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.     

Partnering Mechanism in Construction: An Empirical Study on the Chinese Construction Industry

Partnering and its principles have increasingly been introduced to the construction industry to improve the efficiency of project delivery. However, little research outlines the mechanism behind its application. This paper presents the findings of a study that was conducted to develop and test a partnering model that reveals the relationships between the critical success factors (CSFs) of partnering and demonstrates their importance to construction. With support of data collected from the Chinese construction industry, this study has revealed strong correlations among partnering CSFs, risk management, total quality management (TQM), use of incentives, and project performance. It is concluded that project success is the outcome of the interaction between a variety of techniques, and that partnering, associated with incentives, is a basic management method through which risk management and TQM can be strongly improved.     

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.     

Establishment of Critical Success Factors for Construction Partnering

Research into the use of partnering in construction has become ubiquitous; however, a framework is needed that can be used to identify critical success factors (CSFs) that contribute to the successful use of partnering in projects. Based on a review of the partnering literature within the management discipline, a partnering framework has been developed to identify the CSFs for construction parties implementing partnering arrangements. The framework highlights the influence of contextual characteristics and management skills on partnering success. The CSFs identified and discussed in the framework are effective communication, conflict resolution, adequate resources, management support, mutual trust, long-term commitment, coordination, and creativity. The degree of success of partnering can be determined by subjective measures (e.g., perceived satisfaction of partners' expectations) and objective measures (e.g., cost variation and rejection of work). A case for initiating partnering is also presented, together with some general guidelines.     

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.     

Partnering on Defense Contracts

Contracting on government construction projects has historically been structured and adversarial. The decade of the 1990s saw the advent of a new attitude in government contracting that emulated success stories from the private sector. After witnessing several high-profile success stories such as constructing the Atlanta Olympic Park, the government embraced the concept of partnering as a primary method of contract administration. The private sector consistently demonstrated an ability to contract for services while realizing a marked decrease in claims and litigation costs with partnering. Their success was founded in the building of trust within the project team by creating a common bond between previously dissociated parties. This was achieved through developing a mutual understanding of the other parties’ interests and goals in the project while maintaining a team focus on the ultimate goal of a successful project. The government espied partnering as a way to improve its relationships with contractors and reduce the volume of litigation that seemed to only be increasing in the industry. The government began a paradigm shift by instilling a new attitude of openness and communication with contractors as well as implementing several broad contract administration changes. This paper examines the process of partnering, its key elements and core competencies, and how various agencies apply these principles in their construction management. The paper further researches stakeholder goals and important issues when entering into a partnering relationship on government contracts and what barriers are perceived that preclude the process from working as effectively as possible.     

Construction in Hong Kong: Success Factors for ISO9000 Implementation

This paper examines the success factors for the implementation of ISO9000 in the Hong Kong construction industry. The critical factors for construction contractors to successfully implement ISO9000 were identified. An analytic hierarchy process model was then developed to determine the relative importance among those factors. The findings showed that the top management commitment is the most critical factor for the successful ISO9000 implementation, whilst the common goal, teamworking, education and training, and the cultural changes are also the important factors.     

Achieving Partnering Success through an Incentive Agreement: Lessons Learned from an Underground Railway Extension Project in Hong Kong

Over the years, it has been observed that partnering has been ineffectively implemented in the public sector of Hong Kong. Contributing factors to this lack of success are nature and the large size of bureaucratic organizations and commercial pressure compromising the partnering attitude. The Mass Transit Railway Corporation Limited (MTRCL), one of the prominent pioneers in adopting project partnering in the infrastructure sector of Hong Kong since 1999, however, implemented the partnering principle with significant success. This paper, based on a recently completed research project funded by the Construction Industry Institute?Hong Kong in late 2004 and a followup in-depth interview meeting with senior executives of MTRCL in early June 2005, analyzes the rationale behind the successful development of partnering culture in the infrastructure sector of Hong Kong through a case study—the Tseung Kwan O Railway Extension (TKE) Contract 654—platform screen doors. The project comprises the supply and installation of platform screen doors along the whole MTRCL’s TKE with five stations. This project was analyzed by means of the project documentation and face-to-face interviews with the project representatives, comparisons with another five partnering case studies, and a followup in-depth interview meeting with another two senior executives of MTRCL. After the analysis, it was found that the implementation of partnering together with an incentive agreement (IA), a kind of target cost (TC) contract, underpinned the partnering success of this project. Therefore, it is recommended that partnering together with TC contracts, such as IA, greatly assists in the achievement of construction excellence, and can provide a workable model for enhancing overall project performance in electrical and mechanical projects.     

Partnering Process Model for Public-Sector Fast-Track Design-Build Projects in Korea

The use of design-build project delivery in the public sector has increased rapidly since the early 1990s due to its advantages over traditional delivery methods, particularly in terms of shortening the overall project duration. Fast-track approaches are being applied to design-build projects to achieve the optimum schedule durations. While both fast-track projects and design-build project have been researched separately in the past, there is little published research on how they are truly integrated. Likewise, the research has shown the merits of partnering in design-build and fast-track projects separately, but not in an integrated model. The purpose of this study is to develop a fast-track partnering process model (FTPPM) that combines the fast-track approach with the partnering concept. The model is based on the analysis of the factors that influence successful fast-track processes. Seven key success vehicles were discovered using the factor analysis method. The FTPPM is composed of the preparation stage, the fast-track workshop stage, and the detailed design and construction stage. The activities for each stage for fast-track implementation are developed in consideration with seven key success vehicles for fast-track projects.     

DRB Enhanced Partnering on the Marquette Interchange: Case Study

Completion of the Marquette Interchange Reconstruction project by the Wisconsin Department of Transportation (WisDOT) under budget, ahead of schedule, and with no construction claims at the end of construction was a significant achievement and details of how it was accomplished provide valuable lessons for other public works projects. A standing Dispute Review Board (DRB) ensured that disputes did not linger and affect working relationships, use of partnering ensured effective communication between WisDOT and the contractor, and combining the two by having the DRB chair as an active participant in the partnering effort were identified as being vital to the success of the Core project. This paper describes the contractual establishment of the DRB, the formation and operation of the panel throughout the duration of the project, details of partnering participation requirements and utilization, and then identifies how the two programs were linked by mutual agreement between WisDOT and the prime contractor and worked jointly.     

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.     

Price Competitive Alliance Projects: Identification of Success Factors for Public Clients

The need to identify the critical factors in the successful development and management of the price competitive alliance model has become a priority for public sector clients, as there is an increasing need to obtain better value for money (VfM) for its infrastructure projects. Yet, there has been limited research undertaken about the nature and use of price competitive alliances. This research determines the success factors (SFs) for price competitive alliances during their relationship development phases as this form of alliance contract is being used extensively by public sector clients to procure critical infrastructure projects in Western Australia (WA). A review of the literature of partnering and alliance contracting is used to develop a conceptual model of potential SFs. Interviews with 21 practitioners who participated in alliances on behalf of a WA public sector client were conducted to determine their perceived SF for price competitive alliances throughout the relationship development process. Contrary to the literature, each of the SFs identified was required in each stage of the relationship development process. In particular, the development of a leadership enriched culture (where people view the project as an extension of themselves and feel good about what they personally achieve through cooperation) was deemed necessary for the successful implementation of a price competitive alliance. Moreover it was revealed that the establishment of trust for the client began to arise at the point when a realistic target outturn cost that was able to deliver VfM, as well as an innovative sustainable outcome could be attained. Price competitive alliance models are considered to be an appropriate procurement method, albeit during the current economic climate an alternative to public private partnerships, for delivering large complex infrastructure projects.     

Contracting Relationship Trends and Transitions

Construction industry reports worldwide have called for radical cultural changes to reduce adversarial conflicts and increase productivity levels. These reports have recommended reintegration of fragmented function and teams through different teamworking approaches such as partnering and alliancing. The theoretical basis for such approaches can be tracked back to relational contracting (RC) principles. Recent teamworking initiatives have met with some success, based on structured cooperation between owners and contractors. However, the full benefits of these cooperative approaches may only materialize if (1) all potential team members/project partners are selected on the basis of relevant rationalized evaluation criteria; (2) all stakeholders work closely together as a coalesced team with common objectives, and (3) these arrangements are underpinned by government-sponsored, proper change initiatives. These approaches and arguments are analyzed in this paper, aiming at developing the required project culture through the application of RC principles for the joint management of risks during the entire project life cycle. Relevant observations from two recent Hong Kong-based industry surveys indicate a high motivation toward such approaches. Finally, examples of some potentially beneficial change initiatives are used to illustrate the potential synergies that are achievable.     

Developing ERP Systems Success Model for the Construction Industry

Recently, a significant number of major construction companies embarked on the implementation of integrated information technology solutions such as enterprise resource planning (ERP) systems to better integrate various business functions. However, these integrated systems in the construction sector present a set of unique challenges, different from those in the manufacturing or other service sectors. There have been many cases of failure in implementing ERP systems in the past, so it is critical to identify and understand the factors that largely determine the success or failure of ERP implementation in the construction industry. This paper presents the process of developing an ERP systems success model to guide a successful ERP implementation project and to identify success factors for ERP systems implementation. The paper identifies factors associated with the success and failure of ERP systems, and develops a success model to analyze the relationships between key factors and the success of such systems. The proposed ERP systems success model adapts the technology acceptance model and DeLone and McLean’s information systems success model and integrates those with key project management principles. The goal of the ERP systems success model is to better evaluate, plan, and implement ERP projects and help senior managers make better decisions when considering ERP systems in their organization.     

Integrated Project Delivery Case Study: Guidelines for Drafting Partnering Contract

This paper presents a case study through which a multinational contracting firm aimed to introduce integrated project delivery through strategic partnering into its industry operations. The study reports on a research carried out by the author on behalf of the firm to set out series of principles and guidelines to consider when drafting a standard partnering contract whereby the owner, contractor, suppliers, and manufacturers collaboratively work together under the same terms and conditions. A partnering contract would never, on its own, change the culture and environment of the construction process and thus, strategic partnering should be promoted not only at project specific activities but at all organizational activities. Based on this project, the paper presents a list of ten managerial and contractual issues to promote strategic partnering. The author hopes that the results of this case study would foster legal professionals toward drafting a modern partnering contract, which should help in developing a more effective and efficient contracting environment.     

Business-linked executive development: Coaching senior executives.

Presents a model of executive coaching based on the organizational requirements that shape the leadership factors to be considered in the coaching process. Consultants must clearly shape their coaching to reflect these dimensions if they are to be effective in helping to increase the effectiveness of their individual clients. Consulting issues are described as well as a specific methodology that reflects a business-linked executive development approach to coaching executives. There are 4 stages to the approach: defining the context (i.e., organizational imperatives, role-based success factors, and success-relevant behavioral requirements), assessment of the individual, developmental planning, and implementation. The case study of a middle-aged male executive illustrates this approach. (PsycINFO Database Record (c) 2010 APA, all rights reserved)     

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.     

Budget and Schedule Success for Small Capital-Facility Projects

The project management environment of small capital projects is unique in many ways. One unique aspect is the total administrative burden they place on resources for approvals, reviews, and execution relative to the overall value of the capital works program. Administratively, many organizations follow a prescribed approval process for all capital project expenditures regardless of size. For these organizations, small capital projects constitute 80% of the projects executed per year but only account for approximately 16% of the capital projects’ budget expenditures. The opportunity to improve organizational performance through more effective project execution on small capital projects could provide substantial savings within individual small capital-project programs. This paper reports on data collected from active small project-program personnel as well as project success factors identified in the literature. By means of analysis and comparison between the data collected and the project success factors identified in the literature, a comprehensive list of small-project success factors was developed. Sixteen factors were identified from project success factors listed by various authors in project management literature. These factors are used as a baseline for evaluating the findings from a questionnaire and interview process conducted with a diverse group of project management personnel. The paper concludes that the factors on small projects are not unlike those on large projects. The key differences noted were related to the frequency of process implementation, which affects the timing and execution of the project work phases for small projects. The area holding the greatest potential for performance improvement for small projects is the front-end planning process.