Influence of Fairness Perceptions on Cooperative Behavior in Construction Arbitration
Publication: Journal of Legal Affairs and Dispute Resolution in Engineering and Construction
Volume 12, Issue 4
Abstract
Construction arbitration is characterized by incessant challenges to its awards. Although these challenges suggest dissatisfaction with the outcomes, the role of perceived fairness in influencing disputants’ cooperative behavioral reactions to arbitral awards remains unclear. To address this research gap, a qualitative multiple case study involving documentary analysis and 13 semistructured interviews of arbitrators, parties, and party representatives in five exemplifying cases was undertaken. Findings indicate that although fairness is an integral aspect of the dispute resolution process, perception of its influence on disputants’ cooperative behavior varied. While award favorability influenced perceived award fairness and consequently award acceptability and postdispute relations, perception of procedural and interactional fairness influenced the choice of arbitration as an avenue for resolving future construction disputes. Thus, the extent to which the awards were favorable to one party, based on the degree of control commanded over the process, determined disputants’ cooperative behavior. These findings are significant because they provide a nuanced understanding of how the various components of organizational justice interacted in influencing cooperative behavior in construction arbitration among the cases studied.
Get full access to this article
View all available purchase options and get full access to this article.
Data Availability Statement
Some or all data, models, or code generated or used during the study, thus Appendix S1 are available in a repository online in accordance with funder data retention policies. Mendeley datasets https://data.mendeley.com/datasets/gtvmtks233/3; doi: https://doi.org/10.17632/gtvmtks233.3.
References
List of Statutes
Arbitration Act, Laws of Kenya, No. 4 of 1995 (Amended as Act No. 11 of 2009) Stat. (National Council for Law Reporting 2010).
Constitution of Kenya, Laws of Kenya (National Council for Law Reporting 2010).
List of Cases
Epco Builders, v. Kenya Bureau of Standards, Misc. Cause No. 470 of 2016 (High Court at Nairobi 2017).
Kenya Bureau of Standards, v. Geo-Chem Middle East, Miscellaneous Cause 455 of 2016 (High Court at Nairobi 2017).
Nyutu Agrovet Limited, v. Airtel Networks Kenya Limited; Chartered Institute of Arbitrators-Kenya Branch (Interested Party), Petition 12 of 2016 (Supreme Court of Kenya 2019).
Oloolaiser Water and Sewerage Company Limited, v. Masosa Construction Limited, Miscellaneous Application 355 of 2014 (High Court at Nairobi 2015).
Ongata Works Limited, v. Attorney General, Civil Case No. 690 of 2012 (High Court at Nairobi 2017).
Tcat Limited, v. Joseph Arthur Kibutu, Miscellaneous 213 of 2014 (High Court at Nairobi 2015).
Works Cited
Abwunza, A. A., T. K. Peter, and K. Muigua. 2019. “Effectiveness of arbitration in contractual disputes: Tension between procedural efficiency and award quality.” J. Leg. Aff. Dispute Resolut. Eng. Constr. 11 (2): 04519003. https://doi.org/10.1061/(ASCE)LA.1943-4170.0000290.
Abwunza, A. A., T. K. Peter, and K. Muigua. 2020. “Explaining delays in construction arbitration: A process-control model approach.” J. Leg. Aff. Dispute Resolut. Eng. Constr. 12 (2): 04520003. https://doi.org/10.1061/(ASCE)LA.1943-4170.0000371.
Adams, J. S. 1965. “Inequity in social exchange.” Adv. Experiment. Soc. Psychol. 2 (Jan): 267–299. https://doi.org/10.1016/S0065-2601(08)60108-2.
Aibinu, A. A. 2006. “The relationship between distribution of control, fairness and potential for dispute in the claims handling process.” Constr. Manage. Econ. 24 (1): 45–54. https://doi.org/10.1080/14697010500226954.
Aibinu, A. A., F. Y. Y. Ling, and G. Ofori. 2011. “Structural equation modelling of organizational justice and cooperative behaviour in the construction project claims process: Contractors’ perspectives.” Constr. Manage. Econ. 29 (5): 463–481. https://doi.org/10.1080/01446193.2011.564195.
Aibinu, A. A., G. Ofori, and F. Y. Ling. 2008. “Explaining cooperative behavior in building and civil engineering projects’ claims process: Interactive effects of outcome favorability and procedural fairness.” J. Constr. Eng. Manage. 134 (9): 681–691. https://doi.org/10.1061/(ASCE)0733-9364(2008)134:9(681).
Al-Humaidi, H. M. 2014. “Arbitration in Kuwait: Study of current practices and suggestions for improvements.” J. Leg. Aff. Dispute Resolut. Eng. Constr. 6 (1): 03013001. https://doi.org/10.1061/(ASCE)LA.1943-4170.0000128.
Ambrose, M. L., and M. Schminke. 2009. “The role of overall justice judgments in organizational justice research: A test of mediation.” J. Appl. Psychol. 94 (2): 491–500. https://doi.org/10.1037/a0013203.
Besaiso, H., P. Fenn, and M. Emsley. 2018. “Evolution of construction arbitration.” J. Leg. Aff. Dispute Resolut. Eng. Constr. 10 (2): 04518001. https://doi.org/10.1061/(ASCE)LA.1943-4170.0000248.
Bies, R. J., and J. S. Moag. 1986. “Interactional justice: Communication criteria of fairness.” In Research on negotiation in organizations, edited by R. J. Lewicki, B. H. Sheppard, and M. H. Bazerman, 43–55. Greenwich, CT: JAI Press.
Blau, P. M. 1964. Exchange and power in social life. New York: Wiley.
Brockner, J., and B. M. Wiesenfeld. 1996. “An integrative framework for explaining reactions to decisions: Interactive effects of outcomes and procedures.” Psychol. Bull. 120 (2): 189–208. https://doi.org/10.1037/0033-2909.120.2.189.
Bryman, A. 2016. Social research methods. 5th ed. Oxford, UK: Oxford University Press.
Burch, T. V. 2010. “Manifest disregard and the imperfect procedural justice of arbitration.” Kansas Law Rev. 59: 47–83. https://doi.org/10.17161/1808.20159.
Chaphalkar, N. B., K. C. Iyer, and S. K. Patil. 2015. “Prediction of outcome of construction dispute claims using multilayer perceptron neural network model.” Int. J. Project Manage. 33 (8): 1827–1835. https://doi.org/10.1016/j.ijproman.2015.09.002.
Colquitt, J. A. 2001. “On the dimensionality of organizational justice: A construct validation of a measure.” J. Appl. Psychol. 86 (3): 386–400. https://doi.org/10.1037/0021-9010.86.3.386.
Cropanzano, R. and M. Ambrose. 2001. “Procedural and distributive justice are more similar than you think: A monistic perspective and a research agenda.” In Advances in organizational justice, edited by J. Greenberg and R. Cropanzano, 119–150. Stanford, CA: Stanford University Press.
Cropanzano, R., Z. S. Byrne, D. R. Bobocel, and D. E. Rupp. 2001. “Moral virtues, fairness heuristics, social entities, and other denizens of organizational justice.” J. Vocational Behav. 58 (2): 164–209. https://doi.org/10.1006/jvbe.2001.1791.
El-Adaway, I. H., A. S. Ezeldin, and J. K. Yates. 2009. “Arbitral tribunal proceedings case study: Egyptian large-scale construction project.” J. Leg. Aff. Dispute Resolut. Eng. Constr. 1 (3): 147–153. https://doi.org/10.1061/(ASCE)1943-4162(2009)1:3(147).
Folger, R. 1986. “Rethinking equity theory: A referent cognitions model.” In Justice in social relations, edited by H. W. Beirhoff, R. L. Cohen, and J. Greenberg, 145–162. New York: Plenum Press.
Folger, R., and R. Cropanzano. 1998. Organisational justice and human resource management. Thousands Oaks, CA: Sage Publications.
Folger, R., and R. Cropanzano. 2001. “Fairness theory: Justice as accountability.” In Advances in organizational justice, edited by J. Greenberg and R. Cropanzano, 1–55. Stanford, CA: Stanford University Press.
Folger, R., and M. A. Konovsky. 1989. “Effects of procedural and distributive justice on reactions to pay raise decisions.” Acad. Manage. J. 32 (1): 115–130. https://doi.org/10.5465/256422.
Gebken, R. J. II, and G. E. Gibson. 2006. “Quantification of costs for dispute resolution procedures in the construction industry.” J. Civ. Eng. Educ. 132 (3): 264–271. https://doi.org/10.1061/(ASCE)1052-3928(2006)132:3(264).
Greenberg, J. 1993. “The social side of fairness: Interpersonal and informational classes of organizational justice.” In Justice in the workplace: Approaching fairness in human resource management, edited by J. Greenberg and R. Cropanzano, 79–103. Hillsdale, NJ: Lawrence Erlbaum Associates.
Greenberg, J. 1996. The quest for justice on the job: Essays and experiments. Thousand Oaks, CA: Sage Publications.
Gross, J. I., and B. Black. 2008. “When perception changes reality: An empirical study of investors’ views of the fairness of securities arbitration.” J. Dispute Resolut. 2008 (2): 349–410.
Hansen, S. 2019. “Challenging arbitral awards in the construction industry: Case study of infrastructure disputes.” J. Leg. Aff. Dispute Resolut. Eng. Constr. 11 (1): 06518004. https://doi.org/10.1061/(ASCE)LA.1943-4170.0000281.
Kadefors, A. 2005. “Fairness in interorganizational project relations: Norms and strategies.” Constr. Manage. Econ. 23 (8): 871–878. https://doi.org/10.1080/01446190500184238.
Lim, B. T. H., and M. Loosemore. 2017. “The effect of inter-organizational justice perceptions on organizational citizenship behaviors in construction projects.” Int. J. Project Manage. 35 (2): 95–106. https://doi.org/10.1016/j.ijproman.2016.10.016.
Lind, E. A. 2001. “Fairness heuristic theory: Justice judgments as pivotal cognitions in organizational relations.” In Advances in organizational justice, edited by J. Greenberg and R. Cropanzano, 56–88. Stanford, CA: Stanford University Press.
Lind, E. A., R. J. MacCoun, P. A. Ebener, W. L. Felstiner, D. R. Hensler, J. Resnik, and T. R. Tyler. 1990. “In the eye of the beholder: Tort litigants’ evaluations of their experiences in the civil justice system.” Law Soc. Rev. 24 (4): 953–996. https://doi.org/10.2307/3053616.
Lind, E. A., and T. R. Tyler. 1988. The social psychology of procedural justice. New York: Springer.
Loosemore, M., and B. Lim. 2015. “Inter-organizational unfairness in the construction industry.” Constr. Manage. Econ. 33 (4): 310–326. https://doi.org/10.1080/01446193.2015.1057193.
Loosemore, M., and B. T.-H. Lim. 2016. “Intra-organisational injustice in the construction industry.” Eng. Constr. Archit. Manage. 23 (4): 428–447. https://doi.org/10.1108/ECAM-01-2015-0005.
Lu, W., Z. Li, and S. Wang. 2017. “The role of justice for cooperation and contract’s moderating effect in construction dispute negotiation.” Eng. Constr. Archit. Manage. 24 (1): 133–153. https://doi.org/10.1108/ECAM-01-2015-0002.
Lu, W., L. Zhang, and J. Pan. 2015. “Identification and analyses of hidden transaction costs in project dispute resolutions.” Int. J. Project Manage. 33 (3): 711–718. https://doi.org/10.1016/j.ijproman.2014.08.009.
Marques, R. C. 2018. “Is arbitration the right way to settle conflicts in PPP arrangements?” J. Manage. Eng. 34 (1): 05017007. https://doi.org/10.1061/(ASCE)ME.1943-5479.0000564.
Maxwell, J. A. 2013. Qualitative research design: An interactive approach. 3rd ed. Thousand Oaks, CA: Sage Publications.
Miles, M. B., A. M. Huberman, and J. Saldana. 2014. Qualitative data analysis: A methods sourcebook. 3rd ed. Thousand Oaks, CA: Sage Publications.
Moza, A., and V. K. Paul. 2017. “Review of the effectiveness of arbitration.” J. Leg. Aff. Dispute Resolut. Eng. Constr. 9 (1): 03716002. https://doi.org/10.1061/(ASCE)LA.1943-4170.0000204.
Ossman, G., III, M. E. Bayraktar, and Q. Cui. 2010. “Consistency and reliability of construction arbitration decisions: Empirical study.” J. Manage. Eng. 26 (2): 56–64. https://doi.org/10.1061/(ASCE)ME.1943-5479.0000008.
Patil, S. K., K. C. Iyer, and N. B. Chaphalkar. 2019. “Influence of extrinsic factors on construction arbitrators’ decision making.” J. Leg. Aff. Dispute Resolut. Eng. Constr. 11 (4): 04519021. https://doi.org/10.1061/(ASCE)LA.1943-4170.0000318.
Skitka, L. J., J. Winquist, and S. Hutchinson. 2003. “Are outcome fairness and outcome favorability distinguishable psychological constructs? A meta-analytic review.” Soc. Justice Res. 16 (4): 309–341. https://doi.org/10.1023/A:1026336131206.
Thibaut, J., and L. Walker. 1975. Procedural justice: A psychological analysis. Hillsdale, NJ: Erlbaum.
Thibaut, J., and L. Walker. 1978. “A theory of procedure.” California Law Rev. 66 (3): 541–566. https://doi.org/10.2307/3480099.
Torgbor, E. N. A. 2013. “A comparative study of law and practice of arbitration in Kenya, Nigeria and Zimbabwe, with particular reference to current problems in Kenya.” Doctoral thesis, Faculty of Law, Univ. of Stellenbosch.
Tyler, T. R., and S. L. Blader. 2000. Cooperation in groups: Procedural justice, social identity, and behavioural engagement. Philadelphia: Psychology Press.
Tyler, T. R., and E. A. Lind. 1992. “A relational model of authority in groups.” Adv. Exp. Soc. Psychol. 25 (Jan): 115–191. https://doi.org/10.1016/S0065-2601(08)60283-X.
Williamson, O. E. 2008. “Transaction cost economics.” In Handbook of new institutional economics, edited by C. Ménard and M. M. Shirley, 41–68. Berlin: Springer.
Yin, R. K. 2018. Case study research and applications: Design and methods. 6th ed. Thousand Oaks, CA: Sage Publications.
Information & Authors
Information
Published In
Journal of Legal Affairs and Dispute Resolution in Engineering and Construction
Volume 12 • Issue 4 • November 2020
Copyright
©2020 American Society of Civil Engineers.
History
Received: Nov 26, 2019
Accepted: Apr 6, 2020
Published online: Jun 22, 2020
Published in print: Nov 1, 2020
Discussion open until: Nov 22, 2020
ASCE Technical Topics:
- Analysis (by type)
- Arbitration
- Awards and prizes
- Business management
- Case studies
- Construction engineering
- Construction management
- Dispute resolution
- Engineering fundamentals
- Engineering profession
- Integrals
- Legal affairs
- Management methods
- Mathematics
- Methodology (by type)
- Practice and Profession
- Professional development
- Quality control
- Quantitative analysis
- Research methods (by type)
Authors
Metrics & Citations
Metrics
Citations
Download citation
If you have the appropriate software installed, you can download article citation data to the citation manager of your choice. Simply select your manager software from the list below and click Download.