I have written before about the need tp collaborate and sooner or later the MBA in a big organisation, or an MBA in a strat up is going to have to deal with other parties and realise that thongs cannot be done on their own, or indeed simple tasks like selling also involve interaction with a customer to ask them to buy what you have. 

There will be many occasions contracts will have to be drawn up, whether it is a simple meet you for a coffee and let’s put the world to rights or a long winded legal document stetting out terms of behaviour and trade with lots of parties to the deal and a grand signing ceremony. 

Either way some ground rules should exist as to what sort of relationship is being transacted.  

A good analysis is found in the book ‘ Structures of Social Life’ by AP Fiske ( Free press 1991) in it he outlines four ‘generative models’ of contract in brief they are- 

  • Communal sharing – everyone has an opinion and the issue is debated until a consensus /unanimous agreement is reached, if no consensus then the issue is dropped Very much part of ‘Group think’ 
  • Authority ranking- contractual differences are settled unilaterally by the recognised authority, and performance of the contract is undertaken out of due deference. This is sometimes confused with religion as a means of determining outcomes 
  • Equality matching-this involves putting the matter to a vote which everyone participates in and the winner is the majority view, however there are no winners or losers as everyone must come out equal, each person must match what they give up.. 
  • Market Pricing- this is using peoples wealth and  utility and the contract is letting the  market influence terms and conditions which might not suit all, but will satisfy both parties to the contract, literally testing the market.  

These four kinds of contracts lead to different decision making and consultation processes in doing business and real life transactions invariably incorporate one or more of these characteristics. 

Quite often the Shareholder value mantra favours the Market pricing mechanism, but I would argue that sustainable contracts have to accommodate some measure of the wider society and so Communal sharing might be better, or indeed any of the other characteristics  above. 

The issue here is that there is no one size fits all when an MBA student or graduate is looking for a relationship, they would be well advised to consider these four possibilities and understand that dealing with other parties is not straightforward.