Determinants and Consequences of Contract Violations in Strategic Alliances: A Transaction Cost Economics and Resource-based View Analysis

Lara Helena Schmiedhoff

Student thesis: Master thesis


Contract violations are ubiquitous but are often neglected in management studies. In contrast to prior studies examining the functions of contracts in various settings, this master thesis is dedicated to understanding drivers and consequences of contract violations in strategic alliances. Caused by opportunistic behavior, contract violations pose a risk in strategic alliances, and therefore need to be further investigated. This thesis examines how the strategic alliance context constitutes drivers of contract violations. Moreover, consequences dependent on the violation type are demonstrated. To answer this research objective, a scenario-based experiment is conducted that allows to draw conclusions on potential drivers and consequences of contract violations in strategic alliances. The results show a significant relationship between determinants of the alliance context, such as strategic importance or environmental uncertainty, and the willingness of managers to violate the contract. In a subsequent step, mitigation mechanisms through adequately contracting against the examined drivers of contract violations are analyzed. To increase the alliance performance, it is investigated how the insights on the corresponding consequences of contract violations can be used for contracting. It is argued that firms that successfully eliminate the risks of contract violations through a contract design based on potential drivers and consequences thereof will gain a competitive advantage against other companies. By contributing to management research and extending theory on contracting, this master thesis yields important implications for understanding strategic alliance contracts, complexity and trust and its interplay in generating a competitive advantage

EducationsMSc in International Marketing and Management, (Graduate Programme) Final Thesis
Publication date2020
Number of pages92
SupervisorsHenrik Johannsen Duus