Niklas Lars Hallberg

Senior lecturer

Learning barriers in contracting : an empirical exploration of learning to contract in buyer-supplier relationships

Author

Niklas Lars Hallberg

Summary, in English

Under what conditions do firms in buyer-supplier relationships learn to contract? The development of contracting capabilities is typically understood as a function of experiential learning from past contracts. However, learning to contract is also likely affected by the organizational and institutional conditions under which contracts are entered. Based on five inductive case studies of buyer-supplier relationships in different industries, we explore the potential learning barriers that are likely to affect the development of contracting capabilities. We find that contractual learning in the studied firms was modest in terms of significant contractual change and development. Learning was inhibited by strong functional differentiation in the contracting process, a regulatory focus on promoting positive relational dynamics rather than improving contractual design, and a strong reliance on contractual templates. Overall, our empirical findings highlight important barriers to experiential learning in contractual relationships, which suggest that the development of contracting capabilities is more likely to be driven by deliberate managerial and strategic initiatives than by local experiential learning.

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