Uncertainty In Material Procurement Facing Construction Firms: A Design Of Effective Transaction Model

In southwestern region, the increase of water conservancy developing projects makes the supply tensions for material in recent years, because of that, Ertan company and suppliers have intentions to establish strategic cooperative partnership', to reduce response the uncertainty in the procurement. But the scope and depth of cooperation are neither clear nor understudied. In 2007, with the implementation of the state's adjustment policies in energy industry, a large amount of cement productivity were canceled, contradiction between market supply and demand was exacerbated in a short term. New investment in productivity and implementation of the intensity of policy and other factors make the situation unpredictable in mid-period market.Under such circumstances, the uncertainty of material supply increased, which has been an important issue facing construction companies at present. So it is significant to design mechanisms to reduce uncertainties with the concept of partnership.Firstly, the paper analyzes of the reasons in detail, the status and trend of the uncertainty facing construction companies in material procurement, points out that demand increase, procutivity decrease, and transportation etc. result in the uncertainty in material procurement for construction companies.In order to know what companies should respond and how to when the uncertainty increases, the paper put the theory of uncertainty and choice of transaction system together, improved Williamson Economic theory, as the theoretical guidance of this paper according to comments and the actual situation.Then, in accordance with the judgment method of improved Williamson Economic theory, deducted that companies should adopt the trading system of partner organizations when uncertainty increased. It provided the theoretical foundation of construction companies adopt partnership, and resolved what should be used to deal with increased uncertainty.Based on theoretical framework, the author suggested that the main impact of increased uncertainty's transactions to enterprises is that they will lead to more acts of opportunism. This article analyzes the factors of Participants'action in the transaction from three aspects: "price - plan and the implementation of the plan - inventory", then concluded that opportunism will happen in current market organizations, and pointed out that the cost of these acts or loses will increase as uncertainty increase, given an empirical testing. What need to be dealt when the uncertainty increase is resolved.Based on the two conclusions above, in accordance with the concept of partner organizations, the principle of incentive compatibility and the analysis of participants'action in the transaction, mainly to contract and supplemented by relationship, blueprinted the system to cope with the uncertainty.