Relational Contracts and Organizational Capabilities
Name
Gibbons_Relational contracts.pdf
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269.79 KB
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Adobe PDF
Checksum (MD5)
0acd57876da7c2a94af8e4c6b911f979
Author(s)
Gibbons, Robert S.
Henderson, Rebecca
Date Issued
December 2011
Journal
Organization Science
Publisher
Institute for Operations Research and the Management Sciences (INFORMS)
Citation
Gibbons, R., and R. Henderson. “Relational Contracts and Organizational Capabilities.” Organization Science 23.5 (2011): 1350–1364.
Version
Author's final manuscript
Abstract
A large literature identifies unique organizational capabilities as a potent source of competitive advantage, yet our knowledge of why capabilities fail to diffuse more rapidly—particularly in situations in which competitors apparently have strong incentives to adopt them and a well-developed understanding of how they work—remains incomplete. In this paper we suggest that competitively significant capabilities often rest on managerial practices that in turn rely on relational contracts (i.e., informal agreements sustained by the shadow of the future). We argue that one of the reasons these practices may be difficult to copy is that effective relational contracts must solve the twin problems of credibility and clarity and that although credibility might, in principle, be instantly acquired, clarity may take time to develop and may interact with credibility in complex ways so that relational contracts may often be difficult to build.
MIT Department
Sloan School of Management
Terms of Use
Creative Commons Attribution-Noncommercial-Share Alike 3.0
Persistent DSpace Link
DOI of Published Version
https://doi.org/10.1287/orsc.1110.0715
