New Research Examines How Companies Design Contracts

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Michel Benaroch, associate dean for research and Ph.D. programs and professor of management information systems, and his co-authors, Yossi Lichtenstein (UCD Dublin) and Lior Fink (Ben Gurion University of the Negev), recently completed a study focused on contract development and how the upfront costs of designing a contract impacts the effectiveness of the contract.

For the first time, Benaroch et al were able to bring together many components of contract development that had not been studied together before, including contract functions — safeguard, coordination and adaptability — upfront and downstream costs and the type of contract – fixed price or time/money.

The study, “Contract Design Choices and the Balance of Ex-Ante and Ex-Post Transaction Costs in Software Development Outsourcing,” confirms that the more time and effort that is spent up front designing the contract, the stronger the contract  is and the better it is at guiding the outsourced work. “Our results may seem like common sense but it’s the first time contract development has been studied empirically and what contract professionals have known for years has been confirmed,” said Benaroch.

To read complete details of the study, visit Whitman’s Research website.

Kerri Howell

Kerri is director of communications and media relations for the Whitman School. She is responsible for managing all internal and external communications with students, faculty, staff, alumni, members of the business community and other key stakeholders.After receiving her B.A. from State University of New York at Geneseo, she went on to earn her M.S. in communications management from Syracuse’s S.I. Newhouse School of Public Communications, where she has served as an adjunct professor in the public relations department since 2004.
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