Performance-based and functional contracting in value-based solution selling

Liinamaa, Johanna; Viljanen, Mika; Hurmerinta, Anna; Ivanova-Gongne, Maria; Luotola, Hanna; Hellström, Magnus

doi:10.1016/j.indmarman.2016.05.032

Cited by 76 publications

(80 citation statements)

References 50 publications

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“…Despite the relatively recent interest of management scholars in the study of complex systems (McKelvey, 1999;Brown and Eisenhardt, 1997), complexity as a sub-field in the social sciences has existed for many decades [2]. From the general (von Bertalanffy, 1968) and open systems models (Kast and Rosenzweig, 1972), that arguably laid the foundations for modern organization theory (Lawrence and Lorsch, 1967;Thompson, 1967), IJOPM 34,2 via system dynamics (Forrester, 1961), complex adaptive systems (Holland, 1975), and deterministic chaos theory (May, 1976).…”

Section: Conceptual Background 21 Complexity and Organizationsmentioning

confidence: 99%

Procuring complex performance: implications for exchange governance complexity

Roehrich

Lewis

2014

International Journal of Operations &Amp; Production Management

120

142

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If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. AbstractPurpose -While previous studies explored the argument that allies the notion of complexity to the complex product-service offerings being procured, this paper aims to explore whether there is a corollary with exchange governance complexity. More specifically, the paper analyzes the relationship between systemic complexity and complexity of contractual and relational exchange governance in procuring complex performance (PCP) arrangements. Design/methodology/approach -A multiple, longitudinal case study method is used to examine the relationship between systemic complexity and exchange governance complexity. The study deploys rich data sets by combining government and company reports with 43 semi-structured interviews.Findings -Preliminary conclusions suggest that as a response to increasing systemic complexity, organizations respond with increasing contractual governance complexity. However, better performing PCP arrangements illustrate that the use of simplified contractual governance in form of working agreements in combination with relational governance such as inter-personal relationships may be more effective to counteract complexity. Practical implications -The paper questions whether organizations should respond with increasing exchange governance complexity to counteract systemic complexity. Managers must consider the manageability and enforceability of complex contracts in combination with the formation of inter-personal relationships and simplified working agreements. Originality/value -This study adds to the limited empirical understanding on the nature of long-term public-private interactions in PCP. It also contributes through a rare focus on the relationship between systemic complexity and exchange governance complexity in PCP arrangements.

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Section: Conceptual Background 21 Complexity and Organizationsmentioning

confidence: 99%

Procuring complex performance: implications for exchange governance complexity

Roehrich

Lewis

2014

International Journal of Operations &Amp; Production Management

120

142

View full text Add to dashboard Cite

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“…Perubahan ini menyebabkan PG menghadapi trade off antara risiko biaya produksi dan risiko kualitas dan kuantitas tebu yang dipasok petani. Perubahan struktur kemitraan yang dilakukan PG sesuai dengan temuan studi terdahulu yang menyatakan bahwa dalam lingkungan organisasi industrial, efisiensi tidak hanya berasal dari inovasi teknis akan tetapi juga berasal dari inovasi dalam struktur organisasi (Liinamaa et al 2016;Schipmann and Qaim 2011;Zheng and Vukina 2007).…”

Section: Tabel 3 Kriteria Variabel Yang Diujiunclassified

Farmers’ Satisfaction Toward Arrangement and Performance of Sugarcane Contract Farming in Wonolangan Sugar Mill, Probolinggo, East Java

Rondhi

Ratnasari

Supriono

et al. 2020

j. penelitian tanam. industri

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“…PBC is a contractual approach of tying at least a portion of supplier payment to specific and measurable performance [3,21]. PBC is increasingly considered an appropriate strategy for the effective and efficient procurement of goods and services [8].…”

Section: Pbc and Infrastructure Maintenancementioning

confidence: 99%

Contracting for Road Maintenance in the Netherlands—The Downside of Performance-Based Contracting

2019

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A trend towards performance-based contracting (PBC) can be observed in public infrastructure maintenance. PBC is an approach of tying the contractor’s payment to specified performance. We investigated PBC for the maintenance of highways and roads in the Netherlands, identifying issues ultimately resulting in poor contractor performance. The PBC-induced risks for clients relate to the problematic translation and measurement of specifications, the ineffectiveness of incentives, the avoidance of contractors taking full responsibility, and contract management issues. Clients should recognize the actual balance of power in the relationship with their (main) contractors, and take appropriate measures.

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Performance-based and functional contracting in value-based solution selling

Cited by 76 publications

References 50 publications

Procuring complex performance: implications for exchange governance complexity

Procuring complex performance: implications for exchange governance complexity

Farmers’ Satisfaction Toward Arrangement and Performance of Sugarcane Contract Farming in Wonolangan Sugar Mill, Probolinggo, East Java

Contracting for Road Maintenance in the Netherlands—The Downside of Performance-Based Contracting

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