IDEAS home Printed from
   My bibliography  Save this article

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


  • Per Erik Eriksson

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


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

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Jonathan Levin & Steven Tadelis, 2005. "Profit Sharing and the Role of Professional Partnerships," The Quarterly Journal of Economics, Oxford University Press, vol. 120(1), pages 131-171.
    2. Sharon M. Oster & Daniel S. Hamermesh, 1998. "Aging And Productivity Among Economists," The Review of Economics and Statistics, MIT Press, vol. 80(1), pages 154-156, February.
    3. Uschi Backes-Gellner & Arndt Werner, 2003. "Entrepreneurial Signaling: Success Factors for Innovative Start-Ups," Working Papers 0055, University of Zurich, Institute for Strategy and Business Economics (ISU), revised Mar 2004.
    4. Barron, John M & Gjerde, Kathy Paulson, 1997. "Peer Pressure in an Agency Relationship," Journal of Labor Economics, University of Chicago Press, vol. 15(2), pages 234-254, April.
    5. Coupé, Tom & Smeets, Valerie & Warzynski, Frederic, 2003. "Incentives in Economic Departments: Testing Tournaments?," Working Papers 03-25, University of Aarhus, Aarhus School of Business, Department of Economics.
    6. David Austen-Smith, 2002. "Peer Pressure and Job Market Signaling," Discussion Papers 1352, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    7. Brent Boning & Casey Ichniowski & Kathryn Shaw, 2007. "Opportunity Counts: Teams and the Effectiveness of Production Incentives," Journal of Labor Economics, University of Chicago Press, vol. 25, pages 613-650.
    8. Armendariz de Aghion, Beatriz, 1999. "On the design of a credit agreement with peer monitoring," Journal of Development Economics, Elsevier, vol. 60(1), pages 79-104, October.
    9. Casey Ichniowski & Kathryn Shaw, 2003. "Beyond Incentive Pay: Insiders' Estimates of the Value of Complementary Human Resource Management Practices," Journal of Economic Perspectives, American Economic Association, vol. 17(1), pages 155-180, Winter.
    10. Holzer, Harry J, 1994. "Job Vacancy Rates in the Firm: An Empirical Analysis," Economica, London School of Economics and Political Science, vol. 61(241), pages 17-36, February.
    11. Kandel, Eugene & Lazear, Edward P, 1992. "Peer Pressure and Partnerships," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 801-817, August.
    12. S.J. Prais, 1981. "Vocational Qualifications of the Labour Force in Britain and Germany," National Institute Economic Review, National Institute of Economic and Social Research, vol. 98(1), pages 47-59, November.
    13. Finegold, David & Soskice, David, 1988. "The Failure of Training in Britain: Analysis and Prescription," Oxford Review of Economic Policy, Oxford University Press, vol. 4(3), pages 21-53, Autumn.
    14. Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, Oxford University Press, vol. 87(3), pages 355-374.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    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


    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


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rai:mamere:1861-9908_mrev_2006_01_eriksson. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Rainer Hampp). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.