Where is the origin for cause of conflict arising from in a buyer- seller relationship

Abstract

This case study looks into one of the inevitable outcomes of a buyer- seller relationship, the negative incidents. The hypothesis in this study is to increase the understanding of where the origin for cause of negative incidents, i.e. conflicts, arises from in a buyer- seller relationship in a complex project. The empirical research undertaken for this study was done by using data from three selected dyads. The collected incidents where applied in a questioner used in an interview with stakeholders from the dyads, they were asked to grade the incidents of conflict according to two sets of constructs. Case studies do have challenges when it comes to generalisation as the only certainty comes from the informants and the case one has studied. Another limitation is the selection, the study has a fairly small selection of participants and that the dyads are picked from the same project. In identifying and explaining where the origin for cause of conflict arises from in a business relationship, the characteristics of governance mechanism are applied because they can indicate the origin of conflict. And if a conflict in a dyad primarily is associated with one of the two governance mechanisms one can assume that the weaknesses in that type of governance mechanism is the main source for the emerged conflict. In addition the participants’ perception of importance of the incidents could have an effect on how they rate the governance mechanism, especially if they are in doubt with regards to the cause of the incident, and consequently the perception of importance was the second set of constructs applied in the study. The results reviled that the higher the perceived importance the higher the tendency towards lack of formal governances and conclusion of this study is that lack of formal governance causes the majority of conflicts in the buyer- seller relationship. It would be beneficial for both buyer and seller to put focus on and strengthen the formal connection of the relationship, as this could possibly prevent and eliminate potential costly conflicts, resulting in saving both time and costs and increasing the ability to compete.