Contracting in the New Economy: Using Relational Contracts to Boost Trust and Collaboration in Strategic Business Relationships

The business environment is constantly evolving, and organizations must shift to a mindset of shared goals and objectives built upon transparency and trust to mitigate risk. Contracting in the New Economy provides a practical and proven approach for creating effective relational contracts, empowering organizations to harness the value-creating potential of formal relational contracts.

Format: Hardback
Length: 310 pages
Publication date: 25 May 2021
Publisher: Springer Nature Switzerland AG

The business environment of today is a dynamic and ever-changing landscape, characterized by volatility, uncertainty, complexity, and ambiguity. Driven by digital transformation, globalization, and the relentless pursuit of value creation through innovation, organizations are compelled to adapt their approach to contracting. Traditional transactional contracts, which rely on predicting and mitigating every possible scenario, are no longer sufficient in this complex world. Instead, organizations must shift towards a mindset of shared goals and objectives, built upon a strong foundation of transparency and trust.

In strategic and complex partnerships, where the stakes are high and the risks are manifold, it is imperative to adopt a collaborative approach to contracting. This requires a shift from a mere transfer of risk to the weaker party to a shared responsibility for risk mitigation. Relational contracting, as advocated in this book, provides the framework and tools to achieve this goal.

Relational contracting is based on the belief that contracts are not just legal agreements but also social relationships. It recognizes that organizations are not isolated entities but are part of a larger network of stakeholders, including customers, suppliers, employees, and the community. Contracts, therefore, should be designed not only to protect the interests of each party but also to foster collaboration, trust, and long-term relationships.

The theoretical foundations of relational contracting are grounded in social psychology, organizational behavior, and game theory. The book provides a comprehensive overview of these principles, demonstrating how they can be applied in various contracting situations. It offers powerful examples of relational contracting principles in practice, showcasing how organizations have successfully leveraged contracts to achieve their business objectives while building strong and sustainable relationships with their stakeholders.

Furthermore, the authors provide a practical and proven approach for helping organizations put relational contracting theory into practice. The book offers a framework for approaching any contracting situation, enabling organizations to identify the best contract model for each specific circumstance. It also shares five proven steps that organizations can take to create effective relational contracts, fostering collaboration, trust, and long-term value creation.

This book is a valuable resource for anyone involved in developing contracts, including lawyers, in-house counsels, contract managers, C-level managers, and procurement officers. It empowers these professionals to create powerful cooperative alliances that will help them navigate the complexities of the business environment and achieve their strategic goals. By embracing the social side

In conclusion, the business environment of today is characterized by volatility, uncertainty, complexity, and ambiguity. Organizations must adapt their approach to contracting by shifting towards a mindset of shared goals and objectives, built upon a strong foundation of transparency and trust. Relational contracting provides the framework and tools to achieve this goal, enabling organizations to harness the value creating potential of formal relational contracts. By embracing the social side

In conclusion, the business environment of today is characterized by volatility, uncertainty, complexity, and ambiguity. Organizations must adapt their approach to contracting by shifting towards a mindset of shared goals and objectives, built upon a strong foundation of transparency and trust. Relational contracting provides the framework and tools to achieve this goal, enabling organizations to harness the value creating potential of formal relational contracts. By embracing the social side of contracting, organizations can foster collaboration, trust, and long-term value creation, leading to sustainable success in an increasingly competitive world.

Weight: 698g
Dimension: 164 x 242 x 30 (mm)
ISBN-13: 9783030650988
Edition number: 1st ed. 2021