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Arkani, S (1999) Contractual interfaces: the implications of building production process management and interorganisational relations for productivity in building project coalitions, Unpublished PhD Thesis, Business School, University of Greenwich.
- Type: Thesis
- Keywords: competition; conflict; contracting; governance; liability; negotiation; problem solving; production process; productivity; project manager; reliability; trust
- URL: http://gala.gre.ac.uk/id/eprint/5706/
The aim of this study is to explore the nature of productivity problems in building project coalitions arising from contractual interfaces and conflict. The study investigates the impact of contractual interfaces on the emergence of conflict in both the interorganisational relations of the contracting parties and the operational context of the building production process management. It analyses the dynamics of conflict in the behaviour and performance of the project participants to establish a link between conflict and productivity problems. The focus of the study is the interface between the mechanical and electrical (M&E) contractor and the main contractor. The interface between the main contractor and the client, as well as the design team members, is examined in so far as it affects the relationship between the main and the M&E contractor. The investigation reveals conflict as a potentially creative or destructive behavioural process that emanates from competition between the economic interest of the client and the professional/commercial interests of the consultants and contractors, in conjunction with low levels of trust. In so far as the building production process requires the inputs of all the participants, i.e., the client, the consultants and the contractors, competition gives rise to negotiati6ns. As long as the negotiations comprise integrative bargaining, conflict is creative and results in collective problem solving. In the presence of low levels of trust as reliability or predictability, the more powerful party resorts to strategies of control, domination or manipulation to pursue its own interests at the expense of those of others. Thus negotiations become distributive and conflict becomes dysfunctional. The weaker negotiating party either resists the strategies of power of the more dominant party by applying discretion in the use of their knowledge, and by matching their level of effort to rewards, or capitulates. The level of resistance or capitulation of the weaker party is dependent on their relative size and financial strength compared to those of the dominant party. The study indicates that the nature and level of conflict has a direct impact on the level of motivation, performance and consequently the productivity of the project participants. The investigation finds that conflict is inherent to the contracting system and needs to be managed (Lavers, 1992; Smith, 1992; Langford et ai, 1992). It finds that building project coalitions are organised as networks at the start of the project but may be transformed into political organisations during the project life-cycle (Mintzberg, 1991 (d): 374; Pfeffer, 1981 : 27-9). The imprecise definitions of functions and activities contained in the contractual documents provide the grounds for and facilitate the political activity of the project participants. The investigation therefore supports Clegg' s (1992) postulation that 'contractual documents provide the constitutional and constitutive grounds and framework within which the meaning of the contract is negotiated, contested, and contained' (Clegg, 1992: 135). The opportunistic interpretations resulting negotiations over the meaning of the contract (Tavistock Institute, 1966) very often impecle the full or effective enforcement of the contractual functions and activities, thus reinforce conflictual behaviour. The project managers' capability to manage conflict, though important in terms of preventing escalation of conflict, is indicated to have limited impact on performance levels of project participants. The research concludes that the economic and legal governance structures in the wider business context of building production processes do not foster fair, co-operative and non-confrontational exchange relations (Lane and Bachmann, 1996), and do not appear to discourage the imposition of onerous business agreements by the economically more powerful on those more dependent. It therefore suggests that fundamental changes in both governance structures of building project coalitions as well as attitudes of project coalition representatives are required as the means by which productivity improvements may be carried out.