Understanding Relationship Quality in Construction Projects: A study of the New Zealand Construction Industry

Abstract

In construction projects relationships are of strategic significance, especially in achieving project goals. Although different methodologies of contracting has been proposed and investigated to structure and formulise relationships between contracting parties, the underlying attributes which contribute to relationship quality have not received much attention. This lack of understanding and consideration may lead to harmful and misguided practices which can be detrimental to the outcome of projects and strategic bonds planned by the contracting parties. On the other hand relationship quality has been successfully conceptualised and applied as an informal tool of evaluating relationships for different human interaction. The concept has been especially useful in marketing to create effective strategic bonds in the buyer-supplier dyad. Because of its significance this study attempts to address a series of interrelated issues around relationship quality in construction procurement. Initially through previous literature and a round of expert interviews Trust, performance satisfaction, commitment and teamwork are identified as attributes of relationship quality. In addition a framework of practical strategies and actions is recommended for enhancing relationship quality and its attributes. A conjoint full profile questionnaire technique is used to gather data and assess how contracting parties trade-off and value relationship quality attributes against each other. Cluster analysis reveals that three diverse judgment trends exist with different attribute values. Judgment trends of each industry group were investigated and mapped through correspondence analysis; hence two separate undelaying dimensions of effort for achievement and tangibility were identified. It is identified that judgment of relationship quality is not unanimous within industry professionals and different parties have diverse preferences of attributes and underlying factors. For instance clients require both maximum effort and also tangible results as the basis of good relationships while contractors require more effort compared to tangibility. Furthermore the effect of construction project conflicts on relationship quality is investigated. Initially causes of conflict are identified through construction litigation cases and expert interviews. A survey accompanied with different statistical techniques is carried out. It is observed that while most causes have negative effects, some had positive effects on relationship quality. Three sources of “technical performance”, “constraints and ambiguities” and “team behaviour” were identified for conflict. Furthermore two distinct types of functional and dysfunctional conflict were classified. It is confirmed that relationship quality is more influenced by conflict type in comparison to sources or causes of conflict. While team behaviour was the only significant source of dysfunctional conflict, all identified sources were significant to functional conflict. Based on the findings of the study a systematic framework of relationship quality was presented and recommended for future investigation; resulting in tangible relationship quality application in construction procurement.