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Contract Management, SRM, and Outsourcing Explained by Ground Economic and Psychological Theories
This content isn't a typical crash course on contract management, SRM, or outsourcing. It equally suits newcomers to the profession and seasoned experts who just missed some applicable classical concepts and their practical implications on the contract and supplier management and outsourcing.
We suggest the brief but informative synthesis of ground economic and psychological theories that our students might've overlooked.
We will talk about decision-making, heuristics, incomplete contracts, relationships, and trust - all of that will be explained and suggested for practical use.
Much is being said about the importance of relations in contract management, SRM, and outsourcing. However, the arguments supporting broad statements are primarily subjective.
Indeed, we need to trust our suppliers. We must carefully nurture relations with them, which might eventually bring some fruits of cooperation, support, and innovation.
We rather feel that we understand such ideas. Everyone promotes value creation, relationship building, and business transformation. Yet, there's a certain lack of theoretical background to justify or disapprove of famous slogans and buzzwords.
Meanwhile, some classic economic and psychological theories logically and consistently explain the value of relationships in contract management, SRM, and outsourcing.
One of them is Behavioral Economics - an elegant blend of psychological, cognitive, emotional, and cultural aspects that all together explain the human nature of economic decisions.
With the help of Rational Choice Theory, Bounded Rationality, Transactional Cost Theory, Agency Theory, and Incomplete Contracts, this course will tell you a story of relational norms, mutual dependence, and trust in the modern world of opportunism and irrationality.
It will describe how science explains our behavior when we cooperate, negotiate, or satisfice.
This course suggests ways to reach a constructive and healthy commitment between economic actors.