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Justice in Business-to-Business Relational Exchanges and Contracts

Industrial marketing researchers have developed sophisticated analyses of interactions among business actors in which their exchanges often feature products and services subject to incremental innovation. Relationships feature strongly in this body of research and it is perhaps surprising that the commercial arrangements, such as contracts and management accounting, have featured to a lesser extent. There has been some interest in Macneil’s work on relational exchanges and contracts and we take this as a basis for a comparison of three cases of service innovation in engineering. We are particularly interested in developing the agency implications of Macneil’s work, which concentrates on situations, such as the fundamental qualities of contracts. In particular, we assess the practical problem of how actors combine the asymmetry of often known and immediate costs of committing to projects and exchanges in the context of relationships, but where the outcomes, distribution of benefits and any compensation are uncertain in quality, quantity and duration. We find that actors mobilise the concept in practice of relationship or exchange justice, providing motivation for them engaging in exchanges which feature incremental innovation.