Procurement effects on trust and control in client-contractor relationships: Fid-Bau Portal

Procurement effects on trust and control in client-contractor relationships

Erik Eriksson, Per / Laan, Albertus

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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.