Relationship between governance mechanisms and contract performance

Maurya, Dayashankar and Srivastava, Amit Kumar (2020) Relationship between governance mechanisms and contract performance. International Journal of Productivity and Performance Management (previously Work Study), 69 (1). pp. 44-60. ISSN 1741-0401

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Abstract

Purpose – The purpose of this paper is to explain the variation in the relationship between governance mechanisms and the effect of the relationship on contract performance, especially in controlling partner opportunism. Design/methodology/approach – This study conducts a comparative case analysis of contract governance of “National Health Insurance Program” in India. The data are collected using field research through in-depth interviews and direct observation across three states in India. Findings – The authors find that the governance mechanisms continue to complement and substitute, both in a dynamic manner, but until aligned with the nature of transaction, they are ineffective to mitigate opportunism, a criticaldimension of contractperformance. Inappropriate governance mechanismsinflate the gaps in incomplete contracts, resulting in partner opportunism. Research limitations/implications – The study draws findings from healthcare context and servicebased contracting; therefore, the applicability of this study may vary in other contexts. Practicalimplications – Thepaper highlightsthe need for buildingflexibilityinthe governance structure while designing contracts. Further, managers need to combine both governance mechanisms dynamically to align with the nature of the transaction to control partner opportunism. Originality/value – The authors contribute to the existing debate on the conundrum of the relationship between governance mechanisms and provide a new explanation. The authors propose that it is not the specific governance mechanisms but the alignment of the governance mix with the nature of the transaction that determines the contract performance, especially control of partner opportunism

Item Type:	Article
Uncontrolled Keywords:	Alignment; Healthcare; Partner opportunism; Governance mechanisms; Contract performance
Subjects:	General Management > Strategic Management and Business Policy
Divisions:	Finance and Strategy
Depositing User:	Mr. Muralidhara D
Date Deposited:	23 Mar 2020 04:39
Last Modified:	23 Mar 2020 04:40
URI:	http://tapmi.informaticsglobal.com/id/eprint/651

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