Modular Consortium and Industrial Condominium: analyzing two contemporary forms of inter-firm governance in the Brazilian automotive industry

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This article has analyzed the main mechanisms in inter-firm governance present in a modular consortium as well as in an automotive industry industrial condominium, operating in Brazil. The study was exploratory and data collection was carried out through interviews (in loco) in both carmakers and suppliers. At the modular consortium, an interview was carried out in the carmaker and the production and logistics directors of a module supplier. As far as the industrial condominium is concerned, the logistics manager in the carmaker, the production manager and production director in a supplier installed inside the condominium were interviewed. Modular consortium and industrial condominium not only involve collaborative agreements in manufacturing but also embrace managerial aspects such as: trust, long-term contracts, reciprocity, reputation, channels of interdependence and formal and informal mechanisms of control. These contemporary ways of governance have generated new ways of organizing production and coordination in operations, based on cooperation, integration and inter-firm process control. For such, governance based on company inter-relationship usually operates seeking cooperative agreements so that it would permit quick access to information and technological innovations. These forms  of governance not only  contain horizontal and vertical structures to support exchange, interdependence resource, mutual lines of communication, economies of scale for research and joint production, but also share the risks and uncertainties in the market insertion. Such governance structure evolves high relational and controlling mechanisms.