Buyer-supplier integration in project-based industries

• Published in: The Journal of business & industrial marketing Vol. 28; no. 1; pp. 29 - 40
• Main Authors: Erik Eriksson, Per, Pesämaa, Ossi
• Format: Journal Article
• Language: English
• Published: Santa Barbara Emerald Group Publishing Limited 01.01.2013
• Subjects: Behavior; Business-to-business marketing/industrial marketing; Collaboration; Construction industry; Distribution channels & markets; Entrepreneurship and Innovation; Entreprenörskap och innovation; Joint products; Marketing; Product development; Purchasing; Relationship marketing; Structural equation modeling; Studies; Suppliers; Variables; Buyer-supplier relationships; Procurement; Purchasing; Project management; Partnering
• ISSN: 0885-8624; 2052-1189; 2052-1189
• DOI: 10.1108/08858621311285697

Purpose – The purpose of the study is to propose and test a buyer-supplier integration model, based on clients' collaborative purchasing practices, in a project-based industry. Design/methodology/approach – Hypotheses regarding the relationships among the three variables – i.e. incentive-based payment (IBP), partner selection (PS) based on multiple criteria, and joint action (JA) – are tested using structural equation modeling. Empirical data was collected through two survey rounds of 87 and 106 Swedish construction clients. Findings – The test of the proposed theoretical model receives strong empirical support, indicating that IBP should be coupled with PS based on multiple criteria in order to facilitate JA. Furthermore, it is seen that the occurrence of JA is higher in 2009 than in 2006 and that this is achieved through increased use of IBP. Research limitations/implications – The hypothesized and tested model provides a theoretical contribution, indicating how to facilitate buyer-supplier integration in project-based industries. In future studies it would be useful to adopt a multiple-informant approach, also including suppliers as respondents in order to capture their views on integration. Practical implications – An important managerial implication is that public clients need to improve their understanding of how to design bid proposals and evaluate bids based on multiple criteria instead of lowest price, without infringing public procurement acts. Originality/value – This paper offers unique contributions by addressing a gap in the relationship marketing literature and a lack of quantitative studies of buyer-supplier relationships in project-based industries.