Please join us Wednesday (12/3), at noon, in Lucas 301 for our next management research seminar.
Grounded in transaction cost economics and also the study of alliances, this paper explores when firms decide to change their contracts, examines the drivers of that choice, and discerns important effects on the firm . Scholars of strategic alliances, firm level strategy, behavioral finance, and transaction cost economics may be particularly interested.
A light lunch will be served.
Kyle Mayer, Associate Professor, University of Southern California
Kyle Mayer is an Associate Professor of Strategy in the Management and Organization Department at the Marshall School of Business at the University of Southern California. His research examines vertical integration decisions and the management of buyer-supplier relationships, with a focus on the strategic role that contracts can play in managing inter-firm relationship. He has published articles in a wide variety of outlets including the Academy of Management Journal, the Academy of Management Review, Organization Science, the Strategic Management Journal, Management Science, the Journal of Law, Economics and Organization, and the Journal of Economic Behavior and Organization among others, as well as several book chapters.
Dr. Mayer has won awards for his teaching, research and service, including being named the Marshall Educator of the Year in 2006. Dr. Mayer teaches courses on competitive strategy, corporate and global strategy, strategic alliances and executive education modules on strategy (competitive and global), alliances, organization design and organizational change.
The Effect of Contract Detail and Prior Ties on Contract Change: A Learning Story
(with Zhe Xing, Xuanli Xie, and Jeffrey J. Reuer)
While much is known about how firms design their contracts, we know less about how firms change and amend those contracts during execution of the transaction. A decision to modify an existing contract is likely to have a significant impact on the performance of the exchange. We examine when firms decide to change their contracts and examine the drivers of that choice. Drawing on work on contracts and learning, we develop and empirically test the role of initial contract detail and prior ties between the parties on the amount and content of changes to the contract. Specifically, we show that when firms take the time to add more initial detail, then the need to change the contract will decrease. On the other hand, the more frequently firms have worked together, the more likely they are to make changes to the contract, in part because the cost of making such changes decreases as the parties learn to work together. Finally, more prior ties also lead to a preference for changes to the enforcement clauses in the contract more so than to the coordination clauses in the contract. We test our ideas using a sample of 128 international joint ventures (involving Chinese and foreign firms) and find support for all the hypotheses.
If you would like to have a one-on-one meeting with Kyle, please contact Mary Correia.
We look forward to a lively session of mutual learning! Location: