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2024/2025  KAN-CCMVV2452U  Value-creating contracts

English Title
Value-creating contracts

Course information

Language English
Course ECTS 7.5 ECTS
Type Elective
Level Full Degree Master
Duration One Semester
Start time of the course Autumn
Timetable Course schedule will be posted at calendar.cbs.dk
Study board
Study Board for cand.merc. and GMA (CM)
Course coordinator
  • Henrik Lando - Department of Business Humanities and Law (BHL)
Main academic disciplines
  • Strategy
  • Supply chain management and logistics
  • Economics
Teaching methods
  • Face-to-face teaching
Last updated on 19-02-2024

Relevant links

Learning objectives
The aim is to enable the student to:
  • Design contracts that create optimal incentives and risk allocations
  • Design a strategy for close contractual cooperation with certain customers or suppliers
  • Use the flow of information generated digitally through contracts to manage contracts both relationally and formally
Course prerequisites
The course requires a basic understanding of economics as acquired through bachelor programs at CBS (or similar programs).
Value-Creating Contracts:
Exam ECTS 7,5
Examination form Oral exam
Individual or group exam Individual exam
Duration 20 min. per student, including examiners' discussion of grade, and informing plus explaining the grade
Preparation time With the listed preparation time: 20 Minutes
Grading scale 7-point grading scale
Examiner(s) Internal examiner and second internal examiner
Exam period Winter
Aids Open book: all written and electronic aids
The student is allowed to bring to the preparation room: Simple writing and drawing utensils, laptop/tablet as a reference book (NB: there are no electric outlets available), any calculator, books including translation dictionaries, compendiums, notes. PLEASE NOTE: Students are not allowed to communicate with others during the preparation time.
Make-up exam/re-exam
Same examination form as the ordinary exam
The re-examination will follow the same format as the regular exam.
Description of the exam procedure

The student draws a question within one of the learning objectives that have been communicated at the outset of the course. During the twenty-minute preparation, the student prepares an answer to the question. The exam then first addresses the learning objective after which the conversation may turn to other learning objectives.  

Course content, structure and pedagogical approach

Contracts establish the framework for value-creating and innovative business cooperation. They establish incentives, allocate risk, and create processes for re-negotiation and information exchange. To design optimal contracts, and to carry them out productively through modern contract management techniques, requires an understanding of both classical and behavioral contract theory where the latter includes psychological factors such as reciprocity, trust, and identity. The course includes both theories and illustrates their usefulness through real-world cases in which the students are asked to choose a contracting strategy or to design or negotiate a contract.

Professor Lisa Bernstein, who is world renown expert on how contracts are applied in reality, will co-teach theories and cases, drawing in part on her recent work on managerial outsourcing contracts.

Also, some learning objectives are inspired by the work of the World Commerce and Contracting organization (worldcc.com), enabling students to apply for its apprenticeship program in large international companies. 

Description of the teaching methods
There will on the one hand be lectures about theories and cases, and on the other hand problem-solving in class, where the student, either in groups or individually, will be asked to design a contract's terms or suggest a firm's contract strategy based on real-world cases. Abstract theory will be taught through examples.
The aim is to involve the student to a maximal degree. Lectures will for example take the form of a dialogue rather than a monologue.
Feedback during the teaching period
The student will receive immediate feedback when participating in the dialogue in class and when solving problems in class. Thus, the student will learn the theories and the practices by solving concrete problems; when provided with possible solutions to these problems, the student will receive immediate feedback. Immediate feedback will also be given by project managers from Rambøll who have co-designed a final case study from their practice. Here, the student will be asked to suggest courses of action, and the managers will respond.
Student workload
Undervisning 30 hours
Studenterforberedelse 146 hours
Eksamensforberedelse 30 hours
Further Information



The course includes several of the Nordic Nine principles:




The course provides a deep understanding of business practices by deepening the student's understanding of classic and modern contract theory 



Ambiguity plays a significant role in many of the situations in which the students are asked to choose contract terms or strategy 




Sustainability can be achieved through contractual cooperation with suppliers which also involves ethical dimensions and loyalty




The course aims to enable the student to strengthen a firm's competitive edge. The exercise of loyalty and integrity can be part of this and will be discussed in relational contracting



See #4 



The course underlines the importance of the principle of value maximization, which demands creative problem-solving, critical thinking, and collaborative practices


Prosperity is the aim behind the value maximization principle which is central to the course. Sustainability involves the prosperity of future generations 




Growth occurs through learning and relearning, and the mutual learning experience in group work




The course includes international contracts that create value both globally and locally





Expected literature

Battigalli, P., & Maggi, G. (2002). Rigidity, discretion, and the costs of writing contracts. American Economic Review, 92(4), p. 798 -802.

Bernstein L. & Peterson B: Managerial Contracting: A Preliminary Study, Journal of Legal Analysis, 2023. 

Doz, Y. L. (1987). Technology partnerships between larger and smaller firms: Some critical issues. 

International Studies of Management & Organization, 17(4), 31–57. 

Frydlinger, Hart and Vitasek: A new approach to 

contracts, Harvard Business Review, September/October, 2019.  

Lando, Henrik og Norden, Gunnar: Note om Coase-teoremet. Undervisningsnote.  

Lando, Henrik: How to allocate risk in a large construction project. Undervisningsnote. p 5-48.   

Lando, Henrik. Note om Charness-artikel. Undervisningsnote.

Murnighan, J. K., Babcock, L., Thompson, L., & Pillutla, M. (1999). The information dilemma in negotiations: Effects of experience, incentives, and integrative potential. International Journal of Conflict Management, 10(4). p.  

Rabin M. (1993). Incorporating Fairness into Game Theory and Economics, The American Economic Review , Vol . 83 , No . 5 ( Dec ., 1993 ), pp . 1280-1284. 

R, Wohlgezogen et al. The two facets of coordination. Academy of Management Annals (2012) 6(1) 531-583.

Last updated on 19-02-2024