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Procurement and Governance Management ? Development of a Conceptual Procurement Model Based on Different Types of Control

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  • Per Erik Eriksson

    () (Division of Industrial Management, Department of Business Administration and Social Sciences, Luleå University of Technology)

Abstract

Due to the importance of external suppliers for most companies, procurement and governance management is of utmost relevance for achieving competitive advantage. Research in the field of industrial buying behaviour (IBB) has largely been influenced by transaction cost economics (TCE). However, some TCE research has been rather simplistic; not distinguishing between governance structures and mechanisms, while research in IBB has a surplus of descriptive empirical studies and a critical shortage of analytical and conceptual constructs. This paper aims to address these shortcomings by integrating IBB and TCE in a conceptual model regarding procurement and governance of transactions. The model regards the analytical choice of a suitable combination of governance mechanisms (price, trust and authority) for different types of transactions. Additionally, a procedure for facilitating the achievement of a suitable mechanism mix is developed. The procedure shows how decisions during the buying process, regarding different types of control, will affect the mechanisms? levels in the transaction relationship. The model together with its procedure can serve as a basis for analysing planned purchases, in order to tailor governance mechanisms to transaction characteristics.

Suggested Citation

  • Per Erik Eriksson, 2006. "Procurement and Governance Management ? Development of a Conceptual Procurement Model Based on Different Types of Control," management revue. Socio-economic Studies, Rainer Hampp Verlag, vol. 17(1), pages 30-49.
  • Handle: RePEc:rai:mamere:1861-9908_mrev_2006_01_eriksson
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    Cited by:

    1. Per Erik Eriksson & Ossi Pesamaa, 2007. "Modelling procurement effects on cooperation," Construction Management and Economics, Taylor & Francis Journals, vol. 25(8), pages 893-901.

    More about this item

    Keywords

    Procurement; Governance; Control; Transaction Cost Economics;

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence
    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General

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