Transparency in Relational Contracts

Author(s):  
Matthias Fahn ◽  
Giorgio Zanarone
Keyword(s):  
2007 ◽  
Vol 158 (12) ◽  
pp. 406-416
Author(s):  
Jon Bingen Sande

The forest industry is riddled with exchange relationships. The parties to exchanges may have diverging goals and interests, but still depend upon each other due to non-redeployable specific assets. Formal and relational contracts may be used to deal with the resulting cooperation problems. This paper proposes a framework based on transaction cost economics and relational exchange theory, and examines to what extent empirical research has found formal and relational contracts to deal with three different governance problems. To that end, I review the results from 32 studies in a range of settings. These studies generally support the view that exchanges characterized by high degrees of specific assets should be supported by formal and relational contracts.


2016 ◽  
Vol 25 (5) ◽  
pp. 709-738 ◽  
Author(s):  
Lyra J Colfer ◽  
Carliss Y Baldwin

Abstract The mirroring hypothesis predicts that organizational ties within a project, firm, or group of firms (e.g., communication, collocation, employment) will correspond to the technical dependencies in the work being performed. This article presents a unified picture of mirroring in terms of theory, evidence, and exceptions. First, we formally define mirroring and argue that it is an approach to technical problem-solving that conserves scarce cognitive resources. We then review 142 empirical studies, divided by organizational form into (i) industry studies, (ii) firm studies, and (iii) studies of open collaborative projects. The industry and firm studies indicate that mirroring is a prevalent pattern but not universal. However, in technologically dynamic industries, partial mirroring, where knowledge boundaries are drawn more broadly than operational boundaries, is likely to be a superior strategy. Firms can also strategically ‘break the mirror’ by implementing modular partitions within their boundaries, or by building relational contracts across their boundaries. Finally, studies of open collaborative projects, most of which focused on software, were not supportive of the hypothesis. We argue that digital technologies make possible new modes of coordination that enable groups to deviate from classical mirroring as seen in firms.


2015 ◽  
Vol 69 (1) ◽  
pp. 51-62 ◽  
Author(s):  
James M. Malcomson

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