Trust and Collaboration in the Aftermath of Conflict: The Effects of Contract Structure
Academy of Management Journal, 2011, 54(5): 981-998
40 Pages Posted: 4 May 2011 Last revised: 4 Feb 2016
Date Written: May 2, 2011
Leveraging a longitudinal dataset concerning 102 inter-firm disputes, we evaluate the effects of contract structure on trust and on the likelihood of continued collaboration. We theoretically refine and empirically extend prior research by (a) distinguishing between control and coordination functions of contracts, (b) separating goodwill-based and competence-based trust, and (c) evaluating the effects of contract structure on relational outcomes in the context of disputes. We find that control provisions increase competence-based trust, but reduce goodwill-based trust, resulting in a net decrease in the likelihood of continued collaboration. Coordination provisions increase competence-based trust, leading to an increased likelihood of continued collaboration.
Keywords: Conflict management, Trust, Contract, Collaboration
JEL Classification: D74, D21, L14, K40
Suggested Citation: Suggested Citation