Frödell, M (2014) Organisation of purchasing and buyer-supplier relationships in large construction companies. PhD thesis, Chalmers University of Technology, Sweden.
Abstract
Large construction companies purchase 70-80 per cent of their turnover from material and service suppliers, rendering their purchasing processes and practices crucial for achieving profitability and a competitive edge. However, the organisational structure of these companies, where purchasing is conducted in both the central purchasing department and in the projects, makes purchasing a challenging issue. Despite the potential benefits and challenges, research on purchasing in construction companies remains scarce. The aim of this thesis is two-fold: (1) to explore purchasing processes and practices in large Swedish construction companies regarding organisation of purchasing and buyer-supplier relationships, and (2) to suggest ways of improving purchasing. This thesis is based on two studies. The first is a two-year case study in a large construction company where participant observations and interviews provided an understanding of purchasing mainly from the perspective of a central purchasing department. The second study is an interview study carried out in three large construction companies and among their subcontractors. The latter study provided important insights into the projects’ perspective on purchasing. This thesis shows conflicting interests between the purchasing department and the projects concerning relationships with suppliers with framework agreements. While purchasing departments have a long-term focus, projects focus on flexibility and smoothness in project delivery. These conflicting interests result in a dual interface towards suppliers. To bridge this tension, increased internal integration is proposed by forming cross-functional teams. The thesis also shows current practices for achieving cooperation in the relationships between contractor site managers and subcontractor foremen. This identified cooperation nuances the current one-sided perception of the construction industry as adversarial and short-term. Moreover, this thesis proposes a new definition of purchasing in construction, highlighting the importance of integrating strategic and operational perspectives when exploring purchasing processes and practices.
| Item Type: | Thesis (Doctoral) |
|---|---|
| Uncontrolled Keywords: | flexibility; case study; interview; participant observation; integration; project delivery; purchasing; site manager; subcontractor; supplier; organisational structure |
| Index terms: | construction company, organizational structure, turnover, interview, observation, subcontractor, cooperation, integration, purchasing, case study, framework agreement, project delivery, construction industry, profitability, site manager |
| Subjects: | economic analysis, contractual arrangements, business management, psychology, practitioner, organization, project delivery, data collection methods, procurement strategy, industry analysis, sociology, organizational analysis |
| Topics: | Procurement, Organizational Design, Business Strategy, Research Practice, Roles and Professions |
| Descriptive scope: | 4 PCTE |
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