The moderating effects of economic and strategic relationship value in tolerating active and passive opportunism

•Value in a relationship means more tolerance of active and passive opportunism.•Managers are reluctant to vertically integrate instead opting to find a new supplier.•Economic value is more important than strategic value for governance response.•Firms don’t vertically integrate as they wish to maintain core competency.•Firms don’t vertically integrate as they are reluctant to bring problems in. Active and passive opportunism are elements of the dark side of relationships. In this work, the authors explore the moderating effects of economic and strategic relationship value on governance responses to active and passive opportunism. The findings, drawn from a four-study design, conducted with a total of 377 purchasing managers and 101 MBA students, indicated that economic and strategic value increase the tolerance to active and passive opportunism (with differences between active and passive opportunism), prolonging the relationship and subjecting partners to more dark side behaviors. Furthermore, we found that in the context studied (i.e., microchip supplier–buyer) firms moved to exit, as opposed to hierarchy, under all conditions of economic and strategic value. Our results highlight the importance of interorganizational context in governance choice, with the movement to exit driven by (1) the desire to maintain the firm’s core competency, (2) a hesitancy to bring problems into the firm, and (3) the primacy of economic over strategic value derived from an emphasis on short-term financial results. Implications for academics and managers interested in the dark side of relationship management are discussed.