Effects of Different Face-Saving Concerns on the Escalation of Commitment between State-Owned and Private Investors in PPP Projects
Publication: Journal of Construction Engineering and Management
Volume 148, Issue 9
Abstract
In public–private partnership (PPP) projects, state-owned investors, with their administrative attributes, tend to be more concerned with their own face-saving (self-face) concerns, whereas private investors that partner with the government pay more attention to the government’s face-saving (other-face) concerns than their own. The two kinds of face-saving concerns both aggravate escalation of commitment (EOC). Accordingly, a multigroup model based on questionnaire data was built to analyze the differences in face-saving concerns of the two types of investors and the cross-enterprise differences that influence investors’ EOC. The main findings are as follows: state-owned investors prefer self-face concerns; the influence of face-saving concerns on investors’ EOC does not differ across enterprises; and self-face concerns and other-face concerns each have significant influence on both kinds of investors’ EOC, but the latter plays a larger role. The study enriches the understanding of EOC and emphasizes the advantages of private capital in reducing investors’ behavioral risk. The findings are conducive to improving the mechanism and control of multistakeholder EOC in PPP projects.
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 that support the findings of this study are available from the corresponding author upon reasonable request.
Acknowledgments
This work was supported by the National Natural Science Foundation of China (Grant No. 71571149).
References
Aharoni, Y. 1981. “Performance evaluation of state-owned enterprises: A process perspective.” Manage. Sci. 27 (11): 1340–1347. https://doi.org/10.1287/mnsc.27.11.1340.
Anderson, J. C., and D. W. Gerbing. 1988. “Structural equation modeling in practice: A review and recommended two-step approach.” Psychol. Bull. 103 (3): 411–423. https://doi.org/10.1037/0033-2909.103.3.411.
Bai, C. E., and L. C. Xu. 2005. “Incentives for CEOs with multitasks: Evidence from Chinese state-owned enterprises.” J. Comp. Econ. 33 (3): 517–539. https://doi.org/10.1016/j.jce.2005.03.013.
Bazerman, M. H., T. Giuliano, and A. Appelman. 1984. “Escalation of commitment in individual and group decision making.” Organ. Behav. Hum. Perform. 33 (2): 141–152. https://doi.org/10.1016/0030-5073(84)90017-5.
Beijing BRI Data Technology Corp. 2021. Annual report of China’s PPP market in 2021. Beijing: Beijing BRI Data Technology Corp.
Bobocel, D. R., and J. P. Meyer. 1991. “Escalating commitment to a failing course of action: Separating the roles of choice and justification.” J. Appl. Psychol. 79 (3): 360–363. https://doi.org/10.1037/0021-9010.79.3.360.
Brockner, J., and J. Z. Rubin. 1985. Entrapment in escalating conflicts: A social psychological analysis. New York: Springer.
Cai, F., J. Mo, L. Xie, and H. Ye. 2021. “Research on performance management of PPP project in China.” Res. Econ. Manage. 6 (1): 96. https://doi.org/10.22158/rem.v6n1p96.
Carmines, E. G., and J. P. Mclver. 1981. “Analyzing models with unobservable variables.” In Social measurement: Current issues, 65–115. London: SAGE.
Chang, C., and S. Chen. 2016. “Transitional public-private partnership model in China: Contracting with little recourse to contracts.” J. Constr. Eng. Manage. 142 (10): 05016011. https://doi.org/10.1061/(ASCE)CO.1943-7862.0001166.
Chatterjee, S. 2013. “Constraints in organizational learning, cognitive load and its effect on employee behavior.” IUP J. Knowl. Manage. 11 (4): 7–19.
Chen, B., and M. Gao. 2010. “Golden rules of management in Chinese face culture based on cultural ecosystem theory.” Chin. J. Manage. 7 (6): 797–803. https://doi.org/10.3969/j.issn.1672-884X.2010.06.002.
Chen, H., W. L. Li, and L. R. Chen. 2016. “Organization control and information. Security policy compliance: The moderating effect of face orientation.” Manage. Sci. China 29 (3): 1–12. https://doi.org/10.3969/j.issn.1672-0334.2016.03.001.
Cheung, E., A. P. C. Chan, and S. Kajewski. 2012. “Factors contributing to successful public private partnership projects.” J. Facil. Manage. 10 (1): 45–58. https://doi.org/10.1108/14725961211200397.
Chow, C. W., P. Harrison, T. Lindquist, and A. Wu. 1997. “Escalating commitment to unprofitable projects: Replication and cross-cultural extension.” Manage. Acc. Res. 8 (Apr): 347–361. https://doi.org/10.1006/mare.1996.0046.
Comrey, A. L. 1988. “Factor-analytic methods of scale development in personality and clinical psychology.” J. Consult. Clin. Psychol. 56 (5): 754–761. https://doi.org/10.1037/0022-006X.56.5.754.
Drummond, H. 2014. “Escalation of commitment: When to stay the course?” Acad. Manage. Perspect. 28 (4): 430–446. https://doi.org/10.5465/amp.2013.0039.
Feng, X. 2016. “Research on public private partnerships with privately informed local governments.” Open J. Soc. Sci. 4 (4): 99–107. https://doi.org/10.4236/jss.2016.44014.
Fletcher, C. V., M. Nakazawa, Y. W. Chen, J. G. Oetzel, S. Ting-Toomey, and S. Chang. 2014. “Establishing cross-cultural measurement equivalence of scales associated with face-negotiation theory: A critical issue in cross-cultural comparisons.” J. Int. Intercultural Commun. 7 (2): 148–169. https://doi.org/10.1080/17513057.2014.898364.
Fornell, C., and D. F. Larcker. 1981. “Evaluating structural equation models with unobservable variables and measurement error.” J. Marketing Res. 24 (4): 337–346. https://doi.org/10.1177/002224378702400401.
Gao, R. L., and J. C. Liu. 2020. “Value of investors’ escalation of commitment in PPP projects using real option thinking.” Int. J. Strategic Property Manage. 24 (5): 348–364. https://doi.org/10.3846/ijspm.2020.13120.
Goffman, E. 1955. “On face-work: An analysis of ritual elements in social interaction.” Psychiatry Interpersonal Biol. Processes 18 (3): 213–231. https://doi.org/10.1080/00332747.1955.11023008.
Gomez, C., and J. I. Sanehez. 2013. “Cultural boundaries of self-justification and prospect theories in escalation of commitment: A US-Mexico comparison.” Int. J. Hum. Resour. Manage. 24 (13): 2646–2656. https://doi.org/10.1080/09585192.2013.767061.
Greene, K., and M. Krcmar. 2005. “Predicting exposure to and liking of media violence: A uses and gratifications approach.” Commun. Studies 56 (1): 71–93. https://doi.org/10.1080/0008957042000332250.
Hadi, A. H., and K. R. Erzaij. 2019. “Determination a reasonable concession period for (PPP) projects.” Civ. Eng. J. 5 (6): 1235–1248. https://doi.org/10.28991/cej-2019-03091328.
Hair, J., W. Black, B. Babin, R. Anderson, and R. Tatham. 2009. Multivariate data analysis. New York: Prentice-Hall International.
Ho, Y. F. 1976. “On the concept of face.” Am. J. Sociol. 81 (4): 867–884. https://doi.org/10.1086/226145.
Hoogervorst, J., H. V. D. Flier, and P. Koopman. 2004. “Implicit communication in organizations the impact of culture, structure and management practices on employee behavior.” J. Manage. Psychol. 19 (3): 288–311. https://doi.org/10.1108/02683940410527766.
Hu, H. C. 1944. “The Chinese concepts of ‘face’.” Am. Anthropol. 46 (1): 45–64. https://doi.org/10.1525/aa.1944.46.1.02a00040.
Huemann, M., and G. Silvius. 2017. “Projects to create the future: Managing projects meets sustainable development.” Int. J. Project Manage. 35 (6): 1066–1070. https://doi.org/10.1016/j.ijproman.2017.04.014.
Hwang, K. K. 2006. “Moral face and social face: Contingent self-esteem in confucian society.” Int. J. Psychol. 41 (4): 276–281. https://doi.org/10.1080/00207590544000040.
Jari, K., L. Oulasvirta, and J. Wacker. 2014. “Steering and monitoring model of state-owned enterprises.” Int. J. Public Admin. 37 (7): 409–423. https://doi.org/10.1080/01900692.2013.858355.
Jokar, E., B. Aminnejad, and A. Lork. 2021. “Assessing and prioritizing risks in public-private partnership (PPP) projects using the integration of fuzzy multi-criteria decision-making methods.” Oper. Res. Perspect. 8 (21): 100190. https://doi.org/10.1016/j.orp.2021.100190.
Keil, M. 1995. “Pulling the plug: Software project management and the problem of project escalation.” MIS Q. 19 (4): 421–447. https://doi.org/10.2307/249627.
Keil, M., B. C. Y. Tan, K. K. Wei, T. Saarinen, V. Tuunainen, and A. Wassenaar. 2000. “A cross-cultural study on escalation of commitment behavior in software projects.” MIS Q. 24 (2): 299–325. https://doi.org/10.2307/3250940.
Kline, R. B. 1998. Principles and practices of structural equation modeling. New York: Guilford.
Li, H., L. Lv, J. Zuo, L. Su, L. Wang, and C. Yuan. 2020. “Dynamic reputation incentive mechanism for urban water environment treatment PPP projects.” J. Constr. Eng. Manage. 146 (8): 04020088. https://doi.org/10.1061/(ASCE)CO.1943-7862.0001879.
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.
Liu, J. C., J. Q. Liu, and Y. N. Zhou. 2019a. “Influence of face concerns on stakeholder’s escalation of commitment in PPP project: Base on the government and private sector.” J. Indus. Eng. Eng. Manage. 33 (4): 167–175. https://doi.org/10.13587/j.cnki.jieem.2019.04.020.
Liu, J. Q., J. C. Liu, R. L. Gao, H. Z. Gao, and Y. Li. 2019b. “Identifying project factors that affect an investor’s escalation of commitment in public-private partnership projects.” Project Manage. J. 50 (6): 686–698. https://doi.org/10.1177/8756972819847874.
Liu, J. Q., J. C. Liu, and N. N. Liu. 2020. “Government’s control rights influence investor’s escalation of commitment in PPP project: Regulating effect of other-face concern.” Physica A 545 (3): 123617. https://doi.org/10.1016/j.physa.2019.123617.
Lu, W., A. Liu, H. Wang, and Z. Wu. 2013. “Procurement innovation for public construction projects: A study of agent-construction system and public-private partnership in China.” Eng. Constr. Archit. Manage. 20 (6): 543–562. https://doi.org/10.1108/ECAM-09-2011-0084.
Ma, H., S. Zeng, H. Lin, and R. Zeng. 2020. “Impact of public sector on sustainability of public-private partnership projects.” J. Constr. Eng. Manage. 146 (2): 04019104. https://doi.org/10.1061/(ASCE)CO.1943-7862.0001750.
Ma, J. 2007. “China’s banking sector: From administrative control to a regulatory framework.” J. Contemp. China 5 (12): 155–169. https://doi.org/10.1080/10670569608724247.
Mccarthy, A. M., F. D. Schoorman, and A. C. Cooper. 1993. “Reinvestment decisions by entrepreneurs: Rational decision-making or escalation of commitment?” J. Bus. Venturing 8 (1): 9–24. https://doi.org/10.1016/0883-9026(93)90008-S.
Miles, E. W., and W. C. J. King. 1998. “Gender and administration mode effects when pencil-and-paper personality tests are computerized.” Educ. Psychol. Meas. 58 (1): 68–76. https://doi.org/10.1177/0013164498058001006.
Nguyen, A., A. Mollik, and Y. Y. Chih. 2018. “Managing critical risks affecting the financial viability of public-private partnership projects: Case study of toll road projects in Vietnam.” J. Constr. Eng. Manage. 144 (12): 05018014. https://doi.org/10.1061/(ASCE)CO.1943-7862.0001571.
Nunnally, J. C. 1978. Psychometric theory. New York: McGraw-Hill.
Oetzel, J., A. J. Garcia, and S. Ting-Toomey. 2008. “An analysis of the relationships among face concerns and face-work behaviors in perceived conflict situations: A four-culture investigation.” Int. J. Conflict Manage. 19 (4): 382–403. https://doi.org/10.1108/10444060810909310.
Park, K. J., and N. Berente. 2012. “Institutionalization, embedded rationality, and the escalation of commitment to IT projects.” In Proc., 45th Hawaii Int. Conf. on System Sciences, 4924–4933. New York: IEEE.
Podsakoff, P. M., and D. W. Organ. 1986. “Self-reports in organizational research: Problems and prospects.” J. Manage. 12 (4): 531–544. https://doi.org/10.1177/014920638601200408.
Robert, O. R., and A. P. C. Chan. 2017. “Comparative analysis of the success criteria for public-private partnership projects in Ghana and Hong Kong.” Project Manage. J. 48 (4): 80–92. https://doi.org/10.1177/875697281704800407.
Roper, J., and M. Schoenberger-Orgad. 2017. “State-owned enterprises.” Manage. Commun. Q. 25 (4): 693–709. https://doi.org/10.1177/0893318911415598.
Rutten, M. E. J., A. G. Dorée, and J. I. M. Halman. 2014. “Together on the path to construction innovation: Yet another example of escalation of commitment?” Construct. Manage. Econ. 32 (7–8): 695–704. https://doi.org/10.1080/01446193.2014.933855.
Salter, S. B., and D. J. Sharp. 2001. “Agency effects and escalation of commitment: Do small national culture differences matter?” Int. J. Acc. 36 (1): 33–45. https://doi.org/10.1016/S0020-7063(01)00084-X.
Salter, S. B., D. J. Sharp, and Y. Chen. 2013. “The moderating effects of national culture on escalation of commitment.” Adv. Acc. 29 (1): 161–169. https://doi.org/10.1016/j.adiac.2013.02.001.
Schultze, T., F. Pfeiffer, and S. Schulz-hardt. 2012. “Biased information processing in the escalation paradigm: Information search and information evaluation as potential mediators of escalating commitment.” J. Appl. Psychol. 97 (1): 16–32. https://doi.org/10.1037/a0024739.
Seyal, A., M. N. A. Rahman, and M. Mahbuburrahim. 2002. “Determinants of academic use of the internet: A structural equation model.” Behav. Inf. Technol. 21 (1): 71–86. https://doi.org/10.1080/01449290210123354.
Shleifer, A., and R. W. Vishny. 1994. “Politicians and firms.” Q. J. Econ. 109 (4): 995–1025. https://doi.org/10.2307/2118354.
Staw, B. M. 1976. “Knee-deep in the big muddy: A study of escalating commitment to a chosen course of action.” Organ. Behav. Hum. Decis. Processes 16 (76): 27–44. https://doi.org/10.1016/0030-5073(76)90005-2.
Staw, B. M., and J. Ross. 1987. “Behavior in escalation situations: Antecedents, prototypes and solutions.” Res. Organ. Behav. 9 (4): 39–78.
Steinmetz, H., P. Schmidt, A. Tina-Booh, S. Wieczorek, and S. H. Schwartz. 2009. “Testing measurement invariance using multi-group CAF: Differences between educational groups in human values measurement.” Quality Quantity 43 (4): 599–616. https://doi.org/10.1007/s11135-007-9143-x.
Sun, L. J., and J. R. Xu. 2006. “The effects of decision maker’s personality traits on commitment escalation.” Commer. Res. 23 (Sep): 47–51. https://doi.org/10.3969/j.issn.1001-148X.2006.23.014.
Tang, B. Z. 2010. “Discussion on the problems and strategies in the construction of state owned enterprises’ culture.” Manage. Obs. 19 (Apr): 118–119. https://doi.org/10.3969/j.issn.1674-2877.2010.19.076.
Ting, H. 2011. “The effects of goal distance and value in escalation of commitment.” Curr. Psychol. 30 (1): 93–104. https://doi.org/10.1007/s12144-011-9100-7.
Ting-Toomey, S. 1988. “Intercultural conflict styles: A face-negotiation theory.” In Theories in intercultural communication. Thousand Oaks, CA: SAGE.
Ting-Toomey S. 2005. “The matrix of face: An updated face-negotiation theory.” In Theorizing about intercultural communication, 71–92. Thousand Oaks, CA: SAGE.
Ting-Toomey, S., and A. Kurogi. 1998. “Facework competence in intercultural conflict: An updated face-negotiation theory.” Int. J. Intercultural Relations 22 (2): 187–225. https://doi.org/10.1016/S0147-1767(98)00004-2.
Tinsley, H. E., and D. J. Tinsley. 1987. “Uses of factor analysis in counseling psychology research.” J. Counseling Psychol. 34 (4): 414–424. https://doi.org/10.1037/0022-0167.34.4.414.
Triandis, H. C. 1989. “Culture and interpersonal communication William B. DudyKunst and Stella Ting-Toomey Newbury Park, CA: Sage, 1988, 278 pp $29.95 (cloth), $14.95 (paper).” Int. J. Intercultural Relations 13 (2): 221–223. https://doi.org/10.1016/0147-1767(89)90007-2.
Tse, D. K., K. Lee, I. Vertinsky, and D. Wehrung. 1988. “Does culture matter? A cross-cultural study of executives’ choice, decisiveness, and risk adjustment in international marketing.” J. Market. 52 (4): 81–95. https://doi.org/10.1177/002224298805200408.
Tversky, A., and D. Kahneman. 1978. “Judgment under uncertainty: Heuristics and biases.” Science 185 (3): 17–34. https://doi.org/10.1016/B978-0-12-214850-7.50008-5.
Umar, A. A., N. Zawawi, and A. R. Abdul-Aziz. 2019. “Exploratory factor analysis of skills requirement for PPP contract governance.” Built Environ. Project Asset Manage. 9 (2): 277–290. https://doi.org/10.1108/BEPAM-01-2018-0011.
Wang, Y., J. Chen, J. Liu, and C. Zhou. 2021. “Investors’ exit timing of PPP projects based on escalation of commitment.” PLoS One 16 (9): e0253394. https://doi.org/10.1371/journal.pone.0253394.
West, R. L., and H. T. Lynn. 2010. Introducing communication theory: Analysis and application. New York: McGraw-Hill.
Xiong, W., and Y. Han. 2021. “Incentives of early termination compensation in public-private partnership projects.” IEEE Trans. Eng. Manage. 99 (Mar): 1–13. https://doi.org/10.1109/TEM.2021.3074662.
Yuan, J. F., W. Li, J. Y. Guo, X. Zhao, and M. J. Skibniewski. 2018. “Social risk factors of transportation PPP projects in China: A sustainable development perspective.” Int. J. Environ. Res. Public Health 15 (7): 1323. https://doi.org/10.3390/ijerph15071323.
Zhang, A., Y. Zhang, and R. Zhao. 2003. “A study of the R&D efficiency and productivity of Chinese firms.” J. Compar. Econ. 31 (3): 444–464. https://doi.org/10.1016/S0147-5967(03)00055-6.
Zhang, S., J. Li, Y. Li, and X. Zhang. 2021. “Revenue risk allocation mechanism in public-private partnership projects: Swing option approach.” J. Constr. Eng. Manage. 147 (1): 04020153. https://doi.org/10.1061/(ASCE)CO.1943-7862.0001952.
Zhou, M. S., and Q. Q. Zhang. 2016. “‘Face project’ or ‘True talent’? A research based on the relationship between political promotion incentive and innovation activity in state-owned listed companies.” Manage. World 12 (Jan): 116–132. https://doi.org/10.19744/j.cnki.11-1235/f.2016.12.011.
Information & Authors
Information
Published In
Journal of Construction Engineering and Management
Volume 148 • Issue 9 • September 2022
Copyright
© 2022 American Society of Civil Engineers.
History
Received: Nov 12, 2021
Accepted: May 6, 2022
Published online: Jul 9, 2022
Published in print: Sep 1, 2022
Discussion open until: Dec 9, 2022
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.