Contracts and Trust in Alliances

Book excerpt: Paul Vlaar s book very creatively combines three rich streams of research dealing with economic exchanges; and, in doing so, provides readers with new and important insights on trust, contracts and inter-organizational relationships (IORs). This is cross-disciplinary research at its best. Focusing on the independent and interdependent roles of contracts and trust in value creation and in value capture in IORs, Vlaar relies on solid quantitative and qualitative data to support his arguments. This book is must reading for scholars, managers and policy makers who are interested in these topics. Peter Smith Ring, Loyola Marymount University, US Paul Vlaar s Contracts and Trust in Alliances is one of the most creative contributions to the alliance literature in a very long time. Vlaar s discussion is informed by an unusually deep knowledge of the literature, and significantly pushes the research frontier by examining non-standard but crucial issues, notably how mutual understanding and recognition are preconditions for value discovery and creation. Nicolai Juul Foss, Copenhagen Business School, Denmark Paul Vlaar contends that strategic alliances and other forms of cooperation, such as buyer supplier relationships, joint ventures and offshoring initiatives, increasingly stand at the basis of competitive advantage. Although contracts and trust play a crucial role in such relationships, prior studies on both governance solutions are generally confined to single theories, paradigms and viewpoints. Drawing on an in-depth case study, survey data and conceptual developments, the author advances a more integrative framework. He probes issues such as: the tension between the need and the ability to contract trust and contracts as co-evolving and self-reinforcing phenomena contractual functions other than coordination and control dialectical tensions stemming from contract application standardization of contracting practices. By exploring these topics, the book offers novel perspectives on the role of trust in interorganizational relationships, shifting our attention and creation to the discovery of value by collaborating partners. The book offers novel perspectives on the role of contracts and trust in interorganizational relationships, shifting our attention from the creation and appropriation to the discovery of value by collaborating partners. The book will be useful for managers as well as practitioners interested in the governance and management of inter-organizational relationships. It will also be an important resource for academics and students interested in strategy, organization and organizational theory.