The interplay of governance mechanisms in complex procurement projects

Marjolein C. J. Caniels, Cees J. Gelderman*, Nicole P. Vermeulen

*Corresponding author for this work

    Research output: Contribution to journalArticleAcademicpeer-review

    Abstract

    Although many studies have investigated governance in inter-firm relationships, little is known about the simultaneous use of several governance mechanisms in complex procurement projects and their impact on project outcomes. In a case study about a complex procurement project in the Norwegian oil and gas industry, we investigate the interplay of contractual incentives, authority and relational governance. The project faced many problems with cost overruns and schedule delays. The study clearly illustrates the interrelationships between governance mechanisms and their effect on project outcomes. The findings suggest that relational governance (trust) is only beneficial for project outcomes when it is accompanied by contractual incentives and control systems (authority). Relational governance in itself does not guarantee an effective and beneficial interplay of all three mechanisms in a way that positive project outcomes are generated. (C) 2012 Elsevier Ltd. All rights reserved.
    Original languageEnglish
    Pages (from-to)113-121
    Number of pages9
    JournalJournal of Purchasing and Supply Management
    Volume18
    Issue number2
    DOIs
    Publication statusPublished - Jun 2012

    Keywords

    • Governance mechanisms
    • Contract theory
    • Complex procurements
    • Buyer-supplier relationships
    • Authority
    • Trust
    • Contractual incentives
    • BUYER-SUPPLIER RELATIONSHIPS
    • RELATIONAL GOVERNANCE
    • INTERFIRM RELATIONSHIPS
    • TRUST
    • OPPORTUNISM
    • EXCHANGE
    • SOCIALIZATION
    • CONSEQUENCES
    • INVESTMENTS
    • ANTECEDENTS

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