ABSTRACT
Buyer-supplier relationship can enhance competitive
market amongst the participants and thus increasing their economic performance.
Different projects may exhibit different relationships that exist between the
contractors and suppliers and as such the construction field has been exposed
to various challenges and conflicts resulting from misunderstandings about the
roles and obligations of the players. This research study therefore focused on
the exploration of relationship types that exist between building contractors
and material suppliers in the Ghanaian construction industry. In order to achieve
the above stipulated aim, three main objectives were carved out. This research
work made use of survey questionnaires to acquire the appropriate desired data
among D3K3 and D4K4 contractors in the Greater Accra Region. Adopting a
purposive and convenience sampling technique a total of 60 questionnaires was
distributed among the targeted population. The results of the survey showed
that transactions relationship was the most often engaged relationship type
with the second ranked relationship type being project collaboration. The
analysis further showed that delays was a major factor influencing the
selection of relationship types in the construction industry. The second most
important variable influencing relationship type was trust. The findings
indicate that the in terms of quality, the ideal relationship type is project
collaboration‘. As project collaboration is touted to be one of the
relationships considered to engender growing relationship, this type of
relationship is recommended for the Ghanaian construction industry. It is
recommended that further research work may explore innovative relationship
types between contractors and suppliers in the Ghanaian construction industry.
CHAPTER ONE
INTRODUCTION
1.0 INTRODUCTION
The economy of Ghana has the
construction industry to be one of its important sectors which contributes a
percentage of 8.5 averagely to the Gross Domestic Product (Ghana Statistical
Service, 2007). In 2002, about 2.3% of the working population was engaged by
the construction industry economically (Amankwa, 2003). The construction
industry assists in the line of manufacturing of other industries and also
produces goods for its customers‘ consumption. The responsibility of the
industry has become very key after the discovery of oil with Ghana‘s aspiration
of becoming a middle income nation.
With the constant increase in
competition in the global market, there is a pressure for most organisations to
find the means of cutting down material and production costs hence making the
role of suppliers in the construction industry very crucial. Both the
purchasing department and the supply chain management of every firm deem it
very necessary to conduct a proper evaluation for the selection of a qualified
and reliable supplier in order to attain a reduction in the material and
production costs. Most of contractors highly rely on their suppliers for the
realization of projects and the attainment of the projects‘ required
performance. It has been proven by most studies that about ninety percent (90%)
of the turnover made in a project by the main contractors is spent on the
purchasing of goods and services and this serves as opportunities for both the
contractors and the suppliers (Koskela, 2000). Therefore, this emphasises on
the need on managing the suppliers. Unfortunately, a lot of Contractors have
the intention of building a closer and a long term relationship with their
clients and the inverse with their suppliers.
The contractor-supplier relationship
can be built on trust, commitment to same goals having full knowledge and
in-depth understanding of the expectations and values of each other to enhance
efficiency and cost effectiveness, to provide the chance for innovation
increment and the constant development of quality goods and services due the
significance of partnering and cooperation that exits between the main
contractor and the supplier. According to Gadde and Snehota (2000), one of the
key and valuable assets of every firms is relationship and its management is
not significantly for procurement and transactional relationships but to ensure
the realisation of different facets of business undertakings (Chen and Paulraj,
2004b).
Various studies show that embedding
supplier management philosophies into procurement routes is imperative for
contractors in the built environment (Hennig-Thurau et al., 2002; Berry, 1995).
Among many things they critically influence a company‘s performance. The range
of this philosophies vary and they differ from concepts of strengthening
buyer-supplier relationship to the selection of the appropriate supplier (Prajogo
et al., 2012). Factors that
influence the right selection of
any given supplier include factors such as the products under consideration,
the desired standard of the material, how costly the material is to the given
project goal. (Prajogo et.al., 2012). Customers or buyers expect their
suppliers to uphold known standards of product quality, service, distribution,
promotion and partnering within that industry (Narayandas & Rangan, 2004).
Subsequently, issues on supplier relationship quality (SRQ) has garnered
substantial academic and industrial attention in other fields and industries.
It is however interesting to note that within the context of developing
countries there is a paucity of research especially within the construction
industry. However, within developing countries such research is limited,
particularly within the context of the construction industry (Batt & Rexha,
2000; MacDuffie, 2011; Jiang et.al., 2011a). This observation may be due to the
limited research due to apparent disparities in socio-economic profiles between both developed and developing countries.
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