Contract governance and buyer–supplier conflict: The moderating role of institutions

Journal of Operations Management · 2016 · Volume 41 · Issue 1

DOI: 10.1016/j.jom.2015.10.003

Abstract

Drawing on contract governance literature and institutional theory, this study investigates the differential effects of output- and behavior-based contract governance on buyer–supplier conflict in supply chains. The authors develop a contingent perspective to examine how institutional factors moderate the impact of contract governance. The findings, from an empirical study of buyer–supplier dyads in China, show that an output-based contract is negatively, whereas a behavior-based contract is positively, related to buyer–supplier conflict. The effects of a contract are moderated by two primary institutional factors: legal enforceability and unilateral government support. These findings have important implications for supply chain research, public policy, and managerial practice.

Keywords

Behavior-based contract, Output-based contract, Conflict, Legal enforceability, Unilateral government support, Institution theory

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