Hermeneutical Injustice, Contract Law, and Global Value Chains

Global value chains (GVCs) resist dominant contract framing, because presumptions about contract’s bilateral structure and party autonomy fail to capture the complex interconnections between private exchange relations. Contract law seems to obscure, rather than capture, the ways in which the relationships and experiences of various actors in GVCs are linked. This article argues that, in doing so, contract law contributes to systemic hermeneutical injustice. Systemic hermeneutical injustice captures how shared interpretative resources can render those in disadvantaged positions of social power unable to make intelligible that what is in their interest to render intelligible. The article’s primary aim is to show how this form of injustice bears on contract law and how it can function as an independent normative constraint on the institution of contract law.

TEORI PROSPEK DAN KONSERVATISMA LAPORAN KEUANGAN

This research was aimed to test the influence of incentive contract framing (framing effect) and class action (certainty effect) to financial reporting decision. Beside that, this research also investigated the interaction influence between framing effect and certainty effect. This research used laboratorium experiment design 2x2 between subjects. Experiment subjects were business students (MM and Maksi) Gadjah Mada University who were acted as management (CFO) with certain criteria. Research results showed that there was an influence of incentive contract framing and class action (litigation) to management’s (CFO) financial reporting decision. Subjects who were the insentive contract framed positively, tended to prepare more conservative financial statement. Vice versa, subjects who were the incentive contract framed negatively, tended to become risk taker, so that management (financial director) tended to prepare less conservative financial statement. But, the interaction result between incentive contract framing variable with class action (litigation) showed insignificant result. measurement problems are thought to affect these insignificant. Future studies are expected to give more attention to these problems.

Contract Framing, Expected Disappointment, and Effort: The Moderating Role of External Locus of Control

ABSTRACT Understanding when incentive contracts are effective is important for organizations. Prior research documents that while employees generally prefer to work under contracts that include bonuses, employees exert more effort under economically equivalent penalty contracts. One reason for this is that penalties cause employees to experience greater expected disappointment than do bonuses. This study extends prior research in this area by documenting that external locus of control (ELOC), an individual characteristic, helps explain how different employees respond to incentive contracts. We predict and find that, compared to individuals with higher ELOC, individuals with lower ELOC are less susceptible to contract frame-induced differences in expected disappointment and not as motivated by penalty contracts compared to bonus contracts. This finding extends theory on contract framing and has important implications for organizations. Our results suggest that penalty provisions are most efficacious at lower ranks in the organization where higher ELOC is more common.