Contract Frames and Supplier Learning

Yi Zheng (), Qiong Wang (), Xiaoyan Wang () and Zhilin Yang ()
Additional contact information
Yi Zheng: Department of Marketing, G. Brint Ryan College of Business, University of North Texas, Denton, Texas 76201
Qiong Wang: Division of Marketing and Supply Chain Management, The Michael F. Price College of Business, University of Oklahoma, Norman, Oklahoma 73019
Xiaoyan Wang: Department of Marketing, Business School, Shandong University (Weihai), Weihai, Shandong 264209, China
Zhilin Yang: Department of Marketing, College of Business, City University of Hong Kong, Kowloon, Hong Kong, China

Organization Science, 2025, vol. 36, issue 4, 1625-1642

Abstract: This research examines the impact of contract framing on supplier learning activities within buyer-supplier relationships, an area previously overshadowed by a focus on internal organizational learning mechanisms. Grounded in regulatory focus theory and organizational learning theory, this study assesses how promotion and prevention contract framing influences suppliers’ exploration and exploitation activities. Survey data from 135 buyer-supplier relationship dyads reveals that promotion and prevention framing distinctly affect suppliers’ learning activities. Specifically, during the duration of the contract, (a) compared with prevention contract framing, promotion contract framing has a stronger positive impact on the supplier’s exploration learning activities; and (b) compared with promotion contract framing, prevention contract framing has a stronger negative impact on the supplier’s exploitation learning activities. This study also reveals how the portfolios and clusters of contract framing influence supplier learning activities. Finally, this study reveals that different learning activities result in varied outcomes for the buyer, with exploration boosting continuity and exploitation improving performance. This contribution broadens the understanding of contract framing’s psychological effects on supplier behavior, offering new insights into the dynamics of organizational learning activities and contract design.

Keywords: contract; contract framing; promotion focus; prevention focus; supplier learning; exploration; exploitation (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://dx.doi.org/10.1287/orsc.2022.16526 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:ororsc:v:36:y:2025:i:4:p:1625-1642

Access Statistics for this article

More articles in Organization Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().