Beyond contract drafting and enforcement : The future of contracting in emerging markets

Abstract

The purpose of this study was to explore and gain insight into the current purpose of contracting and, in the main, the future of contracting in emerging markets. The study aimed to explore the nature of contracting in emerging markets in order to understand what the future of contracting will be in emerging markets. The study was a qualitative study and a sample of ten participants was interviewed. Findings of the study indicated that the emerging market environment is risky due to unfamiliar local nuances; and local laws are preferred over international law. Technology and innovation are not a strong focus in emerging markets but relationship frameworks allow for some degree of flexibility and innovation. Relationships and their importance were the biggest finding of this research prompting an exploration of the Confucian concept of guanxi highlighting relational networks within social settings. The research further identified that contract professionals need to firstly be both competent and globally literate. Relationships and links between skills, knowledge and the operating environment are intertwined in determining the future of contracting. The research concluded by making recommendations to Chief Executive Officers of multinationals, lawyers, contract professionals and consultants in emerging market firms in light of the findings of this research. The research highlights the legal and both internal and external contextual considerations of contracting and also suggests variables for further research that are crucial for a deeper understanding of contracting in emerging markets.