The interplay between governance mechanisms and the integration of logistics operations: a literature review

Logistics costs can be significantly impacted by inefficient integration of logistics operations, which is based on process coordination and information sharing and is closely associated with the concept of transactions. Therefore, it is crucial to understand the governance mechanisms associated with operational-level logistics integration. While governance mechanisms have been studied extensively over the last few decades, questions remain about their relationship, influence, and potential contribution to sustainable competitive advantage. The objective of this paper is to identify the key concepts, theoretical lenses, and research methodologies related to the study of governance mechanisms and to explore how they can influence the integration of logistics operations. A systematic literature review was conducted, analyzing 38 articles. The findings suggest that governance mechanisms can be classified into two groups: formal and relational. Formal mechanisms facilitate information sharing and flexibility, but excessive use can reduce the willingness to share information. Relational governance mechanisms can positively influence process coordination and information sharing, but they require caution as they can become a source of inter-organizational competition and lead to opportunistic behavior. It is important to note that, when used appropriately, both types of governance mechanisms can enhance the benefits of logistics integration, such as improved operational performance, reduced opportunism, and minimize ambiguity and conflict.