Exploring the dimensions and transactional outcomes of incomplete business contracts

Erik A. Mooi, David I. Gilliland

Research output: Chapter in Book/Report/Conference proceedingConference publication

Abstract

With an increased emphasis on outsourcing and shortening business cycles, contracts between firms have become more important. Carefully written contracts contribute to the efficiency and longevity of inter-firm relationships as they may constrain opportunism and are often a less costly governance mechanism than maintaining complex social relationships (Larson 1992).
This exploratory examination adds to our understanding of how incomplete contracts affect interorganizational exchange. First, we consider the multiple dimensions of contract constraints (safeguards). We also investigate the extent that constraints affect decisions to enforce the relationship by delaying payments, and whether the decision is efficient. Finally, we examine the extent the constraints are effective (and ineffective) at reducing transaction problems associated with enforcement. Based on 971 observations of transactions using explicit, written terms and other secondary data in the context of IT transaction in The Netherlands we test our research propositions.
Original languageEnglish
Title of host publication2008 AMA educators’ proceedings
Subtitle of host publicationenhancing knowledge development in marketing
EditorsJames R. Brown, Rajiv P. Dant
PublisherAmerican Marketing Association
Pages282-283
Number of pages2
ISBN (Print)0-87757-333-6
Publication statusPublished - 2008
EventAmerican Marketing Association summer educators' conference 2008 - San Diego, United States
Duration: 8 Aug 200811 Aug 2008

Conference

ConferenceAmerican Marketing Association summer educators' conference 2008
Abbreviated titleSummer AMA 2008
CountryUnited States
CitySan Diego
Period8/08/0811/08/08

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