Alliance contracting: adding value through relationship development

Abstract

PurposeAlliancing and partnering have been extensively used to stimulate collaborative relations between supply chain members as well as to address the need to improve the performance of projects. Recognising the need to build and sustain relationships in alliances, the paper aims to present a model that is developed and tested by industry practitioners who are regularly involved with alliance contracting. The developed model can be used to encourage a culture of reflective learning and mutual trust, beyond merely project‐specific performance outcomes.Design/methodology/approachTo examine the applicability of the conceptual model to alliance contracting in construction an exploratory approach was adopted. A total of 49 in‐depth interviews were conducted over a six‐month period with a variety of industry practitioners (clients, contractors, design consultants, construction lawyers, and alliance facilitators) who had extensive experience with working in alliance contracts. Interviews were used as the mechanism to examine the themes and constructs identified from the literature.FindingsThe relationship development process represents a major contributor to successful alliance contracting and can add considerable value throughout the supply chain. There is a recognisable structure to relationship development that is underpinned by specific themes that should be considered when managing the alliance relationship. Trust and commitment are explicit elements that should be continually maintained in an alliance contract, and can significantly contribute to joint learning from joint problem‐solving activities. From the respondents' perspectives it appears that the entire process of relationship development hinged around individual relationships, trust and organizational development.Practical implicationsA three‐phase model for building alliances is developed and can be used by practitioners to improve the performance of projects.Social implicationsIt is suggested that the developed model can be used to promote a culture of reflective learning and mutual trust, beyond merely project‐specific performance outcomes.Originality/valueThe research develops a model for relationship development and maintenance in construction projects so that sustainable relationships can be established. The proposed model includes three phases: assessment, commitment and endurance. Being able to manage each of these phases effectively is critical for successful project delivery and stimulating innovation.

Coordinating collaboration in contractually different complex construction projects

“…Based on the findings, it can be argued that in both contract types, the co-located working shifted the coordination emphasis from authority and contracts towards relationships based on collaboration and trust, which is needed in the construction industry (Barlow, 2000;Briscoe and Dainty, 2005;Davis and Love, 2011). This also supports the finding by Xie et al (2010) that co-located working provides a free and friendly environment for communication and has a positive effect on social collaboration.…”

“…Social networks enable communication, the easy gathering of information, promote the building of trust, and reduce coordination costs between the organizations (Gulati et al, 2000;Davis and Love, 2011).…”

Communication Arising from Relationship Orientation: The Indicator of Keeping Business Cooperation

“…This bi-directional, positive communication can promote partners to perceive value more sensibly, and then affect the process of entire value generation, although communication does not produce value [5]. In marketing activities of relationship orientation, suppliers and customers establish, consolidate and develop the long-term benefits to both, through approving communicating with each other in many ways [6].…”

Performance of Project Alliancing in Australasia: a Digest of Infrastructure Development from 2008 to 2013

“…A key advantage of the alliance approach is that it embeds collaboration, better facilitates innovation, and demands transparency and accountability (Clegg, et al, 2002;Davis and Love, 2011). The collaborative nature of the arrangement provides greater flexibility and effectiveness in coping with uncertainty than occurs with other procurement forms.…”