Th-SYM-1061-5 - “What Do You Expect?”: The Complexity Of Contracting In Supply Chains

Track:
Performance
What:
Symposium
When:
1 hour
Where:
E2.18
Discussion:
0
 
Performance and productivity
Performance
Th-SYM-1061-5
 “WHAT DO YOU EXPECT?”: THE COMPLEXITY OF CONTRACTING IN SUPPLY CHAINS
R. Millican 1,*
1University of Birmingham Business School, Birmingham, United Kingdom
 
Main Abstract Content: PURPOSE
Legal contracts are widely used to govern inter-organisational relationships in the supply chain context. Collaborative relationships may utilise additional relational governance structures (e.g., BS11000). This study investigated if psychological contract theory, more usually identified with the employer / employee relationship, can be applied to the inter-organisational context. Do complex psychological contracts provide the foundations of legal contracts, relationship agreements, collaboration and relational resilience?  
 
DESIGN/METHODOLOGY
The research was undertaken in a complex European supply chain in the pharmaceutical industry and consisted of semi-structured interviews with key decision makers. The interviews explored a 'critical incident’ that caused operational problems but did not breach legal contract.
 
RESULTS
The research found that psychological contracts exist in supply chains and their content can be identified. Expectations extend beyond even very specific legal contract terms. Breach of expectation can impact collaborative approach and contract continuity. Violation is personal and can impact personal wellbeing. Violation intensity can be influenced by position in the organisation.
 
LIMITATIONS
Uni directional (Buyers view only).
 
RESEARCH/PRACTICAL IMPLICATIONS
The findings suggest that implicit expectations can be made explicit. Potential practical applications include improved supply chain partner selection, more accurate collaborative relationship business case financials, improved legal contracting, reduced contractual confrontation and improved relationship resilience.
 
ORIGINALITY/VALUE
The application of the psychological contract metaphor to the collaborative supply chain context. The supply chain literature discusses matters of trust in professional relationships but does not differentiate the key elements of psychological contracts; expectation, promise, need and belief.
 
 
 
 
 

 
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