IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/24028.html
   My bibliography  Save this paper

Relational contract theory and management contracts: A paradigm for the application of the Theory of the Norms

Author

Listed:
  • Diathesopoulos, Michael

Abstract

This paper examines management contracts as a paradigm for the application of relational contracts theory and especially of the theory of contractual and relational norms. This theory, deriving from Macauley's implications, but structured and analysed by I.R. MacNeil gives us a framework for the explanation and understanding of contractual obligations and business relations' rules and practice. After presenting the key literature about the norms theory and especially defining the content of MacNeil's norms, we define management contracts as relations, characterised by a high relational element and we explain why, investigating all their features, which make them a suitable object for an application of norms theory. Then, we select a list of the core obligations for the recipient, provider and both parties in such a relation and we analyse each obligation according to MacNeil's model of norms. Specifically, we test the application of specific relative norms to each obligation and we examine which norms appear in which obligation. Finally, we concentrate our results and we result to our conclusions, based on a matrix showing the strength, breadth and depth of the application of each norm, while we also compare our results to those coming up from the application of a shorter comprehensive model of norms (Austen-Baker's model). The above analysis and tests provide us valuable results about the application, significance and practical value of the theory of the norms, about the significance of each norm for business relations and finally about the potential to present a more useful and comprehensive model of norms.

Suggested Citation

  • Diathesopoulos, Michael, 2010. "Relational contract theory and management contracts: A paradigm for the application of the Theory of the Norms," MPRA Paper 24028, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:24028
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/24028/1/MPRA_paper_24028.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Megginson, William Leon, 2005. "The Financial Economics of Privatization," OUP Catalogue, Oxford University Press, number 9780195150629, Decembrie.
    2. Tatiana Nenova & Catherine Hickey, 2006. "Self-Dealing : Sneaking Corporate Value through the Back Door," World Bank Publications - Reports 11176, The World Bank Group.
    3. Bernstein, Lisa, 1992. "Opting Out of the Legal System: Extralegal Contractual Relations in the Diamond Industry," The Journal of Legal Studies, University of Chicago Press, vol. 21(1), pages 115-157, January.
    4. Morten Hviid, 1998. "Relational Contracts, Repeated Interaction and Contract Modification," European Journal of Law and Economics, Springer, vol. 5(2), pages 179-194, March.
    5. Vincent-Jones, Peter, 2006. "The New Public Contracting: Regulation, Responsiveness, Relationality," OUP Catalogue, Oxford University Press, number 9780199291274, Decembrie.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kambale Mirembe, Omer, 2013. "Customs reforms in eastern Congo (DRC): Between norms and practices," IOB Working Papers 2013.04, Universiteit Antwerpen, Institute of Development Policy (IOB).
    2. Gabriel Jobidon & Pierre Lemieux & Robert Beauregard, 2019. "Comparison of Quebec’s Project Delivery Methods: Relational Contract Law and Differences in Contractual Language," Laws, MDPI, vol. 8(2), pages 1-75, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Daron Acemoglu & Matthew O. Jackson, 2017. "Social Norms and the Enforcement of Laws," Journal of the European Economic Association, European Economic Association, vol. 15(2), pages 245-295.
    2. Sanchez-Pages Santiago & Straub Stéphane, 2010. "The Emergence of Institutions," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-38, September.
    3. Atul Gupta & Kristina Minnick, 2022. "Social capital and managerial opportunism: Evidence from option backdating," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 45(3), pages 579-605, September.
    4. Benson Bruce L., 2000. "Jurisdictional Choice in International Trade: Implications for Lex Cybernatoria," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 10(1), pages 1-30, March.
    5. Justus Baron & Jorge Contreras & Martin Husovec & Pierre Larouche, 2019. "Making the Rules: The Governance of Standard Development Organizations and their Policies on Intellectual Property Rights," JRC Research Reports JRC115004, Joint Research Centre (Seville site).
    6. Paul Walker, 2016. "From complete to incomplete (contracts): A survey of the mainstream approach to the theory of privatisation," New Zealand Economic Papers, Taylor & Francis Journals, vol. 50(2), pages 212-229, August.
    7. Cooter, Robert D., 1997. "Commodifying Liability," Berkeley Olin Program in Law & Economics, Working Paper Series qt9pq4m8ts, Berkeley Olin Program in Law & Economics.
    8. Peter Leeson, 2014. "Pirates, prisoners, and preliterates: anarchic context and the private enforcement of law," European Journal of Law and Economics, Springer, vol. 37(3), pages 365-379, June.
    9. Scott Baker & Pak Yee Lee & Claudio Mezzetti, 2011. "Intellectual property disclosure as threat," International Journal of Economic Theory, The International Society for Economic Theory, vol. 7(1), pages 21-38, March.
    10. Coyne, Christopher J. & Mathers, Rachel L., 2011. "Rituals: An economic interpretation," Journal of Economic Behavior & Organization, Elsevier, vol. 78(1), pages 74-84.
    11. Mukhiddin Jumaev & Prof. Dr. Dileep Kumar. M. & Jalal R. M. Hanaysha, 2012. "Impact Of Relationship Marketing On Customer Loyalty In The Banking Sector," Far East Journal of Psychology and Business, Far East Research Centre, vol. 6(4), pages 36-55, March.
    12. Caselli, Stefano & Gatti, Stefano & Chiarella, Carlo & Gigante, Gimede & Negri, Giulia, 2023. "Do shareholders really matter for firm performance? Evidence from the ownership characteristics of Italian listed companies," International Review of Financial Analysis, Elsevier, vol. 86(C).
    13. Fernando Gomez, 2008. "The Charms of Vagueness in Contracts. Comment," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 164(1), pages 99-105, March.
    14. Mark Koyama, 2014. "The law & economics of private prosecutions in industrial revolution England," Public Choice, Springer, vol. 159(1), pages 277-298, April.
    15. Peter T. Leeson, 2008. "How Important is State Enforcement for Trade?," American Law and Economics Review, Oxford University Press, vol. 10(1), pages 61-89.
    16. Jason Coupet & Abagail McWilliams, 2017. "Integrating Organizational Economics and Resource Dependence Theory to Explain the Persistence of Quasi Markets," Administrative Sciences, MDPI, vol. 7(3), pages 1-13, August.
    17. Roth, M. Garrett & Skarbek, David, 2014. "Prison Gangs and the Community Responsibility System," Review of Behavioral Economics, now publishers, vol. 1(3), pages 223-243, May.
    18. Edward Stringham & Peter Boettke, 2006. "The failings of legal centralism for helping stock markets in transition," Politická ekonomie, Prague University of Economics and Business, vol. 2006(1), pages 22-34.
    19. Kurt Annen, 2001. "Inclusive and Exclusive Social Capital in the Small-Firm Sector in Developing Countries," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 157(2), pages 319-330, June.
    20. Balmaceda, Felipe & Escobar, Juan F., 2017. "Trust in cohesive communities," Journal of Economic Theory, Elsevier, vol. 170(C), pages 289-318.

    More about this item

    Keywords

    Relational Contracts; Macneil; Management Contracts; Norms; Contracts Law; Fiduciary Duties; Directors Duties; Law and Economics; Umbrella Contracts; Interorganisational Trust; Business Cooperation; Reciprocity; Contractual Solidarity; Comprehensive Norms; Contractual Norms; Outsourcing Contracts; relational contracts theory; hotel management agreement;
    All these keywords.

    JEL classification:

    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • K00 - Law and Economics - - General - - - General (including Data Sources and Description)
    • K12 - Law and Economics - - Basic Areas of Law - - - Contract Law
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:24028. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.