From transactional to a devoted relationship – toward performance-based service system governance

Abstract

This field study explores a unique collaborative arrangement between two industrial firms, Siemens and Nestlé, presenting performance-based governance of the cooperation as means to mitigate the information asymmetry problem of the parties involved. In so doing, our field study depicts the essential activities in the formation of the IT-enabled and performance-based service system. Moreover, the findings delineate how technology-related changes affect manufacturing operations. The study contributes to the practice-based research on the emerging inter-organizational IS management issues by highlighting the role of parties’ collaborative arrangements and interaction in the digital transformation of manufacturing operations.