A conceptual model of psychological contracts in construction projects

Abstract

The strategic importance of relationship style contracting is recognised in the construction industry. Both public and private sector clients are stipulating more integrated and collaborative forms of procurement. Despite relationship and integrated contractual arrangement being available for some time, it is clear that construction firms have been slow to adopt them. Hence it is timely to examine how social exchanges, via unwritten agreement and behaviours, are being nurtured in construction projects. This paper adopted the concept of Psychological Contracts (PC) to describe unwritten agreement and behaviours. A conceptual model of the PC is developed and validated using the results from a questionnaire survey administered to construction professionals in Australia. The results uncovered the relationships that existed amongst relational conditions and relational benefits, the PC and the partners’ satisfaction. The results show that all the hypotheses in the conceptual model of the PC are supported, suggesting the PC model is important and may have an effect on project performance and relationship quality among contracting parties. A validated model of the PC in construction was then developed based on the correlations among each component. The managerial implications are that past relationships and relationship characteristics should be taken into account in the selection of procurement partners and the promise of future resources, support and tangible relational outcomes are also vital. It is important for contracting parties to pay attention to unwritten agreements (the PC) and behaviours when managing construction projects.

Psychological Contract of Buyer‐Supplier Relationships in Construction Projects: An Analysis Based on Game Theory

“…For construction projects, the previous researches are shown in Table 1. Some scholars have studied the PC of both sides of project procurement and found that PC had a significant impact on fairness, trust, satisfaction, and project performance [5][6][7]. As a special form of procurement, the PC between important stakeholders (public sector and supplier) will affect sustainable project management and sustainability of project development.…”

“…As a special form of procurement, the PC between important stakeholders (public sector and supplier) will affect sustainable project management and sustainability of project development. However, unwritten psychological contracts are often ignored by stakeholders [5,6].…”

“…In previous study, some scholars thought the PC of construction procurement including unwritten perception and unwritten behaviors. e unwritten perception mainly includes trust, commitment, good faith, and fair dealing, and the unwritten behaviors mainly include initiating behaviors, signaling behaviors, and disclosing behaviors [5,6]. ese unwritten perceptions and unwritten behaviors can affect satisfaction of both parties [5,6].…”

“…e unwritten perception mainly includes trust, commitment, good faith, and fair dealing, and the unwritten behaviors mainly include initiating behaviors, signaling behaviors, and disclosing behaviors [5,6]. ese unwritten perceptions and unwritten behaviors can affect satisfaction of both parties [5,6]. In addition, the satisfaction of both parties can affect the performance of construction projects [34].…”

“…In recent years, some scholars found that the disputes between two sides are often caused not by the formal contract in the construction industry, but by the inconsistency between the formal contract and the psychological contract [4]. Based on this, some scholars put forward the psychological contract (PC) model of both participants in construction projects [5,6]. Fulfilling PC will improve project performance, while failing to fulfill PC will reduce project performance [6,7].…”