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Buyers that operate in buyer-initiated service triads must deal with the repercussions of service suppliers failing to satisfy the buyer’s customer. Performance-based contracting (PBC) can be used to shift the risks associated with performance shortfalls to service suppliers. Attaining specified performance outcomes can, however, be highly uncertain in service triads where there are many factors outside the supplier’s control. In such situations of high outcome uncertainty, suppliers may be induced to shirk their responsibilities since the direct customer–supplier link inherent to triadic structures gives suppliers an opportunity to engage in shirking without being detected. According to established theory, PBC is less effective in such situations, and behavior-based contracting (BBC) is more effective in achieving performance outcomes that are satisfactory to buyers. However, these insights are based on the long-standing assumption that PBC and BBC are substitutes. This assumption has been criticized as not being representative of empirical reality. Therefore, this chapter studies whether combining these contracting approaches during the contract design and contract management phases mitigates shirking of responsibility by suppliers. Using a data set derived from a survey questionnaire, the chapter finds that combining PBC and BBC during the contract design phase does not reduce shirking. However, the results do reveal that responsibility shirking can be mitigated by combining PBC and BBC during the contract management phase. This study provides purchasing managers with new insights concerning how to use PBC to achieve satisfactory performance outcomes, even in uncertain contexts such as service triads.

PurposeManaging projects is an important part of operations management, but many projects fail. This study focuses on attribution processes of such disruption from the underrepresented perspective of the project manager. The authors consider two types of causes: the more frequently researched environmental uncertainty (i.e. uncontrollable events) and the scarcely researched uncertainty imposed by non-collaborative project sponsors (i.e. other-controllable events).Design/methodology/approachThe authors test conceptual arguments grounded in attribution theory and the notion of psychological contracts in a scenario-based experiment among 325 practicing project managers.FindingsThe findings indicate that non-collaborative project sponsors negatively affect project managers' motivation, whereas uncontrollable disruptions leave hope to achieve positive future outcomes. This latter effect is further strengthened when project managers have an internal attribution style. They tend to blame the disruption on themselves and generally feel in control of achieving success even if they are not.Originality/valueThese socio-psychological insights nuance the economic idea that uncertainty reduces motivation per se in the context of project disruption appraisal. The authors contribute to the behavioral project management literature and general attribution theory and help guide the allocation of resources during the recovery of failed projects.