The formation of buyer-supplier relationships: Detailed contract drafting and close partner selection

Stefan Wuyts, Inge Geyskens

Research output: Contribution to journalArticle

350 Scopus citations

Abstract

Firms face two strategic decisions when engaging in a new purchase transaction: the decision whether to draft a detailed contract and the decision whether to select a partner with which they share a close tie. The authors study how organizational culture affects these decisions and the effectiveness of these decisions in curtailing the partner's opportunistic behavior. The results suggest that organizational culture exerts an important but different influence on both decisions. Selecting a close partner shows a marked ability to hedge against partner opportunism, but beyond a certain point, it encourages the opportunism it is designed to discourage. Contracting becomes effective only when a nonclose partner is selected and when the focal relationship is embedded in a network of close mutual contacts.

Original languageEnglish (US)
Pages (from-to)103-117
Number of pages15
JournalJournal of Marketing
Volume69
Issue number4
DOIs
StatePublished - Oct 1 2005

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Marketing

Fingerprint Dive into the research topics of 'The formation of buyer-supplier relationships: Detailed contract drafting and close partner selection'. Together they form a unique fingerprint.

  • Cite this