Relationship between contractual flexibility and contractor’s cooperative behavior

Abstract

Purpose Due to the increasing risk and uncertainty of construction projects, contractual flexibility has been considered as an effective tool to cope with emergences and to promote cooperation between owners and contractors. However, in practice, owners often failed to build an efficient cooperative relationship via contracts, resulting in a lacking of appropriate justice. Furthermore, due to a lack of available empirical research, the influence of contractual flexibility on the cooperative behavior of contractors requires further investigation. The purpose of this paper is to fill this gap by conducting empirical research from the perspective of justice perception. Design/methodology/approach A theoretical model was developed and a series of hypotheses were proposed. Then, partial least squares structural equation modeling analyses were conducted on a sample of 188 respondents. Findings The results show that contractual content and executing flexibility both have a positive influence on the cooperative behavior of a contractor, which was partially mediated by distribution, procedural, and interactional justice perceptions. Moreover, content flexibility has a significant impact on all three types of justice perception, and the execution of flexibility has more impact on interactional justice compared to other justice perceptions. Originality/value The findings contribute to an improved understanding of how contractual flexibility affects the cooperative behavior of contractors, indicating that the owner could develop a fair exchange relationship through flexible contracting and motivation of the other party.

Dissecting the project anatomy: Understanding the cost of managing construction projects

“…By using collaborative delivery methods the focus is to ensure that win-win situations are created for both the client and the contractor through increased collaboration (Yeung et al 2013;Bititci et al 2007). To foster such collaboration, it is important that both parties perceive the contract as fair (Song et al 2018). This will enhance knowledge sharing, openness and trust (Biong, Nes, and Sande 2016).…”

Research on influencing factors of consummate performance behaviors: a configurational approach

“…Existing studies point out that integrity of the contract (Lu, Zhang, and Zhang 2016), clarity of the contract terms (Ning 2018), trust (Lu et al 2015b), uncertainty (You et al 2018;Lu et al 2015b;Wang et al 2013), complexity (Lu et al 2015b), asset specificity (Shi et al 2018;Wang et al 2013) and risk perception (Zhang and Qian 2017) have an impact on the opportunistic behavior of contractors. In addition, some studies also prove that the control, adaptation and coordination functions of the contract (Quanji, Zhang, and Wang 2016;Wang et al 2017), Contract Flexibility (Song et al 2018), risk sharing (Zhang et al 2016;Xu et al 2018), trust (Kadefors 2004;Xu et al 2018) and fairness (Lu, Li, and Wang 2017) have positive effects on the contractor's cooperative behavior. However, under the TCE theory, research on the contractors' behavior focuses on the influence of governance, which is at the project level (Li et al 2019).…”

Understanding Construction Contractors’ Intention to Undertake Consummate Performance Behaviors in Construction Projects

“…A truth table was initially built, listing all possible configurations for explaining the contractors' intention of CPB. In this study, a truth table of 2 5 rows was produced (five denotes the number of conditions). Each row presents a possible configuration.…”

“…In order to improve project performance, it is important to motivate contractors to undertake efforts that are not written in formal contracts. For example, studies, grounded upon transaction cost theory (TCE), presented a complement role of informal governance in inhibiting opportunistic behaviors and nurturing cooperative behaviors [2][3][4][5][6][7]. A large group of studies examined how contractual governance and informal governance influence each other and how they jointly influence project performance (e.g., [8]).…”