Purpose – Qualitative theory building approaches, such as grounded theory method (GTM), are still not very widespread and rigorously applied in operations management (OM) research. Yet it is agreed that more systematic observation of current industrial phenomena is necessary to help managers deal with their problems. The purpose of this paper is to provide an example to help guide other researchers on using GTM for theory building in OM research. Design/methodology/approach – A GTM study in the German automotive industry consisting of 31 interviews is followed by a validation stage comprising a survey (110 responses) and a focus group. Findings – The result is an example of conducting GTM research in OM, illustrated by the development of the novel collaborative enterprise governance framework for inter-firm relationship governance in the German automotive industry. Research limitations/implications – GTM is appropriate for qualitative theory building research, but the resultant theories need further testing. Research is necessary to identify the transferability of the collaborative enterprise governance concept to other industries than automotive, to other organisational areas than R&D and to product and service settings that are less complex and innovative. Practical implications – The paper helps researchers make more informed use of GTM when engaging in qualitative theory building research in OM. Originality/value – There is a lack of explicit and well-informed use of GTM in OM research because of poor understanding. This paper addresses this deficiency. The collaborative enterprise governance framework is a significant contribution in an area of growing importance within OM.
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