Substitution or Complement: How Do Contractual and Relational Governance Shape Members’ Organizational Commitment to Farmer Cooperatives?

Abstract

Organizational commitment is key to sustainable development and the success of farmer cooperatives. The relationship and effectiveness of contractual and relational governance as important means of managing partnerships remain debatable, and their impact on organizational commitment is unclear, particularly in the context of farmer cooperatives. Based on transaction cost theory and social exchange theory, we investigate how contractual and relational governance affect members’ organizational commitment (MOC) under different market uncertainties. Using survey data of 239 farmer cooperatives in China, we examined the conceptual model utilizing hierarchical regression and bootstrapping techniques. The results showed that both contractual and relational governance have significant positive impacts on members’ continuance and affective commitment, but relational governance exerts more positive effects. Contractual governance can significantly promote relational governance; the two have complementary rather than substitute relationships. Moreover, relational governance mediates the link between contractual governance and members’ continuance/affective commitment, and this mediating role strengthens as market uncertainty increases. This study expands the literature on MOC from the perspective of alliance governance, and has important implications for cooperative governance mechanisms and partnership management.