Negotiating and enacting contracts for business networks

Abstract

Flexibility is a major issue in business today and one answer to that is to organize work in networks of companies rather than within a single business. Cooperation between organizations is more easily established and adapted than reorganization of internal company structures. But how do we manage flexibility in such a network without sacrificing the minimum stability that is required for economic success? We suggest a method for coordinating interaction in a business network that provides three levels of flexibility: local ad-hoc change, global negotiated change and planned change. This method is based on the negotiation and enactment of process-based interorganizational contracts.