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The Effect of Customer-Contractor Alignment in Forest Harvesting Services on Contractor Profitability and the Risk for Relationship Breakdown

Eriksson, Mattias and LeBel, Luc and Lindroos, Ola (2017). The Effect of Customer-Contractor Alignment in Forest Harvesting Services on Contractor Profitability and the Risk for Relationship Breakdown. Forests. 8, 1-18
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Official URL: https://dx.doi.org/10.3390/f8100360

Abstract

In forest operations, the interface between forest companies and harvesting contractors is of special importance, considering that it is the first link in the forest industry's supply chains. Supply operations account for a significant share of the final costs of wood products (up to 50%). This study investigates the effect of customer-contractor alignment on contractors' profit margins and on the risk for business relationship breakdown. Alignment is empirically measured for a Swedish forest company and 74 of its harvesting contractors, who were monitored during a four-year period. Two measures of alignment are employed: (1) the customer-perceived value of the contractors' services; and (2) the contractors' perceived alignment with the forest company expectations. Results indicate that the two measures of alignment are largely independent from each other, and that customer-perceived value affects both contractor profitability and the risk of relationship breakdown. Conflict between the two parties and lack of trust for the customer were found to be common complaints among contractors who ceased working for the studied forest company. Consequently, customer-contractor alignment should be considered a key objective by contractors who strive for business success, and also by forest companies who wish to improve their supply chain performance.

Authors/Creators:Eriksson, Mattias and LeBel, Luc and Lindroos, Ola
Title:The Effect of Customer-Contractor Alignment in Forest Harvesting Services on Contractor Profitability and the Risk for Relationship Breakdown
Series/Journal:Forests (1999-4907)
Year of publishing :2017
Volume:8
Page range:1-18
Number of Pages:18
Publisher:MDPI
ISSN:1999-4907
Language:English
Publication Type:Journal article
Refereed:Yes
Article category:Scientific peer reviewed
Version:Published version
Full Text Status:Public
Subjects:(A) Swedish standard research categories 2011 > 4 Agricultural Sciences > 401 Agricultural, Forestry and Fisheries > Forest Science
Agrovoc terms:forestry, contracts, business associations
Keywords:forest harvesting contractor, supply chain alignment, customer-perceived value, contractor profitability, business relationship, supply risk
URN:NBN:urn:nbn:se:slu:epsilon-e-4579
Permanent URL:
http://urn.kb.se/resolve?urn=urn:nbn:se:slu:epsilon-e-4579
Additional ID:
Type of IDID
DOI10.3390/f8100360
Web of Science (WoS)000414627600007
ID Code:14856
Faculty:S - Faculty of Forest Sciences
Department:(S) > Department of Forest Biomaterials and Technology (from 131204)
Deposited By: SLUpub Connector
Deposited On:18 Dec 2017 12:02
Metadata Last Modified:18 Dec 2017 12:02

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