Pre-contractual relational governance for public–private partnerships: how can ex-ante relational governance help formal contracting in smart city outsourcing projects?

In the literature on relational governance, it is often assumed that relational governance emerges primarily after formal contracting and acts as a functional supplement to a formal contract. In this article, we show that especially facing deep uncertainties, relational governance can emerge before the start of formal partnerships, in the form of trust-building, exchanging resources, and fostering flexibility. Based on a case study of a smart city outsourcing project, this article introduces a forward-extended framework of relational governance that captures the pre-contractual dimensions of relationship cultivation and their role in facilitating formal contracting. The study finds that pre-contractual relational governance facilitates formal contracting by reducing substantive, evaluative, technological, and procedural uncertainties in the project and helps the partners to design an elaborative contract, undergo an easy negotiation, adopt short-term contracts, and use simple monitoring and evaluation methods. The article thus argues that only understanding post-contractual relational governance is insufficient for exploring the relation between formal contracting and relational governance; facing deep uncertainties, it is necessary to understand how public and private parties develop their pre-contractual relationship and reduce the uncertainties before a formal contract can be signed. Points for practitioners Practitioners should realize that there is much room for relational governance in the pre-contractual phase of PPP projects when the projects are rife with various uncertainties. Public and private parties can take measures to build trust, foster flexibility, and create interdependence before a formal contract is signed. These ex-ante relational governance measures can facilitate formal contracting by reducing the various uncertainties, making a formal contract designable, making negotiation smooth and easy, and reducing the need for contract supervision.

Whither Formal Contracts?

To measure the benefits of formal contract enforcement for society, I create a market with merchants and buyers, in which buyers can choose whether to buy, and whether to pay. A set of multiple “state‐favored” ethnic groups control the state. I experimentally vary whether formal contracts are required and the composition of buyer‐merchant pairs. The design separately identifies the effect of the contracts on the buyers' incentive to pay and on their incentive to buy. I document two ways in which society limits the benefits of contracts. First, contracts reduce buyer cheating, thus increasing merchants' profits, if, and only if, the merchant is state‐favored. Buyers' beliefs suggest that the merchants can enforce the contracts if, and only if, the merchant is state‐favored. Second, holding constant whether the pair is state‐favored, contracts only influence buyer choices when the buyer and the merchant belong to two, different, state‐favored ethnic groups. Buyers' choices and beliefs confirm that, in that case, the contracts are expected to be enforceable, but they have no effect on buyers' choices because reputation already governs the incentives to cheat within groups. The findings temper the view of the state as independent from society, offer a rationale for why contracts are not adopted, and nuance the notion of state weakness.

Legal Regulations of Flexible Working in Jordan

The flexible working system in Jordan for the year 2017 represents a qualitative leap in the field of work, for providing an easy work for the workers, especially the working woman, which enables her to enter the labor market. However, this system has many conditions that must be met in flexible working contract in terms of a written agreement between the worker and the employer and the time limit and specified some categories that are subject to flexible working.The flexible working system collides with some general principles of the labor law, such as the legal subordination, and the disciplinary authority of the employer in imposition of disciplinary sanctions in the event that the worker violates the flexible working rules.The study concluded with a number of results, the most important is that the flexible working contract is a formal contract in which the writing is required. The Jordanian legislator ruled out the event from the workers who are subject to the flexible working system.The most important recommendations were, It is necessary explicitly state that the rights of the worker may be established in the flexible working contract by all means of legal proofs. If the contract was not issued in writing, it is necessary to stipulate that the wage might be determined in the flexible working contract on a daily or weekly basis.

Purchasing in service triads: the influence of contracting on contract management

Purpose The purpose of this paper is to investigate purchasing practices in service triads by exploring the link between ex ante contracting and ex post contract management and how these practices influence the satisfaction of buyers and suppliers (in concessionary arrangements) with their relationship in terms of meeting the needs of the buyer’s customers. Design/methodology/approach An in-depth exploratory multiple case study was carried out in a shop-in-shop context. Multi-method and multi-source data collection included interviews, documents and the contracts between buyer and supplier, providing evidence of the formal and relational structures in both the contracting and contract management stages. Findings The case findings provide evidence that behavioural standards established in a social contract are important prerequisites for the establishment and subsequent management of a formal contract. Second, this study shows that, when outsourcing core services in a service triad, a combination of performance-oriented and behavioural-oriented contract terms, covering a mix of topics related to both the customer-experience and to buyer-supplier-oriented aspects, contribute to aligning the buyer’s, suppliers’ and customers’ interests. The main findings are presented in a causal model and formulated as propositions. Originality/value This paper is one of the first studies to explore how core services are outsourced in a service triad. It provides evidence that the social contract between buyer and supplier influences the establishment of the formal contract as well as contract management, and a mix of contract topics, some related to the customers’ experience and others purely buyer-supplier oriented, contribute to the alignment of buyer’s, suppliers’ and customers’ interests.