Journal Articles

Resource Dependence, Alternative Supply Sources, and the Design of Formal Contracts

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Employing a resource dependence theoretical framework, the authors analyze a set of recently awarded contracts between the Environmental Protection Agency and its suppliers to determine how joint dependence, supplier dependence, and government dependence affect contract design—specifically, the decision to use a cost-plus (flexible) contract. Findings provide evidence that organizations choose contract designs that will reduce uncertainty related to securing critical resources. However, different dimensions of dependence have different effects: (1) higher levels of joint dependence lead to more flexible governance forms; (2) the lack of alternative suppliers is a more important factor than high levels of financial dependence; and (3) the parties involved in government procurement are likely to perceive government as a unique type of organization, which, in turn, has implications for contract design choices. The authors conclude with managerial strategies for restructuring power/dependence relationships to achieve the contract design most likely to yield a surplus in the exchange.

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Detail Information

Series Title

Public Administration Review

Call Number

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Publisher

Hoboken, United States : Wiley-Blackwell., 2011

Collation

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Language

English

ISBN/ISSN

00333352

Classification

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Content Type

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Media Type

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Carrier Type

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Edition

Volume 71, Issue 4, July/August 2011, pages 608–61

Subject(s)

Resource Dependence, Alternative Supply Sources

Specific Detail Info

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