How relational contract theory influence management strategies and project outcomes: a systematic literature review

Abstract

Despite growing interest in Relational Contracting (RC), few studies have comprehensively investigated the qualities required for a successful RC project. Macneil's ten norms are principles of behaviour in contracts based on the application of relational contract theory and play an essential role in the formation and agreement of parties and their commitment to means and objectives. In contributing a missing dimension to the RC approach in construction, the purpose of this research is to conduct a systematic review of studies of relational contracting to answer the question: In what ways can the influence of RC theory be observed in the management strategies and outcomes of relational projects? Macneil's norms are used to provide a link between strategies and outcomes as a way of understanding RC and its influence on collaboration between the project actors in determining project outcomes. The results provide new insights with a view of consolidating extant literature and contributing through mapping practice back to theory. Findings show that the norms are evident in projects but with varied application and realisation in practice. This paper offers managerial implications and future research directions to investigate and capture the part played by the norms as mechanisms in construction projects.

Relational contracting theory and internal audit: Chief audit executives' perspectives on creating and strengthening trust by building credibility and clarity

“…To conclude, internal auditors adopt a number of measures to establish and maintain a trusted relationship with management. Although the IAF is governed by formal terms of contract (e.g., a charter), internal auditors use various measures and strategies to establish informal relational contracts, which promote creativity, flexibility, trust, open communication, information sharing, and cooperation (Nwajei, 2021), thereby reducing conflict and improving output—that is, audit effectiveness. However, corporate culture may affect management's approach towards the IAF, its status within the organisation, its importance as a corporate governance mechanism and managements' tendency to accept change (Trotman & Duncan, 2018).…”

Mitigation of contractual breaches in international construction joint ventures under conditions of absent legal recourse: case studies from Iran

“…(2021) showed that RC reduces in formation asymmetry in construction projects by 85%. Nwajei (2021) also pointed out how RC theory influences management strategies and project consequences. Notwithstanding these positive results, the question as to how mitigation of contractual breaches may be effected remains unanswered.…”