Contractual Management: Managing Through Contracts

Preface
Short Overview
Reader’s Guide
Contents
List of Abbreviations and Acronyms
List of Figures
List of Tables
Part I The Concept of Contractual Management
1 Contractual Management—A Holistic Approach to a Diverse Issue
	Abstract
	1.1	The Phenomena of Contract
	1.2	Contracts in Business
		1.2.1	Scientific Approaches to the Subject
		1.2.2	Contract and Business
			1.2.2.1 The Notion of Contract in Business
			1.2.2.2 The Practical Relevance of Contracts
			1.2.2.3 Functions and Purposes of Contracts
		1.2.3	Contract and Management
			1.2.3.1 Contract-Focused Approaches
				1.2.3.1.1 Contract Management
				1.2.3.1.2 Contract and Commercial Management
			1.2.3.2 Management-Focused Approaches
				1.2.3.2.1 Contractual Risk Management
				1.2.3.2.2 Contract Governance
				1.2.3.2.3 Steering by Contracts
				1.2.3.2.4 Contractual Management
			1.2.3.3 Inventory: Contract and Management Processes in Enterprises
				1.2.3.3.1 Contract-Related Management Processes
				1.2.3.3.2 Contract and Management Systems
	1.3	Challenges of the Contract in Business
		1.3.1	Current Shortcomings
			1.3.1.1 The ‘Contract Compliance Issue’
			1.3.1.2 Challenges in Contract Management
		1.3.2	Causes for the Shortcomings
			1.3.2.1 Lack of Contract Strategy
			1.3.2.2 Emphasis on Legal Issues
			1.3.2.3 Addressees Out of Focus
			1.3.2.4 Contract as the Subject of Management
			1.3.2.5 Corporate Versus Transaction Governance
		1.3.3	Challenges of the Future
	1.4	Contractual Management Approach and Model
		1.4.1	Goals and Purposes
		1.4.2	Terms and Concepts
		1.4.3	The Contractual Management Approach
			1.4.3.1 Contract as a Management Device
				1.4.3.1.1 External and Internal Management Functions
				1.4.3.1.2 External Management and Mandatory Law
			1.4.3.2 The Contractual Management Cycle
				1.4.3.2.1 Plan
				1.4.3.2.2 Draft
				1.4.3.2.3 Implement
				1.4.3.2.4 Monitor
				1.4.3.2.5 Evaluate
			1.4.3.3 Integration of Contract-Related Management Processes
				1.4.3.3.1 Relevant Management Fields
				1.4.3.3.2 Integration Through Risk and Knowledge Management
		1.4.4	The Contractual Management Model
		1.4.5	Contractual Management Approach and Model in Managerial Decision-Making
			1.4.5.1 Application of the Contractual Management Approach
			1.4.5.2 The Operation of the Contractual Management Model
		1.4.6	Novelties and Benefits of Contractual Management
			1.4.6.1 Novelties of Contractual Management
			1.4.6.2 Benefit for the User
			1.4.6.3 Benefit for the Enterprise
		1.4.7	Limitations of the Contractual Management Approach and Model
			1.4.7.1 Non-contractual Management Issues
			1.4.7.2 Cross-Company Subjects of Management
			1.4.7.3 Deviating Management Landscape
	1.5	Conclusions: Approaching from the Deployment Edge
	References
Part II Case Studies on Contractual Management
2 The Disclosure Backlash Case—Information Transparency in Effective Contractual Management
	Abstract
	2.1	Challenge
		2.1.1	Set of Facts
		2.1.2	Operating Procedure
			2.1.2.1 Author’s Explanations
			2.1.2.2 Reader’s Tasks
	2.2	Decision-Making Process
	2.3	Implementation of the Decision
		2.3.1	Internal Implementation
		2.3.2	External Implementation
		2.3.3	Evaluation of the Decision
	2.4	Process Optimization
	2.5	Actual Execution
	2.6	Learning Outcome
		2.6.1	CM Value for the Case Study
		2.6.2	Case Study Value for the Reader
	Appendices
	References
3 The Second-Hand Software Case—Knowledge Management in the Contract Planning Stage
	Abstract
	3.1	Challenge
		3.1.1	Set of Facts
		3.1.2	Operating Procedure
			3.1.2.1 Author’s Explanations
			3.1.2.2 Reader’s Tasks
	3.2	Decision-Making Process
		3.2.1	Identification of the Decision to be Made and Evaluation of the Decision-Making Circumstances
			3.2.1.1 Legal Risk
			3.2.1.2 Commercial Risk
			3.2.1.3 Ethical Risk
			3.2.1.4 Operational Risk
			3.2.1.5 Motivation Risk
			3.2.1.6 Relationship Risk
		3.2.2	Preparation of the Decision
		3.2.3	Making the Decision
			3.2.3.1 Risk Analysis Regarding the Legal Issues
			3.2.3.2 The Decision
	3.3	Implementation of the Decision
		3.3.1	External Implementation
		3.3.2	Internal Implementation
	3.4	Process Optimization
		3.4.1	Used Software Resale Checklist (USR-Checklist)
		3.4.2	Knowledge Dissemination
		3.4.3	Process Optimization Options
	3.5	Actual Execution
	3.6	Learning Outcome
		3.6.1	CM Value for the Case Study
		3.6.2	Case Study Value for the Reader
	References
4 The Tricky Boiler Case—Managing Scope Issues in Project Execution
	Abstract
	4.1	Challenge 1 (Initial Case)
		4.1.1	Set of Facts
		4.1.2	Operating Procedure
			4.1.2.1 Author’s Explanations
			4.1.2.2 Reader’s Tasks
	4.2	Decision-Making Process
	4.3	Implementation of the Decision
		4.3.1	External Implementation
		4.3.2	Internal Implementation
	4.4	Actual Execution
	4.5	Challenge 2 (Modification 1)
		4.5.1	Set of Facts
		4.5.2	Operating Procedure
			4.5.2.1 Author’s Explanations
			4.5.2.2 Reader’s Tasks
	4.6	Decision-Making Process
	4.7	Actual Execution
	4.8	Learning Outcome
	4.9	Challenge 3 (Modification 2)
		4.9.1	Set of Facts
		4.9.2	Operating Procedure
			4.9.2.1 Author’s Explanations
			4.9.2.2 Reader’s Tasks
	4.10	Decision-Making Process
	4.11	Implementation of the Decision
		4.11.1	External Implementation
		4.11.2	Internal Implementation
	4.12	Actual Execution
	4.13	Learning Outcome
		4.13.1	CM Value for the Case Study
		4.13.2	Case Study Value for the Reader
	Appendices
	References
5 The Click and Wrap Case—Relevance of the Contract for the Adoption of Cloud-Based CRM Applications
	Abstract
	5.1	Challenge
		5.1.1	Set of Facts
		5.1.2	Operating Procedure
			5.1.2.1 Author’s Explanations
			5.1.2.2 Reader’s Tasks
	5.2	Decision-Making Process
		5.2.1	Identification of the Decisions to be Made and Evaluation of Decision-Making Circumstances
		5.2.2	Preparation of the Decision
			5.2.2.1 Risks and Opportunities of the Different Options
			5.2.2.2 John’s Proposition
		5.2.3	Making the Decision
	5.3	Implementation
		5.3.1	External Implementation
			5.3.1.1 Regarding PC’s Relationship with the Service Provider
			5.3.1.2 Regarding PC’s Relationships with Its Customers
				5.3.1.2.1 Governance of Customer Relationships Through the Contract
				5.3.1.2.2 Management of Customer Relationships in General
		5.3.2	Internal Implementation
			5.3.2.1 Decisions to be Made
			5.3.2.2 Establishment of the New CRM System
	5.4	Process Optimization
	5.5	Actual Execution
	5.6	Learning Outcome
		5.6.1	CM Value for the Case Study
		5.6.2	Case Study Value for the Reader
	References
6 The Contractual Sandwich Case—Managing Vertical Integration Through Contracts
	Abstract
	6.1	Challenge
		6.1.1	Set of Facts
		6.1.2	Operating Procedure
			6.1.2.1 Author’s Explanations
			6.1.2.2 Reader’s Tasks
	6.2	Decision-Making Process
		6.2.1	Identification of the Decisions to be Made and Evaluation of the Decision-Making Circumstances
			6.2.1.1 Decision-Making Options
			6.2.1.2 Decision-Making Circumstances
				6.2.1.2.1 Importance of the Decision
				6.2.1.2.2 Impact on Corporate Processes
		6.2.2	Preparation of the Decision
			6.2.2.1 Identification of Required Information
			6.2.2.2 Decision Processes
			6.2.2.3 Decision Recommendations
		6.2.3	Decision
	6.3	Implementation of the Decision
		6.3.1	External Implementation
			6.3.1.1 Measures Regarding the Subcontractor
			6.3.1.2 Measures Regarding the Owner
		6.3.2	Internal Implementation
	6.4	Process Optimization
		6.4.1	Contract Planning
			6.4.1.1 Lessons Learnt on Standard Terms and Conditions
			6.4.1.2 Example: Right to Give Binding Instructions
			6.4.1.3 Better Synchronization of Main Contract and Subcontract
		6.4.2	Contract Drafting
		6.4.3	Contract Monitoring
	6.5	Actual Execution
	6.6	Learning Outcome
		6.6.1	CM Value for the Case Study
		6.6.2	Case Study Value for the Reader
	Appendices
	References
7 The Ultra-Long-Distance Energy Transmission Case—The Impact of Contract on a Public-Private Research Network
	Abstract
	7.1	Challenge
		7.1.1	Set of Facts
		7.1.2	Operating Procedure
			7.1.2.1 Author’s Explanations
			7.1.2.2 Reader’s Tasks
	7.2	Tasks Melanie (Project Phase 1)
		7.2.1	Decision-Making Process
			7.2.1.1 Identification of Decisions to be Made and Evaluation of the Decision-Making Circumstances
			7.2.1.2 Making the Decision
		7.2.2	Implementation of the Decision
	7.3	Tasks Stan (Project Phase 2)
		7.3.1	Decision-Making Process
			7.3.1.1 Identification of Decisions to be Made and Evaluation of the Decision-Making Circumstances
			7.3.1.2 Preparation of the Decision
				7.3.1.2.1 General Considerations
				7.3.1.2.2 Requirements of the Grant Approval
				7.3.1.2.3 Risk Issues
			7.3.1.3 Making the Decision
		7.3.2	Implementation of the Decision
		7.3.3	Process Optimization
		7.3.4	Actual Execution
	7.4	Learning Outcome
		7.4.1	CM Value for the Case Study
		7.4.2	Case Study Value for the Reader
	References
8 The Oil Platform Case—Managing Conflicts in a Consortium Relationship
	Abstract
	8.1	Challenge
		8.1.1	Set of Facts
		8.1.2	Operating Procedure
			8.1.2.1 Author’s Explanations
			8.1.2.2 Reader’s Tasks
	8.2	Decision-Making Process
		8.2.1	Identification of the Decision to be Made and Evaluation of the Decision-Making Circumstances
		8.2.2	Preparation of the Decision
		8.2.3	Making the Decision
	8.3	Implementation of the Decision
		8.3.1	External Implementation
		8.3.2	Internal Implementation
	8.4	Process Optimization
	8.5	Actual Execution
	8.6	Learning Outcome
		8.6.1	CM Value for the Case Study
		8.6.2	Case Study Value for the Reader
	Appendices
	References
9 The Leasing Case—Contract Impact on Accounting and Financing Objectives
	Abstract
	9.1	Challenge
		9.1.1	Set of Facts
		9.1.2	Operating Procedure
			9.1.2.1 Author’s Explanations
				9.1.2.1.1 Accounting Standards
				9.1.2.1.2 Financing Conditions, Especially Covenants
				9.1.2.1.3 Involving an Auditor
			9.1.2.2 Reader’s Tasks
	9.2	Decision-Making Process
		9.2.1	Identification and Evaluation of the Decision-Making Circumstances
			9.2.1.1 Accounting Aspects
				9.2.1.1.1 Leasing Contract
				9.2.1.1.2 Rental Contract
				9.2.1.1.3 Feedback Effects of the Financing Agreements (Covenants)
			9.2.1.2 Business Aspects
		9.2.2	Preparation of the Decision
		9.2.3	Making the Decision
			9.2.3.1 Decision Pros and Cons
			9.2.3.2 The Decision
	9.3	Implementation of the Decision
		9.3.1	External Implementation
		9.3.2	Internal Implementation
	9.4	Process Optimization
		9.4.1	External Processes
		9.4.2	Internal Processes
	9.5	Actual Execution
	9.6	Learning Outcome
		9.6.1	CM Value for the Case Study
		9.6.2	Case Study Value for the Reader
	Appendices
	References
10 The X Virus Case—Leeway for Contractual Steering of Hospital Treatment
	Abstract
	10.1	Challenge
		10.1.1	Set of Facts
		10.1.2	Operating Procedure
			10.1.2.1 Author’s Explanations
				10.1.2.1.1 Stakeholders, Organizational Settings and Regulatory Framework
				10.1.2.1.2 Relevance of a Contract for the Patient-Hospital Relationship
				10.1.2.1.3 Remuneration for Medical Services
				10.1.2.1.4 Summary of Author’s Explanations
			10.1.2.2 Reader’s Tasks
	10.2	Decision-Making Process
		10.2.1	Patient A
			10.2.1.1 Identification of Decision Options
			10.2.1.2 Interim Outcome
		10.2.2	Patient B
			10.2.2.1 Identification of Decision Options
			10.2.2.2 Interim Outcome
		10.2.3	Patient C
			10.2.3.1 Identification of Decision Options
			10.2.3.2 Interim Outcome
		10.2.4	Patient D
			10.2.4.1 Identification of Decision Options
			10.2.4.2 Interim Outcome
		10.2.5	Patient E
			10.2.5.1 Identification of Decision Options
			10.2.5.2 Interim Outcome
	10.3	Learning Outcome
		10.3.1	CM Value for the Case Study
		10.3.2	Case Study Value for the Reader
	10.4	Annex: Compendium on the Foundation and Implementation of Hospital Treatment Contracts
		10.4.1	Special Conditions on Contract Formation
			10.4.1.1 Unilateral Treatment: Emergency and Involuntary Commitment
			10.4.1.2 Informed Patient Consent and Therapeutic Privilege
			10.4.1.3 Hospital Selection and Hospital Transfer
			10.4.1.4 Patient Consent Forms
		10.4.2	Special Conditions of Contract Performance
			10.4.2.1 Patient Decrees
			10.4.2.2 Legal Proxies of the Patient and Their Liability Towards the Hospital
			10.4.2.3 Involvement of Third Parties and Hospital Liability Thereover
			10.4.2.4 Unilateral Treatment Prolongation by the Hospital
			10.4.2.5 Refusal of Individual Treatment Procedures by the Patient
		10.4.3	Special Conditions on Contract Termination
			10.4.3.1 Cessation of Treatment Initiated by the Patient
			10.4.3.2 Cessation of Treatment Initiated by the Hospital
			10.4.3.3 Cessation of Treatment Initiated by Payor
			10.4.3.4 Patient Death/DNR/Assisted Suicide
		10.4.4	Patient Discharge Management
	References
11 The PhilHealth Case—Health Care Contracts and Social Contract in Social Health Insurance
	Abstract
	11.1	Challenge 1 (Provider’s Perspective)
		11.1.1	Set of Facts
		11.1.2	Operating Procedure
			11.1.2.1 Author’s Explanations
			11.1.2.2 Reader’s Tasks
	11.2	Decision-Making Process
		11.2.1	Decision Regarding the 19 Pending Cases
			11.2.1.1 Quest for Knowledge or Information
			11.2.1.2 Options of Action
			11.2.1.3 Options’ Pros and Cons
			11.2.1.4 Decision
		11.2.2	Proposal Whether to Renew the Contract
			11.2.2.1 Options of Action
			11.2.2.2 Options’ Pros and Cons
			11.2.2.3 Proposition
	11.3	Implementation of the Decision
		11.3.1	Internal Implementation
		11.3.2	External Implementation
	11.4	Process Optimization
		11.4.1	Risk Management
			11.4.1.1 Implementation Risks
			11.4.1.2 Risk Treatment
		11.4.2	Other Optimization Actions
	11.5	Actual Execution
	11.6	Challenge 2 (Societal Perspective)
		11.6.1	Set of Facts
		11.6.2	Operating Procedures
			11.6.2.1 Author’s Explanations
			11.6.2.2 Reader’s Tasks
	11.7	Preparation of the Proposition
		11.7.1	Perspective: From SHI to Universal Health Coverage as a Social Contract
		11.7.2	Between Passive and Selective Contracting
		11.7.3	Contract Features and Implications for Contractual Management
	11.8	Implementation of the Decision
	11.9	Process Optimization
		11.9.1	The Social Contract and the Way Forward
		11.9.2	The CM Model and the Way Forward for Z Benefit Contracting
			11.9.2.1 Planning
			11.9.2.2 Monitoring, Evaluation, and Knowledge Management
			11.9.2.3 Risk Management
	11.10	Actual Execution
	11.11	Learning Outcome
		11.11.1	CM Value for the Case Study
		11.11.2	Case Study Value for the Reader
	References
12 The Jamaica Coalition Case—Managing Political Coalitions Through Contract
	Abstract
	12.1	Challenge
		12.1.1	Set of Facts
		12.1.2	Operating Procedure
			12.1.2.1 Author’s Explanations
			12.1.2.2 Reader’s Tasks
	12.2	Decision-Making Process
		12.2.1	Evaluation of the Decision-Making Circumstances
			12.2.1.1 The Features of Exploratory Talks
			12.2.1.2 The Differences Between Management in Politics and in Business
				12.2.1.2.1 Political Management
				12.2.1.2.2 Best Practice of Coalition Contracts?
				12.2.1.2.3 Differences and Similarities
			12.2.1.3 The CM Model’s Management Fields in Politics
			12.2.1.4 Conclusion About the Applicability of the CM Model to the Exploratory Talks and Coalition Negotiations
		12.2.2	Preparation of the Decision
		12.2.3	Making the Decision
			12.2.3.1 Pro/Con-Analysis
			12.2.3.2 Final Risk Analysis
			12.2.3.3 Decision Proposal
	12.3	Implementation of the Decision
		12.3.1	External Implementation
		12.3.2	Internal Implementation
	12.4	Process Optimization
	12.5	Actual Execution
	12.6	Learning Outcome
		12.6.1	CM Value for the Case Study
		12.6.2	Case Study Value for the Reader
	References
Matrix of Case Studies
Short Biographies of the Authors
Inventory of Contract Knowledge