Buyer-supplier integration in project-based industries

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 - A two-stage survey study of client-contractor relationships in the Swedish construction industry was conducted. The survey rounds in 2006 and 2009 obtained 87 and 106 responses respectively. The proposed model was empirically tested using structural equation modeling techniques.

Findings - The empirical results support our proposed model: incentive-based payment and partner selection based on multiple criteria enhance buyer-supplier integration, in terms of joint action. Furthermore, incentive-based payment increases the use of partner selection based on multiple criteria.

Research limitations/implications - A useful theoretical contribution is that incentive-based payment is an important type of incentive structure that enhances buyer-supplier integration in project contexts.

Practical implications - We also found that the occurrence of joint action has been increasing from 2006 to 2009. Especially, incentive-based payment plays a more important role for establishing joint action in 2009 than in 2006. The recent economic downturn and a recently completed training program targeting the survey population may explain some of the unexpected findings.

Originality/value - The paper addresses an identified gap in the relationship marketing literature, that is, the lack of quantitative studies of relationship marketing aspects in project-based industries.