Deep, S; Gajendran, T; Jefferies, M; Uggina, V S and Patil, S (2024) Influence of subcontractors' "strategic capabilities" on "power", "dependence" and "collaboration": An empirical analysis in the context of procurement decisions. Engineering, Construction and Architectural Management, 31(2), pp. 571-592. ISSN 0969-9988
Abstract
Purpose: Research on strategic procurement was mostly focussed on the clients' and main contractors' perspectives, while limited work had been done from a subcontractor's perspective. The paper hypothesises that “strategic capability” influences the latent constructs of power, dependence and collaboration in the main contractor–subcontractor relationship. Therefore, the purpose of this study is to investigate the influence of a subcontractor's strategic capabilities on power, dependence and collaboration. Design/methodology/approach: A survey questionnaire was developed and distributed amongst the subcontractors in Australia, and 212 complete responses were received. Then second order confirmatory factor analysis and partial least square structure equation modelling (PLS-SEM) analysis were performed to test the hypothesised relationships. Findings: The findings support “strategic capabilities” as a construct expressive of a subcontractor's unique market position and good business reputation. The findings also suggest that strategically capable subcontractors enhance their potential for forming partnerships with main contractors through dependence (StratC. → Dep., β = 0.84; Effect Size (ES) = 0.713; p < 0.01), collaboration (StratC. → Collab., β = 0.84; ES = 0.697; p < 0.01) and bargaining power (StratC. → Pow., β = 0.83; ES = 0.672; p < 0.01). Originality/value: The study is one of its kind to explore the impact of a subcontractor's strategic capability on their bargaining power, dependability and ability to form collaborations. Furthermore, results indicate that the “strategic capabilities” of subcontractors can strongly influence their ability to create “dependence”, foster “collaboration” and exert “power” over a main contractor. The findings can help improve the strategic procurement decision-making processes of both subcontractors and main contractors to build better business relationships.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | collaboration; construction; project management; strategic management; subcontractors |
| Index terms: | collaboration, strategic management, methodology, questionnaire, partial least square, subcontractor, confirmatory factor analysis, strategic procurement, survey, bargaining, procurement decision, modelling, project management, main contractor, business relationship, partnership, decision-making process, Australia |
| Subjects: | practitioner, data collection methods, strategic management, strategic project management, analytical methods, project management theory and practice, Geography, research methods, economics, management, statistical analysis, procurement strategy, decision analysis, partnership management |
| Topics: | Organizational Design, Supply Chain Management, Procurement, Stakeholder Management, Roles and Professions, Risk Management, Geographical Context, Project Management, Research Practice, Engineering Principles, Business Strategy |
| Descriptive scope: | 5 PCTEA |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here