An Alternative Form of Supply Chain Governance: Construction Clans

The utility of supply chain management practice within a construction context has
over the past two decades fuelled a great deal of debate. Industry commentators have extolled the virtues and underscored the shortcomings of supply chain management in equal measure. Sponsors of construction supply chain management, including Central Government have repeatedly expressed exasperation at the apparent inability of the sector to grasp rudimentary behaviours of the supply chain concept. Critics, on the other hand have highlighted the discernable lack of contextual adaptation as a primary
cause of underachievement. Drawing inspiration from Williamson, Powell and Ouchi among other eminent writers specialising on alternative forms of organisational structure, this paper explores the contribution 'construction clans' may have on the performance of supply chain management. Clan forms of organisational structure are described as hybrid mechanism of governance, neither a market nor a hierarchy. Not to be mistaken with other coordinating mechanisms of organisational governance such as networks and fiefs, clans are distinguishable by their highly socialised marketplace, enduring relationships and emergent local culture. The growing legitimacy of construction clans may be emblematic of contemporary construction procurement routes such as Framework Agreements. Aided by multiparty contracts such as PPC 2000 and NEC3, it may be contested that construction supply chains are beginning to display ever-increasing levels of corporate inter-dependency and commercial solidarity. Business expectations within a construction clan cast a shadow of future transactions predisposed to temper traditional behavioural tendencies that
have bedevilled the construction industry’s public reputation. Mindful of the fine line between collaboration and collusion, this paper draws on extant literature and
contemporary industry practice to discuss the opportunities and threats an alternative form of supply chain governance such as construction clans may have on industry comprehension and the future enactment of construction supply chain management.