AN EXPLORATORY STUDY INTO RELATIONSHIP TYPES BETWEEN BUILDING CONTRACTORS AND MATERIAL SUPPLIERS IN THE GHANAIAN CONSTRUCTION INDUSTRY

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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Item Type: Ghanaian Project Material  |  Attribute: 68 pages  |  Chapters: 1-5
Format: MS Word  |  Price: GH50  |  Delivery: Within 30Mins.
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