Technical Papers
Aug 2, 2013

Reducing Hindrances to Adoption of Relational Behaviors in Public Construction Projects

Publication: Journal of Construction Engineering and Management
Volume 139, Issue 11

Abstract

Contractual focus is thought to lie on a spectrum ranging from formal contract behaviors to relational behaviors. This study aims to investigate whether the use of relational behaviors leads to higher-quality relationships among contracting parties in public construction projects, identify the hindrances to adopting relational behaviors in these contracts, and recommend measures to overcome the hindrances. Using a structured questionnaire, data were collected from respondents who had public project experiences in Singapore and thereafter analyzed using partial least squares-structural equation modeling. The result shows that a lack of relational background leads contracting parties to adopt formal contract behaviors in public projects, and this further leads to deterioration in the quality of relationships among contracting parties. The results also indicate that (1) a lack of long-term commitment and a lack of public client initiative lead to misalignment among contracting parties and (2) a lack of long-term commitment is positively influenced by a lack of relational background and public client unwillingness to commit to relational behaviors. This study contributes to knowledge by identifying the hindrances to adopting relational behaviors and proving empirically that greater adoption of relational behaviors gives rise to better relationship quality among contracting parties in public projects. Recommendations are offered to enable contracting parties in public projects to adopt more relational practices.

Get full access to this article

View all available purchase options and get full access to this article.

Acknowledgments

This research was supported by the Singapore Ministry of Education’s Academic Research Fund Tier 2 funding (Grant MOE2009-T2-2-067) for the project “Boosting Public Construction Project Outcomes through Relational Transactions.” Dr Yongjian Ke’s assistance in the research is acknowledged with grateful thanks.

References

Akintoye, A., and Main, J. (2007). “Collaborative relationships in construction: The UK contractors’ perception.” Eng. Construct. Architect. Manage., 14(6), 597–617.
Akintoye, A., McIntosh, G., and Fitzgerald, E. (2000). “A survey of supply chain collaboration and management in the UK construction industry.” Eur. J. Purchas. Supply Manage., 6(3–4), 159–168.
Azoulay, P., Repenning, N. P., and Zuckerman, E. W. (2010). “Nasty, brutish, and short: Embeddedness failure in the pharmaceutical industry.” Admin. Sci. Q., 55(3), 472–507.
Bagozzi, R. P., and Yi, Y. (1988). “On the evaluation of structural equation models.” J. Acad. Market. Sci., 16(1), 74–94.
Baker, G., Gibbons, R., and Murphy, K. J. (2002). “Relational contracts and the theory of the firm.” Q. J. Econ., 117(1), 39–84.
Becker, G. S. (1976). The economic approach to human behavior, University of Chicago Press, Chicago.
Bird, R. C. (2005). “Employment as a relational contract.” J. Labor Employ. Law, 8(1), 149–217.
Black, C., Akintoye, A., and Fitzgerald, E. (2000). “An analysis of success factors and benefits of partnering in construction.” Int. J. Project Manage., 18(6), 423–434.
Blois, K. J. (2002). “Business to business exchanges: A rich descriptive apparatus derived from Macneil’s and Menger’s analyses.” J. Manage. Stud., 39(4), 523–551.
Blois, K. J., and Ivens, B. S. (2007). “Methods issues in the measurement of relational norms.” J. Bus. Res., 60(5), 556–565.
Bresnen, M., and Marshall, N. (2000). “Building partnerships: Case studies of client-contractor collaboration in the UK construction industry.” Constr. Manage. Econ., 18(7), 819–832.
Brown, T. A. (2006). Confirmatory factor analysis for applied research, Guilfor, New York.
Campbell, D., and Harris, D. (1993). “Flexibility in long term contractual relationships: The role of cooperation.” J. Law Soc., 20(2), 166–191.
Cenfetelli, R. T., and Bassellier, G. (2009). “Interpretation of formative measurement in information systems research.” MIS Q., 33(4), 689–707.
Cheng, E. W. L., and Li, H. (2002). “Construction partnering process and associated critical success factors: Quantitative investigation.” J. Manage. Eng., 18(4), 194–202.
Cook, E. L., and Hancher, D. E. (1990). “Partnering: Contracting for the future.” J. Manage. Eng., 6(4), 431–446.
Cox, A., and Thompson, I. (1997). “Fir for purpose contractual relations: Determining a theoretical framework for construction projects.” Eur. J. Purchas. Supply Manage., 3(3), 127–135.
Dewulf, G., and Kadefors, A. (2012). “Collaboration in public construction-contractual incentives, partnering schemes and trust.” Eng. Project Organ. J., 2(4), 240–250.
Diathesopoulos, M. (2010). Relational contract theory and management contracts: A paradigm for the application of the theory of the norms, Lancaster University/LLM by Research, Lancaster, UK.
Drexler, J. A., and Larson, E. W. (2000). “Partnering: Why project owner-contractor relationships change.” J. Constr. Eng. Manage., 126(4), 293–297.
Dubios, A., and Gadde, L. (2000). “Supply strategy and network effects-purchasing behavior in the construction industry.” Eur. J. Purchas. Supply Manage., 6(3–4), 207–215.
Dyer, J. H., and Nobeoka, K. (2000). “Creating and managing a high-performance knowledge-sharing network: The Toyota case.” Strategic Manage. J., 21(3), 345–367.
Dyer, J. H., and Singh, H. (1998). “The relational view: Cooperative strategy and sources of interorganizational competitive advantages.” Acad. Manage. Rev., 23(4), 660–679.
Egan, J. (1998). Rethinking construction, Report of Construction Industry Task Force, DETR, London.
Eisenberg, M. A. (1995). “The limits of cognition and the limits of contract.” Stanford Law Rev., 47(2), 211–259.
Eriksson, P. E., Nilsson, T., and Atkin, B. (2008). “Client perceptions of barriers to partnering.” Eng. Construct. Architect. Manage., 15(6), 527–539.
Feinman, J. M. (1999). “Relational contract theory in context.” Northwestern Univ. Law Rev., 94(3), 737–748.
Fornell, C. G., and Larcker, D. F. (1981). “Evaluating structural equation models with unobservable variables and measurement error.” J. Market. Res., 18(1), 39–50.
Ghoshal, S., and Moran, P. (1996). “Bad for practice: A critique of the transaction cost theory.” Acad. Manage. Rev., 21(1), 13–47.
Glagola, C. R., and Sheedy, W. M. (2002). “Partnering on defense contracts.” J. Constr. Eng. Manage., 128(2), 127–138.
Hair, J. F., Ringle, C. M., and Sarstedt, M. (2011). “PLS-SEM: Indeed a silver bullet.” J. Market. Theory Pract., 19(2), 139–151.
Hayford, O. (2002). “Paying the price under project alliances.” Australia Constr. Law Newslett., 84, 22–25.
Henseler, J., Ringle, C. M., and Sinkovics, R. R. (2009). “The use of partial least squares path modeling in international marketing.” New challenges to international marketing (advances in international marketing), R. R. Sinkovics, and P. N. Ghauri, eds., Vol. 20, Emerald Group, 277–319.
Hulland, J. (1999). “Use of partial least squares (PLS) in strategic management research: A review of four recent studies.” Strategic Manage. J., 20(2), 195–204.
Klein, B., Crawford, R. G., and Alchian, A. A. (1978). “Vertical integration, appropirable rents, and the competitive contracting process.” J. Law Econ., 21(2), 297–326.
Kumaraswamy, M. M., Ling, F. Y. Y., Rahman, M. M., and Phng, S. T. (2005a). “Constructing relationally integrated teams.” J. Constr. Eng. Manage., 131(10), 1076–1086.
Kumaraswamy, M. M., Rahman, M. M., Ling, F. Y. Y., and Phng, S. T. (2005b). “Reconstructing cultures for relational contracting.” J. Constr. Eng. Manage., 131(10), 1065–1075.
Larson, A. (1992). “Network dyads in entrepreneurial settings: A study of the governance of exchange relationships.” Admin. Sci. Q., 37(1), 76–104.
Latham, M. (1994). Constructing the team, Final report on Joint Review of Procurement and Contractual Agreements in the UK Construction Industry, Her Majesty’s Stationery Office, London.
Ling, F. Y. Y., Rahman, M. M., and Ng, T. L. (2006). “Incorporating contractual incentives to facilitate relational contracting.” J. Prof. Issues Eng. Educ. Pract., 132(1), 57–66.
Lumineau, F., and Quélin, B. V. (2012). “An empirical investigation of interorganizational opportunism and contracting mechanisms.” Strat. Organ., 10(1), 55–84.
Macaulay, S. (1963). “Non-contractual relations in business: A preliminary study.” Am. Sociol. Rev., 28(1), 55–67.
Macneil, I. R. (1977). “Contracts: Adjustments of long-term economic relations under classical, neoclassical and relational contract law.” Northwestern Univ. Law Rev., 72(6), 854–906.
Macneil, I. R. (1983). “Values in contract: Internal and external.” Northwestern Univ. Law Rev., 78(2), 340–418.
Macneil, I. R. (1986a). “Exchange revisited: Individual utility and social solidarity.” Ethics, 96(3), 567–593.
Macneil, I. R. (1987). “Barriers to the idea of relational contracts.” The complex long-term contract, F. Nicklisch, ed., CF Mueller Juristischer Verlag, Heidelberg, Germany.
Macneil, I. R. (2000). “Contracting worlds and essential contract theory.” Social Legal Stud., 9(3), 431–438.
Macneil, R. W. (1986b). “Contract in China: Law, practice, and dispute resolution.” Stanford Law Rev., 38(2), 303–397.
Misztal, B. (1996). Trust in modern societies: The search for the bases of social order, Polity Press, Cambridge, UK.
Ng, S. T., Rose, T. M., Mak, M., and Eng, S. (2002). “Problematic issues associated with project partnering-the contractor perspective.” Int. J. Project Manage., 20(6), 437–449.
Packham, G., Thomas, B., and Miller, C. (2003). “Partnering in the house building sector: a subcontractor’s view.” Int. J. Project Manage., 21(5), 327–332.
Poppo, L., and Zenger, T. (2002). “Do formal contracts and relational governance function as substitutes or complements?” Strategic Manage. J., 23(8), 707–725.
Rahman, M. M., and Kumaraswamy, M. M. (2004a). “Potential for implementing relational contracting and joint risk management.” J. Manage. Eng., 20(4), 178–189.
Rahman, M. M., and Kumaraswamy, M. M. (2004b). “Contracting relationship trends and transitions.” J. Manage. Eng., 20(4), 147–161.
Rahman, M. M., and Kumaraswamy, M. M. (2005). “Relational selection for collaborative working arrangements.” J. Constr. Eng. Manage., 131(10), 1087–1098.
Reinartz, W., Haenlein, M., and Henseler, J. (2009). “An empirical comparison of the efficacy of covariance-based and variance-based SEM.” Int. J. Res. Market., 26(4), 332–344.
Ringle, C., Sarstedt, M., and Straub, D. (2012). “A critical look at the use of PLS-SEM in MIS Quarterly.” MIS Q., 36(1), iii–xiv.
Ringle, C. M., Wende, S., and Will, A. (2005). Smart-Pls 2.0(beta), TUHH-Hamburg University of Technology, Hamburg, Germany.
Uzzi, B. (1997). “Social structure and competition in inter-firm networks: The paradox of embeddedness.” Admin. Sci. Q., 42(1), 35–67.
Uzzi, B., and Lancaster, R. (2003). “Relational embeddedness and learning: the case of bank loan managers and their clients.” Manage. Sci., 49(4), 383–399.
Williamson, O. E. (1975). Markets and hierarchies: Analysis and antitrust implications, Free Press, New York.
Williamson, O. E. (1985). The economic institutions of capitalism, Free Press, New York.

Information & Authors

Information

Published In

Go to Journal of Construction Engineering and Management
Journal of Construction Engineering and Management
Volume 139Issue 11November 2013

History

Received: Sep 7, 2012
Accepted: May 29, 2013
Published online: Aug 2, 2013
Published in print: Nov 1, 2013
Discussion open until: Jan 2, 2014

Permissions

Request permissions for this article.

Authors

Affiliations

Ph.D. Candidate, Dept. of Building, National Univ. of Singapore, 4 Architecture Drive, Singapore 117566 (corresponding author). E-mail: [email protected]
Florence Yean Yng Ling [email protected]
Associate Professor, Dept. of Building, National Univ. of Singapore, 4 Architecture Drive, Singapore 117566. E-mail: [email protected]

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.

Cited by

View Options

Get Access

Access content

Please select your options to get access

Log in/Register Log in via your institution (Shibboleth)
ASCE Members: Please log in to see member pricing

Purchase

Save for later Information on ASCE Library Cards
ASCE Library Cards let you download journal articles, proceedings papers, and available book chapters across the entire ASCE Library platform. ASCE Library Cards remain active for 24 months or until all downloads are used. Note: This content will be debited as one download at time of checkout.

Terms of Use: ASCE Library Cards are for individual, personal use only. Reselling, republishing, or forwarding the materials to libraries or reading rooms is prohibited.
ASCE Library Card (5 downloads)
$105.00
Add to cart
ASCE Library Card (20 downloads)
$280.00
Add to cart
Buy Single Article
$35.00
Add to cart

Get Access

Access content

Please select your options to get access

Log in/Register Log in via your institution (Shibboleth)
ASCE Members: Please log in to see member pricing

Purchase

Save for later Information on ASCE Library Cards
ASCE Library Cards let you download journal articles, proceedings papers, and available book chapters across the entire ASCE Library platform. ASCE Library Cards remain active for 24 months or until all downloads are used. Note: This content will be debited as one download at time of checkout.

Terms of Use: ASCE Library Cards are for individual, personal use only. Reselling, republishing, or forwarding the materials to libraries or reading rooms is prohibited.
ASCE Library Card (5 downloads)
$105.00
Add to cart
ASCE Library Card (20 downloads)
$280.00
Add to cart
Buy Single Article
$35.00
Add to cart

Media

Figures

Other

Tables

Share

Share

Copy the content Link

Share with email

Email a colleague

Share