Table 2a.
Depiction of how proposed framework address contracting problems.
| Key Contracting Dimensions |
Approaches to solution |
|||
|---|---|---|---|---|
| Transaction cost economics (largely dyadic) | Relational Contracting (largely dyadic) | Sustainable Network Contracts Framework | ||
| 1 | Uncertainty | |||
| a | Internal | Screening/Monitoring | Relies on shared norms | Screening/joint action and risk/task distribution in the network |
| b | External | Renegotiation/Legal action | Relies on relational norms | Joint-action/appropriate stakeholder involvement/periodic review to facilitate adaptation dynamically |
| 2 | Specific investments | |||
| Penalty/legal action | Relies on social sanctions | Applying appropriate safeguarding tools/evaluating results/periodic review/joint-action plans/rebalancing network resource deployment and order allocation | ||
| 3 | Relationships | |||
| a | History of relationship | Does not address | Relies on partner abilities | Provides a mechanism to leverage supplier's/distributor's accumulated/current abilities to identify sustainable network solutions |
| b | Future interest of a partner | Does not address | Relies on relational norms | Considering relationship 'minimum' and building flexibility, future capability, and capacity in the network to ensure productive and sustainable network relationships/solutions |
| 4 | Stakeholder interests | |||
| a | Social | Does not address | Does not address explicitly | Social stakeholders considered through network approach, addressing social constraints and goals; behaviour of actors in value chain addressed through incentives and feedback loop (training, joint-action, investments, etc.) |
| b | Economic | Does not address | Relies on relational norms | Economic goals considered through evaluation of capacity and capability of actors in the network (resource and capability constraints); behaviour of actors in value chain addressed through incentives and feedback loop (training, joint-action, investments, appropriate technology consideration, etc.) |
| c | Environmental | Does not address | Does not address explicitly | Environmental stakeholders considered through network approach, addressing environmental and goals; behaviour of actors in value chain addressed through incentives and feedback loop (training, joint-action, investments, etc.) |