Uncertainty, opportunistic behavior, and governance in construction projects: The efficacy of contracts
TL;DR: In this article, the effects of uncertainty on the supplier's opportunistic behavior and the moderating effects of contractual complexity are examined, using data from 220 owners and general contractors in the Chinese construction industry.
About: This article is published in International Journal of Project Management.The article was published on 2018-07-01. It has received 99 citations till now.
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TL;DR: In this article, the authors evaluate the effects of contract structure on trust and on the likelihood of continued collaboration in inter-firm disputes by distinguishing between control and coordination functions of contracts, separating goodwill-based and competence-based trust.
Abstract: Leveraging a longitudinal dataset concerning 102 inter-firm disputes, we evaluate the effects of contract structure on trust and on the likelihood of continued collaboration. We theoretically refine and empirically extend prior research by (a) distinguishing between control and coordination functions of contracts, (b) separating goodwill-based and competence-based trust, and (c) evaluating the effects of contract structure on relational outcomes in the context of disputes. We find that control provisions increase competence-based trust, but reduce goodwill-based trust, resulting in a net decrease in the likelihood of continued collaboration. Coordination provisions increase competence-based trust, leading to an increased likelihood of continued collaboration.
72 citations
TL;DR: A systematic literature review on project governance is presented in this article, where a typology of projects is proposed to help link project governance guidelines to specific project contexts and future research directions for progressing the theoretical and practical understanding of project governance are identified.
63 citations
TL;DR: The framework may be considered as a basis for extending the effect of uncertainty on consequential performance, as opposed to assuming uncertainty will impede effectiveness or testing uncertainty and managerial interventions as separate contingencies.
42 citations
TL;DR: In this article, the authors employ interviews with 38 project practitioners from three different industries in Norway to identify the five most important factors for project practitioners to prioritize in order to reduce transaction costs through improved collaboration.
Abstract: Transaction costs in projects can be reduced through improved collaboration between contractors and clients. The purpose of this paper is to respond to the call for further research on the framework suggested by Li et al. (2015) who presented 26 factors that determine project transaction costs. The objective is to empirically test the framework to identify factors that have the greatest influence on project collaboration so that practitioners can prioritize their efforts on the most salient factors that will improve collaboration and reduce transaction costs.,The paper employed interviews with 38 project practitioners from three different industries in Norway. The respondents had in average 20 years of professional experience.,The quality of communication, project uncertainty, owner’s organizational efficiency, change orders and trust were the five most frequently found factors that influence both project transaction costs and collaboration level. When the authors compared findings between different industries the authors found that the quality of communication was important for all industries. The owner’s organizational efficiency was also highly important in oil and gas and ICT projects. Trust was particularly important in oil and gas projects while frequency of claims was particularly important in construction projects.,This paper identifies the five most important factors for project practitioners to prioritize in order to reduce transaction costs through improved collaboration.,The paper contributes to the conceptual theory of transaction costs and collaboration as it empirically tests and extends the framework developed by Li et al. (2015).
33 citations
TL;DR: In this paper, the authors propose a joint-contract fun game for building information modeling (BIM) projects and demonstrate that EPC contracting does not promote collaboration and thus may not be suitable for BIM projects.
Abstract: Engineering, procurement, and construction (EPC) contracting does not promote collaboration and thus may not be suitable for building information modeling (BIM) projects. Joint-contract fun...
29 citations
Cites background from "Uncertainty, opportunistic behavior..."
...This practice is fragmented, as each of 560 the project participants follows their own procedures (Fakhimi et al. 2017), and it increases 561 asymmetric information and opportunistic behaviors (You et al. 2018)....
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References
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TL;DR: The extent to which method biases influence behavioral research results is examined, potential sources of method biases are identified, the cognitive processes through which method bias influence responses to measures are discussed, the many different procedural and statistical techniques that can be used to control method biases is evaluated, and recommendations for how to select appropriate procedural and Statistical remedies are provided.
Abstract: Interest in the problem of method biases has a long history in the behavioral sciences. Despite this, a comprehensive summary of the potential sources of method biases and how to control for them does not exist. Therefore, the purpose of this article is to examine the extent to which method biases influence behavioral research results, identify potential sources of method biases, discuss the cognitive processes through which method biases influence responses to measures, evaluate the many different procedural and statistical techniques that can be used to control method biases, and provide recommendations for how to select appropriate procedural and statistical remedies for different types of research settings.
52,531 citations
TL;DR: The Economic Institutions of Capitalism as mentioned in this paper is a seminal work in the field of economic institutions of capitalism. Journal of Economic Issues: Vol. 21, No. 1, pp. 528-530.
Abstract: (1987). The Economic Institutions of Capitalism. Journal of Economic Issues: Vol. 21, No. 1, pp. 528-530.
16,767 citations
TL;DR: A critical element in the evolution of a fundamental body of knowledge in marketing, as well as for improved marketing practice, is the development of better measures of the variables with which marketers deal with marketing as discussed by the authors.
Abstract: A critical element in the evolution of a fundamental body of knowledge in marketing, as well as for improved marketing practice, is the development of better measures of the variables with which ma...
14,727 citations
TL;DR: In this article, it is shown that perceived behavioral control over performance of a behavior, though comprised of separable components that reflect beliefs about self-efficacy and about controllability, can nevertheless be considered a unitary latent variable in a hierarchical factor model.
Abstract: Conceptual and methodological ambiguities surrounding the concept of perceived behavioral control are clarified. It is shown that perceived control over performance of a behavior, though comprised of separable components that reflect beliefs about self-efficacy and about controllability, can nevertheless be considered a unitary latent variable in a hierarchical factor model. It is further argued that there is no necessary correspondence between self-efficacy and internal control factors, or between controllability and external control factors. Self-efficacy and controllability can reflect internal as well as external factors and the extent to which they reflect one or the other is an empirical question. Finally, a case is made that measures of perceived behavioral control need to incorporate self-efficacy as well as controllability items that are carefully selected to ensure high internal consistency.
Summary and Conclusions
Perceived control over performance of a behavior can account for consider- able variance in intentions and actions. However, ambiguities surrounding the concept of perceived behavioral control have tended to create uncertainties and to impede progress. The present article attempted to clarify conceptual ambiguities and resolve issues related to the operationalization of perceived behavioral control. Recent research has demonstrated that the overarching concept of perceived behavioral control, as commonly assessed, is comprised of two components: self-efficacy (dealing largely with the ease or difficulty of performing a behavior) and controllability (the extent to which performance is up to the actor). Contrary to a widely accepted view, it was argued that self-efficacy expectations do not necessarily correspond to beliefs about internal control factors, and that controllability expectations have no necessary basis in the perceived operation of external factors. Instead, it was suggested that self-efficacy and controllability may both reflect beliefs about the presence of internal as well as external factors. Rather than making a priori assumptions about the internal or external locus of self-efficacy and controllability, this issue is best treated as an empirical question.
Also of theoretical significance, the present article tried to dispel the notion that self-efficacy and controllability are incompatible with, or independent of, each other. Although factor analyses of perceived behavioral control items provide clear and consistent evidence for the distinction, there is sufficient commonality between self-efficacy and controllability to suggest a two-level hierarchical model. In this model, perceived behavioral control is the overarching, superordinate construct that is comprised of two lower-level components: self-efficacy and controllability. This view of the control component in the theory of planned behavior implies that measures of perceived behavioral control should contain items that assess self-efficacy as well as controllability. Depending on the purpose of the investigation, a decision can be made to aggregate over all items, treating perceived behavioral control as a unitary factor, or to distinguish between self-efficacy and controllability by entering separate indices into the prediction equation.
6,544 citations
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TL;DR: The Mechanisms of Governance as discussed by the authors is an important work in the field of transaction cost economics, a branch of the New Institutional Economics with which Oliver Williamson is especially associated.
Abstract: This book brings together in one place the work of one of our most respected economic theorists, on a field which he has played a large part in originating: the New Institutional Economics. Transaction cost economics, which studies the governance of contractual relations, is the branch of the New Institutional Economics with which Oliver Williamson is especially associated. Transaction cost economics takes issue with one of the fundamental building blocks in microeconomics: the theory of the firm. Whereas orthodox economics describes the firm in technological terms, as a production function, transaction cost economics describes the firm in organizational terms, as a governance structure. Alternative feasible forms of organization--firms, markets, hybrids, bureaus--are examined comparatively. The analytical action resides in the details of transactions and the mechanisms of governance. Transaction cost economics has had a pervasive influence on current economic thought about how and why institutions function as they do, and it has become a practical framework for research in organizations by representatives of a variety of disciplines. Through a transaction cost analysis, The Mechanisms of Governance shows how and why simple contracts give way to complex contracts and internal organization as the hazards of contracting build up. That complicates the study of economic organization, but a richer and more relevant theory of organization is the result. Many testable implications and lessons for public policy accrue to this framework. Applications of both kinds are numerous and growing. Written by one of the leading economic theorists of our time, The Mechanisms of Governance is sure to be an important work for years to come. It will be of interest to scholars and students of economics, organization, management, and law.
4,106 citations