The show must go on: The role of contract frames in safeguarding relationship continuity

Abstract

Contracting is a cornerstone of productive interorganizational exchange; and while much research has been conducted about how contracts impact exchange consequences (e.g., transaction costs, performance), there is less understanding of how contracts shape the mediating behaviors and exchange processes that lead to those consequences. We demonstrate how flexible and vigilant exchange processes mediate promotion and prevention frames in building expectations of relationship continuity. We further identify interpretive uncertainty—a perceptual misalignment between the exchange parties—as a key moderator weakening flexible exchange processes’ impact on continuity expectations. These insights are empirically verified in samples involving 661 managers and executives across a wide range of industry contexts. Our results provide key theoretical and managerial implications.