The key informant technique and the number of informants

The ‘key informant technique’ is the most used technique to collected data in

inter-organizational research. The technique implies that just one or a few informants are relied upon to describe critical factors of the unit of analysis (Phillips 1981). These informants are specially identified and have specific knowledge regarding the unit of analysis; in addition, the informants should have the capabilities to describe and communicate the phenomenon of interest (Campbell 1955).

An additional requirement is that the phenomenon of interest exists independently of the informant (Heide and John 1995; Wathne 2001; Svendsen 2005). If the phenomenon of interest (i.e., the information you seek) is tied directly to the informant, that is, if the informant is reporting on himself, then you need not one, but a representative sample of informants to report on the phenomenon of interest. In this study, the critical constructs are related to: 1) governance (e.g., level of formalization), 2) hazards (e.g., the level of project specific investments), and 3) the performance effects (e.g., if an innovation has occurred). All of these ‘phenomena’ are assumed to be independent of the informant, and we conclude that the “researcher can select informants on the basis of their alleged knowledge instead of their representativeness in a statistical sense” (Svendsen 2005: 87). In this study, we contacted general managers in the relevant companies, and we asked them to pick project managers who were knowledgeable and motivated (i.e., we assumed that the quality of the data would be highly dependent on the motivation of the informant). Since the unit of analysis is the project, a natural choice of

42 Measures of TCE’s central constructs are often not accessible from archival data Williamson, O. E. (1985). The Economic Institutions of Capitalism. New York, Free Press, Rindfleisch, A. and J. B. Heide (1997). "Transaction cost analysis: Past, present, and future applications." Journal of Marketing 61(4): 30-54. Hence, in this study data on the project level or “micro level” is needed to conduct valid empirical tests of the hypotheses.

informant is the project manager, or next best, a dedicated project member with in-depth

knowledge of the project. We concluded that the requirements put forward by Campbell (1955), Phillips (1981), and John (1984) are satisfied; project managers do have deep insight into the project processes, project managers are knowledgeable about the customer and their

organization, and finally, project managers should also be knowledgeable about the actual performance in their own project.

However, data collection from just one informant has both advantages and disadvantages. It is, of course, highly problematic to collect data on complicated, abstract, and maybe ambiguous phenomena, and then only rely on a single informant. The researcher does not know who the informant is, in most cases. Is the informant motivated, really knowledgeable, and to be trusted?

The researcher does not have any tool to establish the accuracy of the data without multiple informants; for instance, Phillips (1981) concluded that informants belonging to the same

unit/organization had divergent views on the same phenomenon. Let me put forward an example that illustrates this point. Imagine that technical and commercial informants report on the same unit of analysis: the relation with a long-term contractor. The technical people have worked side-by-side with the contractor over many years and are really satisfied with the relationship; they may have developed strong interpersonal (i.e., social) ties with the people employed by the contractor. Consequently, their perception of the contractor’s performance is very positive. The commercial purchaser, on the other side, might have another view. The purchaser has conducted a market survey and he is not satisfied with the contractor’s price levels, the quality delivered etc. A multiple informant approach in this case would have revealed the highly divergent views of how the contractor is evaluated; the engineers and the purchasers have different information regarding the relative performance of the contractor.

On the other hand, the collection of data from just one informant has several advantages. We presume this is the reason why researchers, almost without exception, collect data from just one informant, on one side of the dyad. First, the collection of data from several informants is time consuming (and time is money!) and requires a lot more resources (Kumar, Stern et al. 1993). In this case, time was limited and the resources scare. This is a cynical argument, but unfortunately the reality. Second, when the data is gathered, it must be analyzed. This is a much more time consuming exercise when the researcher has many observations for the same phenomenon (Kumar, Stern et al. 1993). Then the data must be analysed for convergence and a joint understanding should be reported. The interpretation of these results is ambiguous and not

straightforward. When a single informant is used, the results are reported directly, thus saving both time and money. No further analysis of possible divergent data is necessary.

Third, informants are a scarce resource! Although multiple informants are preferred to avoid or reduce the risk of biased information (Phillips 1981), the focus was placed entirely on the identification of as many project managers as possible. To gather multiple informants for each project would just be too difficult (or even impossible) and time consuming. Multiple informants for each project would certainly reduce the number of observations considerably; furthermore, on many projects the contractor company only had one informant available. The managers were generally very positive and wanted to contribute to the study, but due to a (extremely) high activity level in the industry, multiple informants on each project were not considered a relevant option.

Another related and recurrent discussion in the interorganizational literature is the problem of data collection on one or both sides of the dyad (Phillips 1981; Heide and John 1995). This problem is strongly related to the problem of one or multiple informants from the same

organization reporting on the same phenomenon. In short, it is highly problematic to collect data on complicated phenomena and just rely on one single informant from one organization/one side of the dyad (i.e., either the customer or the contractor). As argued above, Phillips (1981)

concluded that informants that belonged to the same organization had highly divergent views on the same phenomenon; what about informants belonging to different organizations? In the following, we will provide arguments that support data collection on only one side of the dyad, although this is not an optimal solution. Following Svendsen (2005), we will use the empirical literature and theoretical reasoning to justify our choices. However first, many of the same practical arguments can be used as above (i.e., the arguments behind the choice of one informant compared to multiple informants from the same organization). There are time and resource constraints, and data collection will be more straightforward compared to sampling on both sides. Furthermore, the analysis of the collected data is simpler with just one informant on one side of the dyad. Furthermore, the interpretation of the data is much simpler when data is collected on one side of the dyad (Kumar, Stern et al. 1993). An argument not previously

mentioned, is that to collect data on both sides of the dyad, one has to identify the informants on both sides of the dyad. Without doubt, this would lead to a significant reduction in the number of observations or projects. Furthermore, there could be confidentiality issues related to the dyad,

which in the worst case, could lead to refusal to participate in the study, and in the end lead to an even smaller number of observations.

Therefore, we now consult the empirical studies within the interorganizational literature. First and most important, is the fact that the literature within the field concludes that it is justifiable to collect data on only one side of the dyad (Heide and John 1994). Several studies have conducted data collection on both sides of the dyad (e.g. Heide and John 1990; Anderson and Weitz 1992).

This approach is highly relevant if the unit of analysis is affected by both parties, and the parties (for whatever different reasons) are assumed to have potentially divergent views on critical issues, for example, how well the contractor organization has performed their tasks. The multiple informant approach will give the researcher a more objective value of the construct in question.

In this study, critical constructs are, for example, ‘formalization,’ ‘relational contracts,’ ‘project specific investments,’ and several constructs that measure ‘project performance.’ Regarding

‘formalization’ and ‘relational contracts,’ we find support in the empirical literature that both of the reporting organizations have the same convergent views on the structural elements of the dyad (Reve 1980; John and Reve 1982; Svendsen 2005). The same results are confirmed for

‘specific investments,’ according to Anderson and Weitz (1992). This empirical support is found in the distribution channel literature, where the parties typically have worked together for an extensive period of time. Projects are significantly shorter in length (i.e., time that the parties actually work together). On the other hand, projects are intense and the project managers involved (i.e., the informants) are assumed to be knowledgeable on all aspects of the project, including the structural parts.

To sum up, some empirical support for the critical variables in this study is found in the empirical literature. There seems to be convergence in the buyer and seller perception of the elements of the dyad. For a more thorough investigation of these arguments consult Svendsen (2005). One critical construct is project performance; to assume that both the oil companies and the contractors have the same perceptions on this construct is perhaps dangerous. It is, of course, especially problematic for the contractor to objectively evaluate his/her own performance.

The key informants that participated in the study, that is, the informants who returned acceptable questionnaires, displayed the following characteristics. In all, 361 questionnaires were returned, and 320 were accepted. That is, 320 unique informants employed within the contractor industry contributed to the study. These 320 informants were employed in 98 contractor companies. Of

the 320 informants, 201 were project managers (63%), 37 were project members (11%), and 82 informants had some other role in the project, for example general manager (26%).

We conclude that the collection of data from multiple informants, that is, multiple informants on both the contractor side and on the customer side, is highly problematic. In this research, it would not be a practical and realistic approach due to the limitations in time and resources. We also find empirical evidence that gives support to data collection on one side of the dyad only (Heide and John 1994). It is practical and efficient to collect on one side only and with just one informant on each project. However, validation of the results is problematic and interpretation of the data and results must be treated with caution.