University of Twente Student Theses


Towards performance-based contracting in service triads

Raukola, Riikka Maaria (2018) Towards performance-based contracting in service triads.

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Abstract:This thesis focuses on identifying actor perceptions, expectations, barriers and goals of performance-based contracting, thus aiming to answer how performance-based contracting can be effectively introduced in service triads. The study contributes to operations and supply management literature by illuminating how transition from product-based contracting to performance-based contracting (PBC) is seen from different actors’ perspectives in a service triad. The triad consists of a purchasing department, mills and suppliers, all operating in forest industry. The study is conducted as qualitative case study that employs an abductive approach. The primary data consists of 25 theme-based individual interviews. The interviews cover all the actors of the triad, namely seven interviews from purchasing department, 11 from eight different mills and seven from three different suppliers. The findings show that the buyer is not a coherent unit, but has conflicting interests. Though the actors possess a variety of perceptions and expectations towards performance-based contracting, most of them are interested in the transition at the level of thought, but do not know how it could be done in practice. Findings also show that it is easier to identify barriers, change resistance, conflicting interests, difficulties in designing the compensation system and fear of increased workload just to name a few, than goals and especially purchasing department believes in the potential of PBC.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration MSc (60644)
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