Blay-Armah A, R A (2013) The impact of varying asset specificities of subcontractors on relationships development in construction. In: Smith, S D and Ahiaga-Dagbui, D D (eds.) Proceedings of 29th Annual ARCOM Conference, 2-4 September 2013, Reading, UK.
Abstract
The adoption of more collaborative relationships in the supply network is recommended to provide sustained performance improvement, greater effectiveness and efficiency in operations. Transaction cost economics (TCE), however, argues that competitive advantage results from efficient governance of transactions, which involves tailoring of procurement procedures to transaction characteristics and thus viewing an optimum relationship as a function of asset specificity. Nonetheless, relationships between the main contractors and their subcontractors are complex. This paper explores impact of varying asset specificities of subcontractors on their relationships development. The data is part of an ongoing exploratory study which to date comprises, 7 semi-structured interviews individuals who are involved in the procurement of subcontract packages. The analysis is structured around the key attributes influencing asset specificity of subcontractors. Results suggest that subcontractors can be grouped on the basis of their asset specificity. Low asset specificity is associated with arm’s length relationship, whilst high asset specificity is closely linked to collaborative relationship. The development of bilateral dependency between main contractor and subcontractor starts at tender stage and follows different trajectories, depending on subcontract trade.
| Item Type: | Conference Paper (Paper) |
|---|---|
| Uncontrolled Keywords: | asset specificity; main contractor; relationship development; subcontractor |
| Index terms: | asset specificity, exploratory study, subcontract, governance, transaction cost, package, competitive advantage, interview, main contractor, key attribute, efficiency, subcontractor, effectiveness, tender stage, performance improvement |
| Subjects: | performance measurement, research methods, performance management, tendering, economic concepts, market analysis, financial analysis, data collection methods, risk assessment, business, contract type, practitioner, contractual arrangements |
| Topics: | Research Practice, Cost Management, Governance, Procurement, Roles and Professions, Risk Management, Quality Management, Contract Administration |
| 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