| dc.description.abstract | On the trend of intensive outsourcing in construction industry, how to manage subcontractors, especially the core suppliers, is a crucial element in a contractor’s business strategy. Research in this area has been lacking and few existing research is based on solid field experience. This study examines in depth 30 main general contractors (all listed top 100) to reveal the content of subcontracting strategy. Four major themes are included in their outsourcing strategy: (1) the status of subcontracting; (2) the organizational types and processes of subcontracting; (3) the characteristics of core supply base; and (4) the shifting trend of subcontracting strategy. This study offers abundant information for industrial practitioners to comprehend the essence of outsourcing logistics.
This study concludes that the contractor should consider three dimensions when implementing a subcontracting strategy, including: (1) the cost of subcontracting items, (2) the transaction cost, and (3) the added value. It further suggests that the contractor should carefully evaluate the added value which is created as a result of strategic settings.
Additionally, four indices are given to characterize the a contractor’s core supply base. In quantitative terms, a contractor’’s characteristics and performance are significantly positively correlated with the characteristics of his core supply base. In qualitative terms, according to a case study, the core supply base is pivotal in improving the competitive advantage in most value-added activities in construction.
Finally, subcontracting strategy is categorized into five types in this study, including: (1) market transaction, (2) pure core supply base, (3) quasi-strategic alliance, (4) strategic alliance, and (5) vertical integration. The contractor who carries out aggressive subcontracting strategies, i.e. Type III, IV and V, perform better than the one who remains in Type II. The finding of the study also suggests that the general contractor should regard his subcontractors more as a critical type of construction resource for the success of a project, rather than simply a cost item in running the business. | en_US |