8.3 Measurement models development 132
8.3.1 Measurement model for efficiency considerations 132
Principal’s Asset specificity
The first construct of interest with regard to efficiency considerations, is a principal’s transaction
asset specificity or otherwise the principal’s transaction‐specific assets. With the term principal
reference is made to a focal marine shipping firm identified as a potential customer of servitized
offerings. The construct’s objects are identified to be the six focal maintenance activities. The
construct’s attribute is the degree of non‐redeployability exhibited by a principal’s assets invested
in each activity, given that the activity is outsourced to any degree.
In recognizing from previous theory that there are six distinct types of transaction‐specific assets,
the attribute is identified to be abstract formed. Its components, in turn are the six different
types of transaction‐specific assets, namely (1) human asset specificity, (2) site asset specificity,
(3) physical asset specificity, (4) dedicated asset specificity, (5) procedural asset specificity and (6)
temporal asset specificity. Given that in the study’s elected empirical context site asset specificity
is thought to have no bearing whatsoever, it is dropped from the rest of the measurement
development process.
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In turn, each of the five remaining types of transaction‐specific assets is deemed as a concrete
attribute each representing a different type of asset whose degree of non‐redeployability is under
judgment. As such, given the conceptual definitions provided in the chapter delineating the
theoretical background of strategic considerations affecting customer firm boundary decisions,
five distinct questions along with their respective answer formats are developed. After many pre‐
test refinement iterations with regard to the wording of the scales’ stems, the following measures
were produced:
With regard to a principal’s human asset specificity:
With regard to a principal’s physical asset specificity:
With regard to a principal’s dedicated asset specificity:
With regard to a principal’s procedural asset specificity:
With regard to a principal’s temporal asset specificity, a slightly varying definition in relation to
the previous types is used. Temporal specificity refers to the importance of timing and
0 1 2 3 4 5 6 7
Engine maintenance planning: Engine problem troubleshooting: Tactical spare part logistics: Extraordinary spare part logistics: Regular engine maintenance: Extraordinary engine repairs:
To switch to a different supplier for each activity, to what degree do you need to change your company's know‐how?
not at all slightly quite extremely
0 1 2 3 4 5 6 7
Engine maintenance planning: Engine problem troubleshooting: Tactical spare part logistics: Extraordinary spare part logistics: Regular engine maintenance: Extraordinary engine repairs:
extremely
To switch to a different supplier for each activity, to what degree do you need to change your company's technical
infrastructure? (e.g. hardware, software or other technical equipment)
not at all slightly quite
0 1 2 3 4 5 6 7
Engine maintenance planning: Engine problem troubleshooting: Tactical spare part logistics: Extraordinary spare part logistics: Regular engine maintenance: Extraordinary engine repairs:
not at all slightly quite extremely
To switch to a different supplier for each activity, to what degree do you need to change your company's human resources?
0 1 2 3 4 5 6 7
Engine maintenance planning: Engine problem troubleshooting: Tactical spare part logistics: Extraordinary spare part logistics: Regular engine maintenance: Extraordinary engine repairs:
not at all slightly quite extremely
To switch to a different supplier for each activity, to what degree do you need to change your company's operating
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Chapter 8 – Measurement models and data collection
coordination in a given transaction (here, in maintenance activities). As such, the associated
measurement scale is formed as:
Principal’s Proprietary Asset Exposure
The construct once again focuses on a principal marine shipping firm, and while closely related to
asset specificity centres on slightly different issues. The construct’s objects are once again the six
focal maintenance activities. The relevant attribute is the degree to which a focal principal firm’s
proprietary assets, including brand name capital, intellectual property and privileged information,
are exposed to expropriation in each activity. The construct’s attribute under judgment is
considered abstract formed and its components (deemed as concrete) are the three
aforementioned types of proprietary assets. As with site asset specificity, the exposure of
intellectual property is thought to have no bearing in the particular empirical context. As such,
the following measures were produced:
With regard to brand name capital (i.e. a principal’s reputation) exposure, it is held that the
stronger the influence of an activity’s performance level to the principal’s reputation the higher
the level of the proprietary asset’s exposure is. As such, the relevant question formed is:
With regard to the exposure of a principal’s privileged information, the scale focuses on the
frequency at which such information becomes available to the transaction’s (i.e. activity’s)
partners (i.e. the activity’s suppliers). Furthermore, to delineate the notion of privileged
information, the latter is held to be privileged for the reason of being of value to third parties (i.e.
the principal’s competitors). Therefore the relevant question becomes:
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Engine maintenance planning: Engine problem troubleshooting: Tactical spare part logistics: Extraordinary spare part logistics: Regular engine maintenance: Extraordinary engine repairs:
How important is timing and on‐time delivery in each activity?
not at all slightly important quite important extremely important 0 1 2 3 4 5 6 7
Engine maintenance planning: Engine problem troubleshooting: Tactical spare part logistics: Extraordinary spare part logistics: Regular engine maintenance: Extraordinary engine repairs:
How important is good performance in each activity to your company's reputation?
(i.e. poor performance hurts your company's reputation)
not at all slightly important quite important extremely important 0 1 2 3 4 5 6 7
Engine maintenance planning: Engine problem troubleshooting: Tactical spare part logistics: Extraordinary spare part logistics: Regular engine maintenance: Extraordinary engine repairs:
How often do suppliers gain information about your operations that would be valuable to your competitors?
In each activity:
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Chapter 8 – Measurement models and data collection
Agents’ Asset specificity
The construct of agents’ asset specificity along with the related construct of agents’ proprietary
asset exposure is, in essence, the mirror image of the construct of a principal’s asset specificity.
The key difference is that it refers to the non‐redeployability of assets exposed in each activity on
behalf of the principal’s transacting partners (i.e. each activity’s suppliers). The six focal activities
naturally remain as the construct’s objects, while the attribute under judgement is respectively
thought to be formed and composed of the five different kinds of transaction‐specific assets as
represented in human, physical, dedicated, procedural and temporal asset specificity.
In contrast, though, the consultation of expert judges from the marine shipping industry,
indicated that a different wording approach than that used for the principal’s asset specificity is
more appropriate in targeting the agents’ asset non‐redeployability characteristics. As such,
instead of wording the questions in terms of changes needed to supply a different client, the
content focuses on the level of the assets’ specialization to the particular needs of the principal as
that specialization is observed by the principal’s managers. Indeed, asking a principal’s managers
to pass direct judgment on other principal‐agent relationships would be irrational and not based
on actual experience. Given the foregoing points, the following measures were produced:
With regard to agents’ human asset specificity:
With regard to agents’ physical asset specificity:
With regard to agents’ dedicated asset specificity:
In each activity:
0 1 2 3 4 5 6 7
Engine maintenance planning: Engine problem troubleshooting: Tactical spare part logistics: Extraordinary spare part logistics: Regular engine maintenance: Extraordinary engine repairs:
How specialized is your suppliers' know‐how to your company's particular needs?
not at all slightly specialized quite specialized extremely specialized In each activity: 0 1 2 3 4 5 6 7
Engine maintenance planning: Engine problem troubleshooting: Tactical spare part logistics: Extraordinary spare part logistics: Regular engine maintenance: Extraordinary engine repairs:
not at all slightly specialized quite specialized extremely specialized
How specialized is your suppliers' technical infrastructure to your company's particular needs?
(e.g. hardware, software or other technical equipment)
In each activity:
0 1 2 3 4 5 6 7
Engine maintenance planning: Engine problem troubleshooting: Tactical spare part logistics: Extraordinary spare part logistics: Regular engine maintenance: Extraordinary engine repairs:
not at all slightly specialized quite specialized extremely specialized
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Chapter 8 – Measurement models and data collection
With regard to agents’ procedural asset specificity:
With regard to agents’ temporal asset specificity, once more the varying definition previously
associated with the principal’s temporal asset specificity is utilized. Accordingly, temporal
specificity here refers to the importance of timing and coordination in a maintenance activity on
behalf of the principal’s transacting partners (i.e. the activity’s suppliers). This time, however, to
primarily provide a concrete anchoring reference point for the survey’s respondents (i.e. a
principal’s managers), timing and on‐time delivery is further tied specifically with the agent’s
compensation regime by the principal.
More specifically, it is held that the higher the influence of timing and on‐time delivery to the
agents’ compensation regime is, the higher the importance of timing and on‐time delivery for the
agents. This associating assertion is based on the assumption of incentives alignment. Although
the approach is targeting the focal issue by proxy, it is held as a reasonable compromise allowing
the respondents to rely on experience and not pass direct judgment on the agents’ inner
corporate workings. As such, the relevant question formed is:
Agents’ Proprietary Asset Exposure
The construct of agents’ proprietary asset exposure echoes that of a principal’s proprietary asset
exposure. The construct focuses on a principal’s transacting partners (i.e. an activity’s suppliers)
while the construct’s objects are, once again, the six focal maintenance activities. The relevant
attribute under judgment is the degree to which agents’ proprietary assets, including brand name
capital and privileged information are exposed to expropriation (by the principal this time) in each
activity. The construct’s attribute is similarly considered abstract formed and its components
(deemed as concrete) are the two aforementioned types of proprietary assets. Subsequently the
following measures were produced:
With regard to brand name capital (i.e. the agents’ reputation) exposure, it is held that a
maintenance activity’s performance levels directly impact a maintenance supplying firm’s
reputation (be it in a good way or a bad one). The assumption is based on the pragmatic
acknowledgement that the end‐result is what really matters in the heavily functionalistic, and
In each activity:
0 1 2 3 4 5 6 7
Engine maintenance planning: Engine problem troubleshooting: Tactical spare part logistics: Extraordinary spare part logistics: Regular engine maintenance: Extraordinary engine repairs:
not at all slightly specialized quite specialized extremely specialized
How specialized are your suppliers' operating procedures to your company's particular needs?
0 1 2 3 4 5 6 7
Engine maintenance planning: Engine problem troubleshooting: Tactical spare part logistics: Extraordinary spare part logistics: Regular engine maintenance: Extraordinary engine repairs:
How much does timing and on‐time delivery influence supplier compensation in each activity?
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Chapter 8 – Measurement models and data collection
often legalistic, context of marine shipping. As such, contrary to the principal’s case were the end‐
result is the transportation of cargo from point A to point B, and subsequently the reputational
effects of maintenance activity performance levels are free to vary, in the agents’ (maintenance
suppliers) case, the end‐result is the very performance of the focal maintenance activities
themselves. Consequently, in keeping that performance levels directly affect the agents’
reputation, focus is put on the visibility of that performance to other companies (i.e. other
potential customers of agents) in the sector. As a result, the relevant question is formed as:
With regard to the exposure of agents’ privileged information, the scale focuses on the frequency
with which such information becomes available to the principal. Much like in the case of a
principal’s privileged information, the notion of privileged information is exemplified through its
consideration as information that can be of value to third parties (in this case, the agents’
competitors). Resultantly, the relevant question is formed as:
Behavioural Uncertainty
Behavioural uncertainty is one of the central constructs included in the study’s exploration of
efficiency considerations. The construct’s objects are once again the six focal activities while the
attribute under judgment here is the perceived level of behavioural unpredictability bestowed on
maintenance suppliers in each activity. Said unpredictability is essentially equated with the
perceived probability that suppliers might engage in any form of opportunistic behaviour that
could herald manifest or latent contractual infractions. In conferences with expert judges from
the marine shipping industry, two approaches to the measurement of the construct were put
forth.
The first related with its consideration as an eliciting attribute as one could convey the notion
that it is a construct representing an ‘internal’ trait or perceptual disposition (state).
Nevertheless, all expert judges agreed that the construct’s interpretation as unpredictable
behaviour exhibited in corporate rather than any form of personal terms was relatively concrete.
Additionally, during the item generation phase of the construct’s consideration as an eliciting
attribute, the items generated were found to relate more to notions of actualized and proven (i.e.
factual) unpredictability rather than perceived unpredictability. For example, two of the items
For each activity:
0 1 2 3 4 5 6 7
Engine maintenance planning: Engine problem troubleshooting: Tactical spare part logistics: Extraordinary spare part logistics: Regular engine maintenance: Extraordinary engine repairs:
How visible is your suppliers' performance in the activity to other companies in your sector?
not at all slightly visible quite visible extremely visible 0 1 2 3 4 5 6 7
Engine maintenance planning: Engine problem troubleshooting: Tactical spare part logistics: Extraordinary spare part logistics: Regular engine maintenance: Extraordinary engine repairs:
How often do you gain information about your supplier's operations that would be valuable to their competitors?
In each activity:
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Chapter 8 – Measurement models and data collection
considered included inquiries surrounding the frequency with which suppliers exaggerate their
needs or alter facts, or the frequency with which they breach formal or informal agreements (as
suggested by Skarmeas et al., 2002). At that point, however, the expert judges pointed out a
number of problematic issues and advised against the use of such measures principally due to an
increased potential for social (or in this case corporate) desirability bias.
The second approach related with the consideration of the attribute as a concrete one, and in
particular one directly associated with reliability issues. In other words, the expert judges
consented that the construct is more than adequately captured with the notion of perceived
reliability. As such, the final scale developed for the construct of behavioural uncertainty was
reverse coded and articulated in the following deceptively simple way:
Market/Volume Uncertainty
Market/volume uncertainty or simply volume uncertainty is related with the inability to
accurately forecast the volume requirements of an exchange (i.e. a transaction, or in this case a
maintenance activity). As such, the construct’s objects are yet again the six focal maintenance
activities while the construct’s attribute (held to be a concrete one) is defined as the difficulty
with which the focal firm can predict its demand levels for each activity. As such, and with
inspiration drawn from John and Weitz (1988), the following measure was produced:
Technological Uncertainty
The construct of technological uncertainty refers to technological volatility, or otherwise the
inability to accurately forecast future technological developments related with the construct’s
objects, which once more include the six focal maintenance activities. The construct’s attribute, in
contrast to the case of volume uncertainty, is held to be abstract formed. Two concrete
components are thought to form it in a composite (multiplicative) manner. The first component,
inspired by Walker and Weber (1984), relates to the speed with which the relevant technology
evolves, while the second component, inspired by Stump and Heide (1996), relates to the
unpredictability of relevant technological developments.
0 1 2 3 4 5 6 7
Engine maintenance planning: Engine problem troubleshooting: Tactical spare part logistics: Extraordinary spare part logistics: Regular engine maintenance: Extraordinary engine repairs:
How reliable do you think that the suppliers are?
In each activity:
not at all slightly quite extremely
0 1 2 3 4 5 6 7
Engine maintenance planning: Engine problem troubleshooting: Tactical spare part logistics: Extraordinary spare part logistics: Regular engine maintenance: Extraordinary engine repairs:
How difficult is it to predict your company's demand for each activity?
not at all slightly difficult quite difficult extremely difficult
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Chapter 8 – Measurement models and data collection
Through the multiplication of the two components to form the construct of technological
uncertainty, it is inferred that while technological developments may be unpredictable to a
degree, uncertainty is further exacerbated by the speed of their development. Similarly, even if
technological developments occur at a rapid pace, low unpredictability levels allow the curbing of
technological uncertainty. Given the foregoing points, the following measures were produced
(with the unpredictability component being reverse‐coded):
With regard to the speed of technological developments:
With regard to the unpredictability of technological developments (reverse‐coded):
Value Assessment Ability
The construct of value assessment ability generally refers to a focal firm’s ability to assess the
value of the goods or services exchanged in a given transaction. In the study’s empirical setting, it
specifically refers to a focal shipping firm’s ability to assess the value of tasks included in the six
focal maintenance activities (i.e. the construct’s objects). As such, the construct’s attribute,
considered a concrete one, is defined as the ease of pricing the tasks included in each activity.
Subsequently, the following measure (reverse‐coded) was produced:
Contribution Assessment Ability
The construct of contribution assessment ability, in general, refers to a focal firm’s ability to
ascertain ex‐post whether the contract terms of an exchange were adequately satisfied or in the
words of Geyskens et al. (2006) “whether contractual compliance has taken place”. In this study’s
0 1 2 3 4 5 6 7
Engine maintenance planning: Engine problem troubleshooting: Tactical spare part logistics: Extraordinary spare part logistics: Regular engine maintenance: Extraordinary engine repairs:
How rapid are technological developments in tools, methods and equipment in each activity?
not at all slightly rapid quite rapid extremely rapid 0 1 2 3 4 5 6 7
Engine maintenance planning: Engine problem troubleshooting: Tactical spare part logistics: Extraordinary spare part logistics: Regular engine maintenance: Extraordinary engine repairs:
extremely
predictable
How predictable are technological developments in each activity?
not at all slightly predictable quite predictable 0 1 2 3 4 5 6 7
Engine maintenance planning: Engine problem troubleshooting: Tactical spare part logistics: Extraordinary spare part logistics: Regular engine maintenance: Extraordinary engine repairs:
How difficult is it to price the tasks included in each activity?
not at all slightly