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Antecedents of Intentionally Incomplete Inter-Firm Contracts

Schmalenbachs Zeitschrift für betriebswirtschaftliche Forschung volume 62, pages 133–157 (2010)Cite this article

Abstract

We investigate (1) whether frms deliberately write incomplete contracts, and (2) if so, under which conditions. a better understanding of this phenomenon is important, because research shows that incomplete contracts can yield higher results than fully specifed ones. p]We investigate these questions using the grounded theory methodology developed by Glaser and Strauss, and specifcally the Straussarian version. We conducted thirty-seven semi-structured in-depth interviews with executives from diferent industries who negotiate contracts. We found that, given a confdent view of the world, executives are willing to write incomplete inter-frm contracts under the following circumstances: a) they have a confdent attitude towards their environment, b) they trust their contracting partner, c) the power relationship between the companies is equal, and d) the value of the contract is relatively low, i.e., of minor strategic importance.

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Author information

Authors and Affiliations

  1. Institute for Management, People and Information, University of Passau, Deutschland

    Marina Fiedler

  2. Alvarez & Marsal, One Finsbury Circus, London EC2M 7EB, UK

    Carolin Blank

  3. Institute for Information, Organisation and Management, Ludwig-Maximilians-University Munich, UK

    Arnold Picot

Authors
  1. Marina Fiedler
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  2. Carolin Blank
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  3. Arnold Picot
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Corresponding author

Correspondence to Marina Fiedler.

Additional information

We would like to thank Oliver Baumann and two anonymous referees for helpful comments and suggestions.

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Fiedler, M., Blank, C. & Picot, A. Antecedents of Intentionally Incomplete Inter-Firm Contracts. Schmalenbachs Z betriebswirtsch Forsch 62 (Suppl 62), 133–157 (2010). https://doi.org/10.1007/BF03373750

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  • DOI: https://doi.org/10.1007/BF03373750

JEl-Classification

  • L14L24 D86 J41

Keywords

  • cooperation
  • grounded theory
  • trust
  • indefniteness
  • intentionally incomplete contracts
  • non-verifable contracts
  • power balance
  • qualitative research