Intention to Settle as an Indispensable Element of Negotiated Construction Dispute Settlement

Among the various methods to resolve construction disputes, negotiation is considered the most cost-effective due to its informal, fast-tracking, and relationship-maintenance characteristics. Moreover, most negotiation studies assume that negotiators will decide to settle or otherwise based on rational analysis. This may not be true; negotiated settlement can only be achieved when negotiators have the intention to do so. To highlight the significance of intention to settle (ITS) in construction dispute negotiation (CDN), this study achieves two working objectives. First, a conceptualized ITS framework is developed. Using facilitators of negotiated settlement as the conceptual base, manifestations of intention to settle were developed. With data collected from construction negotiators, six underlying constructs of ITS were proposed by a principal component factor analysis (PCFA). The six constructs were then conceptualized as three intention forms, which were further validated by hierarchical confirmatory factor analysis (HCFA), thus developing the ITS framework. Second, the influence of ITS on the practice of negotiating behavior is examined. It is found that the ITS can foster cooperative negotiating behaviors that have been recognized as pivotal settlement agents. The findings not only confirm the indispensability of ITS in negotiation settlement but also embody negotiators’ intention by digging out its underlying formulations. The study contributes to the body of knowledge by conceptualizing sources of intention as technique based (preparation and integration), relationship based (goodwill and continuity), and cognition based (commitment and self-efficacy). In addition, the ITS framework is valuable for both negotiating parties to serve as an evaluation instrument. It enables management to review the readiness to settle before initiating a negotiation. During a negotiation, the manifestations can be applied as a checklist to gauge both parties’ settlement intentions, thereby assisting negotiators in formulating appropriate strategies. This study, therefore, makes both theoretical and practical advancements in construction dispute management.

Most negotiation studies have focused more on tactics or strategies to enhance the overall utility of negotiation. However, negotiators’ choice of strategies may not solely depend on rational cost-benefit analysis because other behavioral factors such as settlement intention are of equal importance. This study affirms that having the intention to settle (ITS) is a necessary condition for a negotiated settlement. To go beyond this conventional understanding, how settlement intentions are formulated and operationalized are examined. Drawing from the wealth of relevant literature review and experience of construction professionals, a conceptual framework of ITS was developed and verified by statistical analysis. Categorically, settlement intention can be technique based, relationship based, and cognition based. Respectively, these forms are manifested by the negotiators’ behavior in dealing with the negotiation issues, the counterpart, and the self. The significance of ITS is further exemplified by its ability to foster cooperative negotiating behaviors. The ITS can be put into dispute management practice in two ways. First, the ITS framework can be used to assess both parties’ readiness and worthiness to commence negotiation. Second, ITS manifestations can be used as a checklist to gauge the level of intention to settle of the negotiating parties during a negotiation.