Supplier relationships in regulated industries: longitudinal study on energy distribution
by Mika Immonen, Kaisa Tahvanainen, Satu Viljainen
International Journal of Procurement Management (IJPM), Vol. 4, No. 6, 2011

Abstract: The article attempts to analyse the transformation of procurement management with Finnish electricity distribution network operators regarding the maintenance and construction of distribution networks. We aim to provide insights into their portfolio frameworks the dynamics of which are illustrated using a longitudinal case-based study. The case study is based on archival analysis and interviews. The article demonstrates how the competitive changes through regulation, supply market evolution and supply decisions are interlinked. The appropriateness of: 1) the strategic value of functions; 2) transaction risks; 3) the performance view of portfolio models is evaluated from a theoretical viewpoint. Our findings suggest that supply management changes along with relationship management on high strategic value, comparative performance and the transaction costs of externalised activities. Indeed, the study shows that procurement management becomes less sensitive to portfolio attributes if specialised service providers are able to build attractive offerings.

Online publication date: Sat, 31-Jan-2015

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