Contracting for new product development
In this chapter, we outline the ﬁndings of the research on contracting in new product development from the perspective of mitigating agency issues in both the internal and external contexts to the ﬁrm. The literature has studied the role of contracting in aligning the incentives of both internal stakeholders and external partners, and the nature of decisions being made by the principal. A common set of agency issues studied in the literature is the use of contracts for coordinating single or multiple efforts to attain higher proﬁts for the supply chain, and the division of proﬁts between the different partners in the supply chain. Additionally, the mitigation of information asymmetry effects, the decision rights for exercising contracts, group and individual incentives, different contracting levers and monitoring of agent efforts have also been considered. Finally, simultaneous versus sequential decision-making, the use of informal contracts in addition to formal contracts, and the impact of risk proﬁles have been studied. We also identify critical gaps in the literature and propose directions for future research.
Operations and Supply Chain Management | Technology and Innovation
Handbook of information exchange in supply chain management
Albert Ha & Christopher Tang
City or Country
HASIJA, Sameer and BHATTACHARYA, Shantanu.
Contracting for new product development. (2016). Handbook of information exchange in supply chain management. 123-144. Research Collection Lee Kong Chian School Of Business.
Available at: http://ink.library.smu.edu.sg/lkcsb_research/5437