Balancing Conflicting Goals in Interorganizational Collaborations in the Pharmaceutical Industry: A Contractual Dynamics View

Abstract

This study examines how contractual dynamics allow company managers to balance conflicting goals in interorganizational collaborations. While the literature on contractual governance has mainly investigated single contracts through a static view, this paper advances a ‘contractual dynamics view’ to explore how the dynamics of related contracts allow managers to balance conflicting goals in interorganizational collaborations. The study involves a longitudinal case study of a collaboration among a pharmaceutical company, a biotech firm, a foundation, and a university. Exploring contractual dynamics from the perspective of the pharmaceutical company's managers, the study finds that related contracts allowed them to balance goals through an unfolding process of differentiating and integrating goals and responding to changing goals. By presenting a ‘contractual dynamics view,’ the study advances understanding of contractual governance and offers implications for management.