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Article
Publication date: 12 July 2021

Chandrasekararao Seepana, Ahmad Khraishi, Antony Paulraj and Fahian Anisul Huq

This study aims to investigate how contract complexity and relational trust could impact offshore outsourcing innovation (OOI) performance of small and medium enterprises…

Abstract

Purpose

This study aims to investigate how contract complexity and relational trust could impact offshore outsourcing innovation (OOI) performance of small and medium enterprises (SMEs). This study further examines the moderating effects of knowledge routines and joint actions on the relationships between contract complexity, as well as relational trust and OOI performance.

Design/methodology/approach

The empirical investigation extends transaction cost economics and the relational view of buyer-supplier dyads in the context of offshore outsourcing SMEs. To test the hypotheses, the authors collected and analysed survey data from 200 European manufacturing SMEs that have existing offshore supplier relationships.

Findings

The results suggest that both complex contracts and relational trust as governance structures positively affect SMEs’ OOI performance. Additionally, while both formal knowledge routines and joint actions help strengthen the relationship between complex contracts and OOI, they showed no significant moderating effect on the relationship between relational trust and OOI. Furthermore, based on the results, the authors also develop a governance framework covering four configurations – fit, firm, flexible and fragile (4F).

Originality/value

The 4F governance scenarios – fit, firm, flexible and fragile – introduced in this study emphasise the need for a combination of contract complexity and relational trust mechanisms in OOI relationships. The 4F labelling has rich implications for practitioners on how interfirm outsourcing innovation relationships can be managed based on configurations of contractual and relational governance. The study also adds to the understanding of how SMEs’ specific characteristics (e.g. resource shortcomings and flexibility) may influence their OOI decisions in comparison with large firms.

Details

Supply Chain Management: An International Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1359-8546

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Article
Publication date: 2 May 2020

Shui Bo Zhang, Junying Chen and Yafan Fu

The purpose of this paper is to unpack the “black box” of the relationship between contract and inter-organizational trust, both theoretically and empirically. Two…

Abstract

Purpose

The purpose of this paper is to unpack the “black box” of the relationship between contract and inter-organizational trust, both theoretically and empirically. Two mediators, namely perceived safeguard and restriction, are identified to build up two seemingly contrary possible paths between contract and trust from current literature. Both paths are tested in the context of Chinese construction industry due to our access to sample.

Design/methodology/approach

A survey of 295 contractor-subcontractor relationships from Chinese construction industry was conducted. A three-step multiple regression model was employed to test the mediating effect of perceived safeguard and restriction. Then, a hierarchical regression model was used to test the possible moderating effect of bilateral transaction-specific investment.

Findings

The empirical results support the mediating effect of perceived safeguard between contract and trust in the construction subcontracting industry. Bilateral transaction-specific investments enhance the positive effect of contract on safeguard perception.

Originality/value

Theoretically, this study contributes to governance literature by opening up the “black box” of the relationship between contract and trust. It provides a better understanding of how and when contract complexity impacts trust, instead of simply focusing on whether contract and trust act as complements or substitutes. Practically, this study provides guidelines for construction firms to decide the degree of contract complexity under various degrees of bilateral transaction-specific investments to enhance the other party’s trust, so as to improve performance outcomes.

Details

Engineering, Construction and Architectural Management, vol. 27 no. 9
Type: Research Article
ISSN: 0969-9988

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Article
Publication date: 22 March 2019

Longwei Wang, Xiaodong Li and Min Zhang

The purpose of this paper is to empirically investigate the effects of cooperation history on contractual governance and the moderating effects of dependence asymmetry on…

Abstract

Purpose

The purpose of this paper is to empirically investigate the effects of cooperation history on contractual governance and the moderating effects of dependence asymmetry on those relationships from the perspective of a weaker firm in emergent economies. Drawing from resource dependence theory and contingency theory, this paper develops a conceptual model to investigate the impact of cooperation history on contractual governance.

Design/methodology/approach

The authors use data from 188 buyer–supplier relationships in China

Findings

The authors find that cooperation history is positively associated with contractual governance when dependence asymmetry is high but negatively associated with contractual governance when dependence asymmetry is low. Furthermore, the negative moderating effect of dependence asymmetry on the relationship between cooperation history and contractual complexity is stronger than the relationship between cooperation history and contract enforcement.

Originality/value

This study contributes to a better understanding of how cooperation history affects contractual governance with respect to the various levels of dependence on partners by incorporating a contingency view. This study also advances the literature on interfirm governance by distinguishing contractual governance into contractual complexity and contract enforcement.

Details

Baltic Journal of Management, vol. 14 no. 3
Type: Research Article
ISSN: 1746-5265

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Article
Publication date: 2 March 2021

Mahmoud Ershadi, Marcus Jefferies, Peter Rex Davis and Mohammad Mojtahedi

The purpose of this study is twofold: first, to identify major project management (PM) complexities in principal construction contracting; and second, to study the…

Abstract

Purpose

The purpose of this study is twofold: first, to identify major project management (PM) complexities in principal construction contracting; and second, to study the contribution of project management offices (PMOs) to addressing such complexities.

Design/methodology/approach

A two-stage research design was adopted through a structured literature review (SLR) and a qualitative survey study.

Findings

The two-stage study resulted in mapping out the contribution of 10 functional areas to 15 complexity factors that were retrieved from the literature and categorized using the TOE (technical, organizational and environmental) framework. Six outcomes including (1) facilitated processes, (2) improved decisions, (3) improved coordination, (4) enhanced alignment, (5) addressed uncertainties and (6) integrated oversight were identified that describe how PMOs can contribute to tackling complexities.

Research limitations/implications

Similar to other qualitative studies, this study has some limitations in terms of the replicability of results. Regarding the exploratory nature of this study to explain the contribution of PMO to complexity, further quantitative surveys can be conducted using a larger sample to statistically examine the significance of proposed relations between capabilities and complexity factors.

Practical implications

This study provides an understanding of the contribution of PMOs to tackling ever-increasing complexities embedded in construction contracting. The authors suggest requirements to be considered by professionals toward overcoming such complexities.

Originality/value

Although prior studies have separately investigated PMO functions and PM complexities, this study explores the link between these two spheres to discuss one important application of PMO in this context.

Details

Engineering, Construction and Architectural Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0969-9988

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Article
Publication date: 16 September 2020

Ilias Vlachos

This study aims to investigate how contract design influences supplier performance. This study synthesises three theoretical views (efficiency, relational, contingency…

Abstract

Purpose

This study aims to investigate how contract design influences supplier performance. This study synthesises three theoretical views (efficiency, relational, contingency) and provides empirical support on how effective contract design improves supplier performance.

Design/methodology/approach

This study reviewed contract design literature and uncovered 18 factors that may impact supplier performance. Multi-criteria, decision-making analysis examined the impact of contract factors on three supplier groups: average-, over- and under-performers. Procurement experts working with a large multinational company dealing with hundreds of procuring contracts, yearly, provided their judgement on the impact of these factors on supplier performance. Semi-structured interviews with experts and other evidence were used for data and method triangulation.

Findings

Results show that contracting with under- and over- performers presents significant differences: in the case of over-performers, contracts have a dual, yet discrete, efficiency and relational role: at transaction level, they emphasise formality, protect from opportunism and include both liquidated damages and legal action clauses. At relational level, they focus on relational learning and incentivising suppliers. However, in the case of under-performers, contracts appear to focus on contingency factors, which can be a source of ambiguity, particularly in complex environments, and trust, which has a negative impact on supplier performance.

Social implications

Improving contract design can help reduce partner opportunism, reduce inter-firm conflicts and avoid disputes that can bear a social cost. This study demonstrates that companies can use advanced analytical tools to reflect upon their own decision-making process of contact design in making transparent supplier performance assessments.

Originality/value

To the author’s knowledge, this is the first study using decision-making techniques to enhance supplier performance by improving the contract design process.

Details

International Journal of Productivity and Performance Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1741-0401

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Article
Publication date: 21 October 2013

Melanie E. Kreye, Linda B. Newnes and Yee Mey Goh

– The purpose of this paper is to explore the information that manufacturing companies have available when competitively bidding for service contracts.

Abstract

Purpose

The purpose of this paper is to explore the information that manufacturing companies have available when competitively bidding for service contracts.

Design/methodology/approach

A semi-structured interview study was undertaken with industrialists in various sectors, which are currently facing the issue of servitisation.

Findings

One of the main findings was that, despite the novelty of the process, the decision makers at the competitive bidding stage have an understanding of the involved uncertainties. In particular, the uncertainty arising from the customer as the user of the product and evaluator of the competitive bids in addition to the uncertainty connected to the competitors were identified as the main influences on the pricing decision.

Research limitations/implications

The research implications show the influences and considerations during the decision-making process at the competitive bidding stage for service contracts. These include the customer and the competitors.

Practical implications

Shortcomings in the current industrial practice were identified such as the approaches used to communicate the cost estimate for the service contract. The approaches currently used contradict research findings in the area of communicating uncertainty information, which means that further research is to be done to identify optimal approaches to displaying the uncertainty connected to the communicated information.

Originality/value

This paper offers a basis for research to understand the challenges industry faces when competitively bidding for service contracts. This can be used to develop novel approaches in supporting the decision maker such as a model that presents the probability of winning in comparison to the probability of making a profit.

Details

Journal of Manufacturing Technology Management, vol. 24 no. 7
Type: Research Article
ISSN: 1741-038X

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Abstract

Details

Review of Marketing Research
Type: Book
ISBN: 978-0-85724-726-1

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Article
Publication date: 2 August 2013

Stephen Rosenbaum

This article aims to explore how knowledge-intensive service firms design inter-firm contracts to govern the exchange of highly intangible and inseparable knowledge under…

Abstract

Purpose

This article aims to explore how knowledge-intensive service firms design inter-firm contracts to govern the exchange of highly intangible and inseparable knowledge under varying degrees of property right protection.

Design/methodology/approach

This research uses a multiple case study of management consulting firms domiciled in Serbia and Albania.

Findings

Firms domiciled in relatively weak property right settings prefer more informal contracts, whereas those in settings of superior property right protection favour greater formality as a means of encouraging the creation and sharing of knowledge, whilst concurrently mitigating the threat of opportunism.

Research limitations/implications

This article contributes new knowledge with regard to the design of inter-firm contracts to govern the sharing of highly intangible and inseparable knowledge. In terms of theory, it employs a transaction cost economics approach in which inter-firm contracts are decomposed into five requisite provisions, which are then related to the degree of formality.

Practical implications

Knowledge-intensive service firm managers should assess the degree of property right protection when considering the degree of formality of inter-firm contracts.

Originality/value

The study constitutes the first attempt to empirically examine how knowledge-intensive service firms craft contracts in different property right settings. With the burgeoning number of cross-border collaborative partnerships between such firms, it offers important insights into the choice of governance mechanism in different property right protection settings.

Details

Journal of Services Marketing, vol. 27 no. 5
Type: Research Article
ISSN: 0887-6045

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Article
Publication date: 27 October 2020

Mengyuan Cheng, Guoliang Liu and Yongshun Xu

The role of conventional contracts in achieving sustainability goals in public–private partnership (PPP) projects has been questioned. From the multifunctional perspective…

Abstract

Purpose

The role of conventional contracts in achieving sustainability goals in public–private partnership (PPP) projects has been questioned. From the multifunctional perspective of contract theory, joint-contract functions that combine contractual control, coordination and adaptation may be a potential approach for improving PPP project sustainability performance. This research intends to investigate the link between the joint-contract functions and PPP project sustainability performance, and their underlying mechanism, by analyzing the mediating role of relationship quality and moderating roles of environmental uncertainty and behavioral uncertainty.

Design/methodology/approach

Based on 170 valid survey data collected from the Chinese PPP professionals, partial least squares structural equation modeling (PLS-SEM) was adopted to test the hypothesis.

Findings

The results reveal that joint-contract functions are positively associated with the PPP project sustainability performance. This relationship is strengthened by environmental and behavioral uncertainty. Moreover, the relationship between the joint-contract functions and PPP project sustainability performance is mediated by relationship quality.

Research limitations/implications

This research extends contract governance theory and sustainability research in PPP projects. The research implications are as follows: (1) joint-contract functions are a second-order construct consisting of three first-order dimensions: control, coordination and adaptation and are positively associated with PPP project sustainability performance; (2) joint-contract functions enhance the sustainable benefits of PPP projects during environmental uncertainty and behavioral uncertainty; (3) informal relationships are a critical bridge connecting formal institutions with the sustainability performance of PPP projects.

Practical implications

In general, these findings guide project participants who aim to achieve sustainable outcomes in PPP projects. (1) Project participants should consider the process of contract design and sign contracts that focus on joint-contract functions. (2) Project participants should investigate the degree of uncertainty of a PPP project before designing contracts, and design the contracts with corresponding complexity. (3) Project participants should work to enhance PPP sustainable benefits by improving the relationship between partners, such as encouraging mutual trust and joint problem-solving.

Originality/value

This research verifies the relationship between joint-contract functions and PPP project sustainability performance, and the boundary and intermediary conditions between them.

Details

Engineering, Construction and Architectural Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0969-9988

Keywords

Content available
Article
Publication date: 16 August 2021

Barbara Orser, Xiaolu (Diane) Liao, Allan L. Riding, Quang Duong and Jerome Catimel

This paper aims to inform strategies to enhance public procurement opportunities for women-owned small- and medium-sized enterprises (SMEs). To do so, the study examines…

Abstract

Purpose

This paper aims to inform strategies to enhance public procurement opportunities for women-owned small- and medium-sized enterprises (SMEs). To do so, the study examines two research questions: To what extent are women-owned enterprises under-represented among SME suppliers to government; and Do barriers to public procurement – as perceived by SME owners – differ across gender?

Design/methodology/approach

The study draws on the resource-based view (RBV) of the firm and on theories of role congruity and social feminism to develop the study’s hypotheses. Empirical analyses rely on comparisons of a sample of 1,021 SMEs that had been suppliers to government and 9,376 employer firms that had not been suppliers to government. Data were collected by Statistics Canada and are nationally representative. Logistic regression analysis was used to control for systemic firm and owner differences.

Findings

Controlling firm and owner attributes, majority women-owned businesses were underrepresented as SME suppliers to government in some, but not all sectors. Women-owned SMEs in Wholesale and Retail and in Other Services were, ceteris paribus, half as likely as to be government suppliers as counterpart SMEs owned by men. Among Goods Producers and for Professional, Scientific and Technical Services SMEs, there were no significant gender differences in the propensity to supply the federal government. “Complexity of the contracting process” and “difficulty finding contract opportunities” were the obstacles to contracting cited most frequently.

Research limitations/implications

The limitations of using secondary analyses of data are well documented and apply here. The findings reflect only the perspectives of “successful bidders” and do not capture SMEs that submitted bids but were not successful. Furthermore, the survey did not include questions about sub-contractor enterprises, data that would likely provide even more insights about SMEs in government supply chains. Accordingly, the study could not address sub-contracting strategies to increase the number of women-owned businesses on government contracts. Statistics Canada’s privacy protocols also limited the extent to which the research team could examine sub-groups of small business owners, such as visible minorities and Indigenous/Aboriginal persons. It is also notable that much of the SME literature, as well as this study, define gender as a dichotomous (women/female, men/male) attribute. Comparing women/female and men/males implicitly assumes within group homogeneity. Future research should use a more inclusive definition of gender. Research is also required to inform about the obstacles to government procurement among the population of SMEs that were unsuccessful in their bids.

Practical implications

The study provides benchmarks on, and directions to, enhance the participation of women-owned SMEs or enterprises in public procurement. Strategies to support women-owned small businesses that comply with United Nations Sustainable Development Goals are advanced.

Social implications

The study offers insights to reconcile economic efficiency and social (gender equity) policy goals in the context of public procurement. The “policy-practice divides” in public procurement and women’s enterprise policies are discussed.

Originality/value

The study is among the first to use a feminist lens to examine the associations between gender of SME ownership and public procurement, while controlling for other salient owner and firm attributes.

Details

Journal of Public Procurement, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1535-0118

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