This study addresses a long-standing debate as to why escalation in capital costs is so common over the lifecycle of 'megaprojects'-the project-based, multi-party organizational contexts that are set up to develop capital-intensive, long-lived infrastructure. We ground our study on three case studies conducted with theoretical alertness to a range of factors that need to be considered from an organizational governance perspective. Our findings trace cost escalation to fundamental changes of the project governance structure and concomitant renegotiations of the value to be created and the value distribution. Specifically we link substantive cost hikes to, first, early negotiations to agree a value proposition that unifies a core group of autonomous actors under a shared form of governance. And second, to collective action problems that arise as key nonmarket stakeholders are brought into a polycentric governance structure to encourage cooperation in joint local value creation activities. We also associate cost hikes, although less substantive, to market transactions with suppliers and to bilateral agreements with other nonmarket stakeholders that stay excluded from direct participation in governance-related decisions. We discuss implications to our theoretical and empirical understanding of megaproject behavior and performance.
There has long been inconsistence on the relationship among prior interactions, contracts and cooperative behavior. This study aims to examine how prior interactions affect cooperative behavior, including the effects of prior interactions on cooperative behavior and the mediating role of the contract between prior interactions and cooperative behavior. We classify cooperative behavior as in-role and extra-role behavior, and contract as a three-dimensional construct, including control, coordination and adaptation. Collecting data from 200 contractors in Chinese construction industry, the empirical results demonstrate the significance of the effect of prior interactions, the relationship between contract and cooperative behavior, and the mediating role of contractual coordination. According to our result, increasing contractual coordination emerge from prior interactions, while contractual control and adaptation is not related to these repeated collaborations. The findings reflect the interconnectedness of real-life projectsand provide a nuanced explanation to the complex relationships among prior interactions, contracts and cooperative behavior.
Purpose
The purpose of this paper is to identify and analyse factors that affect contractors’ behavioural strategies in resolving disputed claims.
Design/methodology/approach
Factors were explored by a literature review and an open-ended questionnaire survey. In total, 9 hypotheses involving 12 factors were developed accordingly. Then a structured questionnaire survey was conducted, and 248 valid questionnaires were received from Chinese contractors. Partial least squares structural equation modelling was employed to test the hypotheses.
Findings
Factors that have the largest impacts on the contractual approach and the relational approach regarding obliging and compromising are favourability of evidence, time pressure and reputation, respectively. Unexpected results show that obliging behaviours are negatively correlated with procedural fairness but positively correlated with occurrence time of the dispute.
Research limitations/implications
The results are based on correlation, although the research design improves the internal validity. Furthermore, this study belongs to single-level research. In the future, researchers can conduct multilevel research to enrich theories.
Practical implications
The findings not only enhance practitioners’ understanding of the factors influencing contractors’ behavioural strategies when dealing with disputed claims, but also offer insights into both parties’ ex ante focus of attention on specific factors to facilitate the subsequent dispute resolution.
Originality/value
This study furnishes a nuanced picture of multiple factors’ impacts on contractors’ behavioural strategies of claim-related dispute resolution, and thus supplements the relevant construction dispute management literature. From the perspective of contractual governance, it is one of those exploring drivers of contract application in problem situations. It extends the body of knowledge on this topic and hopefully will encourage more research on contractual governance from the reactive perspective.
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