ASU Center for Organization Research and Design

Clarifying the Concept of Performance-Based Contracting in Manufacturing Industries a Research Synthesis

by Phillipp Hypko; Meike Tilebein; Ronald Gleich

Jan 1, 2010

Purpose – Although performance‐based contracting (PBC) is gaining importance in manufacturing industries, corresponding research is still in its infancy. In order to provide a basis for future research on this emerging topic, thus paper aims to propose a specific conceptual model. Design/methodology/approach – Conducting a comprehensive literature review, 39 academic publications dealing with this topic in‐depth were analyzed. To structure the various approaches of PBC in manufacturing industries, existing preliminary conceptual models in the form of morphological boxes were built upon and developed further. Findings – Focusing on manufacturing industries, the review reveals a comprehensive view on PBC, with three topics that are important to PBC but have been largely neglected in research: even though research considers PBC foremost regarding manufacturers, independent service providers can also offer PBC; closely related to ownership, financing constitutes an essential issue in PBC; and PBC may include maintenance as well as operation. Originality/value – First, the paper systematizes existing literature and clarifies the concept of PBC in manufacturing industries. Second, it presents a specific conceptual model for analyzing this topic in more depth. Third, it reveals promising avenues for future research.

 Clarifying the Concept of Performance-Based Contracting in Manufacturing Industries a Research Synthesis