Contractor as Trust Initiator in Construction Partnering—Prisoner’s Dilemma Perspective

Partnering has been advocated for use in construction as a project-delivery approach to curb dispute and enable a cooperative contracting environment. Successful construction partnering is perceived to derive benefits to both developers and contractors. In view of significant implications to successful project delivery, there has been a surge of research and studies on construction partnering. These studies typically focus on the partnering process as well as the identification of critical success factors. Among the various success factors that underpin partnering success, establishing trust among partners is considered the most important. Moreover, skeptics have been swift to point out that establishing trust in construction is daunting. A better understanding of the role of trust and its manifestation in partnering efforts is therefore of both academic and practical value. In this study, motivating trust in construction partnering is described within the classic framework of “the prisoner’s dilemma,” which suggests the trust cycle can be kick-started if construction partners put cooperation before competition and self-interest. This paper reports a study that is designed to suggest a suitable candidate for the trust initiator. As such, the critical trust factors for two groups of construction partners in Hong Kong—developers/consultants and contractors—are first identified. It is found that “performance” and “permeability” of partners are the two most critical trust factors. “Performance” describes the partner’s competence and problem-solving ability as perceived by their counterpart. “Permeability” reflects the partner’s openness in sharing information. The result of a multiple-regression analysis further suggests that the contractor is in a position to initiate trust through competent performance and maintaining effective communication with the client. In this manner, the trust cycle can expand with reciprocal trustworthiness from the client.     

Constructing Relationally Integrated Teams

Worldwide initiatives to improve construction industry performance converge on the common need for more effective teamworking. This is increasingly critical in the context of complex multiparticipant construction projects. Clashes of organizational, operational, national, and/or professional cultures point to the need for “relational integration” as a prerequisite for such synergistic teamworking. This paper draws on recent approaches to promoting trust and cooperation through (1) basic teambuilding techniques in general and (2) partnering and alliancing in construction projects. It then focuses on analyzing the views of Singapore-based contractors as derived from a survey to elicit the hypothesized 28 factors facilitating relationally integrated teambuilding, and 31 factors deterring such integration in construction project teams. On the whole: (1) 27 of the 28 factors facilitating integrated project team, and 26 of the 31 factors deterring integrated project team, are significant; (2) these two sets of factors could be represented by four and five “broad factors,” respectively; and (3) except in a few cases, respondents from large and medium companies, as well as with and without experience in RC, have similar perceptions of the importance levels of different factors. These two sets of critical factors, as identified in this paper, complement two other previously isolated sets of factors that facilitate or deter a “relational contracting” culture. Taken together, they feed into a consolidated strategy for releasing the latent energies and potential synergies that should yield the much higher construction project performance levels that have been called for worldwide.     

Whole Life Performance Assessment: Critical Success Factors

Whole life costing (WLC) has become the best practice in construction procurement and it is likely to be a major issue in predicting whole life costs of a construction project accurately. However, different expectations from different organizations throughout a project’s life and the lack of data, monitoring targets, and long-term interest for many key players are obstacles to be overcome if WLC is to be implemented. A questionnaire survey was undertaken to investigate a set of ten common factors and 188 individual factors. These were grouped into eight critical categories (project scope, time, cost, quality, contract/administration, human resource, risk, and health and safety) by project phase, as perceived by the clients, contractors and subcontractors in order to identify critical success factors for whole life performance assessment (WLPA). Using a relative importance index, the top ten critical factors for each category, from the perspective of project participants, were analyzed and ranked. Their agreement on those categories and factors were analyzed using Spearman’s rank correlation. All participants identify “Type of Project” as the most common critical factor in the eight categories for WLPA. Using the relative index ranking technique and weighted average methods, it was found that the most critical individual factors in each category were: “clarity of contract” (scope); “fixed construction period” (time); “precise project budget estimate” (cost); “material quality” (quality); “mutual/trusting relationships” (contract/administration); “leadership/team management” (human resource); and “management of work safety on site” (health and safety). There was relatively a high agreement on these categories among all participants. Obviously, with 80 critical factors of WLPA, there is a stronger positive relationship between client and contactor rather than contractor and subcontractor, client and subcontractor. Putting these critical factors into a criteria matrix can facilitate an initial framework of WLPA in order to aid decision making in the public sector in South Korea for evaluation/selection process of a construction project at the bid stage.     

Project Organizations as Social Networks

High-performance teams achieve outcomes that exceed the expectations of the project and often demonstrate unique or innovative approaches within a final solution. The foundation of this high performance is the ability to focus on the success of the team over individual objectives. However, the recognition of this emphasis is based on the establishment of professional trust and strong communications between the team members. The social network model of construction introduced a dual-focused approach to enhancing these elements and creating high-performance project teams. The approach emphasizes balancing both a traditional project management emphasis on efficiency of communications with a focus on the social factors that move the project team from efficient to effective. In this paper, the model is extended to present the results of four studies of organizations that are full-service engineering companies that also provide construction oversight services. The paper presents the results of these studies in terms of the social network model and the achievement of high performance in the project teams. Analytical and graphical results are presented based on social network analysis techniques to provide a multiperspective analysis of the project teams.     

Proposed Subcontractor-Based Employee Motivational Model

The intent of this research was to identify the factors that promote positive motivational behavior in construction subcontractor crews. The factors affecting motivation, goal-setting, workforce needs, and incentives were investigated to determine the attributes for a subcontractor employee motivational model. A survey addressing these four categories was distributed to subcontractor foremen and supervisors to establish a list of motivational factors. The statistical analysis of the survey results aided in the final development of the proposed subcontractor based employee motivational model, which includes such components as confidence and competence as being reinforced by quality of work, incentives, safe performance, praise, and a sense of belonging. The proposed model provides industry practitioners with another level of understanding of the motivation sequence of the subcontractor’s labor force. Perhaps the most interesting finding was related to the attributes found in relation to workforce needs. A common link “feeling of being a member of the team/crew” was discovered between “praise” and “job security.” It was surmised that essentially a worker must first receive praise before they feel as if they are a member of the team/crew and once they feel like a member of the team, they then begin to acquire feelings of job security. The results of this study further reinforce the findings of several previous behavioral studies. Future research should attempt to validate the model using a larger sample size incorporating multiple general contractors.     

Global Dimension of Robust Project Network Design

Managing the increased complexity, emerging uncertainties, and diversity of cultures on global projects is creating significant challenges for architecture, engineering, and construction firms. In global projects, differences in “institutions”—including language, beliefs, values, group norms, work practices, professional roles, industry organizations, and legal frameworks—among team members from different national backgrounds can lead to misunderstanding and conflicts that cause delays, increase costs, and reduce quality. Previous research has examined risk factors associated with international project execution. However, little research to date has explored whether reconfiguring project networks might mitigate such risks. Project organizational simulation tools have been combined with “robust design” experimental techniques to design robust project networks that can perform reliably in uncertain conditions. This paper extends project network design research to examine whether robust designs for given project networks differ between “domestic” and “global” projects, given differing organizational uncertainties. The results demonstrate that robust project network designs may differ for global project networks. This finding has significant implications for the design of project networks in an industry where firm participation in global project networks is increasing, both domestically and abroad.     

Alliancing in Australia—No-Litigation Contracts: A Tautology?

A project alliance is a business strategy whereby client and commercial participants’ objectives are aligned. This paper takes an alliance project between public and private organizations in Queensland, Australia as a case study and reports the critical factors identified that influence the success of the alliance project. Alliancing is a system that provides a collaborative environment and a framework to adapt behavior to project objectives. It is about sharing resources and experiences, exposing the “hidden” risks. The case study suggests that leadership has a strong influence on the alliance climate. Commitment and action by the Project Alliance Board (and, so, parent organizations) have a strong impact on the team and alliance culture, indicating alliancing has a high chance of failure when there is inadequate support from top management. Like all relational contracting approaches, trust between alliance partners is important. This case study project takes a further step toward reinforcing the trust element by placing a No-Dispute clause in the alliance agreement. A review of the effects of the no-litigation clause upon the project team is presented. The writers conclude that without a positive approach to relationship management, a No-Dispute approach is impossible. Hence, they postulate that a “no-litigation” alliancing contract is essentially tautological, and go on to argue that a no-litigation contract cannot exist without the help of a clear relational vision, that leads to both soft and hard infrastructure to assist in decision making and relationship building.     

Relational Selection for Collaborative Working Arrangements

Procurement arrangements for collaborative working arrangements (CWAs) should arguably provide suitable protocols under which different project partners can interact effectively and maintain harmonious relationships and mobilize their collective efforts towards common project objectives. Technical abilities of different project partners for carrying out the works are important. Also critical are their “soft” or “relational” qualities to work jointly and synergistically in the project team. The aims of the reported study are to examine the importance of a single set of different factors for selecting consultants, contractors, subcontractors, suppliers, and clients for CWAs; and to assess the relative importance of various factors and strategies for building CWAs. Data were collected internationally from 17 countries through a questionnaire survey and statistical analyses were conducted. Results attribute varying degrees of importance to various factors for selecting different project partners and suggest an interrelated and consolidated selection approach in general, except for “selecting” clients. The study confirms that trust and business ethics related factors and strategies are more helpful for CWAs than some others. Outcomes of this study are expected to benefit both industry practitioners and researchers, in exploring, designing, and implementing suitable CWAs and selecting appropriate project partners.     

Project-Specific Web Sites: Friend or Foe?

Recent research has shown that one of the keys to project success is effective communication. Today, project communication is becoming increasingly complex, and the rapid transmission of project information is vital to project performance. Unfortunately, our current information network is based on project “push”—where information is moved sequentially to and from each member of the project team. The alternative to push communication is “pull” communication, where individuals access project information from a single central source. Project-specific Web sites (PSWSs) give construction personnel new ways of pulling the information needed to design and build today's complex projects. This paper will describe information push and pull, and discuss its applications in project-specific Web sites. Additionally, the paper will outline a case study approach that uses a social network analysis to study push∕pull on three major construction projects. The research found that PSWSs can speed information flows on construction projects, but can also generate information “overload” that limits its effectiveness. More important, the study found that the success of new Internet-based technologies depends on the participation of key members of the project team. When one of these key players refuses to participate, then Internet-based project management systems quickly lose their effectiveness.     

Activity Awareness as an Enabler for Communication and Network Building in Construction Design Teams

The paper reports on ongoing research into the facilitation of communication in distributed design teams of the type typically encountered in the construction sector. Ideas around social aspects in such design teams are discussed followed by our previous research efforts as an evolutionary process that has led us to develop in this direction. It is argued that facilitating timely and contextually grounded communication in a distributed environment can help to build the social networks and associated social capital common in collocated design teams but often absent in distributed ones. We describe our framework for providing such facilitation through monitoring and awareness of the information “space” of a construction project. We believe that by leveraging the relationships in the information space, we can go some way to identifying those individuals who would benefit from developing interpersonal relations in their work and further by exploiting those relationships in real time we can accelerate the formation of personal social networks and social capital between those individuals.     

Design and Build Project Success Factors: Multivariate Analysis

This study aimed to identify a set of project success factors for design and build (D&B) projects and examine the relative importance of these factors on project outcome. Six project success factors (project team commitment, contractor's competencies, risk and liability assessment, client's competencies, end-users' needs, and constraints imposed by end-users) were extracted from factor analysis of data provided by 53 participants of public-sector D&B projects through a questionnaire survey. Project team commitment, client's competencies, and contractor's competencies were found to be important to bring successful project outcome from the multiple regression findings. Contractor's competencies also contributed to project time performance. Project team members should also recognize that time and cost performance as well as quality of design and workmanship represent the key elements of overall success of D&B projects. Practitioners are advised to focus on teamwork and partnering for successful project completion. More research should be conducted to further explore the relationship between procurement method and project success factors.     

Interorganizational Teamwork in the Construction Industry

Interorganizational teamwork has attracted considerable attention over the years and is one of the characteristics of the construction industry. However, most of the research has just focused on the factors necessary for team success, rather than investigating human perceptions of interorganizational teamwork and what factors affect the individual’s perception that they are working in a team. Building on a modified model, the effects of cultural and context factors (individualism and power distance) and employee attitudes (task interdependence and trust) on team orientation (the individual’s perception of working in a team) were investigated in this research. Data were collected via questionnaire surveys from a sample of construction practitioners working in interorganizational project teams in Hong Kong. Using correlation and multiple regression analyses, the findings indicated that, as hypothesized, there were positive relationships between team orientation and contractual trust, competence trust and task interdependence, but there was a negative relationship between team orientation and opportunism. The results further suggested that the influence of team orientation was moderated to a certain extent by individualism and power distance in some employees’ attitudes.     

Reconstructing Cultures for Relational Contracting

Although previous research has pointed to potential performance gains through relational contracting (RC), reservations remain as to its value and viability. Even those who wish to use RC need guidelines for introducing it, especially where it clashes with prevalent project cultures. A study was launched from Hong Kong to identify the critical factors which promote RC and team building in the context of specific cultures. This paper consolidates the perceptions of 60 respondents to a questionnaire survey in Singapore, in relation to the hypothesized 24 factors facilitating RC, and 28 factors impeding/deterring RC. It indicates the evident readiness of the Singaporean contracting industry to embrace collaborative working practices. On the whole: (1) all the 24 factors facilitating RC, and 23 of the 28 factors deterring RC, are significant; (2) these two sets of factors could be represented by six and seven “broad factors,” respectively; and (3) except in a few cases, respondents from large and medium companies, as well as with and without experience in RC, have similar perceptions of the importance of different factors. It was perceived that trust should be at the core of RC approaches to construction procurement, but also seen that the current level of trust is low. Identifying the principal “facilitators” and “impediments”/ deterrents to RC, provides pointers to building relationally integrated teams to boost performance to much higher levels, as are now expected from the industry. The literature indicates that the outcome of the survey in Singapore reflects the trends in many countries that are moving toward RC. This research model and approach may be conveniently replicated in other contractual regimes, in order to reinforce these observations.     

Structural Equation Model of Trust and Partnering Success

The establishment of trust has been identified as the most critical factor that facilitates partnering success. As such, management should direct their efforts and energy to enhance trust effectively and systematically. It is hypothesized that partners’ trust level is positively related to their performance, permeability, and relational bonding and can be system based. This paper reports the use of the structural equation modeling technique to test this hypothesis. Project-based data on partnering success and the relative importance of the four trust factors were collected through a questionnaire survey, and the level of partnering success was assessed by the achievement of the preset project targets. The findings of the study support the hypothesized positive relationship between the partners’ trust level and partnering success. In addition, performance, permeability, and relational bonding were found to make significant contributions toward parties’ trust level.     

Catastrophic Transitions of Construction Contracting Behavior

The ways to manage a construction project very much depend on the attitude of the people involved. Collectively this is identified as construction contracting behavior (CCB). The CCB of the construction industry is adversarial as pinpointed in many industry-wide reviews. A more cooperative project delivery approach has therefore been advocated. In fact, drive for efficiency provides the incentive for cooperation. Nevertheless, members of a project team, in representing their respective organizations, are often in conflict. The dichotomous pair of cooperation and aggression forces therefore coexist. It is not uncommon to note that CCB turns aggressive as the construction activities of a project intensify. This change is often sudden and thus matches well with the phenomenon of hysteresis described by the catastrophe theory (CT). It is hypothesized that the dynamics of CCB can be modeled by CT. The three-variable CT models include CCB (as dependent variable), cooperation forces (as normal factor) and aggression forces (as splitting factor). With data collected from a survey fitted by the Cuspfit program, it was found that trust intensity is an effective normal factor. Contract incompleteness and competitive inertia are splitting factors that trigger aggression.     

Competency-Based Model for Predicting Construction Project Managers’ Performance

Using behavioral competencies to influence human resource management decisions is gaining popularity in business organizations. This study identifies the core competencies associated with the construction management role and, further, develops a predictive model to inform human resource selection and development decisions within large construction organizations. A range of construction managers took part in behavioral event interviews where staff were asked to recount critical management incidents, decisions, and actions from which their key competencies could be identified. By delineating the sample according to their levels of performance measured against a range of role-specific performance criteria, the competencies defining superior management performance could be determined. These were then used to construct a logistic regression model from which a project manager’s performance can be predicated. The validated results reveal that “self-control” and “team leadership” are the most predictive behaviors of effective project management performance within the framework of the model. The paper explores the potential role and application of the framework to underpin human resource management decision making with regards to recruitment, performance management, succession planning, and resource allocation.     

Measuring Safety Climate of a Construction Company

Safety climate can benefit contractors, specialty contractors, and owners of industries by providing them with the knowledge of attitudes and perceptions that can help to consistently achieve better safety performance. The objective of this research was to determine safety climate that would enhance safety culture and positively impact perceived safety performance on construction projects. A safety climate questionnaire survey was conducted on the construction sites of a leading construction company and its subcontractors in Hong Kong. Approximately, 1,500 hard copy questionnaires were distributed and the response rate was excellent, resulting in 1,120 valid questionnaires being collected from 22 construction projects. By means of factor analysis, two underlying safety climate factors were extracted, accounting for 43.9% of the total variance. Multiple regression analysis confirmed that these climate factors, “management commitment and employee involvement” and “inappropriate safety procedure and work practices” were significant predictors of workers’ perceptions of safety performance. The findings indicated that the relationship between perceived safety performance and “inappropriate safety procedure and work practices” was inversely correlated. The results suggest that safety climate can be used as an effective measure of assessing and improving site safety for projects under construction. The findings of this study and the methodology might be useful for research at other construction sites in other regions and countries. This work provides useful information for project managers and safety practitioners who desire to improve safety climate and safety performance on construction sites.     

Impact of Resources and Strategies on Construction Company Performance

Globalized competition and customer needs forced construction companies to measure their performance beyond the financial measures such as profitability, turnover, etc. As qualitative determinants were added to measurement systems, their investigation and evaluation became a major area of research. In this study, the impact of “resources and capabilities,” “strategic decisions,” “project management competencies,” and “strength of relationships with other parties” on “company performance” was investigated. A questionnaire survey was administered to 73 Turkish contractors and the results of the survey were analyzed using structural equation modeling. The findings indicate that, as expected, resources and capabilities and strategic decisions have an important and direct impact on company performance, whereas project management competencies and strength of relationships with other parties impact company performance only indirectly, through their impact on companies’ resources and capabilities and strategic decisions.     

Exploring Critical Success Factors for Partnering in Construction Projects

The construction industry is a very competitive high-risk business. Many problems, such as little cooperation, lack of trust, and ineffective communication resulting in adversarial relationships between contracting parties, are facing the construction industry. Partnering is perhaps one of the most innovative developments in delivering a project efficiently and reducing construction disputes. It provides a sound basis for a “win-win” climate and synergistic teamwork. Project partnering in the Hong Kong construction industry has gained in popularity since 1994. A number of potential factors contributing to partnering success have emerged and deserve further study. This paper presents a review of the development of the partnering concept in general and identifies critical success factors for partnering projects from the Hong Kong perspective in particular. Through a postal questionnaire survey geared toward project participants with hands-on partnering experience, the opinions of various parties—clients, consultants, and contractors were sought and evaluated in relation to partnering success factors. The relationship between the perception of partnering success and a set of success factors hypothesized in the study was derived using factor analysis and multiple regression. The results indicated that certain requirements must be met for partnering to succeed. In particular, the establishment and communication of a conflict resolution strategy, a willingness to share resources among project participants, a clear definition of responsibilities, a commitment to a win-win attitude, and regular monitoring of partnering process were believed to be the significant underlying factors for partnering success. Such an identification of success factors could well formulate effective strategies for minimizing construction conflicts and improving project performance.     

Lean Processes for Sustainable Project Delivery

Facility owners and project teams often struggle to engage “green” or “sustainable” requirements on building projects and can incur additional project costs as a result. Although “investments” in high performance building features can be paid back through operational savings, the project delivery methods currently adopted by most teams are laden with process waste. Lean production principles have been proven to reduce waste and improve process performance in highly complex development and production environments. Adopting these lean principles, this paper reports a study that identified the presence of value and waste in a sustainable building project. Through an empirical investigation of the Real Estate and Facilities Division of Toyota Motor Sales, Toyota’s capital facility delivery process was mapped to identify both the steps in project delivery critical for success (value) and those that are waste. The investigation focused on the South Campus Facility, which received U.S. Green Building Council’s Leadership in Energy and Environmental Design Gold certification at a project cost equivalent to a conventional facility. Through post hoc process-based analysis, insight about what added value and waste in sustainable project delivery at Toyota was obtained. The results also identify further improvement opportunities to Toyota’s delivery process. For corporate facility owners and the Architecture Engineering Construction industry, the results unearth insights about how to successfully and economically deliver sustainable facilities.