The end of the opportunism vs trust debate: bounded reliability as a new envelope concept in research on MNE governance

Modern transaction cost economics (TCE) thinking has developed into a key intellectual foundation of international business (IB) research, but the Williamsonian version has faced substantial criticism for adopting the behavioral assumption of opportunism. In this paper we assess both the opportunism concept and existing alternatives such as trust within the context of IB research, especially work on multinational enterprise (MNE) governance. Case analyses of nine global MNEs illustrate an alternative to the opportunism assumption that captures more fully the mechanisms underlying failed commitments inside the MNE. As a substitute for the often-criticized assumption of opportunism, we propose the envelope concept of bounded reliability (BRel), an assumption that represents more accurately and more completely the reasons for failed commitments, without invalidating the other critical assumption in conventional TCE (and internalization theory) thinking, namely the widely accepted envelope concept of bounded rationality (BRat). Bounded reliability as an envelope concept includes two main components, within the context of global MNE management: opportunism as intentional deceit, and benevolent preference reversal. The implications for IB research of adopting the bounded reliability concept are far reaching, as this concept may increase the legitimacy of comparative institutional analysis in the social sciences.

Use and abuse of mathematical models: an illustration from the 2001 foot and mouth disease epidemic in the United Kingdom

Foot and mouth disease (FMD) is a major threat, not only to countries whose economies rely on agricultural exports, but also to industrialised countries that maintain a healthy domestic livestock industry by eliminating major infectious diseases from their livestock populations. Traditional methods of controlling diseases such as FMD require the rapid detection and slaughter of infected animals, and any susceptible animals with which they may have been in contact, either directly or indirectly. During the 2001 epidemic of FMD in the United Kingdom (UK), this approach was supplemented by a culling policy driven by unvalidated predictive models. The epidemic and its control resulted in the death of approximately ten million animals, public disgust with the magnitude of the slaughter, and political resolve to adopt alternative options, notably including vaccination, to control any future epidemics. The UK experience provides a salutary warning of how models can be abused in the interests of scientific opportunism.

The dark side of brand attachment: a conceptual framework of brand attachment's detrimental outcomes

Brand attachment recently has received great attention among practitioners and academics alike. Scholars consider brand attachment a key requisite in consumer-brand relationships that create favourable consumer behaviours such as positive brand attitudes and brand loyalty. Few studies, however, examine the detrimental outcomes of brand attachment. In this paper, we develop a conceptual framework that explores how brand attachment may explain detrimental consumer behaviours, such as oppositional brand loyalty and antibrand actions. We investigate consumers' trash-talking and schadenfreude in brand communities and their subsequent outcomes. Our framework reveals that the link between brand attachment and oppositional brand loyalty is driven by consumers' social identity and sense of rivalry. Furthermore, we put forward that brand attachment leads to anti-brand actions when relationships deteriorate. We identify two factors behind the deterioration: (1) companies' opportunism activities, and (2) incongruity between consumers' values and the brand's values. Theoretical and managerial implications are discussed arising from our emerging 'dark side' brand attachment framework.