Relational Mechanisms in Complex Contracting: Factors Associated with Private Managers’ Satisfaction with and Commitment to the Contract Relationship

Abstract The complexity of human service delivery means that contracts are often incomplete or contingent. When contracted services or products are complex, relational contracting can function as a critical informal accountability mechanism. This study introduces and tests a conceptual framework of relational processes and organizational factors hypothesized to inform private human service contract outcomes. Data from a 2015 survey of private nonprofit and for-profit human service organizations in five counties are used to examine factors associated with two proximal indicators of success in human service contracting: commitment to and satisfaction with the contract relationship. Findings provide support for our conceptual framework, highlight the multidimensional nature of trust and commitment, and identify key differences in the relational processes associated with commitment and satisfaction to the contract relationship. Communication quality, trust, and flexibility were associated with satisfaction, whereas interdependence, flexibility, and asset specificity were associated with longer-term commitment to the contract relationship. For-profit ownership was associated with lower commitment and satisfaction. Implications for research and practice are discussed.