Effects of performance-based contracts on innovation in inter-organizational relationships
Sumo, Regien A. F.
;
Valk, Wendy van der
;
Weele, Arjan J. van
;
Bode, Christoph

Document Type:
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Conference presentation
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Year of publication:
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2014
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Conference title:
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Academy of Management Annual Meeting
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Location of the conference venue:
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Philadelphia, Pa.
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Date of the conference:
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1.-5.8.2014
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Publication language:
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English
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Institution:
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Business School > Stiftungslehrstuhl für Procurement (Bode 2014-)
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Subject:
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650 Management
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Keywords (English):
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Innovation ; Contracts ; Inter-organizatinal relationships
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Abstract:
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Recent contributions suggest that a specific type of contract that has intentionally been left incomplete, the performance-based contract (PBC), fosters innovation in inter-organizational relationships. Studies on PBCs are mostly context-specific and have hardly empirically demonstrated their effects on performance outcomes. We study the effects of PBCs on innovation by means of a survey study. More specifically, we investigate how the two main features of PBCs, i.e., low term specificity and rewards being tied to performance (i.e., pay-for-performance), affect incremental and radical innovation using data on 106 inter-organizational relationships from the Dutch maintenance industry. We find that term specificity is inverse-U related to incremental innovation, but not related to radical innovation. Pay-for-performance positively affects both, incremental and radical innovation. Finally, the partner's degree of risk-aversion negatively affects incremental and radical innovation.
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Search Authors in
BASE:
Sumo, Regien A. F.
;
Valk, Wendy van der
;
Weele, Arjan J. van
;
Bode, Christoph
Google Scholar:
Sumo, Regien A. F.
;
Valk, Wendy van der
;
Weele, Arjan J. van
;
Bode, Christoph
ORCID:
Sumo, Regien A. F. ; Valk, Wendy van der ; Weele, Arjan J. van ; Bode, Christoph ORCID: 0000-0001-5006-5804
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