Technical Papers
Apr 20, 2022

Mitigating Opportunistic Behaviors in Consulting Projects: Evidence from the Outsourced Architectural and Engineering Design

Publication: Journal of Construction Engineering and Management
Volume 148, Issue 7

Abstract

Although control strategies are widely used to mitigate opportunistic behaviors, their implementation in consulting projects with intangible outputs can be challenging. Whether or not control strategies are effective to curb consultants’ opportunistic behaviors remains unknown. To fill the knowledge gap, this study examines the effects of clients’ control strategies on consultants’ opportunistic behaviors in consulting projects, with requirement risks and information asymmetry as moderators. The results from a questionnaire survey of 360 architectural and engineering design consultants showed that outcome control breeds opportunistic behaviors. This effect is exacerbated in projects with high levels of requirement risks or information asymmetry. It was also found that behavior control constrains opportunistic behaviors. The findings complement the project management literature by providing empirical evidence for the role of control strategies in curtailing design consultants’ opportunistic behaviors and by revealing that the tangibility of project outputs is an important contextual factor for mitigating opportunistic behaviors.

Get full access to this article

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

Data Availability Statement

All data generated or used during the study are available from the corresponding author by request.

Acknowledgments

This work was supported by the National Natural Science Foundation (71872039).

References

Abubakre, M. A., M. N. Ravishankar, and C. R. Coombs. 2015. “The role of formal controls in facilitating information system diffusion.” Inf. Manage. 52 (5): 599–609. https://doi.org/10.1016/j.im.2015.04.005.
Bagozzi, R. P., and Y. Yi. 1988. “On the evaluation of structural equation models.” J. Acad. Marketing Sci. 16 (1): 74–94. https://doi.org/10.1007/BF02723327.
Brandon-Jones, A., M. Lewis, R. Verma, and M. C. Walsman. 2016. “Examining the characteristics and managerial challenges of professional services: An empirical study of management consultancy in the travel, tourism, and hospitality sector.” J. Oper. Manage. 42–43 (Mar): 9–24. https://doi.org/10.1016/j.jom.2016.03.007.
Caniëls, M. C. J., and C. J. Gelderman. 2010. “The safeguarding effect of governance mechanisms in inter-firm exchange: The decisive role of mutual opportunism.” Br. J. Manage. 21 (1): 239–254. https://doi.org/10.1111/j.1467-8551.2009.00654.x.
Cardinal, L. B. 2001. “Technological innovation in the pharmaceutical industry: The use of organizational control in managing research and development.” Organ. Sci. 12 (1): 19–36. https://doi.org/10.1287/orsc.12.1.19.10119.
Cardinal, L. B., M. Kreutzer, and C. C. Miller. 2017. “An aspirational view of organizational control research: Re-invigorating empirical work to better meet the challenges of 21st century organizations.” Acad. Manage. Ann. 11 (2): 559–592. https://doi.org/10.5465/annals.2014.0086.
Chen, X.-P., A. Tsui, and J.-L. Farh. 2012. Empirical methods in organization and management research. Beijing: Peking University Press.
Choudhury, V., and R. Sabherwal. 2003. “Portfolios of control in outsourced software development projects.” Inf. Syst. Res. 14 (3): 291–314. https://doi.org/10.1287/isre.14.3.291.16563.
Crosno, J. L., and J. R. Brown. 2015. “A meta-analytic review of the effects of organizational control in marketing exchange relationships.” J. Acad. Marketing Sci. 43 (3): 297–314. https://doi.org/10.1007/s11747-014-0386-5.
Dang, C. N., Y.-Y. Chih, L. Le-Hoai, and L. D. Nguyen. 2020. “Project-based A/E/C firms’ knowledge management capability and market development performance: Does firm size matter.” J. Constr. Eng. Manage. 146 (11): 04020127. https://doi.org/10.1061/(ASCE)CO.1943-7862.0001918.
Dawson, G. S., R. T. Watson, and M.-C. Boudreau. 2010. “Information asymmetry in information systems consulting: Toward a theory of relationship constraints.” J. Manage. Inf. Syst. 27 (3): 143–178. https://doi.org/10.2753/MIS0742-1222270306.
Dawson, J. F. 2014. “Moderation in management research: What, why, when, and how.” J. Bus. Psychol. 29 (1): 1–19. https://doi.org/10.1007/s10869-013-9308-7.
Eisenhardt, K. M. 1985. “Control: Organizational and economic approaches.” Manage. Sci. 31 (2): 134–149. https://doi.org/10.1287/mnsc.31.2.134.
Eisenhardt, K. M. 1989. “Agency theory: An assessment and review.” Acad. Manage. Rev. 14 (1): 57–74. https://doi.org/10.2307/258191.
ENR (Engineering News-Record). 2021. “Top 225 international design firms: Designing for shifting priorities.” Accessed July 28, 2021. https://www.enr.com/articles/52161-top-225-international-design-firms-designing-for-shifting-priorities.
Fornell, C., and D. F. Larcker. 1981. “Evaluating structural equation models with unobservable variables and measurement error.” J. Marketing Res. 18 (1): 39–50. https://doi.org/10.1177/002224378101800104.
Goodale, J. C., D. F. Kuratko, and J. S. Hornsby. 2008. “Influence factors for operational control and compensation in professional service firms.” J. Oper. Manage. 26 (5): 669–688. https://doi.org/10.1016/j.jom.2007.12.001.
Hair, J. F., C. M. Ringle, and M. Sarstedt. 2011. “PLS-SEM: Indeed a silver bullet.” J. Marketing Theory Pract. 19 (2): 139–152. https://doi.org/10.2753/MTP1069-6679190202.
Hair, J. F., C. B. William, J. B. Barry, and E. A. Rolph. 2019. Multivariate data analysis. Hampshire, UK: Cengage.
Han, L., S. Zhang, P. Ma, and Y. Gao. 2019. “Management control in international joint ventures in the infrastructure sector.” J. Manage. Eng. 35 (1): 04018051. https://doi.org/10.1061/(ASCE)ME.1943-5479.0000665.
Hawkins, T. G., C. M. Wittmann, and M. M. Beyerlein. 2008. “Antecedents and consequences of opportunism in buyer–supplier relations: Research synthesis and new frontiers.” Ind. Marketing Manage. 37 (8): 895–909. https://doi.org/10.1016/j.indmarman.2007.05.005.
Heide, J. B., K. H. Wathne, and A. I. Rokkan. 2007. “Interfirm monitoring, social contracts, and relationship outcomes.” J. Marketing Res. 44 (3): 425–433. https://doi.org/10.1509/jmkr.44.3.425.
Hsu, J. S.-C., S.-P. Shih, and Y. Li. 2017. “The mediating effects of in-role and extra-role behaviors on the relationship between control and software-project performance.” Int. J. Project Manage. 35 (8): 1524–1536. https://doi.org/10.1016/j.ijproman.2017.08.008.
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. https://doi.org/10.1002/(SICI)1097-0266(199902)20:2%3C195::AID-SMJ13%3E3.0.CO;2-7.
Huo, B., Y. Ye, and X. Zhao. 2015. “The impacts of trust and contracts on opportunism in the 3PL industry: The moderating role of demand uncertainty.” Int. J. Prod. Econ. 170 (Dec): 160–170. https://doi.org/10.1016/j.ijpe.2015.09.018.
ISIC (International Standard Industrial Classification). 2008. International standard industrial classification (ISIC) revision 4. New York: United Nations Publication.
Jap, S. D., and E. Anderson. 2003. “Safeguarding interorganizational performance and continuity under ex post opportunism.” Manage. Sci. 49 (12): 1684–1701. https://doi.org/10.1287/mnsc.49.12.1684.25112.
Jap, S. D., D. C. Robertson, A. Rindfleisch, and R. Hamilton. 2013. “Low-stakes opportunism.” J. Marketing Res. 50 (2): 216–227. https://doi.org/10.1509/jmr.10.0121.
Jeffries, F. L., and R. Reed. 2000. “Trust and adaptation in relational contracting.” Acad. Manage. Rev. 25 (4): 873–882. https://doi.org/10.5465/amr.2000.3707747.
Jones, C., W. S. Hesterly, K. Fladmoe-Lindquist, and S. P. Borgatti. 1998. “Professional service constellations: How strategies and capabilities influence collaborative stability and change.” Organ. Sci. 9 (3): 396–410. https://doi.org/10.1287/orsc.9.3.396.
Jones, C., and B. B. Lichtenstein. 2008. “Temporary inter-organizational projects.” In The Oxford handbook of inter-organizational relations. Oxford, UK: Oxford University Press.
Keil, M., A. Rai, and S. Liu. 2013. “How user risk and requirements risk moderate the effects of formal and informal control on the process performance of IT projects.” Eur. J. Inf. Syst. 22 (6): 650–672. https://doi.org/10.1057/ejis.2012.42.
Kirsch, L. J. 1996. “The management of complex tasks in organizations: Controlling the systems development process.” Organ. Sci. 7 (1): 1–21. https://doi.org/10.1287/orsc.7.1.1.
Li, Y., E. Xie, H.-H. Teo, and M. W. Peng. 2010. “Formal control and social control in domestic and international buyer–supplier relationships.” J. Oper. Manage. 28 (4): 333–344. https://doi.org/10.1016/j.jom.2009.11.008.
Liu, Y., Y. Luo, and T. Liu. 2009. “Governing buyer–supplier relationships through transactional and relational mechanisms: Evidence from China.” J. Oper. Manage. 27 (4): 294–309. https://doi.org/10.1016/j.jom.2008.09.004.
Loch, C., and S. Sommer. 2019. “The tension between flexible goals and managerial control in exploratory projects.” Project Manage. J. 50 (5): 524–537. https://doi.org/10.1177/8756972819870062.
Lu, P., S. Guo, L. Qian, P. He, and X. Xu. 2015. “The effectiveness of contractual and relational governances in construction projects in China.” Int. J. Project Manage. 33 (1): 212–222. https://doi.org/10.1016/j.ijproman.2014.03.004.
Lu, W., K. Ye, R. Flanagan, and C. Jewell. 2013. “Developing construction professional services in the international market: SWOT analysis of China.” J. Manage. Eng. 29 (3): 302–313. https://doi.org/10.1061/(ASCE)ME.1943-5479.0000144.
Lu, W., K. Ye, R. Flanagan, and C. Jewell. 2014. “Nexus between contracting and construction professional service businesses: Empirical evidence from international market.” J. Constr. Eng. Manage. 140 (2): 04013049. https://doi.org/10.1061/(ASCE)CO.1943-7862.0000802.
Lu, W., L. Zhang, and L. Zhang. 2016. “Effect of contract completeness on contractors’ opportunistic behavior and the moderating role of interdependence.” J. Constr. Eng. Manage. 142 (6): 04016004. https://doi.org/10.1061/(ASCE)CO.1943-7862.0001110.
Lui, S. S., Y.-Y. Wong, and W. Liu. 2009. “Asset specificity roles in interfirm cooperation: Reducing opportunistic behavior or increasing cooperative behavior?” J. Bus. Res. 62 (11): 1214–1219. https://doi.org/10.1016/j.jbusres.2008.08.003.
Musarra, G., M. J. Robson, and C. S. Katsikeas. 2016. “The influence of desire for control on monitoring decisions and performance outcomes in strategic alliances.” Ind. Marketing Manage. 55 (May): 10–21. https://doi.org/10.1016/j.indmarman.2016.02.012.
Nayyar, P. R. 1993. “Performance effects of information asymmetry and economies of scope in diversified service firms.” Acad. Manage. J. 36 (1): 28–57. https://doi.org/10.5465/256511.
Nuwangi, S. M., D. Sedera, S. C. Srivastava, and G. Murphy. 2014. “Intra-organizational information asymmetry in offshore ISD outsourcing.” VINE: J. Inf. Knowl. Manage. Syst. 44 (1): 94–120. https://doi.org/10.1108/VINE-04-2013-0023.
Pheng, L., and C. Leong. 2000. “Cross-cultural project management for international construction in China.” Int. J. Project Manage. 18 (5): 307–316. https://doi.org/10.1016/S0263-7863(99)00027-7.
Podsakoff, P. M., S. B. MacKenzie, J.-Y. Lee, and N. P. Podsakoff. 2003. “Common method biases in behavioral research: A critical review of the literature and recommended remedies.” J. Appl. Psychol. 88 (5): 879–903. https://doi.org/10.1037/0021-9010.88.5.879.
Reinartz, W., M. Haenlein, and J. Henseler. 2009. “An empirical comparison of the efficacy of covariance-based and variance-based SEM.” Int. J. Res. Marketing 26 (4): 332–344. https://doi.org/10.1016/j.ijresmar.2009.08.001.
Remus, U., and M. Wiener. 2012. “The amount of control in offshore software development projects.” J. Global Inf. Manage. 20 (4): 1–26. https://doi.org/10.4018/jgim.2012100101.
Riordan, M. H., and O. E. Williamson. 1985. “Asset specificity and economic organization.” Int. J. Ind. Organ. 3 (4): 365–378. https://doi.org/10.1016/0167-7187(85)90030-X.
Rosin, A. F., S. Stubner, S. S. Chaurasia, and S. Verma. 2019. “Outsourcing, information symmetry and governance: The effects of retailers’ formal and informal controls on manufacturers’ outsourcing performance.” J. Enterp. Inf. Manage. 32 (6): 993–1014. https://doi.org/10.1108/JEIM-06-2018-0124.
Rowley, T., D. Behrens, and D. Krackhardt. 2000. “Redundant governance structures: An analysis of structural and relational embeddedness in the steel and semiconductor industries.” Strategic Manage. J. 21 (3): 369–386. https://doi.org/10.1002/(SICI)1097-0266(200003)21:3%3C369::AID-SMJ93%3E3.0.CO;2-M.
Rustagi, S., W. R. King, and L. J. Kirsch. 2008. “Predictors of formal control usage in IT outsourcing partnerships.” Inf. Syst. Res. 19 (2): 126–143. https://doi.org/10.1287/isre.1080.0169.
Sharma, A. 1997. “Professional as agent: Knowledge asymmetry in agency exchange.” Acad. Manage. Rev. 22 (3): 758–798. https://doi.org/10.5465/amr.1997.9708210725.
Sihag, V., and S. A. Rijsdijk. 2018. “Organizational controls and performance outcomes: A meta-analytic assessment and extension.” J. Manage. Stud. 56 (1): 91–133. https://doi.org/10.1111/joms.12342.
Stouthuysen, K., H. Slabbinck, and F. Roodhooft. 2012. “Controls, service type and perceived supplier performance in interfirm service exchanges.” J. Oper. Manage. 30 (5): 423–435. https://doi.org/10.1016/j.jom.2012.01.002.
Sydow, J., and T. Braun. 2018. “Projects as temporary organizations: An agenda for further theorizing the interorganizational dimension.” Int. J. Project Manage. 36 (1): 4–11. https://doi.org/10.1016/j.ijproman.2017.04.012.
Thomson, D. S., S. A. Austin, H. Devine-Wright, and G. R. Mills. 2003. “Managing value and quality in design.” Build. Res. Inf. 31 (5): 334–345. https://doi.org/10.1080/0961321032000087981.
Tiwana, A., and M. Keil. 2009. “Control in internal and outsourced software projects.” J. Manage. Inf. Syst. 26 (3): 9–44. https://doi.org/10.2753/MIS0742-1222260301.
Tong, P. Y., and J. L. Crosno. 2016. “Are information asymmetry and sharing good, bad, or context dependent? A meta-analytic review.” Ind. Marketing Manage. 56 (Jul): 167–180. https://doi.org/10.1016/j.indmarman.2015.11.004.
Treasury Task Force. 2000. How to achieve design quality in PFI projects. London: HM Treasury.
Turner, K. L., and M. V. Makhija. 2006. “The role of organizational controls in managing knowledge.” Acad. Manage. Rev. 31 (1): 197–217. https://doi.org/10.5465/amr.2006.19379631.
Von Nordenflycht, A. 2010. “What is a professional service firm? Towards a theory and taxonomy of knowledge intensive firms.” Acad. Manage. Rev. 35 (1): 155–174. https://doi.org/10.5465/AMR.2010.45577926.
Wallenburg, C. M., and T. Schäffler. 2014. “The interplay of relational governance and formal control in horizontal alliances: A social contract perspective.” J. Supply Chain Manage. 50 (2): 41–58. https://doi.org/10.1111/jscm.12041.
Wang, X., and Z. Yang. 2013. “Inter-firm opportunism: A meta-analytic review and assessment of its antecedents and effect on performance.” J. Bus. Ind. Marketing 28 (2): 137–146. https://doi.org/10.1108/08858621311295272.
Wang, Y., Y. Chen, W. Wang, Y. Chen, and M. Jin. 2019. “Revisiting the relationship between contract governance and contractors’ opportunistic behavior in construction projects.” IEEE Trans. Eng. Manage. 1–13. https://doi.org/10.1109/TEM.2019.2945551.
Wathne, K. H., and J. B. Heide. 2000. “Opportunism in interfirm relationships: Forms, outcomes, and solutions.” J. Marketing 64 (4): 36–51. https://doi.org/10.1509/jmkg.64.4.36.18070.
Werr, A., and A. Styhire. 2002. “Management consultants-friend or foe? Understanding the ambiguous client-consultant relationship.” Int. Stud. Manage. Organ. 32 (4): 43–66. https://doi.org/10.1080/00208825.2002.11043670.
Winch, G., and E. Schneider. 1993. “Managing the knowledge-based organization: The case of architectural practice.” J. Manage. Stud. 30 (6): 923–937. https://doi.org/10.1111/j.1467-6486.1993.tb00472.x.
Wynstra, F., G. Rooks, and C. Snijders. 2018. “How is service procurement different from goods procurement? Exploring ex-ante costs and ex-post problems in IT procurement.” J. Purchasing Supply Manage. 24 (2): 83–94. https://doi.org/10.1016/j.pursup.2017.12.001.
Zu, X., and H. Kaynak. 2012. “An agency theory perspective on supply chain quality management.” Int. J. Oper. Prod. Manage. 32 (4): 423–446. https://doi.org/10.1108/01443571211223086.

Information & Authors

Information

Published In

Go to Journal of Construction Engineering and Management
Journal of Construction Engineering and Management
Volume 148Issue 7July 2022

History

Received: Aug 10, 2021
Accepted: Mar 4, 2022
Published online: Apr 20, 2022
Published in print: Jul 1, 2022
Discussion open until: Sep 20, 2022

Permissions

Request permissions for this article.

Authors

Affiliations

Yadi Li, Ph.D.
Lecturer, School of Business, East China Univ. of Science and Technology, Shanghai 200237, China.
Professor, School of Management and Engineering, Nanjing Univ., Nanjing 210093, China (corresponding author). ORCID: https://orcid.org/0000-0001-7305-9773. Email: [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

  • Exploring Environmental Collaboration and Greenwashing in Construction Projects: Integrative Governance Framework, Journal of Construction Engineering and Management, 10.1061/JCEMD4.COENG-13543, 149, 11, (2023).
  • Effect of Contractual Complexity on Conflict in Construction Subcontracting: Moderating Roles of Contractual Enforcement and Organizational Culture Distance, Journal of Construction Engineering and Management, 10.1061/JCEMD4.COENG-12822, 149, 5, (2023).
  • Adaptability in Public Procurement of Engineering Services Promoting Carbon Reduction: An Organizational Control Perspective, Sustainability, 10.3390/su14105958, 14, 10, (5958), (2022).

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