The Contracting Model (theory)

The Contracting Model is a theory in management that emphasizes formal agreements between leaders and team members. It suggests that clear contracts—outlined expectations, roles, and responsibilities—help define how work is done, establish accountability, and promote mutual understanding. This approach encourages transparency and structure, reducing misunderstandings and conflict. Essentially, it treats work relationships like legal agreements, with written terms that guide behavior and performance. By formalizing these agreements, organizations aim to improve coordination, trust, and productivity, ensuring everyone understands their commitments and how their contributions align with organizational goals.