Beyond intentional trust: supplier opportunism and management control mechanisms in public sector procurement and contracting

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Abstract

We test an argument, drawn from transaction cost economics, that an assumption of intentional trust should be replaced with one of supplier opportunism in public sector procurement and contract management. We use structural equation modelling to evaluate quantitative evidence from 180 public and private sector buyers on the perceived effectiveness of various management control mechanisms aimed at restraining supplier opportunism. Our findings suggest that supplier opportunism is potentially a problem and that certain procurement and contract management mechanisms can assist buying organisations in moderating that opportunism. This supports arguments in favour of a 'cautious approach' to procurement and contract management.
Original languageEnglish
Pages (from-to)289-311
Number of pages22
JournalPolicy and politics
Volume44
Issue number2
DOIs
Publication statusPublished - 1 Apr 2016

Keywords

  • procurement
  • contract management
  • intentional trust
  • opportunism

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