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An empirical investigation of interorganizational opportunism and contracting mechanisms

Author

Listed:
  • Fabrice Lumineau

    (university of technology - The University of Sydney)

  • Bertrand Quélin

    (GREGH - Groupement de Recherche et d'Etudes en Gestion à HEC - HEC Paris - Ecole des Hautes Etudes Commerciales - CNRS - Centre National de la Recherche Scientifique)

Abstract

This study investigates contracting mechanisms in situations of opportunistic disputes between organizations. The authors specifically explore the relationships between the formal versus informal nature of opportunism and the formal versus informal nature of contractual governance. They use a unique data set of 102 buyer-supplier disputes to explore in depth different types of opportunism - that is, strong form versus weak form opportunism - and different types of contracting mechanisms - that is, the controlling and coordinating functions of formal contracts and the cooperative and competitive sides of relational contracts. The authors' detailed empirical analysis suggests distinct relationships between the different contracting mechanisms, the different types of opportunism, and the level of legal fees necessary to deal with the dispute. From these findings the authors derive implications for research on the role of contractual mechanisms in dealing with interorganizational opportunism.

Suggested Citation

  • Fabrice Lumineau & Bertrand Quélin, 2012. "An empirical investigation of interorganizational opportunism and contracting mechanisms," Post-Print hal-00668599, HAL.
    • Handle: RePEc:hal:journl:hal-00668599
    DOI: 10.1177/1476127011434798
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    Citations

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    Cited by:

    1. Dayashankar Maurya & Amit Srivastava, 2022. "Controlling Partner Opportunism in Cross-Sectoral Alliance: Dynamics of Governance Flexibility," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 23(1), pages 15-28, December.
    2. Latusek, Dominika & Vlaar, Paul W.L., 2018. "Uncertainty in interorganizational collaboration and the dynamics of trust: A qualitative study," European Management Journal, Elsevier, vol. 36(1), pages 12-27.
    3. George Hendrikse & Patrick Hippmann & Josef Windsperger, 2015. "Trust, transaction costs and contractual incompleteness in franchising," Small Business Economics, Springer, vol. 44(4), pages 867-888, April.
    4. Nuno Oliveira & Fabrice Lumineau, 2017. "How Coordination Trajectories Influence the Performance of Interorganizational Project Networks," Organization Science, INFORMS, vol. 28(6), pages 1029-1060, December.
    5. Anna Minà & Giovanni Battista Dagnino & Gianluca Vagnani, 2020. "An interpretive framework of the interplay of competition and cooperation," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 24(1), pages 1-35, March.
    6. Zhang, Lihan & Gao, Yan & Lu, Wenxue & Guo, Wenqian, 2023. "The influence of conflict event strength on interorganizational cooperation: Moderating roles of contractual complexity and trust," Journal of Business Research, Elsevier, vol. 159(C).
    7. Selma Kadic-Maglajlic & Claude Obadia & Irena Vida & Matthew J. Robson, 2023. "Moral Categorization of Opportunists in Cross-Border Interfirm Relationships," Journal of Business Ethics, Springer, vol. 188(2), pages 221-238, November.
    8. Yilin Yin & Qing Lin & Wanyi Xiao & Hang Yin, 2020. "Impacts of Risk Allocation on Contractors’ Opportunistic Behavior: The Moderating Effect of Trust and Control," Sustainability, MDPI, vol. 12(22), pages 1-16, November.
    9. Oliver Schilke & Karen S. Cook, 2015. "Sources of alliance partner trustworthiness: Integrating calculative and relational perspectives," Strategic Management Journal, Wiley Blackwell, vol. 36(2), pages 276-297, February.
    10. van der Valk, Wendy & Lumineau, Fabrice & Wang, Wenqian, 2019. "Research on contracting in supply chain management and related disciplines: A synthesis of scholarly recommendations and a discussion of future opportunities," Other publications TiSEM 55901a88-7fc5-4808-a47a-e, Tilburg University, School of Economics and Management.
    11. Zhao, Danyang & Wang, Longwei & Gu, Flora F., 2021. "Reconsidering network embeddedness: Effects on different forms of opportunism," Journal of Business Research, Elsevier, vol. 131(C), pages 12-24.
    12. Andaç T. Arıkan, 2020. "Opportunism is in the Eye of the Beholder: Antecedents of Subjective Opportunism Judgments," Journal of Business Ethics, Springer, vol. 161(3), pages 573-589, January.
    13. Jianbo Zhu & Miao Fang & Qianqian Shi & Peng Wang & Qian Li, 2018. "Contractor Cooperation Mechanism and Evolution of the Green Supply Chain in Mega Projects," Sustainability, MDPI, vol. 10(11), pages 1-15, November.
    14. Yongcheng Fu & Yongqiang Chen & Shuibo Zhang & Wenqian Wang, 2015. "Promoting cooperation in construction projects: an integrated approach of contractual incentive and trust," Construction Management and Economics, Taylor & Francis Journals, vol. 33(8), pages 653-670, August.
    15. Lumineau, Fabrice & Henderson, James, 2012. "The influence of relational experience and contractual governance on the negotiation strategy in buyer-supplier disputes," MPRA Paper 38510, University Library of Munich, Germany.
    16. Luo, Yadong & Liu, Yi & Yang, Qian & Maksimov, Vladislav & Hou, Jigang, 2015. "Improving performance and reducing cost in buyer–supplier relationships: The role of justice in curtailing opportunism," Journal of Business Research, Elsevier, vol. 68(3), pages 607-615.
    17. Yin, Qiaoyi & Song, Dian & Lai, Fujun & Collins, Brian J. & Dogru, Ali K., 2023. "Customizing governance mechanisms to reduce opportunism in buyer–supplier relationships in the digital economy," Technological Forecasting and Social Change, Elsevier, vol. 190(C).
    18. Alex Scott & Christopher W. Craighead & Chris Parker, 2020. "Now You See It, Now You Don't: Explicit Contract Benefits In Extralegal Exchanges," Production and Operations Management, Production and Operations Management Society, vol. 29(6), pages 1467-1486, June.
    19. Tran, Phuong Nguyen Thu & Gorton, Matthew & Lemke, Fred, 2021. "When supplier development initiatives fail: Identifying the causes of opportunism and unexpected outcomes," Journal of Business Research, Elsevier, vol. 127(C), pages 277-289.
    20. Guoli Feng & Shengyue Hao & Xiaoguang Li, 2022. "Project Sustainability and Public-Private Partnership: The Role of Government Relation Orientation and Project Governance," Sustainability, MDPI, vol. 14(8), pages 1-20, April.
    21. Cheng, Lu-Yun (Vivian) & Cai, Huifen (Helen) & Jin, Zhongqi, 2016. "The effect of parental opportunism, IJV's autonomy and tacit knowledge on IJV instability: A comparison of multi-variate regression and fuzzy-set qualitative comparative analysis," Journal of Business Research, Elsevier, vol. 69(11), pages 5203-5209.
    22. Yeo Amy Chu May & Lai Marcus Ee Ken, 2020. "The Influence of B2B Relationship Quality on Opportunism and Firm Performance," HOLISTICA – Journal of Business and Public Administration, Sciendo, vol. 11(3), pages 59-87, December.
    23. Nidthida Lin, 2020. "Designing Global Sourcing Strategy for Cost Savings and Innovation: A Configurational Approach," Management International Review, Springer, vol. 60(5), pages 723-753, October.

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    More about this item

    Keywords

    formal contract; legal fees; opportunism; relational contract; vertical relationship;
    All these keywords.

    JEL classification:

    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • K12 - Law and Economics - - Basic Areas of Law - - - Contract Law
    • K1 - Law and Economics - - Basic Areas of Law
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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