Abstract:

This study highlights a part of the results of a doctoral research regarding business performance improvement through contract management, conducted by authors in the Research Centre of Business Administration, Bucharest University of Economic Studies, Romania. The goal of this paper is to identify the dysfunctionalities in outsourcing contracts and missing competences for contract managers by giving examples from the Oil and Gas industry. Based on those findings, we aim to propose an improved contract management process. The focus of our research is on the Oil and Gas industry, which represents an economic environment with decades of experience in international outsourced contracts and a major impact on the global business sustainability. We have analyzed the root causes of contract dysfunctionalities identified between 2014 and 2016 on over 1000 outsourcing contracts. It resulted that main causes were produced in the pre-award phase, due to default process of Contract Management. Because performance is not ensured only through an efficient process and much of the planned success lies with the input of skilled human resource, we interviewed 100 Contract Management Experts to identify the core competencies where development of knowledge and skills is needed. Based on our findings, we have identified a potential missing link in the standard contract management process. We explored the impact Contract Management has on business performance in global companies and propose an improved process in order to help ensuing business sustainability. The first part of the paper provides an overview of the existing literature whereas the second part includes research results and solution proposal.