Governance under volatility: how contracts and trust shape opportunism in humanitarian operations

Abstract

Purpose Opportunism poses a significant risk that can undermine relationships between humanitarian actors during disruptions. Thus, it is essential to mitigate this issue, ensuring that actors make decisions that favor effective humanitarian operations. This study aims to highlight the nature and manifestation of opportunism through the lens of governance theory. Design/methodology/approach This study emphasizes how contract- and trust-based governance influence opportunism. The novel model for relationship management during disruption is designed using the logic of transaction cost and relational exchange theories. A challenging survey involving approximately 150 humanitarian actors was conducted. Findings The results demonstrates that contract-based governance significantly enhances trust, but a contract by itself does not effectively reduce opportunism. Trust is crucial in mitigating opportunism. Yet, as the intensity of crises escalates, resulting in high volatility, it may disrupt the beneficial synergies of contract and trust, leading to uncontrollable opportunism. Practical implications This study suggests that policymakers should implement strategies to balance contract- and trust-based governance to reduce opportunism in humanitarian operations. These strategies include prioritizing the development of shared humanitarian principles, establishing adaptive coordination structures and investing in capacity-building initiatives such as joint training. Originality/value This study represents a novel effort to explain how volatility and governance mechanisms are associated with opportunism, specifically in humanitarian operations. While the differences between contract- and trust-based governance are well-explored in business contexts, the findings suggest that strategies effective in business contexts may require modification in humanitarian contexts.