The common ground of relationships and exchange: towards a contractual foundation of marketing

Purpose – The aim of this paper is to argue for an explicit foundation of market exchange on person‐to‐person relationships as an alternative to the foundation on person‐to‐goods relationship underlying the exchange model inherited from neoclassical economics and classical contract law and used in a large significant share of marketing studies. Design/methodology/approach – The paper provides a unifying theoretical framework to the analysis of transactions and relationships that links institutional approaches from economics, sociology, and law. Findings – Relational contract theory provides a common ground for phenomena studied by both traditional exchange‐based and relationship marketing approaches. Relational contract theory conceives all types of market exchange as based on person‐to‐person relationships and provides an anchor for institutional, social and economic approaches in marketing. Research limitations/implications – The concept of transaction provides a common foundation for the analysis of marketing phenomena that holds in diverse environments, including arms‐length transactions and close‐linked relationships. It provides an interface between marketing theory on the one hand and institutional, social and economic disciplines on the other. Practical implications – Contracts specify how the parties to a transaction can realize action options opened up by property rights arrangements. Contracting strategy is the vital backbone of an industrial service strategy. Sound design of business models starts with the identification of the optimal owner of a resource, i.e. the actor who is in the best position to manage uncertainties or take on responsibilities associated with resource use. Originality/value – This is the first investigation of a contractual foundation of marketing theory. It embeds the concept of exchange in an institutional framework and adapts it to the evolving business reality shaped by co‐operating firms and the rising share of services in value creation.