Purpose – Opportunism is the key risk that can deteriorate the cooperation that prevails between two parties in a relationship. Therefore, it is important to curb this outcome to ensure that both the parties orchestrate their decisions in the best interest of each other. Accentuating this phenomenon, the context of humanitarian logistics and partner relationship is visualized from the lens of opportunism.

Design/methodology/approach – Leveraging on the anchoring of transaction cost economics, a focus on governance unlocks the positions of formal control mechanisms (contracts) and trust to shape governance mechanisms. Distinguishing features of the humanitarian logistics scenario are duly theorized on the grounds of opportunism and volatility. A difficult to orchestrate survey of 150 humanitarian field executives is conducted.

Findings – In terms of humanitarian logistics governance, to curb opportunism, formal governance via contracts bear a strong positive effect on trust, while formal governance alone has no significant effect in curbing opportunism. However, trust is very much capable of mitigating opportunism. Most interestingly, contract can serve as the premise to bolster trust between the parties in the challenging setting of humanitarian relief. However, as the volatility of the disaster increases, it can distort the positive synergies of governance levers to make opportunism uncontrollable.

Originality/value – This research is the first attempt to study the role of volatility and opportunism in the humanitarian logistics based on primary data. The insights on contractual versus trust based governance have been well contrasted with traditional contexts of logistics and supply chain management. Findings outline that what might work in peacetime contexts might not hold for humanitarian logistics.

Keywords: Disaster; Humanitarian logistics; Relationship; Cooperation; Contract; Trust; Governance

Chandra Prakash

Affiliation

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Formal Governance and Trust in Humanitarian Logistics: Mitigating Opportunism Amidst Volatility