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    Rights statement: This is an Accepted Manuscript of an article published by Taylor & Francis in Production Planning and Control on 25/08/2016, available online: http://www.tandfonline.com/doi/full/10.1080/09537287.2016.1224397

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Contract functions in service exchange governance: evidence from logistics outsourcing

Research output: Contribution to journalJournal article

Published
<mark>Journal publication date</mark>15/09/2016
<mark>Journal</mark>Production Planning and Control
Issue number16
Volume27
Number of pages16
Pages (from-to)1373-1388
Publication statusPublished
Early online date25/08/16
Original languageEnglish

Abstract

The logistics outsourcing literature emphasises relational governance mechanisms and has underplayed the role of formal contractual provisions. This paper empirically examines the multiple functions that contracts perform in the governance of service exchanges. Codification, safeguarding, coordination and adaptation functions are linked to contract specification schedules, payment mechanisms, (early) termination rights, performance review and communication provisions, service variations clauses and renegotiation provisions. Contracts may also embody exchange- or partner-specific learning, albeit to a limited extent. Overall, the empirical findings lend support to the functional view of contracting. The functionality of contracts extends beyond safeguarding against opportunism and financial losses. In addition to offering economic and legal safeguards, contracts are used to coordinate and adapt service exchanges in the face of complexity and uncertainty.

Bibliographic note

This is an Accepted Manuscript of an article published by Taylor & Francis in Production Planning and Control on 25/08/2016, available online: http://www.tandfonline.com/doi/full/10.1080/09537287.2016.1224397