IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/38360.html
   My bibliography  Save this paper

An organizational learning perspective on contract design

Author

Listed:
  • Lumineau, Fabrice
  • Frechet, Marc
  • Puthod, Dominique

Abstract

The contracting process is a crucial step in alliance development and its success. However, the existing literature reveals surprisingly little investigation into how organizational learning relates to the process of contract making. We therefore conducted an in-depth longitudinal study of the alliance contracting process in the animated film industry. First, our findings suggest that during the contracting process, firms can learn about the way to deal with the contracting process, about themselves and their partner, and about the transaction features. Second, the case analysis indicates a combination of experiential, vicarious, and inferential learning mechanisms. Combining these insights into the objects and the mechanisms of learning during the contracting process, we discuss how contracting and learning processes are related and analyze the role of the contracting process in supporting organizational learning. The findings show that the drafting of contractual clauses fosters learning and, in turn, this learning triggers new contractual negotiations. Hence we suggest that the alignment between transaction features and the choice of contractual governance results from learning during the contracting process. We then propose avenues for future research.

Suggested Citation

  • Lumineau, Fabrice & Frechet, Marc & Puthod, Dominique, 2011. "An organizational learning perspective on contract design," MPRA Paper 38360, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:38360
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/38360/1/MPRA_paper_38360.pdf
    File Function: original version
    Download Restriction: no

    References listed on IDEAS

    as
    1. Malhotra, Deepak & Lumineau, Fabrice, 2011. "Trust and collaboration in the aftermath of conflict: the effects of contract structure," MPRA Paper 38358, University Library of Munich, Germany.
    2. Grossman, Sanford J & Hart, Oliver D, 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 691-719, August.
    3. Dekker, Henri C., 2004. "Control of inter-organizational relationships: evidence on appropriation concerns and coordination requirements," Accounting, Organizations and Society, Elsevier, vol. 29(1), pages 27-49, January.
    4. Keith J. Crocker & Scott E. Masten, 1988. "Mitigating Contractual Hazards: Unilateral Options and Contract Length," RAND Journal of Economics, The RAND Corporation, vol. 19(3), pages 327-343, Autumn.
    5. Isabelle Huault & V. Perret & S. Charreire-Petit, 2007. "Management," Post-Print halshs-00337676, HAL.
    6. Foss, Nicolai J., 2003. "Bounded rationality in the economics of organization: "Much cited and little used"," Journal of Economic Psychology, Elsevier, vol. 24(2), pages 245-264, April.
    7. Henri C. Dekker & Alexandra Van den Abbeele, 2010. "Organizational Learning and Interfirm Control: The Effects of Partner Search and Prior Exchange Experiences," Organization Science, INFORMS, vol. 21(6), pages 1233-1250, December.
    8. Michael D. Ryall & Rachelle C. Sampson, 2009. "Formal Contracts in the Presence of Relational Enforcement Mechanisms: Evidence from Technology Development Projects," Management Science, INFORMS, vol. 55(6), pages 906-925, June.
    9. Lumineau, Fabrice & Malhotra, Deepak, 2011. "Shadow of the contract: how contract structure shapes inter-firm dispute resolution," MPRA Paper 38359, University Library of Munich, Germany.
    10. Vlaar, P.W.L. & van den Bosch, F.A.J. & Volberda, H.W., 2006. "On the Evolution of Trust, Distrust, and Formal Coordination and Control in Interorganizational Relationships: Towards an Integrative Framework," ERIM Report Series Research in Management ERS-2006-035-STR, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    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. Fabrice Lumineau & Bertrand Quélin, 2012. "An empirical investigation of interorganizational opportunism and contracting mechanisms," Post-Print hal-00668599, HAL.
    2. Africa Ariño & Jeffrey J. Reuer & Kyle J. Mayer & Juan Jané, 2014. "Contracts, Negotiation, and Learning: An Examination of Termination Provisions," Journal of Management Studies, Wiley Blackwell, vol. 51(3), pages 379-405, May.
    3. 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.
    4. Martijn Hurk, 2016. "Learning to contract in public–private partnerships for road infrastructure: recent experiences in Belgium," Policy Sciences, Springer;Society of Policy Sciences, vol. 49(3), pages 309-333, September.
    5. Spencer Elizabeth Crawford, 2015. "Revising the Role of Contract in Development Cooperation," The Law and Development Review, De Gruyter, vol. 8(1), pages 147-186, June.

    More about this item

    Keywords

    Contracting process; Strategic alliances; Organizational learning; Longitudinal case study;

    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
    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:38360. See general information about how to correct material in RePEc.

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

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.