Miller, C J M; Packham, G A and Williams, T (1999) Re-defining sub-contracting: Reducing transaction costs? In: Hughes, W (ed.) Proceedings of 15th Annual ARCOM Conference, 15-17 September 1999, Liverpool, UK.
Abstract
It is maintained that partnering can arguably reduce ex post transaction costs within the construction process. These costs primarily arise due to a lack of harmonization between contracting parties. Historically, this relationship has been transactional in nature, with both parties seeking to secure value added at minimal cost. Despite this fact, evidence suggests that mutual co-operation that can supersede a traditional cost led approach offers new hope for prosperity in the construction industry. This paper offers preliminary research highlighting that the competent implementation of strategic partnerships based upon trust can only reduce transaction costs if the small sub-contracting firm is fully integrated into the process. The paper concludes that traditional approaches and new practices will, if they continue to facilitate contractor opportunism, encourage small sub-contracting firms to seek alternative markets instead of enabling mutual co-operation to reduce the transaction costs of all stakeholders involved in the construction process.
| Item Type: | Conference Paper (Paper) |
|---|---|
| Uncontrolled Keywords: | harmonization; partnering; small firms; sub-contracting; transaction costs |
| Index terms: | opportunism, transaction cost, partnering, contracting party, sub-contracting, partnership, evidence, construction process, construction industry, implementation, markets |
| Subjects: | evaluation and assessment methods, organization, business, practitioner, contractual arrangements, economic analysis, partnership management, building construction, industry analysis, financial analysis |
| Topics: | Supply Chain Management, Site Management, Organizational Design, Research Practice, Cost Management, Business Strategy, Procurement, Stakeholder Management, Roles and Professions |
| Descriptive scope: | 4 PCTA |
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