Trust and Collaboration in the Aftermath of Conflict: The Effects of Contract Structure

Academy of Management Journal, 2011, 54(5): 981-998

40 Pages Posted: 4 May 2011 Last revised: 4 Feb 2016

See all articles by Deepak K. Malhotra

Deepak K. Malhotra

Harvard Business School - Negotiation, Organizations & Markets Unit

Fabrice Lumineau

Purdue University

Date Written: May 2, 2011

Abstract

Leveraging a longitudinal dataset concerning 102 inter-firm disputes, we evaluate the effects of contract structure on trust and on the likelihood of continued collaboration. We theoretically refine and empirically extend prior research by (a) distinguishing between control and coordination functions of contracts, (b) separating goodwill-based and competence-based trust, and (c) evaluating the effects of contract structure on relational outcomes in the context of disputes. We find that control provisions increase competence-based trust, but reduce goodwill-based trust, resulting in a net decrease in the likelihood of continued collaboration. Coordination provisions increase competence-based trust, leading to an increased likelihood of continued collaboration.

Keywords: Conflict management, Trust, Contract, Collaboration

JEL Classification: D74, D21, L14, K40

Suggested Citation

Malhotra, Deepak K. and Lumineau, Fabrice, Trust and Collaboration in the Aftermath of Conflict: The Effects of Contract Structure (May 2, 2011). Academy of Management Journal, 2011, 54(5): 981-998. Available at SSRN: https://ssrn.com/abstract=1829795

Deepak K. Malhotra

Harvard Business School - Negotiation, Organizations & Markets Unit ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

Fabrice Lumineau (Contact Author)

Purdue University ( email )

610 Purdue Mall
West Lafayette, IN 47906
United States

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