The evolution of governance mechanisms and negotiation strategies in fixed-duration interfirm relationships

This study focuses on how governance mechanisms and negotiation behavior develop in interorganizational relationships with a fixed endpoint. A framework for describing and analyzing interorganizational processes is developed based on contract theory and negotiation theory. The framework is applied on a case study describing cooperation between the Norwegian Road Authorities (NRA) and a private contractor. The data suggest that a cooperative climate characterized by trust and relational norms can develop even in a temporally delimited relationship. An enabling aspect is the complementary nature of different governance mechanisms, and the interdependence between governance and behavioral orientation. The key for understanding how value is both created and distributed as the relationship develops is the process itself, and how the process continually develops.