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An Organizational Learning Perspective on the Contracting Process

Published: 07 Dec 2015 Average Rating: 4 / 5 Print
 

Author: Fabrice Lumineau University of Technology Sydney, Australia Marc Fr├ęchet University of Toulouse, France Dominique Puthod University of Savoie, France

The contracting process is a crucial step in alliance development and its success. However, the existing
literature reveals surprisingly little investigation into how organizational learning relates to the process of
contract making. The authors therefore conducted an in-depth longitudinal study of the alliance contracting
process in the animated film industry. First, the study's findings suggest that during the contracting process,
firms can learn about the way to deal with the contracting process, about themselves and their partner, and
about the transaction features. Second, the case analysis indicates a combination of experiential, vicarious and
inferential learning mechanisms. Combining these insights into the objects and the mechanisms of learning
during the contracting process, the authors discuss how contracting and learning processes are related
and analyse the role of the contracting process in supporting organizational learning. The findings show
that the drafting of contractual clauses fosters learning and, in turn, this learning triggers new contractual
negotiations. Hence the authors suggest that the alignment between transaction features and the choice of
contractual governance results from learning during the contracting process. They then propose avenues
for future research

 

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