Changing governance of supply chains in the building industry

While the process of deregulation supported the use of market mechanisms in the building industry, it also means that manufacturers, contractors and architects have become the dominant parties in the supply chains. The objective of this paper is to explain the paradox that deregulation (more market) has inspired more hierarchical forms of organising supply chains of building projects. Concepts from transaction cost economics are used for analysing circumstances under which new co-ordination mechanisms develop. In a multiple case study, firms that are analysed are involved in different stages of supply chains in the building industry. The case studies show one of the partners in the supply chain may take the role of director to improve efficiency as well as to reduce co-ordination costs. Which partner takes this role depends on the specific product–market combination under investigation