Business Contracts in Javanese Vegetable Marketing

Abstract

The paper looks at long-term personalized business contracts in Javanese vegetable marketing as mechanisms for coping with pervasive uncertainty. It thereby builds on a perspective evolving in both anthropology and in industrial sociology. Comparing exchange relationships along two vegetable assembly channels, it finds a rich variety of contract and non-contract forms of exchange. Comparative analysis indicates close links between exchange patterns and market micro-environment, a finding that confirms the uncertainty-handling-hypothesis. The study also provides some support for the proposition, advanced in industrial sociology, that firms engage in long-term contracts in order to bridge market failure problems arising from the interdependency of their actions. Longitudinal studies of contracting are suggested as a promising tool for future research on contracting practice.