Contract frame and participation: mitigating disadvantages of penalty contracts

Fehrenbacher, Dennis D. and Bicudo De Castro, Vincent 2017, Contract frame and participation: mitigating disadvantages of penalty contracts, in ECIS 2017 : Proceedings of the 25th European Conference on Information Systems, Association for Information Systems, Atlanta, Ga., pp. 293-309.

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Title Contract frame and participation: mitigating disadvantages of penalty contracts
Author(s) Fehrenbacher, Dennis D.
Bicudo De Castro, VincentORCID iD for Bicudo De Castro, Vincent orcid.org/0000-0002-1453-6733
Conference name European Conference on Information Systems (25th : 2017 : Guimaraes, Portugal)
Conference location Guimar√£es, Portugal
Conference dates 2017/06/05 - 2017/06/10
Title of proceedings ECIS 2017 : Proceedings of the 25th European Conference on Information Systems
Publication date 2017
Conference series European Conference on Information Systems
Start page 293
End page 309
Total pages 17
Publisher Association for Information Systems
Place of publication Atlanta, Ga.
Keyword(s) IT governance
contract framing
fairness perception
participation
Summary Contracting is an important aspect of IT governance and control. This aspect involves the manner inwhich goals are set, their achievements rewarded and penalized. In the context of service levelagreements it has been shown that contracts that involve penalties have positive effects onindividuals’ effort and negative effects on individuals’ attitude such as fairness perception. Thenegative effects of penalty clauses are a likely reason why they are rarely found in contracting withindividuals. Our study was motivated by the question whether negative effects of penalty contracts canbe mitigated. In an experiment we found that controllee participation can mitigate such negativeeffects. This implies that controllee participation is even more important in the face of penaltycontracts in order to maintain high fairness perception levels.
ISBN 9780991556700
Language eng
Field of Research 1501 Accounting, Auditing and Accountability
08 INFORMATION AND COMPUTING SCIENCES
Socio Economic Objective 0 Not Applicable
HERDC Research category E1 Full written paper - refereed
ERA Research output type E Conference publication
Copyright notice ©[2017, Association for Information Systems]
Persistent URL http://hdl.handle.net/10536/DRO/DU:30097484

Document type: Conference Paper
Collection: Department of Accounting
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