Title: Supplier relationships in regulated industries: longitudinal study on energy distribution

Authors: Mika Immonen, Kaisa Tahvanainen, Satu Viljainen

Addresses: Technology Business Research Center, Lappeenranta University of Technology, P.O. Box 20, FI-53851 Lappeenranta, Finland. ' LUT Energy, Department of Electrical Engineering, Lappeenranta University of Technology, P.O. Box 20, FI-53851 Lappeenranta, Finland. ' LUT Energy, Department of Electrical Engineering, Lappeenranta University of Technology, P.O. Box 20, FI-53851 Lappeenranta, Finland

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.

Keywords: procurement management; supplier relationship; content models; market evolution; transaction risks; resource-based view; RBV; energy distribution; portfolio management; industry dynamics; deregulation; FInland; electricity distribution networks.

DOI: 10.1504/IJPM.2011.043001

International Journal of Procurement Management, 2011 Vol.4 No.6, pp.589 - 609

Published online: 31 Jan 2015 *

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