The Many Futures of Contracts

Abstract

In this article, we review the literature on interfirm contracting in an effort to synthesize existing research and direct future scholarship. While transaction cost economics (TCE) is the most prominent perspective informing the “optimal governance” and “safeguarding” function of contracts, our review indicates other perspectives are necessary to understand how contracts are structured: relational capabilities (i.e., building cooperation, creating trust), firm capabilities, relational contracts, and the real option value of a contract. Our review also indicates that contract research is moving away from a narrow focus on contract structure and its safeguarding function toward a broader focus that also highlights adaptation and coordination. We end by noting the following research gaps: consequences of contracting, specifically outcome assessment; strategic options, decision rights, and the evolution of dynamic capabilities; contextual constraints of relational capabilities; contextual constraints of contracting capabilities; complements, substitutes, and bundles; and contract structure and social process.

Contracts, Negotiation, and Learning: An Examination of Termination Provisions

“…We believe these types of clauses will have different effects on negotiation time, and analysing these differences will offer a more fine-grained understanding of the consequences of contractual detail of termination provisions than we would gain from assuming these facets of contracts present the same challenges during contracting. This is also in line with a broader trend in recent literature on the structure of contracts regulating inter-firm exchange (Schepker et al, 2013).…”

“…We do so by considering the consequences of prior relationships and contractual provisions in partnership negotiations -in particular, their effect on negotiation time -rather than focusing on the antecedents of contractual detail in inter-firm agreements. Our study therefore responds to calls for research on the implications of contractual provisions for collaborators (Schepker et al, 2013).…”

“…Overall, our study offers an original contribution that is of both scientific and practical utility (Corley and Gioia, 2011). It is original in approaching contracting from a temporal perspective to understand the complex relationship between negotiation time and learning from prior relationships and in contributing to understanding of the consequences of contractual detail (Schepker et al, 2013). The scientific utility of identifying a reduction in negotiation time for a given level of contractual detail as an indicator of learning-tocontract is that it can advance current debates on the effects of prior relationships and spark new research about learning processes in partnerships and alliances.…”

“…Second, we develop arguments and provide evidence that negotiation time implications of contractual detail are not homogenous across qualitatively different types of termination provision. While most of the literature has concentrated on identifying determinants of contractual detail, there is a need for more empirical work assessing contracting outcomes (Schepker et al, 2013). Lastly, we suggest negotiation time for a given level of contractual detail as a new indicator of learning to contract, one that complements indicators currently in use -i.e., the level of contractual detail (Argyres and Mayer, 2007;Vanneste and Puranam, 2010).…”

Custos de produção na empresa e no mercado: uma visão

“…O principal objetivo de Williamson (1985;1996) é reconhecer a melhor forma de governança para executar determinada atividade. Com efeito, embora reconheça a importância da especialização dos ativos, este autor desenvolve sua teoria a partir da relação que a firma individual deve ter com o mercado (SCHEPKER et al, 2014;EBERS;OERLEMANS, 2016).…”