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This study aims to propose a tool for conceptualizing and operationalizing perceptual distance in client-contractor collaborations: the perceptual distance monitor (PDM). This paper explains how this monitor was developed and used to examine the impact of perceptual distance on project outcomes.

This paper developed the PDM by gathering quantitative survey data from client and contractor representatives. Structural equation modeling tested the predictive validity of perceptual distance on project outcomes.

The PDM enables a valid and reliable assessment of the perceptual distance between client and contractor in projects. Moreover, the PDM shows that project outcomes suffer if parties have different perceptions of project objectives, project managers’ competences and the level of trust in the collaboration. These findings confirm the predictive validity of the PDM.

The study builds on survey data representing dyadic perceptions from 38 measurements in collaborative projects. This paper may not have identified all the effects of perceptual distance on project outcomes, as the analyses were conducted at the project level. This research underlines the importance of gathering dyadic data for studies in interorganizational settings.

Perceptual distance can be expected between clients and contractors, and higher perceptual distance is generally associated with lower project outcomes. Using the PDM, project managers can concretize, discuss and monitor this perceptual distance over time. The PDM provides project managers with a useful tool to prevent the escalation of conflicts and project failure.

Based on agency theory and social identity theory, this study provides a unique and validated conceptualization and operationalization of perceptual distance between client and contractor in interorganizational collaborations and supply chains.

The purpose of this paper is to investigate how perceptions of team performance and teamwork processes relate to functional diversity appropriateness perceptions (FDAP), that is, whether one believes that the right functions are represented in a team. Thereby, the authors distinguish between perceptions of team managers and team members.

The study involved a cross-sectional survey study among 48 sourcing teams from 12 multinational companies, all from different industries.

Members’ and managers’ congruent perceptions of performance showed differential relationships with their perceptions of the team’s functional diversity appropriateness. For managers, perceptions of team performance and functional diversity appropriateness were directly and positively related. For team members, this relationship was moderated by teamwork behavior. Moreover, unlike team members, purchasing managers did not consider functionally diverse teams to be more suitable for executing sourcing tasks.

This study identified teamwork behavior as a critical element for explaining the differences in FDAP of members and managers of sourcing teams.

Rather than homogenizing team structures, managers should stimulate good teamwork behavior that allows for an the integration of interests and insights from different functional areas.

This study adds to functional diversity literature as well as perceptual distance literature by revealing how different team effectiveness criteria shape managers’ and members’ perceptions of functional diversity appropriateness.

The purpose of this paper is to seek to investigate performance outcomes of vendor managed inventory (VMI) from a buyer's perspective and enablers for its successful application.

Structural equation modelling through Partial Least Squares (PLS) is used to identify relationships between four enablers (information systems, information sharing, information quality, and relationship quality), perceived VMI success, and three outcomes (cost reductions, customer service, and supply chain control).

Buyer‐perceived VMI success is impacted by the quality of the buyer‐supplier relationship, the quality of the IT‐system and the intensity of information sharing, but not by the actual quality of the information shared. Furthermore, VMI leads to three performance outcomes: higher customer service levels, improved supply chain control and, to a lesser extent, cost reduction.

Although theory stipulates a positive impact of high quality information on the success of VMI, this study shows that the effect of information quality is limited in practice.

The results of the survey show that purchasing managers who invest in the relationship with their suppliers and a good IT infrastructure are more likely to get better results from a VMI implementation. Furthermore, this paper shows that while most managers expect major cost reductions when implementing VMI, benefits primarily come from improved service levels.

The study provides empirical evidence of why VMI in practice does not achieve all the benefits claimed in theory.

While anecdotal evidence suggests that performance-based contracts (PBCs) may foster innovation in buyer-supplier relationships, the understanding of the underlying mechanisms is limited to date. The purpose of this paper is to draw on transaction cost economics and agency theory to develop a theoretical model that explains how PBCs may lead to innovation.

Using data on 106 inter-organizational relationships from the Dutch maintenance industry, the authors investigate how the two main features of PBCs – low-term specificity and performance-based rewards – affect incremental and radical innovation.

The authors find that term specificity has an inverse-U-shaped effect on incremental innovation and a non-significant negative effect on radical innovation. Furthermore, pay-for-performance has a stronger positive effect on radical innovation than on incremental innovation. The findings suggest that in pursuit of incremental innovation, organizations should draft contracts with low, but not too low, term specificity and incorporate performance-based rewards. Radical innovation may be achieved by rewarding suppliers for their performance only.

The findings suggest that in pursuit of incremental innovation, organizations should draft contracts with low, but not too low, term specificity and incorporate performance-based rewards. Radical innovation requires rewarding suppliers for their performance only.

Total outsourcing is now a common strategy for delivery of building maintenance and facilities services. Standing on the cross roads of “vanish or reinvent oneself” the Maintenance and Control Division of the corporate real estate management (CREM) Service of the Eindhoven University of Technology puts new focus on the operational aspect of CREM and gives less weight to the outside market. Based on engineering management viewpoints on CREM rather than pure economic management viewpoints, the purpose of this paper is to investigate under what conditions a mutual cooperation between in‐house staff and external contractors is successful in implementing new solutions, in effective as well as efficient ways.

A single case methodology in the format of a real business case. Based on theoretical and pragmatic engineering management principles, a business case was developed with the help of a well‐known Business Consultancy. The business case had an interim evaluation and will have a final evaluation.

From the interim evaluation, it can be concluded that the CREM entrepreneurial cooperation is on the right track towards promising results in reaching its efficiency and effectiveness goals. Real cooperation in joint cross‐functional expert teams is felt as experimental and thus time consuming. So CREM entrepreneurial cooperation is only suitable for complex CREM situations where there is a real need for innovative solutions. In spite of this, a sufficient number of large and some international external contractors in diverse aspects of building and building services were willing to participate in CREM entrepreneurial cooperation. In line with the English saying “the proof of the pudding is in the eating”, the official tendering of the next round will prove if the external contractors will be as satisfied as the university with the business case results.

The paper offers a non‐conformist view on mainstream outsourcing trends based on engineering management viewpoints on CREM, rather than pure economic management viewpoints. Also, the business case format of the case study is original.