Contracts and Trust in Alliances

Contracts and Trust in Alliances

Discovering, Creating and Appropriating Value

Paul W.L. Vlaar

Paul Vlaar contends that strategic alliances and other forms of cooperation, such as buyer–supplier relationships, joint ventures and offshoring initiatives, increasingly stand at the basis of competitive advantage. Although contracts and trust play a crucial role in such relationships, prior studies on both governance solutions are generally confined to single theories, paradigms and viewpoints. Drawing on an in-depth case study, survey data and conceptual developments, the author advances a more integrative framework. He probes issues such as: • the tension between the need and the ability to contract • trust and contracts as co-evolving and self-reinforcing phenomena • contractual functions other than coordination and control • dialectical tensions stemming from contract application • standardization of contracting practices. By exploring these topics, the book offers novel perspectives on the role of trust in interorganizational relationships, shifting our attention and creation to the discovery of value by collaborating partners.

Chapter 9: Discussion and Conclusion

Paul W.L. Vlaar

Subjects: business and management, organisational behaviour, strategic management


INTRODUCTION This manuscript started with the observation that, although interorganizational cooperation has become an important phenomenon in today’s business environment, it is also marked by many problems. I then advanced the view that these issues may be circumvented, mitigated or alleviated by adopting appropriate governance mechanisms. This requires better understandings of the forces shaping collaborative agreements (Olk and Elvira, 2001; Osborn and Hagedoorn, 1997) and of the processes that are used to design and manage interorganizational relationships. Such understandings would not only assist researchers in moving beyond a sheer focus on the coordination and control functions of formal governance and the antecedents– governance–performance framework (see Figure 1.5), but it would also contribute to improved managerial practices and a reduction in cooperative failures (Barringer and Harrison, 2000). In particular, I observed that several authors have pointed at the significance of governance mechanisms and processes for interorganizational performance (e.g. Grandori and Soda, 1995; Masten and Saussier, 2002; Reuer, 1999; Sampson, 2004a; Zollo and Singh, 2004). Others have called for new inquiries into the skills, mechanisms and processes associated with the governance of interorganizational relationships (Colombo, 2003; Thatcher, 2004; Wright and Lockett, 2003). Some researchers have noted, for example, that ‘an integrated perspective that simultaneously considers the relationships between task characteristics, the contractual and procedural dimensions of inter-firm relationships and the outcome of the relation’ deserves more attention (Sobrero and Schrader, 1998: 601; see also Faems et al., 2007). Others have put forward that ‘the next step should be a...

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