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Industrial Strategy 2022

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Pregunta:

What is subcontractor opportunism?

Autor: Hjalmer Pedersen



Respuesta:

When a subcontractor exploits their power to decrease quality / increase price. Subcontractor opportunism is found where: • There are few alternatives to the subcontractor • The product or service is complex and changing, and therefore hard to specify in a legally binding contract • Principal firm investments have been made in specific assets, which the subcontractor knows will have little value if they withhold their product or service. (Supplier Power)


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