Efficient governance of construction projects through cooperative procurement procedures

Abstract: The purpose of this research is to increase the understanding of how efficient governance of construction projects can be achieved through appropriate procurement procedures. In this PhD project, literature reviews, a pre-study, a longitudinal case study and a survey study have been conducted in order to investigate five research questions and thereby fulfil the research purpose. The main theoretical field in this thesis is transaction cost economics, which forms the basis of the developed conceptual procurement model. Other literature fields that have been reviewed are: game theory, innovation, partnering, industrial buying behaviour and principal-agent theory. All these different theories and fields of literature have one thing in common: they are all well suited to analysing different aspects of buyer-supplier relationships. The research presented in this thesis contributes to theory and practice in four main ways. 1) The developed conceptual procurement model adds knowledge to transaction cost economics through a broad process perspective that makes it possible to describe how governance prescriptions can be achieved by suitable procurement procedures. The model also contributes to procurement practice since it may be utilised as a useful framework, guiding procurement decisions in order to tailor procurement procedures to transaction characteristics. In this way it increases the understanding of how to procure different types of projects in order to facilitate efficient governance. 2) The survey study shows that the current procurement procedures used by Swedish construction clients are still of the traditional type, facilitating governance forms focusing on price and authority, which according to the conceptual model are unsuitable in construction transactions. This finding can hopefully serve as an alert to practitioners that their procurement procedures have become obsolete due to the increased complexity and uncertainty of construction projects. 3) The case illustrations and the structural equation model show that cooperative procurement procedures facilitate the establishment of cooperation and thereby efficient governance of complex, customised and lengthy construction projects with high uncertainty. These procedures are therefore more suitable and up to date than the most common ones. 4) A side effect of this research is a suggestion of how to look upon the concept of partnering. The research results suggest that different governance forms are facilitated through different procurement procedures. An indirect finding is therefore that partnering can be viewed as a cooperative governance form, which is facilitated through cooperative procurement procedures. The TCE-perspective of this definition makes sure that partnering is not used for its own sake, but only to achieve efficient governance, tailored to the characteristics of the transaction.

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