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Modelling procurement effects on cooperation

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Author Info
Eriksson, Per-Erik
Pesämaa, Ossi

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Abstract

Cooperative arrangements, such as partnering, have received increased interest in recent years. Several studies show however that cooperative relationships are not easily achieved in construction. Implementation of cooperative relationships requires changes in several elements of the traditional procurement procedures. The purpose of this paper is therefore to propose and test a sequential model regarding clients’ cooperative procurement procedures. We especially ask: what elements in clients’ procurement procedures facilitate the establishment of cooperation and trust in their relationships with contractors? The model was tested through structural equation modelling. The empirical data required for the test were collected through a survey responded to by 87 Swedish professional construction clients. The empirical results show that cooperative procurement procedures are triggered by clients’ wish to involve contractors early in specification, which has a simultaneous effect on procedures regarding bid invitation and compensation. Furthermore, these simultaneous effects breed a certain kind of partner selection based on task-related attributes, which also has a direct positive effect on trust and above all on cooperation in client–contractor relationships. Besides these implications from the model, the improvement of measurements for future modelling is discussed.

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File URL: http://mpra.ub.uni-muenchen.de/8730/
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Publisher Info
Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 8730.

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Date of creation: 2007
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Handle: RePEc:pra:mprapa:8730

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Related research
Keywords: Construction cooperation procurement

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Find related papers by JEL classification:
C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Hypothesis Testing
C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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  1. Per Erik Eriksson, 2006. "Procurement and Governance Management ? Development of a Conceptual Procurement Model Based on Different Types of Control," Management Revue, Rainer Hampp Verlag, vol. 17(1), pages 30-49.
  2. Anna Dubois & Lars-Erik Gadde, 2002. "The construction industry as a loosely coupled system: implications for productivity and innovation," Construction Management & Economics, Taylor and Francis Journals, vol. 20(7), pages 621-631, October. [Downloadable!] (restricted)
  3. Bajari, Patrick & Tadelis, Steven, 2001. "Incentives versus Transaction Costs: A Theory of Procurement Contracts," RAND Journal of Economics, The RAND Corporation, vol. 32(3), pages 387-407, Autumn.
  4. M. Motiar Rahman & Mohan M. Kumaraswamy, 2002. "Joint risk management through transactionally efficient relational contracting," Construction Management & Economics, Taylor and Francis Journals, vol. 20(1), pages 45-54, January. [Downloadable!] (restricted)
  5. Roberto Pietroforte, 1997. "Communication and governance in the building process," Construction Management & Economics, Taylor and Francis Journals, vol. 15(1), pages 71-82, January. [Downloadable!] (restricted)
  6. Geoffrey H. Briscoe & Andrew R.J. Dainty & Sarah J. Millett & Richard H. Neale, 2004. "Client-led strategies for construction supply chain improvement," Construction Management & Economics, Taylor and Francis Journals, vol. 22(2), pages 193-201, February. [Downloadable!] (restricted)
  7. Spekman, Robert E., 1988. "Strategic supplier selection: Understanding long-term buyer relationships," Business Horizons, Elsevier, vol. 31(4), pages 75-81. [Downloadable!] (restricted)
  8. Barlow, James, 2000. "Innovation and learning in complex offshore construction projects," Research Policy, Elsevier, vol. 29(7-8), pages 973-989, August. [Downloadable!] (restricted)
  9. Albert P. C. Chan & Daniel W. M. Chan & Kathy S. K. Ho, 2003. "An empirical study of the benefits of construction partnering in Hong Kong," Construction Management & Economics, Taylor and Francis Journals, vol. 21(5), pages 523-533, January. [Downloadable!] (restricted)
  10. Sai-On Cheung, Tsun-Ip Lam, Mei-Yung Leung, Yue-Wang Wan, 2001. "An analytical hierarchy process based procurement selection method," Construction Management & Economics, Taylor and Francis Journals, vol. 19(4), pages 427-437, July. [Downloadable!] (restricted)
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