The Norwegian Petroleum Industry: Motivations for Tendering – A Partial Least Squares (PLS) - Structural Equation Modelling (SEM) approach.

Abstract

Purpose: The main purpose of this study is to identify the key factors of motivations for tendering in the Norwegian Petroleum Industry (NPI). By identifying the many dimensions of tendering, by reviewing literature and theories, we can apply multivariate analysis to determine the statistical significance of the different motivations.

Design / methodology / approach: A cross sectional research design in the form of a survey was conducted, targeting tendering professional from a buyer-seller perspective. This resulted in 127 respondents and include CEOs, procurement managers, supply chain managers, contract managers, sales managers, sales coordinators, supply chain advisors and buyers/procurement specialists. The geographical locations in Norway, include Oslo, Kristiansand, Stavanger, Sandnes, Bergen, Ålesund, Kristiansund, Hammerfest and Molde to mention a few. SPSS and SmartPLS were applied to perform the PLS-SEM analysis.

Findings: The empirical findings found support for 4 of the 9-hypotheses formulated and suggest that complexity, organizational values, information quality and purchasing social responsibility have a positive effect on the preference for tendering. In addition, the study suggests that company size and educational level also have a positive effect on the preference for tendering.

Research limitation: The main limitation of this study, is the sample size which is represented by only a portion of the NPI. Within the time available to us, we were able to collect 127 individual responses from a wide range of significant actors in the industry. The nature of the companies and their activities involve many different segments of the industry, and it can, therefore, be hard to make a survey that is well suited for all participants.

Practical / managerial implication: From an academic perspective, this study will contribute to the tendering literature, in an industry that has little available research. In addition, the managerial implications can help tendering professionals get a better understanding on how organizational complexity can be reduced, how organizational values are created, how information quality is determined and how purchasing social responsibility is perceived by many stakeholders from a tendering perspective.