Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • September–October 2012
  • Article
  • Organization Science

Relational Contracts and Organizational Capabilities

By: Robert Gibbons and Rebecca Henderson
  • Format:Print
ShareBar

Abstract

A large literature identifies unique organizational capabilities as a potent source of competitive advantage, yet our knowledge of why capabilities fail to diffuse more rapidly—particularly in situations in which competitors apparently have strong incentives to adopt them and a well-developed understanding of how they work—remains incomplete. In this paper, we suggest that competitively significant capabilities often rest on managerial practices that in turn rely on relational contracts (i.e., informal agreements sustained by the shadow of the future). We argue that one of the reasons these practices may be difficult to copy is that effective relational contracts must solve the twin problems of credibility and clarity and that although credibility might, in principle, be instantly acquired, clarity may take time to develop and may interact with credibility in complex ways so that relational contracts may often be difficult to build.

Keywords

Competitive Advantage; Organizations

Citation

Gibbons, Robert, and Rebecca Henderson. "Relational Contracts and Organizational Capabilities." Organization Science 23, no. 5 (September–October 2012): 1350–1364.
  • Find it at Harvard
  • Read Now

About The Author

Rebecca M. Henderson

General Management
→More Publications

More from the Authors

    • 2022
    • Faculty Research

    Firms, Morality, and the Search for a Better World

    By: Rebecca Henderson
    • 2022
    • Faculty Research

    A Political Economy of Justice

    By: Danielle Allen, Yochai Benkler, Leah Downey, Rebecca Henderson and Joshua Simons
    • September 2021
    • Management Science

    Innovation in the 21st Century: Architectural Change, Purpose, and the Challenges of Our Time

    By: Rebecca Henderson
More from the Authors
  • Firms, Morality, and the Search for a Better World By: Rebecca Henderson
  • A Political Economy of Justice By: Danielle Allen, Yochai Benkler, Leah Downey, Rebecca Henderson and Joshua Simons
  • Innovation in the 21st Century: Architectural Change, Purpose, and the Challenges of Our Time By: Rebecca Henderson
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Accessibility
  • Digital Accessibility
Copyright © President & Fellows of Harvard College