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Procurement effects on trust and control in client‐contractor relationships

Per Erik Eriksson (Department of Business Administration and Management, Luleå University of Technology, Luleå, Sweden)
Albertus Laan (Department of Construction Management and Engineering, University of Twente, Enschede, The Netherlands)

Engineering, Construction and Architectural Management

ISSN: 0969-9988

Article publication date: 10 July 2007

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Abstract

Purpose

This paper aims to investigate how construction clients currently deal with procurement and to analyse how the choices made during the buying process stages affect the combination of governance mechanisms and control types in client‐contractor relationships.

Design/methodology/approach

Empirical data were collected through a survey of 87 Swedish construction clients.

Findings

Current procurement procedures establish governance forms facilitating a focus on price, through output control, and authority, through process control. Since construction transactions are mostly characterized by high complexity and customisation and long duration, the theoretical framework prescribes a focus on trust and a somewhat lower focus on price and authority. Hence, from a transaction cost perspective, construction clients focus too much on price and authority and too little on trust. Since current procedures may cause problems in all stages of the buying process, the result suggests that partnering arrangements, entailing completely different choices during the buying process, may be a suitable way to facilitate trust and cooperation through informal social control.

Research limitations/implications

Since the empirical results are based on data collected from only Swedish clients, international generalizations should be made cautiously.

Practical implications

Clients wishing to implement trust‐based collaborative relationships need to reconsider their procurement procedures entirely; joint objectives, teambuilding and other “fuzzy” techniques are not enough to transform adversarial relationships into cooperative ones.

Originality/value

Earlier research has focused on one or a few aspects of procurement and governance, while this paper adopts an overall process perspective, taking into account clients' procurement procedures in their entirety.

Keywords

Citation

Erik Eriksson, P. and Laan, A. (2007), "Procurement effects on trust and control in client‐contractor relationships", Engineering, Construction and Architectural Management, Vol. 14 No. 4, pp. 387-399. https://doi.org/10.1108/09699980710760694

Publisher

:

Emerald Group Publishing Limited

Copyright © 2007, Emerald Group Publishing Limited

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