The purchase of information technology products by Dutch SMEs : problem resolution

This research focuses on the purchase of information technology (IT) products by small and medium-sized enterprises (SMEs) in the Netherlands. Based on nationwide representative survey data (a total of 1,252 IT transactions), the research considers the problems that Dutch SMEs are faced with and the way in which these problems are dealt with. On average, 28 percent of transaction are completed without problems. If problems are encountered, they mostly involve inadequate documentation (45 percent of all transactions). Frequently mentioned problems, such as incompatibility with other IT products and being over budget, occur much less frequently (about 25 percent of all transactions). Moreover, strong support was found for the existence of a specific sequence in dealing with ex-post problems. Nearly all SMEs at least communicate the problem to the supplier; if that does not solve the issue, it is almost always followed by active deliberation with the supplier about a solution. If that does not help, about half of the SMEs impose some kind of sanction (most of the time delaying the payment). If that still does not settle the issue, virtually all SMEs give up on it. Third parties, such as arbitration committees or the courts, are rarely invoked

Ex Post Problems in Buyer–Supplier Transactions: Effects of Transaction Characteristics, Social Embeddedness, and Contractual Governance

This paper focuses on ex post governance of inter-firm transactions. We develop and test hypotheses on the occurrence of ex post problems like delivery delays, inferior quality, and insufficient service in buyer–supplier transactions. Our hypotheses address effects of transaction characteristics, of social embeddedness, and of contractual governance on the occurrence of problems. Other than earlier research on embeddedness effects in this field, we consider not only effects of dyadic embeddedness but also effects of network embeddedness. We test hypotheses using rich survey data on more than 1200 purchases of information technology (IT) products: hardware and software, both standard and complex. We find evidence for effects of transaction characteristics on the occurrence of problems, while our data do not support hypotheses on effects of contractual governance. Our data provide rather consistent support for hypotheses on the effects of embeddedness. Specifically, we find evidence that network embeddedness reduces problems. Copyright Springer Science+Business Media, Inc. 2006buyer–supplier relations, embeddedness, ex post problems, inter-firm networks, governance, transaction cost theory,