore, we noted that with the development of interpersonal relationship, cooperation moved from reciprocal to communal. That is, at the early stage of relationship, both parties cooperate conditionally according to the norm of reciprocity. When the relationship becomes more mature, both parties share a common identity and work towards their collective goals. To that end, service performance would then be greatly enhanced. Through a theory-in-use methodol- ogy, our study maps the practices of behaviour transformation in complex engi- neering service systems, effected through interpersonal relationship development.