Unpacking Contract Capabilities: Shaping Behavior by Implementing Appropriate Contract Framing
25 Pages Posted: 25 Feb 2009
Date Written: February 25, 2009
Contract design capabilities are extended in this paper by examining firms' differential abilities to implement appropriate framing in exchange contracts. Firms must first determine whether a prevention or promotion frame produces appropriate behavior for the task characteristics. Then, to implement this framing in task-specific clauses, they must align negotiators frames with those suggested by the task characteristics. This process is further complicated because firms must also align the framing of non-task clauses with the frame induced by the firm's own culture. Because this process is so complex, a firm that excels at implementing appropriate contract framing enjoys increased exchange success and sustained competitive advantage, as a result of this distinct contract design capability.
Keywords: Interfirm contracts, Capabilities, Framing, Regulatory Focus Theory
Suggested Citation: Suggested Citation