Adaptability and Ongoing Contractual Term Specificity: Advancements and Theoretical Implications

Abstract

Studies on interfirm contractual relations have followed an incremental path. Recent developments have suggested a dichotomous property of contracts (i.e., contingent adaptability and ongoing contractual term specificity). Such a view is one step toward resolving most contradictory findings in studies related to contracting that have assumed a single dimension. This article takes a step toward minimizing the vacuum on contracting theory by adding a stronger theoretical base that takes into account the dichotomous property of contracts. Findings suggest some differences and similarities in these key contractual components.

KEYWORDS:

• contingent adaptability
• cultural distance
• environmental uncertainty
• ongoing contractual term specificity
• relational norms
• supplier foreigness