The effectiveness of contractual and relational governances in construction projects in China

Lu, Ping; Guo, Shuping; Qian, Lamei; He, Ping; Xu, Xiaoyan

doi:10.1016/j.ijproman.2014.03.004

Cited by 189 publications

(232 citation statements)

References 67 publications

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“…Lahdenperä (2012) compared three different contractual arrangements including partnering, alliance and integrated project delivery and concluded that the core of philosophy in three arrangements is to generate a cooperative and trustful climate for implementation for the best of the project. Similar findings are observed in Ling et al (2014a) and Lu et al (2015) suggesting that relational governance can improve the relationships among contracting parties, thereby improving project performance in construction projects.…”

Section: Literature Reviewsupporting

confidence: 87%

A conceptual model of psychological contracts in construction projects

Ke¹,

Davis²,

Jefferies³

2016

CEB

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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.

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Section: Literature Reviewsupporting

confidence: 87%

A conceptual model of psychological contracts in construction projects

Ke¹,

Davis²,

Jefferies³

2016

CEB

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“…However, the formal control mechanisms do not fully cover the project risks, and an informal mechanism based on dyadic trust in the client and contractor relationship goes a long way towards achieving project goals. In order to control the behaviour of a contractor, the client organisation employs both formal and informal power mechanisms (Lu et al, 2015). Scant attention has been paid to understanding how the client organisation keeps the balance between the mediated and non-mediated power sources to seek contractor integration in order to achieve successful project delivery.…”

Section: Power Issues In the Construction Supply Chainmentioning

confidence: 99%

“…Another source of mediated power-legitimate power is a prudent mechanism in order to seek commitment of the contractor on the project. Lu et al (2015) asserted that contractual governance is more meaningful to improve project performance. The provision of incentives can be a win-win proposal for a client and contractor to adapt to a gain-/pain-sharing culture to potentially improve project performance in cost and time frame (Hughes et al, 2012).…”

Section: Mediated Power and Project Performancementioning

confidence: 99%

“…The involvement of the client organisation and its inclination to execute the project in a certain way improves the compliance and coordination of contractor in executing the project delivery mechanism. However, there are very few studies (Ling et al, 2014;Lu et al, 2015;Lumineau and Henderson, 2012) primarily advocated the use of relational governance over contractual governance. Therefore, we hypothesise:…”

Section: Non-mediated Power and Project Performancementioning

confidence: 99%

“…In contractual governance, the provision of contractual incentives of the client organisation is associated with positive outcomes in project delivery in cost and time measures (Caniels et al, 2012;Lu et al, 2015). On the other hand, according to Eriksson and Westerberg (2011), the cooperative procurement procedures of the client organisation (joint specification, incentive-based payment) can improve the cost and time performance of the project.…”

Section: Introductionmentioning

confidence: 99%

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An empirical examination of the procurement-led supply chain in the construction industry

Kamble¹,

Raut²,

Jagtap³

2017

IJPM

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Abstract:The mechanisms of supply chains are omnipresent, but procurementcentric supply-chain management has received little attention in the construction industry, despite its economic weight. A procurement centric construction supply chain requires client integration and contractor integration to cope with the project complexity and project uncertainty. In this regard, procurement-led supply-chain initiatives using mediated power and non-mediated power of the client organisation can influence contractor integration and project performance. A structural equation model consisting of two exogenous variables -mediated power and non-mediated power of clientand three endogenous variables -client integration, contractor integration and project performance -is developed based on theoretical support. The data are collected from 244 construction professionals working in a variety of construction projects across India. The result of the study suggests that, the use of mediated power by the client organisation accompanied by the involvement of the client in the project relates to the improving of project performance.Keywords: supply chain; procurement; integration; project performance; power.Reference to this paper should be made as follows: Jagtap, M., Kamble, S.S. M. Jagtap et al.Sachin S. Kamble is an Associate Professor at the National Institute of Industrial Engineering, Mumbai, India is a leading academician, top industry consultant and researcher with rich experience in supply chain and operations management. He obtained his Bachelor degree in Mechanical Engineering; Master degree in MBA; Doctorate degree in Business Management. His research area of expertise includes supply chain performance studies in several sectors that include -farm fresh products (agriculture supply chain), medical supply chain, construction, retail and automobile supply chains. He has co-authored more than 67 publications in international refereed journals such as

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Game analysis of social capital violations and government regulation in public–private partnership risk sharing

Wang

2023

Systems Engineering

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The public–private partnership (PPP) mode entails a variety of risks because the government, private enterprises, financial institutions, and other participants have different interests. To prevent private enterprise violations, dynamic government regulation of PPP risk‐sharing is necessary. Game theory is used here to examine the game behavior of government regulators, private enterprises, intermediary agencies, and the public in the stage of tracking management after the initial risk‐sharing of the project. Primarily, this study analyzes whether private enterprises provide fully compliant reporting and whether government departments check the information by investigating the behavioral motivations behind strategic choices. The primary contribution of this study was to construct a game model of government due diligence inspection under the condition of public participation in regulation. The results of simulations revealed the behavioral characteristics and stability of the participants of PPP in terms of decision‐making. Furthermore, a sensitivity analysis between the state variables and several auxiliary variables was used to reveal the internal relationships of the participants’ strategic choices. This paper offers new insights into reducing violation behavior, protecting the public interest from harm, reducing government departments’ regulatory costs, and promoting effective regulation with public participation.

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The effectiveness of contractual and relational governances in construction projects in China

Cited by 189 publications

References 67 publications

A conceptual model of psychological contracts in construction projects

A conceptual model of psychological contracts in construction projects

An empirical examination of the procurement-led supply chain in the construction industry

Game analysis of social capital violations and government regulation in public–private partnership risk sharing

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