EFFECTIVENESS IN RELATIONAL CONTRACTING · 2005, organised by AIPM, Hilton on the Park, Australia,...

A STUDY OF THE DETERMINANTS OF

EFFECTIVENESS IN RELATIONAL CONTRACTING

By

YAN KI FIONA CHEUNG

A thesis submitted in partial fulfilment of the requirements for the degree of

Master of Applied Science by Research

QUEENSLAND UNIVERSITY OF TECHNOLOGY

2006

Faculty of Built Environment and Engineering

To my dearest family

i

KEYWORDS

Australia, Case Study, Construction Industry, Culture, Interviews,

Organisation, Public Sector, Relational Contracting Survey.

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ABSTRACT

The significance of a link between organisational culture and

organisational performance has long been recognised in both mainstream

management literature as well as in the construction management

literature. Within the construction research domain, the impact of culture

and organisation on project performance is becoming an increasingly

important topic for the establishment of sound partnering or alliancing, or

to what has been referred to increasingly in recent years as relational

contracting, in the overall approach to project management. However,

studies of the efficacy of alliancing or partnering have so far produced

mixed results.

The present study concerns two public sector organisations in Australia,

where the interrelationships between organisational culture and structure,

commitment and national culture were investigated. The methodology

was triangulated; with a detailed questionnaire survey undertaken with

both organisations, and with subsequent interviews and case studies

carried out for validation. Multivariate statistical techniques were utilised to

investigate complex relationships between variables.

The research reports the perceptions of professional personnel in the

public sector organisations, and some mismatches found between

organisational structuring and organisational culture. Key issues affecting

project performance, and the set of project team characteristics enhancing

the development of a collaborative project culture, were found to include

continuous commitment from all levels, right mix of people, formal and

informal communication, continuous facilitation, education and training in

the universities, institutions and industry. The combined outcomes of the

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research provided a framework of fundamental elements for successful

relational contracting.

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CONTENTS

Keywords ............................................................................................................. i

Abstract.............................................................................................................. iii

List of Tables...................................................................................................... ix

List of Figures .................................................................................................... xi

List of Publications and Presentations ..............................................................xiii

Acknowledgements..........................................................................................xvii

Statement of Original Authorship ..................................................................... xix

CHAPTER 1 INTRODUCTION .......................................................................1

1.1 Background of Research ........................................................................1

1.2 Research Problems................................................................................2

1.3 Scope of the Research...........................................................................5

1.4 Research Methodology...........................................................................5

1.5 Structure of thesis ..................................................................................6

1.6 Conclusion..............................................................................................8

CHAPTER 2 PARTNERING, ALLIANCING AND RELATIONAL

CONTRACTING ........................................................................9

2.1 Introduction.............................................................................................9

2.2 Partnering...............................................................................................9

2.3 Alliancing ..............................................................................................16

2.4 Relationship Contracting ......................................................................21

2.5 Conclusion............................................................................................24

CHAPTER 3 CULTURE................................................................................29

3.1 Introduction...........................................................................................29

3.2 What is Culture?...................................................................................29

3.3 National and Organisational Culture.....................................................31

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3.4 Culture and Value ................................................................................ 36

3.5 Culture Dimensions.............................................................................. 38

3.5.1 Large or Small Power Distance............................................................................ 39

3.5.2 Masculinity vs. Femininity .................................................................................... 39

3.5.3 Individualism vs. Collectivism............................................................................... 40

3.5.4 Strong or Weak Uncertainty Avoidance ............................................................... 40

3.5.5 High and Low Confucian Dynamism .................................................................... 40

3.6 Commitment ........................................................................................ 41

3.7 Organisational Culture and Structure................................................... 44

3.8 Trust..................................................................................................... 45

3.8.1 Implications of Trust............................................................................................. 46

3.8.2 Nature of Trust ..................................................................................................... 47

3.9 Culture and Trust in the Construction Industry..................................... 49

3.10 Conclusion ........................................................................................... 52

CHAPTER 4 BACKGROUND OF QUEENSLAND DEPARTMENTS OF

MAIN ROADS AND PUBLIC WORKS ................................... 55

4.1 Introduction .......................................................................................... 55

4.2 Background of Queensland Department of Main Roads...................... 55

4.3 Project Delivery System....................................................................... 56

4.4 Partnering and Alliancing in QDMR ..................................................... 57

4.4.1 Relationship Management ................................................................................... 59

4.5 Background of Queensland Government Department of Public

Works............................................................................................................ 62

4.6 Project Delivery System....................................................................... 62

4.7 Partnering, Alliancing and Relational Contracting in QDPW ................ 64

4.7.1 C21 Construction Contract................................................................................... 65

4.8 Conclusion ........................................................................................... 68

CHAPTER 5 METHODOLOGY.................................................................... 71

5.1 Introduction .......................................................................................... 71

5.2 Research Background ......................................................................... 72

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5.2.1 Objectives.............................................................................................................73

5.2.2 Hypothesis............................................................................................................73

5.3 Research Methodology.........................................................................74

5.3.1 Organisational Culture and Structure....................................................................76

5.3.2 Levels of Commitment ..........................................................................................77

5.3.3 Organisational Structure .......................................................................................77

5.3.4 National Culture ....................................................................................................77

5.4 Scope of the Research.........................................................................78

5.5 Data Collection .....................................................................................79

5.6 Data Analysis .......................................................................................80

5.7 Summary ..............................................................................................80

CHAPTER 6 CULTURE SURVEY ................................................................83

6.1 Introduction...........................................................................................83

6.2 QDPW Survey Analysis........................................................................84

6.2.1 Organisational Culture ..........................................................................................84

6.2.2 Commitment .........................................................................................................86

6.2.3 Organisational Assessment ..................................................................................87

6.2.4 Culture ..................................................................................................................99

6.2.5 Overview of QDPW Data ....................................................................................103

6.3 QDMR Survey Analysis ......................................................................105

6.3.1 Organisational Culture ........................................................................................105

6.3.2 Commitment .......................................................................................................108

6.3.3 Organisational Assessment ................................................................................109

6.3.4 Culture ................................................................................................................119

6.3.5 Overview of QDMR Data ....................................................................................123

6.4 Discussion ..........................................................................................125

CHAPTER 7 CASE STUDIES ....................................................................129

7.1 Introduction.........................................................................................129

7.2 Findings..............................................................................................129

7.2.1 Case Study 1 ......................................................................................................130

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7.2.2 Case Study 2 ..................................................................................................... 132

7.2.3 Case Study 3 ..................................................................................................... 133

7.2.4 Case Study 4 ..................................................................................................... 135

7.2.5 Case Study 5 ..................................................................................................... 136

7.2.6 Case Study 6 ..................................................................................................... 137

7.2.7 Case Study 7 ..................................................................................................... 139

7.3 Discussion ......................................................................................... 141

7.3.1 Postscripts ......................................................................................................... 148

CHAPTER 8 CONCLUSION ...................................................................... 153

8.1 Introduction ........................................................................................ 153

8.2 Research Hypotheses........................................................................ 154

8.3 Conclusions ....................................................................................... 155

8.3 Limitations of the Research ............................................................... 158

8.4 Areas for Future Research................................................................. 158

APPENDICES .............................................................................................. 161

Appendix I Transactional & Relational Contracting ..................................161

Appendix II Definitions of Partnering, Alliancing & RC ..............................163

Appendix III Culture Questionnaire ............................................................171

Appendix IV Survey Results .......................................................................217

Appendix V Case Studies..........................................................................313

Appendix VI Relational Contracting Success and Failure Factors..............345

REFERENCES .............................................................................................. 349

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LIST OF TABLES

Table 2.1 Australian Partnering Types................................................................... 10

Table 2.2 Comparison of Identified Partnering Benefits......................................... 14

Table 2.3 Characterises of Services, Opportunistic and Stakeholder Alliances ..... 18

Table 2.4 Characteristics of Relational Contract and Construction Contract.......... 22

Table 3.1 Comparison between National Culture and Construction Culture .......... 35

Table 3.2 ‘Types’ of Commitment Identified by Meyer and Allen............................ 42

Table 4.1 Formal Relationship Management Process in QDMR Projects .............. 61

Table 4.2 Types of Contracts Used in QDPW........................................................ 67

Table 5.1 Organisation Culture and Structure Defined by Handy........................... 76

Table 6.1 Organisational Culture (QDPW)............................................................. 85

Table 6.2 Commitment Levels (QDPW)................................................................. 86

Table 6.3 Hypothesis Patterns of Systematized, Discretionary and Developmental Models of Structure in Complex Organisations.............. 88

Table 6.4 Hypothesised Patterns of Structure mode in QDPW.............................. 89

Table 6.10 Consensus and Conflict between QDPW and Other Units..................... 90

Table 6.14 Frequency of Use of Methods of Conflict Resolution (QDPW) ............... 91

Table 6.19 Correlation between Working Relationship Effectiveness and Methods of Communication (QDPW & Other Units)............................... 93

Table 6.43 Correlation between Perceived Effectiveness of Relationship and Relationship Indices (QDPW) ................................................................ 97

Table 6.44 Scores for Australian Professionals on Hofstede Indices .................99,119

Table 6.45 Importance of Criteria for an Ideal Job (QDPW)....................................100

Table 6.46 Levels of Agreement on Statements (QDPW).......................................101

Table 6.47 Agreements to Statements in Relation to Project Success or Achieving Objectives (QDPW)..............................................................102

Table 6.48 Organisational Culture (QDMR)............................................................106

Table 6.49 Commitment Levels (QDMR)................................................................108

Table 6.50 Hypothesised Patterns of Structure Mode in QDMR .............................110

Table 6.65 Correlation between Working Relationship Effectiveness and Methods of Communication (QDMR & Other Units)..............................114

Table 6.89 Correlation between Perceived Effectiveness of Relationship and Relationship Indices (QDMR) ...............................................................117

Table 6.90 Importance of Criteria for an Ideal Job (QDMR)....................................119

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Table 6.91 Difference between the Means of QDPW and QDMR on the Importance of Criteria for an Ideal Job using t-test............................... 121

Table 6.92 Level of Agreement on Statements (QDMR)........................................ 121

Table 6.93 Agreement to Statements in Relation to Project Success or Achieving Objectives (QDMR) ............................................................. 122

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LIST OF FIGURES

Figure 1.1 Research Propositions............................................................................. 4

Figure 1.2 Thesis Map.............................................................................................. 6

Figure 2.1 Evolution of Partnering: from Project to Third Generation ...................... 12

Figure 3.1 Types of Culture as Illustrated Base on System Theory......................... 30

Figure 3.2 Components in an Organisational Culture ............................................. 32

Figure 5.1 Research Method .................................................................................. 74

Figure 7.1 Input-Process-Output Map based on Research Findings......................152

xiii

LIST OF PUBLICATIONS AND PRESENTATIONS

The following publications were produced by or in conjunction with the

author, during her M.Sc. candidacy:

Refereed Journal Papers

Rowlinson, S., Cheung, F.Y.K., Simons, R. and Rafferty, A. (2006).

‘Alliancing in Australia – No Litigation Contracts; a Tautology?’,

Journal of Professional Issues in Engineering Education and Practice

(accepted for publication).

Refereed Conference Papers

Cheung, F.Y.K. and Rowlinson, S. (2005). ‘Relational Contracting: the

Way Forward or Just a Brand Name?’, Proceedings of 1st

International Conference on Construction Engineering and

Management, Seoul, Korea, October 16th-18th.

Cheung, F.Y.K., Rowlinson, S. and Jefferies, M.C. (2005). ‘A Critical

Review of the Organisational Structure, Culture and Commitment in

the Australian Construction Industry’, in (ed) Sullivan, K. and

Kashiwagi, D.T. Proceedings of the International Symposium of CIB

W92/TG23/W107 on the Impact of Cultural Differences and Systems

on Construction Performance, Las Vegas, Nevada, USA, February

8th-10th, 347-354.

Rowlinson, S. and Cheung, F.Y.K. (2004). ‘Relational Contracting,

Culture and Globalisation’, in (ed) Ogunlana, S., Charoenngam, C.,

Herabat, P. and Hadikusumo, B.H.W. Proceedings of the

International Symposium of CIB W107/TG23 Joint Symposium on

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Globalisation and Construction, Bangkok, Thailand, November 17th-

19th, 239-247.

Rowlinson, S. and Cheung, F.Y.K. (2004). ‘A Review of the Concepts

and Definitions of the Various Forms of Relational Contracting’, in

(ed) Kalidindi, S.N. and Varghese, K. Proceedings of the

International Symposium of CIB W92 on Procurement Systems,

Chennai, India, January 7th-12th, 227-236.

Conference Papers

Cheung, F.Y.K. and Rowlinson, S. (2005). ‘The Interrelationships between

Organisational Structure, Culture and Commitment – an Australian

Case Study’, Proceedings of Australian Institute of Project

Management Conference 2005, Melbourne, Australia, October 9th-

11th.

Cheung, F.Y.K., Rowlinson, S., Spathonis, J., Sargent, R., Jones, T.,

Jefferies, M.C. and Foliente, G. (2004). ‘Organisational Structure,

Culture and Commitment: An Australia Public Sector Case Study’, in

(ed) McCarthy, J.V. and Hampson, K. Proceedings of the

International Conference of CRC for Construction Innovation on

Clients Driving Innovation, Surfers Paradise, Australia, October 25th-

27th.

Rowlinson, S. and Cheung, F.Y.K. (2004). ‘Relationship Management in

QDMR’, Road System and Engineering Technology Forum,

Brisbane, Queensland, Australia, August 4th-5th.

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The following presentations were given by the author, during her M.Sc.

candidacy:

Presentations

Cheung, F.Y.K. (2005), ‘The Interrelationships between Organisational

Structure, Culture and Commitment – an Australian Case Study’,

Australian Institute of Project Management National Conference

2005, organised by AIPM, Hilton on the Park, Australia, 9-11

October.

Cheung, F.Y.K. (2005), ‘A Critical Review of the Organisational Structure,

Culture and Commitment in the Australian Construction Industry’,

International Symposium of CIBW92/TG23/W107, organised by CIB,

UNLV, USA, 8-10 March.

Cheung, F.Y.K. (2004), ‘Relational Contracting, Culture and

Globalisation’, International Symposium of CIB W107/TG23,

organised by CIB, AIT, Thailand, 17-19 November.

Cheung, F.Y.K. (2004), ‘Organisational Structure, Culture and

Commitment: An Australia Public Sector Case Study’, International

Conference of CRC for Construction Innovation, organised by CRC

for Construction Innovation, Crown Plaza, Australia, 25-27 October.

Cheung, F.Y.K. (2004), ‘A Review of the Concepts and Definitions of the

Various Forms of Relational Contracting’, International Symposium

of CIB W92, organised by CIB, Indian Institute of Technology

Madras, India, 7-12 January.

xvii

ACKNOWLEDGEMENTS

A special acknowledgement goes to my supervisors Prof. Steve Rowlinson

and Prof. Tony Sidwell, who provided valuable advice and guidance for

the successful production of this thesis. Special thanks to Steve for his

patient and trust in me to be able to successfully complete the Master

degree. I have been given tremendous supports and opportunities from

Steve to attend workshops and conferences; as well as being encouraged

to publish and present during my candidature. Thanks Steve!

I would also like to express my sincere gratitude to staff members of the

Queensland Departments of Main Roads and Public Works, for their kind

participation on the questionnaire survey and interviews and providing me

with access to resources. Without their time and commitment to the

research, this thesis would hardly have been completed. Special thanks go

to John Spathonis.

I am grateful to the CRC for Construction Innovation and the Faculty of

Built Environment and Engineering, for funding me to attend conferences

during my candidature.

Finally, I would like to express my deepest gratitude to my Mom, Dad and

brother, for their unconditional love and support, and appreciation of my

work, which has motivated me to work harder. I would like to give my

special thanks to my dear friend Catherine Chen for keeping my spirits up

when I was at my lows during my M.Sc. journey.

xix

STATEMENT OF ORIGINAL AUTHORSHIP

“The work contained in this thesis has not been previously submitted to

meet requirements for an award at this or any other higher education

institution. To the best of my knowledge and belief, the thesis contains no

material previously published or written by another person except where

due reference is made.”

Signature CHEUNG, Yan Ki Fiona

Date

xxi

Harvard referencing style has been employed in this thesis.

1

CHAPTER 1

INTRODUCTION

1.1 Background of Research

The implicit link between organisational culture and organisational

performance has long been recognised in both main-stream management

literature (Handy 1985; Hofstede 1980) as well as in the construction

management literature (Liu & Fellows 2001; Rowlinson 2001). Within the

construction research domain, the impact of culture and organisation on

project performance is becoming an increasingly important topic for the

establishment of a sound partnering or alliancing, or as referred to more

often in recent years, relational contracting, approach to projects. Many

reports have been produced in recent years, such as the Tang Report on

‘Construct for Excellence: Report of the Construction Industry Review

Committee’, the Hong Kong Housing Authority report on ‘Partnering for

Change’, ‘Building for Growth’ by Australia NatBACC and the Egan report

on ‘Rethinking Construction’; all indicate the way forward for the

construction industry and call for a culture change in the industry. These

reports advocate a move away from adversarial relationships and towards

the use of partnering and alliancing.

CHAPTER 1 INTRODUCTION

2

The impact of culture and organisation on project performance is

becoming recognised as an increasingly important research topic, as both

of these are important for the establishment of a sound relational

contracting approach to projects. The Queensland Departments of Main

Roads (QDMR) and Public Works (QDPW) have both identified the need

for further development in their own organisation culture and attitudes to

implementing the fundamental components of relationship contracts.

Alliancing, partnering and relational contracting projects aim to move the

project team away from adversarial relationships and towards collaborative

relationships. However, the efficacy of alliancing or partnering has thus far

not been proven and projects have produced mixed results. This research

aims to shed light on the practices and pre-requisites for relationship type

contracts to be successful (see for example Bresnen & Marshall

2000a,b,c) and to understand how the interrelationships between national

culture, organisational structure, organisation culture and levels of

commitment affect an organisation’s performance.

1.2 Research Problems

Organisational culture and organisation structure must be matched if

participants are to retain commitment to the organisation (Rowlinson

2001). This research takes Rowlinson’s work as a starting point and

develops it further into a study of the key determinants of effectiveness in

relational contracting. The aim of this research is to develop and test a

framework within which the determinants of performance in project teams

can be assessed. Therefore, the objectives of this research are:

• To investigate how a collaborative project culture is developed and

enhanced by considering the set of project team characteristics;

and

• To identify the ways in which collaboration can be transmitted

throughout the industry.


3

Based on the issues outlined in section 1.1 above, this research will

address the following questions:

• How is a collaborative project culture developed and enhanced by

considering the set of organisational characteristics, project team,

characteristics and national culture?

• What are the ways in which collaboration can be transmitted

throughout the organisation?

Based on issues identified in Chapters 2-4, the following hypotheses are

developed and will be tested in the study:

• Organisational culture and organisation structure must be matched

if participants are to retain commitment to the organisation

(Rowlinson 2001).

• Parent organisation culture affects temporary project culture.

• Encouragement by organisation to exhibit cooperative behaviour

amongst employees leads to greater cooperation between

individuals

The relationship between the literature review, research propositions and

instruments employed are presented in Figure 1.1 overleaf.


4

Figure 1.1 Research Propositions

LITERATURE REVIEW

RC Definitions � Long-term relationship � Culture � Trust � Legislations &

regulations

Culture & Value, Commitment, Organisational Culture & Structure • National culture • Organisational culture • Organisational structure • Commitment • Cooperation between individuals • Empowerment • Collaborative relationship & trust

Public Sector Organisations • Definition of relational

contracting • Current project delivery

systems • Relational contracting

in practice

INSTRUMENTS EMPLOYED • Organisational Culture and Structure (assessed using Handy’s instrument) • Commitment (assessed using Allen and Meyer’s instrument) • Organisation Assessment (assessed using Van de Ven and Ferry’s instrument) • National Culture (assessed using Hofstede’s VSM)

RESEARCH PROPOSITIONS

How is a collaborative project culture developed and enhanced by considering the set of organisational characteristics, project team, characteristics and national culture?

What are the ways in which collaboration can be transmitted throughout the organisation?

Hypothesis 1 Organisational culture and organisation structure must be matched if participants are to retain commitment to the organisation

Hypothesis 2 Parent organisation culture affects temporary project culture

Hypothesis 3 Encouragement by organisation to exhibit cooperative behaviour amongst employees leads to greater cooperation between individuals


5

1.3 Scope of the Research

Due to time and resource constraints, the research focused on the public

sector in Queensland. Believing the client is the driver of change

(Construction Clients' Forum 1998; Construction Industry Board 1997;

Construction Industry Institute 1991; Egan 1998), this research attempts to

provide an overall perspective of the industry’s achievements in effective

relational contracting by employing data collected from the public sector

organisations. A triangulated approach using questionnaire, interview and

case study was adopted and the research methodology is outlined in

section 1.4.

1.4 Research Methodology

The research was broken into two distinct phases and was carried out

using questionnaire survey, interview and case study approaches. Due to

the size and complexity of the questionnaire, both public sector

organisations, QDPW and QDMR, were asked to nominate professionals

with experience on partnering, alliancing or relationship contracting

projects for the questionnaire survey, to control the sample quality.

Twenty professionals were nominated to participate in the main

questionnaire survey and 16 questionnaires were returned. A sub-

questionnaire was then sent to 47 people identified in the main

questionnaire and 42 completed sub-questionnaires were returned. Upon

the collection of each main questionnaire, a 30 to 60 minute interview was

carried out with each professional. A total of seven case studies were

collected from both organisations. Observations of monthly site and

relationship management meetings were carried out in two case studies to

examine team dynamics and communication processes in the project

teams.


6

1.5 Structure of thesis

Three themes, the relational contracting form, cultural aspects and project

delivery systems in the public sector organisations, are treated in the

introductory chapters in order to provide the necessary background for the

presentation of the research model and methodology in Chapters 5, 6 and

7. The results of data analysis and subsequent discussions follow and the

thesis closes with an examination of the conclusions drawn from the

research. The thesis structure is shown in Figure 1.2.

Figure 1.2 Thesis Map

Chapter 2 RELATIONAL

CONTRACTING � Definitions � Perceptions � Project team

Chapter 3 CULTURE

� National culture � Organisational

culture � Organisational

structure � Commitment � Project team

Chapter 4 PUBLIC SECTOR

� Relational contracting process

� Current project delivery systems

Chapter 5 RESEARCH MODEL & METHODOLOGY

� Variables � Framework � Sample

Chapter 6&7 RESULTS

� Analysis � Discussion

Chapter 8 CONCLUSIONS

� Tested hypotheses � Research conclusions � Limitations of research � Further research

Chapter 1 INTRODUCTION

� Thesis structure � Research Scope � Introduction to thesis chapters


7

Chapter 1 is an introduction to the thesis, presenting its structure, its

primary assumptions and major findings. It introduces some key issues in

relation to relational contracting, organisational culture and performance,

in particular the scarcity of research into the practice and pre-requisites for

relationship type contracts to be successful in the construction industry.

Chapter 1 presents the overall thesis structure in a flowchart.

Chapter 2 is a review of the existing definitions of partnering, alliancing

and relational contracting in the construction domain. An overview of the

current state-of-the-art of the use and implementation of the procurement

systems presented. Attention is then turned to the construction industry

culture with relational contracting in practice. Chapter 3 discusses the

interrelationships between culture, structure and commitment in the parent

and project organisations. Factors affecting performance, as indicated

from a literature review of construction and general project management,

are presented. The chapter concludes with a presentation of the

construction industry characteristics and the drivers for culture change.

Chapter 4 presents the background of project delivery systems used by

the Queensland Departments of Main Roads and Public Works and the

reasons for change. It outlines how a relational contracting approach has

been adopted in both organisations, in theory and in practice, and the

inadequacies of the current system.

The review of previously published research, management literature and

theory, and opinions expressed publicly and privately, lays the foundation

for the presentation of the research model in Chapter 5. It outlines the

research questions addressed in this thesis and the hypotheses tested

during the study. The research was broken into 2 distinct phases: the

impact of the various cultural variables on project performance was

investigated using a questionnaire survey with follow-up interviews and the


8

results are presented in Chapter 6; and the variables influencing the

success of relational contracts were analysed through interviews and case

studies and are discussed in Chapter 7. Chapters 6 and 7 present and

discuss the research methodology adopted and cover the method of data

collection, the statistical analyses used and the properties of the sample

under consideration. The chapters discuss the research findings in detail.

More detailed case study information and data listings are included as

appendices.

Chapter 8 concludes with a summary of the contribution made to

knowledge by this thesis. It has examined the interrelationship between

national culture, organisational structure, culture and commitment in two

Australian public sector organisations with very diverse natures. The

chapter investigates the fundamental issues affecting project performance

and hence identifies the key determinants of effectiveness in relational

contracting in the construction industry. Chapter 8 outlines some

limitations to this research and the chapter concludes with proposed areas

of future research.

1.6 Conclusion

This chapter has laid the foundations for the thesis. It has introduced the

research problem that the thesis seeks to address and the research

hypotheses (see section 1.2). This chapter has provided an overview of

the research area and the research scope on relational contracting

effectiveness in the construction industry. The research methodology,

using questionnaire survey, case studies and interviews, has been briefly

described and the structure of the thesis has been outlined.

9

CHAPTER 2

PARTNERING, ALLIANCING AND RELATIONAL

CONTRACTING

2.1 Introduction

Partnering has been defined in many ways. It can be considered as an

individual project mechanism or as a long-term strategy. Alliancing is

normally assumed to be a long-term business strategy linking together

client, contractor and supply chain. Relational contracting goes further

than this and brings in the whole philosophy of the value chain and the

linking of the interdependent parts within the construction project as a key

business objective. This chapter aims to review existing definitions of

these three concepts and present an overview of the current state of-the-

art of the use and implementation of the procurement systems.

2.2 Partnering

Partnering is defined as a structured management approach to facilitate

team work across contractual boundaries. Its fundamental components

include mutual objectives, agreed problem resolution methods, and an

active search for continuous measurable improvements (CBP 1998). The

CHAPTER 2 PARTNERING, ALLIANCING & RELATIONAL CONTRACTING

10

Construction Industry Institute (CII) (1996) suggests a partnering charter is

developed to run in parallel with a traditional construction contract to

provide guidelines to the relationship between the organisations. CII

defines partnering as three types, namely experimental partnering,

packaged partnering and committed partnering, as illustrated in Table 2.1.

Type Description Outcome

Experimental partnering • Charter, workshop, small number of follow-up meetings

• Usually first partnering experience

• Minimally resourced • Often seen as a ‘toe-in-the-

water’ exercise

• Often unsuccessful, generally because of lack of clear understanding, commitment and structure

Packaged partnering • Offered as part of a contractor’s tender or imposed upon the contractor after the tender is accepted

• Often involves only the client and contractor

• This model is used very successfully as a marketing tool

• Problems may arise from lack of commitment and understanding of each stakeholder’s objective

• A client-contractor relationship perceived to be cooperative at the outside (outset) of a project may not necessarily last for the duration of the contract

Committed partnering • Often developed as a result of first, unsuccessful experience

• Incorporates as many stakeholders as possible in a tight, well facilitated dispute resolution mechanism

• Well resourced

• Problems may arise from lack of commitment and understanding of each stakeholder’s objective

• A client-contractor relationship perceived to be cooperative at the outside (outset) of a project may not necessarily last for the duration of the contract

Table 2.1 Australian Partnering Types (adapted from CII 1996 by Walker & Hampson 2003 – p. 48)

Partnering is also recognised as a method of improving communication

mechanisms and technologies, responding to innovative construction

projects, creating a less stressful working environment and reducing

transaction costs resulting from uncertainty, competition and information


11

asymmetry (ECI 1997; Liu & Fellows 2001). One of the most commonly

used definitions for partnering was created by CII as follows (CII 1991):

‘…a long-term commitment between two or more organisations for the

purpose of achieving specific business objectives by maximising the

effectiveness of each participant’s resources. This requires changing

traditional relationships to a shared culture without regard to organisational

boundaries. The relationship is based on trust, dedication to common

goals, and an understanding of each other’s individual expectations and

values.’

Weston and Gibson (1993) find the three most important elements in the

definition given by CII are trust, shared vision and long-term commitments.

Peters et al. (2001) suggest partnering relies solely on the commitment of

individuals due to the fact that a partnering charter is not legally binding.

Green (1999) sees partnering as primarily concerned with ‘maximising

effectiveness’. The definition given by Bennett and Jayes (1995b) reflects

similar themes:

‘…partnering is a management approach used by two or more

organisations to achieve specific business objectives by maximising the

effectiveness of each participant’s resources. The approach is based on

mutual objectives, an agreed method of problem resolution, and an active

search for continuous measurable improvements.’

It is noted that improvement must not only be continuous but measurable

as well. The definition offered by the ‘Egan Report’ is similar (Egan 1998):

‘…partnering involves two or more organisations working together to

improve performance through agreeing mutual objectives, devising a way

for resolving disputes and committing themselves to continuous

improvement, measuring progress and sharing the gains.’


12

The Department of the Environment, Transport and the Region further

consider partnering to be a ‘tool to tackle fragmentation’ which is

increasingly used by the best firms in place of traditional contract-based

procurement and project management (Green 1999). According to the

Construction Industry Board (1997), partnering has three essential

components:

• establishment of agreed and understood mutual objectives

• methodology for quick and cooperative problem resolution

• culture of continuous, measured improvement.

Partnering has also been discussed by many commentators and

categorised as project partnering and strategic partnering (RCF 1995a;

Gaedo 1995; Kumaraswamy & Matthews 2000; Matthews 1996; Matthews

& Rowlinson 1999). Project partnering is partnering undertaken on a

single project. At the end of the project, the partnering relationship is

terminated and another relationship is commenced on the next project.

Project partnering was pioneered in the USA construction industry during

the mid to late 1980s. Australia followed by adopting the partnering

philosophy in the early 1990s. Strategic partnering takes place when two

or more firms use partnering on a long-term basis to undertake more than

one construction project, or some continuing construction activity (RCF

1995a).

Kubal (1994) and more recently the Reading Construction Forum (RCF)

(1998) discuss partnering at an industry-wide level. Kubal (1994) notes

that although partnering is practiced on fragmented projects, it requires

national lobbying in order for partnering to be used across industry under

the correct circumstances. In the UK, the Reading Construction Forum

(1998) develop this point further by stating that new initiatives in partnering

have enabled ‘second and third generation partnering’ to evolve. Watson


13

(1999) reported that second generation partnering was underpinned by the

‘seven pillars’ of partnering (RCF 1998) which are strategy, membership,

equity, integration, benchmarks, project processes, and feedback. In the

third generation of partnering, the construction firm should be building

virtual organisations with its supply chain to provide a complete service

that is efficient, creative, and innovative (Kumaraswamy & Matthews 2000;

Watson 1999). The industry should also become truly collaborative in

producing and marketing a range of services that clients are eager to

invest in (Matthews & Rowlinson 1999). Figure 2.1 shows the three

categories of partnering as described by RCF (1995a; 1998).

Figure 2.1 Evolution of Partnering: from Project to Third Generation (adapted from RCF 1995, 1998 by Matthews & Rowlinson 1999 – p.349)

Key Principles • Agreeing mutual objectives. • Making decisions jointly and

resolving problems. • Aiming at targets that provide

continuous measurement in performance from project to project.

(RCF, 1998: Chp. 1, Page 3)

Project and Strategic Partnering Partnering can be applied to one-off schemes (project partnering), or can be on going over a series of developments (strategic partnering). Typically, with project partnering, cost savings of 2-10% are achieved, with strategic partnering savings of 30% are realistic over time. (RCF, 1995:iii)

Key Principles (Seven Pillars) Strategy, Membership, Equity, Integration, Benchmarks, Project Process, Feedback. (RCF, 1998, Chp. 3, Page 12)

Second Generation A ‘Second Generation’ of partnering has now emerged that requires a strategic decision to cooperate in improving joint performance by a client and a group of consultants, contractors and specialists engaged in an ongoing series of projects… Second generation is tough but those firms who have the Seven Pillars in place find that cost savings of 40% are not uncommon, and time savings of more than 50% are achievable. (RCF, 1998:iii)

Third Generation …research also identifies the beginnings of a third generation of partnering in which the construction industry becomes a truly modern industry producing and marketing a range of products and services that clients are eager to invest in. The resulting Third Generation Partnering delivers even greater benefits, - cost savings of more than 50% or more, and where speed is crucial, construction time frames can be reduced by 50% or more. (RCF, 1998:ii)


14

A comparison of identified partnering elements is as follows:

Associated General Contractors of America (1991) Sanders and Moore (1992)

Commitment Continuous evaluation Equity Mutual objectives Timely responsiveness Trust Implementation

Cooperative management team Cooperation Open communication Group working Common goals Problem solving

Matthews (1996) Reading Construction Forum (1995a)

Goals and objectives Trust Problem resolution Commitment Continuous evaluation Group working Win-win philosophy Shared risk Equity Cooperation

Free and open communication Open book costing Annual review of performance Workshops Continuous evaluation Mutual objectives Problem resolution

Table 2.2 Comparison of Identified Partnering Elements (Adapted from Matthews 1996 by Kumaraswamy & Matthews 2000 – p.5)

Green (1999) offers an opposing view on partnering. He argues that the

philosophy of continuous, measured improvement from the definition of

partnering presented by Construction Industry Board (1997) actually

demands that each project exceeds the performance of the previous one.

Despite the seductive discourse on ‘empowerment’, ‘working together’ and

‘relationships’, the ultimate measure of success seems to hinge on cost

improvement.

Green (1999) also suggests that the arguments in favour of partnering

would seem to owe more to the buying power of its advocates rather than

to any independent appraisal. It is advocated by the Construction Clients’

Forum (1998):


15

‘…the message from the Construction Clients’ Forum is clear. If this Pact

is concluded, clients represented on the CCF will seek to place their £40bn

of business with companies that are seen to follow the approach described

in this document…’

The Construction Industry Board (1997) made their point equally

emphatically:

‘…if it becomes clear that anyone at the workshop is unable to adopt the

spirit of partnering, that person should be replaced in the team…’

Green (1999) has further pointed out that to propagate partnering in

construction is to exercise increased control over the construction supply

chain. Examples of some leading supermarkets in U.K. were used and

Green (1999) suggested that their innovations in supply-chain

management were directed towards earning super-normal profits, rather

than serving the interests of their customers. Investigation was carried out

by the Office of Fair Trading in 1998 according to a report in The Times on

31 July 1998. Further investigation of the supermarkets was carried out by

the Monopolies and Mergers Commission in late March 1999, with a

possible monopoly penalty.

It is difficult to separate partnering from the principles of Total Quality

Management (TQM) because they share a common goal – continuous

improvement - which originally came from TQM (Green 1999). TQM

encourages employees to identify themselves as parts of a supply chain

which comprises a sequence of relationships between suppliers and

customers (Tuchman 1995). Kerfoot and Knight (1995) suggest that this

provides employees with a sense of self-esteem from serving the next

person in the chain, rather than having to derive satisfaction from the task

itself. Metaphors such as ‘teamwork’ and ‘customer’ are therefore

intentionally used to mask the reality that most employees are required to


16

act as mindless cogwheels in a remorseless machine (Green 1999). If this

critical interpretation is accepted, Green argues that the rhetoric of

customer responsiveness is primarily used as hollow propaganda to justify

management regimes that are increasingly based on domination and

control. The more that managers’ behaviour is governed by propaganda,

the less likely they are to engage in risk-taking and entrepreneurial

behaviour. Such behaviour might become a great barrier to change in an

organisation, for example, a move away from adversarial contractual

behaviour to more collaborative and proactive working behaviour. The

role culture described by Handy (1985) has similar characteristics; role

cultures are slow to perceive the need for change and slow to change

even if the need is seen.

Wood et al. (2002) and Wilson (1994) find the essence of partnering is

single-source, long-term relationships. Such relationships are business-

focused; directed at solving problems, rather than simply selling products.

Trust is a key component when a new relationship is developed, while the

industry moves from competitive, adversarial to cooperative relations

based on reciprocity and solidarity (Wood & McDermott 1999a). Trust-

based partnering encourages parties to adopt higher ethical standards.

2.3 Alliancing

Confusion about the differences between partnering and alliancing is

common in the construction industry. The most noticeable distinction

between partnering and alliancing is described by Walker and Hampson

(2003) as:

‘…with partnering, aims and goals are agreed upon and dispute resolution

and escalation plans are established, but partners still retain

independence and may individually suffer or gain from the relationship.


17

With alliancing the alliance parties form a cohesive entity, that jointly

shares risks and rewards to an agreed formula…’

Alliancing is categorised into two main types by scholars, namely strategic

alliancing and project alliancing. The most common definition of strategic

alliances adopted is: to establish inter-organisational relations and to

engage in collaborative behaviour for a specific purpose (Love &

Gunasekaran 1999). The inter-organisational relationships can be

grouped into three broad classifications of services: cross-company

consortium (service), opportunistic, and stakeholder alliances (Howarth,

Gillin & Bailey 1995). The characteristics of the alliances are outlined in

Table 2.3. A strategic alliance is also seen as an inter-organisational

arrangement which usually exists between two companies, that extends

beyond a specific project and the parties would expect ongoing, mutually

beneficial business (Peters, Walker & Hampson 2001). According to

Bronder and Pritzl (1992), a strategic alliance exists when the value chains

between at least two organisations with compatible goal structures are

combined for the purpose of sustaining and achieving significant

competitive advantages.

A strategic alliance can provide access to resources such as capital,

information, technology, management expertise, markets, customers,

distribution channels, land and labour. Such resources may not be

available to an organisation acting alone. Greater access to resources

allows an organisation to reduce its level of uncertainty in a demanding

and turbulent environment. Strategic alliances also enable organisations

to speed up the market-entry process and increase their responsiveness

to consumer markets (Howarth, Gillin & Bailey 1995).


18

Service Alliances • Requires the lowest level of interdependence between partners with the smallest amount of changes and the lowest level of joint commitment

• Provide economies of scale • Provide the ability for the partners to undertake

large-scale projects with a limited purpose • Difficulties arise due to the diversity of the

interests and goals of the partners • Result in a loss of commitment from members

Opportunistic Alliances e.g. Joint Ventures

• Provide access to the resources of the partner organizations

• Motivated by the existence and recognition of a market opportunity

• Partners might exploit one another’s resources and then move on to pursue the opportunity alone

Stakeholder Alliances e.g. Suppliers,

customers, employees.

• The closest link of all between member organizations

• Seek to build strong, long-term relationships • Assist in achieving the organizational goals by

(of) major stakeholders

Table 2.3 Characteristics of services, opportunistic and stakeholder alliances (Adapted from Howarth et al. 1995)

No successful strategic alliance can be developed without trust. Trust in a

strategic alliance also includes the concept of reciprocity, which implies a

long-term focus, the acceptance that obligations are mutual, and room for

adjustment if one partner is suddenly placed in a compromising position

(Howarth, Gillin & Bailey 1995). Like partnering and relational contracting,

trust between strategic alliance partners is important because it creates an

opportunity and willingness for further alignment, reduces the need for

partners to continually monitor one another’s behaviour, reduces the need

for formal controls, and reduces the tensions created by short-term

inequities. It allows the partners to focus on their long-term business

development as well as cutting down their costs and time. The

characteristics of successful strategic alliances as well as successful

business relationships proposed by Hampson and Kwok (1997) – trust,


19

commitment, interdependence, cooperation, communication and joint

problem solving – reflect a similar theme.

A successful alliance also requires creativity. It has been shown in the

past that the alliances that fail are typically the second alliance that a

group of companies undertakes together. The problem arises when the

individual team members who were on the first alliance insist on using the

same practices since they worked on the previous alliance, despite the

fact that they might not be appropriate for the second. The new team

members do not understand why the practices are adopted and do not feel

any sense of ownership. Since both strategic and project alliances are

tailor-made mechanisms, such alliancing would fail due to the lack of

creativity by the team members from the first project team and the

avoidance of commitment to the work by the new team members.

The main difference between project alliances and strategic alliances is

that project alliances have a defined end, which is most commonly the

practical completion date of a project. The parties are brought together for

a specific project or outcome (Peters, Walker & Hampson 2001). A project

alliancing agreement is also legally enforceable.

A project alliance is described by Hutchinson and Gallagher (2003) as a

project delivery strategy. Several participants join together to share risks

and outcomes on a project (Manivong & Chaaya 2000), where sponsor

and commercial participants’ objectives (client’s objectives) are aligned to:

• maximise performance;

• proactively manage risk;

• reduce cost; and

• achieve outstanding results in the sponsor’s key project objective.

Hutchinson and Gallagher (2003) define a project alliance as:


20

‘… an integrated high performance team selected on a best person for the

job basis; sharing all project risks with incentives to achieve game-

breaking performance in pre-aligned project objectives; within a framework

of no fault, no blame and no dispute; characterised by uncompromising

commitments to trust, collaboration, innovation and mutual support; all in

order to achieve outstanding results.’

Love and Gunasekaran (1999) state that alliances can be either

collaborative or cooperative (Bronder & Pritzl 1992; Hamel 1989;

Hutchinson & Gallagher 2003), based on core competences. Kwok and

Hampson (1996) describe project alliances as a cooperative arrangement

between two or more organisations that forms part of their overall strategy,

and contributes to achieving their major goals and objectives for a

particular project. Hamel (1989) suggests that organisations that enter

into collaborative alliances (short-term) are aware that their partners are

capable of disarming them. Parties to these alliances have clear

objectives and understand that their partner’s objectives will affect their

success. Yet, collaboration does not always provide an opportunity to

internalise a partner’s skills. Love and Gunasekaran (1999) suggest that a

‘psychological barrier’ may exist between alliance partners caused by the

fear that their partner(s) may out-learn or deskill them. Wood and Gray

(1991) state that organisations typically enter collaborative relations to

reduce the complexity of their environment and to gain more control over

environmental factors. Such collaboration may cause new dependencies

to be created, which may increase environmental complexity and

turbulence. They argue that increases in complexity may increase

transaction costs, the need to manage bilateral and multilateral relations

and the need to develop new skills.

Cooperative alliances (long-term) encourage alliance partners to commit

their resources to the relationship to gain mutual learning (Love &


21

Gunasekaran 1999). There is a lower level of competition and as a result,

partners may feel more committed to work together and exchange their

knowledge and resources. Ketelholm (1993) suggests that cooperative

strategic alliances can create a competitive advantage. Organisations that

rely on cooperation have been found to obtain lower costs for as long as

they maintain trust internally and externally – among employees and

members of their network.

2.4 Relationship Contracting

Relationship (or relational) contracting is based on a recognition of mutual

benefits and win-win scenarios through more cooperative relationships

between the parties. Relationship contracting embraces and underpins

various approaches, such as partnering, alliancing, joint venturing, and

other collaborative working arrangements and better risk sharing

mechanisms (Alsagoff & McDermott 1994; Jones 2000; Rahman &

Kumaraswamy 2002). Relational contracts are usually long-term, develop

and change over time, and involve substantial relations between the

parties. Relational contracts are the norm for complex transactions to be

conducted in environments of high complexity, where complete

contingency arrangements are impossible. Successful completion of the

transaction relies on cooperation and the desire to effectuate the contract.

In addiction, the contract must allow a certain flexibility so as to enable

necessary adjustments as appropriate (Cheung 2001). The characteristics

of relational contracts and construction contracts are summarised in Table

2.4.


22

Relational Contracts Construction Contracts

Contracting Environment

• Cooperative instead of defensive

• Proactive instead of reactive

• Cooperative, mutual trust is the desired static of contracting

Effectuation • Flexibility and Adjustments provisions to cater for unanticipated contingencies

• Power to issue variations with associated time and cost adjustments

Dispute Resolution

• Relational Dispute Resolution

• Alternative Dispute Resolution

Table 2.4 Characteristics of Relational Contract and Construction Contract (adapted from Cheung 2001 – p.43)

Various authors have suggested that a relational approach to contractual

governance entails long-term social exchange between parties, mutual

trust, interpersonal attachment, commitment to specific partners, altruism

and cooperative problem solving (Blau 1963; Darwin 1994; Darwin,

Duberley & Johnson 2000; MacNeil 1978; 1985; Rousseau & Parks 1993).

Darwin and numerous other authors suggest that a relational approach is

closely associated with partnerships and strategic alliances (Jorde &

Teece 1989; Kanter 1989; 1994; Lynch 1993), with contractors who avoid

adversarial approaches to contract management (e.g. Lorenz 1991;

Stinchcombe 1986; Teubner 1991) by emphasising the ‘stable bonding

mechanisms’ (Bolton, Malmrose & Ouchi 1994) which entail long-term

collaborative arrangements based on informality, shared problem solving,

reciprocity and high trust. MacNeil (1985) suggests that construction

contracts are typical relational contracts as they often involve numerous

parties and subcontracts with heavy informational exchange in the

construction activities. The parties involved are mutually dependent. The

extent of mutuality and interdependence and the need for trust and

cooperation are greatly heightened (Cheung 2001).


23

According to Rahman and Kumaraswamy (2002), relational contracting

considers contracts as the ‘ongoing dynamic state’ of relations among the

contracting parties and promises to do something in the future (MacNeil

1974), in the process of projecting ‘exchange’ into the future (MacNeil

1980). Rahman and Kumaraswamy (2002) point out that no real life

human cooperation will be entirely transactional - personal relations,

diffuse communication and some non-economic personal satisfaction will

be involved. Equally, contractual relations will not be entirely lacking in

transactional discreteness. Accordingly, MacNeil (1978) classified

contracts into three types: classical, neoclassical, and relational. Classical

contracting covers all future contingencies, and transactions tend to be

self-liquidating. Neoclassical contracting involves trilateral governance,

where third-party ‘assistance’ is employed in resolving disputes and

evaluating performance. Relational contracting provides the means to

sustain ongoing relations in long and complex contracts by adjustment

processes of a more thoroughly transaction-specific, ongoing

administrative kind.

Industry-wide studies have pointed out that a more efficient construction

industry would be achieved if a cooperative style of contracting were used.

Two major studies in quality and efficiency of the construction industry

commissioned by the government were carried out in the UK. The Latham

Report (1994) highlighted 30% reduction in construction costs as an

attainable goal while the Egan Report (1998) forecast annual reductions of

10% in both construction costs and time. The common theme in their

recommendations is replacement of competitive tendering with long-term

relationships.

Partnering is a good example of practicing relational contracting principles

(Rahman & Kumaraswamy 2002). Thompson and Sander (1998)

observed that benefits from partnering (i.e. relational contracting) increase

with a migration of teamwork attitude from competition to cooperation,


24

through to collaboration and finally to coalescence. Rahman et al. (2001)

argued that more relational and performance oriented contractor selection

would encourage an amicable relational contracting environment and

more collaborative teamwork. Rahman and Kumaraswamy (2002)

suggest relational contracting approaches should work in almost any

environment if applied properly. However, this requires transforming

traditional relationships towards a shared culture that transcends

organisational boundaries (CII 1996), where the motivation and attitude of

the project participants are also critical.

2.5 Conclusion

Alliancing, partnering and relational contracting all have a common theme,

which is to move away from adversarial relationships, to develop a team,

perhaps a long-term relationship (e.g. long-term work relationship). From

the previous literature review, it is not difficult to see that both alliancing

and partnering are heading toward the concept of relational contracting. A

long-term relationship has always been a main element in relational

contracting. In order to build up a long-term relationship between two

parties, trust is essential.

Unlike traditional contracting, relational contracting allows a much higher

flexibility, which is suitable for the construction industry where there are

many uncertainties as well as many unforeseeable events. Also with

relational contracting, a lower construction cost may be obtained. With

traditional contracts, if contractors are not able to get their work done on

time according to the contract, they will suffer liquidated damages and in

most cases, arbitration or litigation will also be involved. Because of the

involvement of legal practitioners, works may be delayed and the

construction time extended since work will be postponed until proceedings

are completed and results known. For example, it is not uncommon for an

arbitration to take at least one year before the decision is made.


25

With the high flexibility in relational contracting, construction time will be

shortened, as less documentation passes between parties when an

unexpected event occurs during construction; and solutions are negotiated

around a table. Also, it might minimise the necessity for extensions of time

for works since the contractor has more flexibility in re-scheduling the

work.

Without the aggravation of hearings, claims and damages, a better

relationship is built up between the client and the contractor. The trust in

each other becomes stronger and the contractor is willing to work for the

client in a better and more efficient way, while the client is willing to give

the contractor more work in the future. A mechanism for dealing with this

in Hong Kong government contracts is the appointment of an alternative

dispute resolution adviser. The role is one of arbiter between the two

parties but this is still, essentially, an adversarial approach – although a

skilled advisor can draw the parties together into an informal, relational

approach. Such a role could be fitted ‘on top’ of a relational contract to

help steer it after the project workshop has been completed.

However, a recent case study carried out by Darwin et al. (2000) on ten

clients from the public sector and contractors in the U.K., shows that it is

not desirable to have a pure long-term relationship from both clients’ and

contractors’ point of view. It is also necessary to have contracts drawn up

in black and white .

Due to human nature, while parties may be moving along with the main

purpose of relational contracting, legally binding documents are also

necessary for both parties to feel secure and to ensure work is

‘guaranteed’. Also, for the public sector, a transparent system is required

as the government needs to report to the public. For questions such as

‘what if that does not happen…’, some contracted terms are needed to


26

reassure the public. Research has demonstrated the importance of

legislative constraints upon the application of partnering in the public

sector (Loraine 1993).

Pure ‘buddy buddy’ relationships do not exist in the commercial world.

There is never complete trust. A structured legal framework where roles

and protocols are defined can provide a level playing field for all parties,

as well as the initial bonding of the relationship between parties.

Culture is another issue. Without knowing much about or having much

experience with the contractor, the client may have doubts about the

trustworthiness of the contractor. One may argue that pre-qualification

addresses this issue, however, further research may need to be carried

out on the effectiveness of pre-qualification in respect of relational

contracts.

Contractors have traditionally taken every chance to increase their income

during work, and this has been part of the culture in the construction

industry – see, for example, the CIRIA report on management contracting

(1983). However, if once the contractor knows there will be more work

with the client in the future, it is highly likely that he would look at the

relationship from a long-term perspective rather than concentrating on

seeking more money during work as a short-term response.

It is comment believe that in the past everything was simple and people

had a much stronger sense of trusting one another, whereas now, every

party tries to get the most out of the other. Because of such human

behaviour, workshops evolve with the aim of trying to build up the team

spirit as well as trust in each other. Yet, the objectives of the workshops

need to be implemented continuously or the results will fade and the whole

program will become a failure. In this case, it depends very much on the

approach to future development and implementation.


27

After all, ‘Business is business’, which also describes the current industry

culture as a whole.

29

CHAPTER 3

CULTURE

3.1 Introduction

Culture is a difficult and complex concept. It is socially transmitted

behaviour patterns, beliefs, thoughts and values. It is learnt and built over

time, and passes on from generation to generation.

Culture is predominating attitudes and behaviours that characterise the

functioning of a group or organisation. National and organisational culture

cannot be studied in isolation. National culture has an effect on

organisational culture. National culture defines boundaries of behaviour,

based on characteristics of interrelations and assumptions. Organisation

culture is an interconnected web of relationships. This chapter aims to

break down the concept of culture, also to identify the elements that have

an influence on culture.

3.2 What is Culture?

It is recognised world wide that culture is a difficult and complex concept.

In the broadest sense culture refers to the way of life of a group of people:

CHAPTER 3 CULTURE

30

patterns of behaviour that are seen to be useful and valuable to the people

concerned and worthy of being passed on from one generation to another.

Figure 3.1 presents a general idea on types of culture.

Figure 3.1 Types of Culture, based on Systems Theory

Culture takes time to evolve. It also takes time to change, or to evolve a

‘new’ culture. It is very difficult to define each type of culture on its own.

No matter which type of culture we look at, they all overlap with each other

and cannot be separated from one another. Culture needs to be looked at

as a WHOLE.

American anthropologists, Kroeber and Kluckhohn (1952), presented 160

different definitions of culture. Bodley (1994) drew out a simple version by

stating that culture involves what people think, what they do, and what

they produce. The concept of culture has also been identified in literary

traditions and philosophy (Jenks 1993; Williams 1988). Jenks (1993)

argues the term ‘culture’ became widely accepted due to the changes to

the structure of social life during the industrial revolution.

World

Nations

Professions

Organisations

Project Teams/Groups

Individuals

CHAPTER 3 CULTURE

31

3.3 National and Organisational Culture

Culture can be broadly defined as the dominant set of learnt, shared and

interrelated behaviour within a society (Vecchio, Hearn & Southey 1992).

Terpstra and David (1985) also see culture as a compelling set of

symbols, which provides a set of orientations for members of a society.

When taking these orientations together, solutions are provided to

problems that all societies must solve if they are to remain viable. As

suggested by Punnett (1998), culture is interrelated and provides

orientation to people.

Owens (1987) and Schein (1990) examine organisation culture as patterns

of shared beliefs and values that evolve into norms of behaviours, which

are adopted in solving problems. Rousseau (1993) sees culture as layers

of elements, which all lie along a continuum of subjectivity and

accessibility. These layers range from physical manifestations of culture

to fundamental assumptions, which are hidden deeply in the centre of

culture and are most difficult to uncover (Thorsdottir 2001). Trompenaars

(1994) describes culture using an onion, which has many layers. The

products of the basic values are on the outer layer and assumptions are

deep inside the onion, which coheres with Rousseau’s view on culture.

Schein (1990) proposes three levels in organisation culture – surface (by

means of structure and rules of conduct), organisation values and

underpinning assumptions, as also suggested by Wool et al. (2001).

CHAPTER 3 CULTURE

32

Figure 3.2 Components in an Organisational Culture (adapted from Organisational Behaviour: A Global Perspective by Wood et al. 2001 – p.293)

Culture is knowledge, behaviour and value, and is evolved over time.

Culture is built over time (Handy 1985). National culture has an effect on

organisational behaviour. It creates divergent mindsets regarding

characteristics of interaction and assumptions defining the boundaries of

behaviour (Vecchio, Hearn & Southey 1992). Assumptions amongst the

subordinates are also made. For example, Australians would expect open

and honest communication, and are not afraid of confrontation; for Asian

people, there should be no direct confrontation with superiors, relationship

and job security are placed in a very high position; whereas the English

have a strong sense of pride and would show their politeness to others,

despite a strong sense of distrust. In essence, national culture influences

the attributional basis for evaluating behaviour and the consequences of

behaviour (Vecchio, Hearn & Southey 1992).

As shown in Figure 3.2, the surface aspects of organisational culture relate

to observable culture. These are the methods that the group has

developed and are learnt by new members (Wood, Wallace & Zeffane

2001), where the behaviours are visible and can be clearly seen. The

observable aspects of the culture emerge from the collective experience of

OBSERVABLE CULTURE

SHARED VALUES

COMMON ASSUMPTIONS

Deeper/hidden Aspects

Surface aspects

CHAPTER 3 CULTURE

33

its members. Some of these aspects may be observed from day-to-day

practice; others may have to be discovered by asking subordinates about

past events and the history of the culture. Going further down, the next

level in culture is shared values between members in an organisation.

Shared values play a critical part in linking people together. They also

provide a set of orientations for members of a society. These orientations,

when taken together, provide solutions to problems that all societies must

solve if they are to remain viable. As suggested by Punnett (1998), culture

is interrelated and provides orientation to people. However, the shared

values may not be agreed by every member in the organisation, but they

have all been exposed to the values and have often been reminded that

they are important (Wood, Wallace & Zeffane 2001). While at the deepest

level of culture analysis, there are common assumptions or truths

developed and shared by members through their joint experience in the

organisation. Culture is learnt, shared and interrelated.

Organisational culture is an interconnected web of relationships (Tierney

1988). Based on Roger Harrison’s work, Handy (1985) identifies four

primary forms of organisational culture.

CHAPTER 3 CULTURE

34

• Power Culture – which is configured as a

web with the primary power at the centre,

and is frequently found in entrepreneurs;

• Role culture – in which functions and

professions provide the structural pillars to

support the overarching top management,

and is typical of public service

organisations;

• Task culture – in which the structure can be

represented as a net and is job or project

orientated, such culture can usually be

found in a matrix organisation; and

• Person culture – in which people interact

and cluster relatively freely.

Although national culture and organisational culture cannot be studied in

isolation from each other, there is a clear distinction between the two types

of culture. It is important to understand the connections between

organisational culture and national culture because organisational culture

frequently derives from national culture. Many of the shared beliefs and

values that develop in organisations can be traced to commonly held

assumptions in society (Wood, Wallace & Zeffane 2001). Organisations

seek commonality of beliefs and values amongst personnel which accord

with the beliefs of the organisation, while people retain levels of

individuality which impact on organisational performance (Liu & Fellows

1996). National culture is where people in the same nation share the

same beliefs, values and practices. It creates divergent mindsets

regarding characteristics of interaction and assumptions defining the

boundaries of behaviour (Vecchio, Hearn & Southey 1992). National

culture is learnt early in life without awareness. It is reflected in the

�

CHAPTER 3 CULTURE

35

behaviour and reinforced by rules and procedures. For example, in

Germany, business plans would be for twenty or even fifty years in the

future, whereas in America, the business planning intervals are often much

shorter.

Organisational culture is where beliefs, values and practices are shared by

most members of an organisation. Like national culture, each organisation

has its own unique culture. Members of an organisation need to learn

their own culture. When one moves to a new organisation, one needs to

learn the new rules of the new culture. Compared with national culture,

organisational culture is acquired at a later stage in life at a conscious

level. Also, values change when the top management introduces new

beliefs and attitudes to the subordinates. National culture is originated

from the root and is more difficult to change than organisational culture.

National Culture Organisational Culture

• Share same beliefs, values and practices

• Share same beliefs, values and practices

• Nation • Organisation

• Learnt early in life • Learnt at a later stage in life

• Learnt subconsciously • Learnt at conscious level

• Difficult to change • Changes when moving to a new organisation or when new beliefs or attitudes are introduced by top management

Table 3.1 Comparison between National Culture and Organisational Culture

National culture is reflected in organisational culture. Members of an

organisation would resist plans to impose a culture which does not reflect,

or which goes against their national values (Laurent 1986). Although

organisational culture values are learnt later in life at the workplace, they

also have an influence on behaviour, just as national culture does. The

extent to which the individual is influenced by the organisational culture

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36

depends very much on how long he/she has stayed with the organisation

(Mead 1998). The organisational culture would have a much stronger

influence on a long-term employee than a ‘job-hopper’, who moves rapidly

between companies. After all, culture takes time to ‘root’.

3.4 Culture and Value

To many scholars, sharing common values lie at the very heart of culture.

Hofstede defines culture as including systems of values. Indeed, if culture

is viewed as an emergent social process, values are very important

because the values of the collective form the foundations of an emerging

culture (Root 2000). However, as with culture, values are very

complicated and cannot be easily defined. In human society, the removal

of value means no value judgments and so, no quality (Pirsig 1974; Root

2000). All that remains in an imaginary world of no art, variety or trade, is

pure science, mathematics, philosophy and logic. Of course, there are

certain concepts within the mind that are not affected by the removal of the

‘value’ concept because they are not part of the physical perceived reality;

yet other concepts such as love, which has a strong relationship to objects

in the world, are greatly affected (Root 2000).

Value is a set of relationships between the mind (self) and the world

(Morrill 1980; Pirsig 1974; Robinson 1964). If values are purely subjective,

they can then be equated with the satisfaction of a felt need or an object

being of interest (Perry 1954). It was argued by Pirsig (1974) and

Robinson (1964) that value then just becomes a term for anything the

individual likes, and is meaningless within a social group. On the other

hand, if values are objective, they can be described as self existent

essences whose reality is independent of the feelings of the observer

(Morrill 1980). Again, Pirsig (1974) argues that the world can be split into

subjects and objects; quality and values cannot be measured objectively

due to their subjective nature and cannot be subjective because they are

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37

linked to the object. Morrill (1980) attempts to overcome this paradox by

quoting Niebuhr (1960):

‘That value is present wherever an existent being with capacities and

potentialities confronts another existent that limits or completes or

complements it. Thus, first of the fittingness or unfittingness of being a

being’

Morrill continues:

‘this relational perspective suggests that value is neither an exclusively

subjective or objective reality. Elements from each of these views need to

be incorporated into an adequate theory. Value is understood best as

arising in a relation among beings. As such, value is not simply a function

of preference or desire. … it is difficult to conceive of worth or value as

independent of the potential or structure of some particular being. Value,

then, is always for someone or something and is not a self-sufficient reality

or ideal’.

As pointed out by Morrill (1980), value is something neither subjective nor

objective. Root (2000) suggests existentialism provides a way out of the

paradox by quoting Magee (1988) that ‘the objects of our consciousness

do exist as objects of consciousness for us’. By accepting the said

proposition, no further assumptions on existence of values need to be

made. Culture may be viewed as an object as long as it is treated as our

consciousness and is real in its effects (Root 2000).

In sociological terms, an individual is ‘cultured’ when the valuing process is

conscious. Taking a child as an example, the valuing process of a child is

flexible and depends highly on context; food is valued highly when hungry

but once fed is negatively valued (Rogers & Stevens 1967). At the early

stage, values are driven by organism, representing a clear approach to

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38

values. As the child develops, the valuing process becomes dependent

on the external environment. The child learns the good and the bad from

others and absorbs them as his/her own values. The valuing process

changes from organism-driven to being dependent on the norms of

behaviours/values expected by - others (Rogers & Stevens 1967; Root

2000). Such ideas align with Terpstra and David’s (1985) belief – culture

is learnt.

However, the mechanism for acquiring values is dependent on the

collective level of mental programming (Hofstede 1980), which

distinguishes people from one group to another, by classifying groups. It

does not only focus on an individual, but individuals with similar cultures

would cluster together and form groups of different cultures. Some

successful organisations share some common cultural characteristics.

Organisations with strong cultures possess a broadly and deeply shared

value system (Mead 1998; Wood, Wallace & Zeffane 2001).

3.5 Culture Dimensions

Cultures vary in their underlying values and attitudes (Wood, Wallace &

Zeffane 2001). The way people think about such matters as achievement

and work, wealth and material gain, risk and change may influence how

they view work and their experiences in organisations. Using an example

of Western and Asian culture, a Western manager may value autonomy

and therefore not provide detailed operational directions to his Asian

subordinates. Using the findings from a study conducted by Hofstede in

early 80’s, Koreans are found to be collectivists, whereas Americans are

individualists. In this case, the subordinates may look up to the manager

for his directions with total respect. Because of the culture differences,

when the subordinates do not perform appropriately, the manager may

attribute this to their incompetence, and the subordinates may come to

believe the manager cannot be trusted. These consequences then act to

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39

reinforce cultural stereotypes and in turn lead to more divergence between

cultures and increase misunderstanding (Vecchio, Hearn & Southey

1992).

As mentioned earlier, one of the most ambitious studies of how cultural

differences relate to organisational issues was undertaken by Hofstede in

forty different countries. He developed a framework that offers an

approach for understanding value difference across national cultures.

Based on his findings and evidence in the field of cultural differences,

Hofstede (1980) identifies four cultural dimensions. The four dimensions

used to differentiate between cultures are:

3.5.1 Large or Small Power Distance

Power distance reflects the degree to which a society accepts a

hierarchical system and unequal distribution of power. Large power

distance indicates larger inequalities between the members in these

societies with power and those without. People in these societies also find

it normal that usually a small number of people have much power while

most of the people have less power. In countries with small power

distance, the basic idea is that in principle, everybody is born equal.

3.5.2 Masculinity vs. Femininity

Masculinity reflects the degree to which a society defines achievement in

terms of success and the acquisition of money or material possessions.

Some societies with sharp and strict divisions turn masculine; others when

the divisions are loose and blurred turn feminine. In masculine societies,

people admire the ones who have success. In feminine societies, people

pursue a different set of values such as relationship orientation, concern

for quality of life, modesty and caring.

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40

3.5.3 Individualism vs. Collectivism

Individualism reflects the degree to which a society values independence

from group membership. It is concerned with the form and manner of the

relationship between an individual and others in the society. In

individualist cultures, people are supposed to look after themselves and

their direct families only, people are expected to conform; while in

collectivist cultures, people belong to larger group (e.g. in-group, extended

family, etc.) which takes care of their interests in exchange for loyalty, and

relationships are more tightly structured.

3.5.4 Strong or Weak Uncertainty Avoidance

Uncertainty avoidance reflects the degree to which a society tolerates

ambiguous situations and the extent to which it has created institutions

and beliefs to minimise or avoid these situations. In some societies,

people are socialised to accept ambiguity and uncertainty and do not feel

threatened. In others, uncertainty is seen as disruptive, and makes people

psychologically uncomfortable. Strong uncertainty avoidance societies

reduce uncertainty and limit risk by ordering and structuring things,

imposing rules and systems.

Hofstede’s later work with Bond (Hofstede & Bond 1988) produced a fifth

cultural dimension.

3.5.5 High and Low Confucian Dynamism

Confucian dynamism is associated with the teaching of Confucius. This

dimension is the degree to which people in a country emphasise values

associated with the future over values that focus on the past or present. In

societies with high scores on Confucian dynamism, people tend to be

pragmatic, future-oriented, and focusing on obligations and tradition;

whereas in those with low scores, people tend to be normative and short

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41

term oriented, quick results are expected and people are more concerned

for stability.

3.6 Commitment

Some successful organisations share some common cultural

characteristics. Organisations with strong cultures often also have a

deeply shared value system (Deal & Kennedy 1982; Wood, Wallace &

Zeffane 2001). According to Wood et al. (2001), unique, shared values

have the following benefits:

• provide a strong corporate identity;

• enhance collective commitment;

• provide a stable social system; and

• reduce the need for formal and bureaucratic controls.

Culture is a system of shared values that distinguish one group of people

from another (Fang 2001) and value can be explicitly or implicitly desirable

to individuals or groups, which also influences their selections of various

modes, means and ends of actions (Adler 2002). Value also provides a

guide for desired patterns of behaviour and explains why people

selectively attend to certain goals while subordinate others. A high level of

commitment by members also implies a strong value system within the

organisation. Individuals express culture and its normative qualities

through the values that they hold about life and the world around them

(Adler 2002). Meyer and Allen (1991) developed three measurements for

the levels of commitment in an organisation.

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42

Affective Commitment

It refers to the employee’s emotional attachment to the organisation. Employees with strong affective commitment continue employment with the organisation because they want to.

Continuance Commitment

It is based on the idea that the costs of leaving the organisation outweigh the opportunity costs of staying. Employees whose primary link to the organisation is based on continuance commitment remain because they need to do so.

Normative Commitment

It is based on the acceptance of the organisation’s set of values. Employees with a high level of normative commitment feel that they ought to remain with the organisation.

Table 3.2 ‘Types’ of Commitment Identified by Meyer and Allen

Affective, continuance and normative commitment should be considered

as components, rather than types of commitment because an employee’s

relationship with an organisation might reflect varying degrees of all three

(Allen & Meyer 1990). The identification of culture given by Liu and

Fellows (1996) reflects a similar theme. They find culture comprises a

shared understanding of what is correct, proper and normal for the

conduct of relationships and has both normative and behavioural

components. As commonly accepted by scholars, culture defines people’s

behaviour. A strong commitment to the organisation by an employee

results in behaviour such as getting to work on time, more flexible at work

hours to the organisation’s benefit, willing to take up tasks outside his/her

job specification, he/she is more self motivated, a good team player and

has good relationships with his/her subordinates. Although strong

commitment to the organisation by employees influences their

performance, Meyer and Allen (1997) argue continuous commitment to the

organisation is negatively related to job performance. The suggested

relation was observed in many studies for (for example, Konovsky &

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43

Cropanzano 1991; Meyer et al. 1989), but was also refuted by some

(Angle & Lawson 1994; Bycio, Hyackett & Allen 1995; Moorman, Niehoff &

Organ 1993). A strong positive relationship was found between affective

commitment and job performance (for example, Bycio, Hyackett & Allen

1995; Ingram, Lee & Skinner 1989; Konovsky & Cropanzano 1991; Leong,

Randall & Cote 1994; Meyer et al. 1989; Moorman, Niehoff & Organ

1993); similar results were found between normative commitment and job

performance (for example Ashforth & Saks 1996; Randall, Fedor &

Longenecker 1990), although the results were weaker than for affective

commitment. Rowlinson (2001) points out that organisational culture and

structure must be matched if employees are to retain commitment to the

organisation.

Clearly, a strong culture and value system can reinforce a remarkably

positive view of the organisation and its environment. However, a strong

culture can also be a double-edged sword, creating great resistance to

dramatic changes in an organisation (Wood, Wallace & Zeffane 2001).

Organisations with strong power dynamics and role prescriptions impeded

promotion of staff empowerment (Cunningham & Hyman 1999; Foster-

Fishman & Keys 1997; Goodstein & Boyer 1972; Gruber & Trickett 1987;

Serrano-Garcia 1984). Implementing changes to an organisation

effectively requires strong commitment from top management (Bresnen &

Marshall 2000c; Oakland 1993; Prabhu & Robson 2000; Zairi 1999).

Empowerment refers to ‘the process of gaining influence over events and

outcomes of importance to an individual or group’ (Fawcett et al. 1994).

Staff empowerment was cited as a powerful means to engendering

commitment (Walton 1985). Staff at lower levels feel they are given

greater responsibilities in decision making, which leads to more

commitment to the project and to achievement of its missions (McDonough

III 2000), leading to greater job satisfaction and sense of ownership. The

decision-making process in projects is shorter since local (hands on)

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44

knowledge is acquired (Griffin & Hauser 1996). Project staff work in a

more cooperative manner as a team and in so doing enhance project

process (Jassawall & Sashittal 1998; Moenaert et al. 1994) and project

performance such as timely completion (McDonough III & Barczak 1991).

3.7 Organisational Culture and Structure

In layman’s terms, culture is ‘how we do things here’, which has a huge

effect on a project’s success. Successful project delivery is greatly

influenced by organisational culture and structure.

In an unsuccessful project, it is often found that people in the project or the

organisation do not understand the organisational culture and the existing

culture is not supportive. Also, having a good procedure in place is the

first challenge; getting staff in the organisation or the project team to follow

it is another issue. We will take contract administration in the construction

industry as an example. Traditional contracting has an adversarial effect

on the project team, people tend to work in opposition to each other rather

than cooperatively as a team. However, like national culture, the

organisational culture also has an effect on the project team, the project

culture. Experience shows that project performance is largely hindered by

the parent organisation. It is commonly seen in a construction project with

a high staff turnover, when the parent company removes staff from the

project, especially when a new job arises. The new project member(s)

would need to learn about the project including the problems facing it and

its history, as well as building up their relationships with the project team.

If the parent organisation has a culture of communicating in black and

white, with everything being referred to the contract document; staff

working on the project will do the same. Rather than concentrating on

working efficiently and effectively on the project work, staff spend a large

portion of their time on correspondence, ‘fighting the paper war’, with

letters back and forth between the contractor and the client representative.

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45

Organisational structure also plays a major role in project success. It is

the way in which the interrelated groups of an organisation are

constructed. Yet to develop or to change an organisational structure takes

much less time when compared with organisational culture. Changes in

organisational structure can also be carried out more frequently e.g. by

changing the organisation chart.

Organisational structure can be based on organisation size, number of

supervisory levels, number of sections and job titles, number of operating

sites, administrative intensity (based on the supervisor-staff ratio, spans of

control by top manager and the percentage of supervisors above the

bottom level supervisors), number of divisions and the form of department

(e.g. functional, project, product, or matrix forms) (Blau & Schoenherr

1971; Galbraith 1977; Galbraith & Nathanson 1978; Van de Ven & Ferry

1980).

3.8 Trust

Earlier in this chapter, the relationship between trust and culture was

briefly introduced. Trust is defined as the willingness to rely upon the

actions of others, to be dependent upon them and thus be vulnerable to

their actions (Wood & McDermott 1999b). Trust is also perceived as a

result of effective collaborative relationship and higher level of

partner/customer satisfaction (Mohamed 2003; Zineldin & Jonsson 2000).

Trust is seen as representing a ‘diffuse loyalty to the organisation’ which

prompts the individual to ‘accept, as the occasion demands,

responsibilities beyond any specific contracted function’ (Parson &

Smelser 1984). Moorman, Deshandè and Zaltman (1993) believe that

trust is built up over a series of interpersonal encounters, in which the

parties establish reciprocal obligations. However, Gambetta (1998) and

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46

his contributors see trust as a precondition of cooperation because

partners need some assurance that the other parties will not defect.

The traditional Chinese way of doing business exhibits a high level of trust

at interpersonal level. Trust has a very strong moral content when seen in

the Chinese way (see Confucius [Lun Yu], 1979). Trust has the meaning

of integrity, as well as the meaning of trustworthiness and compliance. In

the Records of Historian, it states in a similar way ‘by commending the

soldier, the empire should trust him (in the sense of trustworthiness and

ability) with all his heart once he is recruited’ (Lau, 1999).

3.8.1 Implications of Trust

The implication of high trust is that one would be confident and

psychologically secure. One is more relaxed, less suspicious and

defensive towards the organisation one is entrusted to (Westwood 1993).

High trust between parties not only reduces the transaction costs, it makes

possible the sharing of sensitive information, permits joint projects of

various kinds, and also provides a basis for expanded moral relations in

business (Brenkert 1998).

Trust is said to have a direct effect on work group process and

performance, and in Dirks’ findings (1999), it is shown that better

coordination and greater efficiency are found in a high-trust group and

hence better performance. Barney and Hansen (1994) believe that a firm

characterised by a culture of trustworthy values and beliefs will often

behave with a strong form of ‘trust in exchange’ relationship.

Wood and McDermott (1999b) define trust from a social perspective with

the following statement:

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‘Trust is a multidimensional (Ganesan 1994; McAllister 1995; Sako 1992),

multifaceted social phenomenon (Fukuyama 1995; Misztal 1996), which is

regarded by some as an attitude (Flores & Solomon 1998; Luhmann

1979), by others as a personality trait (Wolfe 1976) and as a vital social

lubricant (Flores & Solomon 1998; Gambetta 1998; Luhmann 1979)’

3.8.2 The Nature of Trust

Ganesan (1994) and McAllister (1995) identified two dimensions of trust,

whereas Sako (1992) and Mittal (1996) have argued for three dimensions

of trust, namely competence (behaviour), motives (feelings) and

commitment (beliefs) (Wood & McDermott 1999a). Das and Teng (1998)

refer to trust as the expectation of positive motives (behaviour) of the

trustee, while Lewicki, Saunders and Minton (1999) see trust as positive

conduct, where morality comes from the individual. Trust also has a social

meaning concerning both individual and organisation. Social trust

described by Earle and Cvetkovich (1995) is a bridge from State A

(disequilibrium or non-normal) to State B (equilibrium or normal). It

constitutes the in-group and out-group theory where people will behave

differently in groups, and is culture-specific (Earle & Cvetkovich 1995;

Fukuyama 1995). Nevis’s model of hierarchy of needs shows that social

need is higher in Chinese culture than in western culture.

Trust is also seen to have different levels, which is an essential

precondition for a successful negotiation (Fisher & Ury 1981). It is

interesting to see how and where trust is implied in different cultures.

French negotiators may come to the table mistrusting the other party until

they can establish an element of trust, while American negotiators may

come fully trusting the other unless led to believe that the other person is

untrustworthy (Jackson 1993). Japanese tend to have a tolerance of

ambiguity and rely on mutual trust while facing internationalisation of

business. Westwood (1993) finds this is a way of avoiding making

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48

offensive statements. Many managers in Asian countries negotiate in a

subtle and indirect manner to avoid confrontation. The Chinese

negotiation process is in an order of preference compromising: avoiding,

accommodating, collaborating and competing (Westwood 1993), with

competing being the last resort (Lau 1999).

Trust is described as calculative, with constitute of self-interest and vest

benefits in the economic dimension (Williamson 1975; Williamson 1985).

Williamson (1993) further suggests two other kinds of trust, namely

personal and institutional. Personal trust is suggested to be non-

calculative and is irrelevant to commercial exchange; institutional trust

refers to the social and organisational context on a contractual basis (Sako

1992; Williamson 1993). In management, Deming (1994) states that trust

is mandatory for optimisation of a system where a network of

interdependent components works together to try to accomplish the aim of

the system. In organisational management, trust is shown in the form of

achieving results, demonstrating concern and possessing integrity (Shaw

1997), and in an employee’s perception of trust in performance appraisal,

trust is measured by ability, benevolence and integrity (Mayer & Davis

1999). These items are measured as antecedent factors (Wong, Then &

Skitmore 2000) for trust relationships in order to evaluate trustworthiness

between trustor and trustee.

Trust is particularly important when a relationship contains the following

elements:

• entering into any form of contract;

• exchange of information;

• uncertainty arising from unforeseeable future contingencies;

• risk sharing;

• a degree of interdependence between agents;

• the threat of missing opportunities;

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49

• acting as a means of enhancing the effectiveness of a relationship

that depends upon extensive cooperation at both inter-

organisational and intra-organisational levels;

• developing the business relationship to a higher level;

• reaching alternative goals by group members;

• negotiating to avoid confrontation.

3.9 Culture and Trust in the Construction Industry

Construction project teams are unique entities, created through a complex

integration of factors, with inter-disciplinary players, and varying roles,

responsibilities, goals and objectives (Goodman & Chinowsky 1996).

Collaboration and teamwork are therefore crucial since sharing up-to-date

information between participants leads to minimising errors, reduction of

time delays and breaking the widespread rework cycle. Benefits of

collaborative, rather than adversarial, working relationships within

construction organisations are well documented (Walker & Hampson

2003).

Successful collaborative relationships rely on relational forms of exchange

characterised by high levels of trust. Higher levels of trust encourage

more open communication between individuals (Argyris 1973; Ruppel &

Harrington 2000), which subsequently increases understanding of other

parties’ perspectives (Johnson & Johnson 1989). Hosmer (1994a,b)

suggests trust leads to commitment, which in turn leads to enthusiastic

cooperative and innovative effort in people. However, it has been shown

in the past that the construction industry has a stronger preference for

distrust rather than the full benefits of cooperation (Wood & McDermott

1999a). There is a need for culture change to bring about increased

cooperation between parties on a long-term basis. With relational

contracting, based on the long-term relationship and trust, a win-win

situation can be created for both the client and contractor. The

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50

development of trust between organisations is seen as a function of the

length of the relationship between them (Bresnen & Marshall 2000c). It is

also believed that the construction industry is one that requires more trust

between parties due to the high uncertainty in the industry.

Partnering has been criticised as benefiting the clients’ side only (Green

1999). Bresnen and Marshall’s work (2000c) shows that contractors would

absorb extra costs in the interest of maintaining good relationships with the

client and increasing chances of gaining future work. Yet, one may ask

why contractors are still involved if they would not gain any benefits. The

reason behind this may be the global pressure for change. Partnering is

seen to be a pre-qualification requirement in recent years.

In reality, the client would try to spend as little money as possible to get

the work done; whereas the contractor would want to earn as much as

possible from the project – reflecting a part of human behaviour from an

economic point of view, that all human beings are selfish. In order for the

client to maximise its benefits, a choosing mechanism is required where

the contractors compete for the project. Tendering is the most common

approach used in the construction industry. The norm behind the

tendering process is that the lowest bid wins the contract. The downside

of this mechanism is the lower the proposed project cost, the higher risk

for work to result in low quality with extra costs incurred during and/or after

work. After all, the contractor also runs a business, and would not carry

out work which would result in a loss. Rather, a minimum amount of profit

to be made is set. With a low bidding price on the tender, what is most

likely to happen is cost cutting on items such as labour cost, affecting the

quality of labour (something which is difficult to state in the contract) with

extensive sub-contracting, which makes work difficult to supervise and has

a great impact on the quality control of work done. Also, the suppliers of

materials chosen might be of poor work performance with no guarantee of

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51

prompt delivery of materials. Such problems have been solved by

implementing a pre-qualification system – ISO certification.

The quality certification system, ISO 9000, is widely used as a pre-

qualification before selection of tenderers in Hong Kong. In the Hong

Kong public housing sector, ISO certification is a requirement for all

contractors and suppliers before they apply to be included on the ‘Control

List’.

The fact is that ISO certification does not really help the company to

achieve a higher standard of quality, but is rather a mechanism for

generating more paper and consuming time, however they still fight to get

a certificate in order to promote greater job opportunities. Indeed, results

have proved this strategy on pre-qualification for high quality and

productivity has not been very successful. Partnering seems to follow the

same track. Even though contractors suspect they will not get much

benefit from partnering, they still enter into partnering arrangements

because many job opportunities will be missed if they do not. Partnering

has even been called a ‘brand label’ (Liu & Fellows 2001).

However, with relational contracting, it benefits not just the clients but also

the contractors because of high chances of future work. Maintaining a

good relationship to sustain a long-term relationship is believed to lead to

reduced tendering cost, by means of lower transaction costs, which

benefits both the client and the contractor. A cynical view might be

expressed: first generation partnering suits the public sector as it provides

no guarantees of future work but commits the contractor to a non-

contractual relationship; alliancing suits the private sector as long term

business relationships and mutual benefits can accrue – in both cases

probity issues can be managed.

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52

Characteristics and benefits of relational contracting have been discussed

in Chapter 2 and they include long-term relationship, trust, commitment,

interpersonal attachment and cooperative and collaborative attitudes

towards problem-solving. Partnering, alliancing, Private-Public-

Partnership and joint-ventures are examples of relational contracting

approaches and were introduced to the Australian construction industry

during the 20th Century.

Studies show that role cultures are barriers to change (see Cunningham &

Hyman 1999; Foster-Fishman & Keys 1997 for examples). They are slow

to perceive the need for change and slow to change even if the need is

seen (Handy 1985). They are particularly unsuitable for a continuously

changing and competitive environment. Interactions in the organisation

between function groups and individuals are controlled by rules and

procedures, restricting staff empowerment, especially at the lower or team

levels. Role culture is often stereotyped as bureaucracy. On the other

hand, task culture is job or project orientated. This culture is extremely

adaptable; it reacts quickly to changes and is most appropriate where

flexibility and sensitivity to the environment are important (Handy 1985).

This culture suits the construction project team environment very well;

after all the whole emphasis of the culture is on getting the job done.

Project teams are formed for specific purposes and can be reformed,

abandoned or continued. Individuals in task cultures are found to have a

high degree of control over their work, can be judged by results, and have

easy working relationships within the project team with mutual respect

based upon capacity rather than status.

3.10 Conclusion

This chapter has explored prior research and theory into culture and has

discussed culture and trust in the construction industry. This chapter has

commented that national culture has an effect on organisational culture,

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53

which also has an effect on project culture. The industry has a stronger

preference for distrust rather than the benefits of cooperation. The need

for culture change to bring about increased cooperation between parties

on a long-term basis is identified. Benefits of relational contracting

approaches such as long-term relationships, cooperative and collaborative

attitudes towards problem-solving have been well documented. However,

tests of the efficacy of alliancing or partnering have so far produced mixed

results, and there is a scarcity of prior studies that have significantly

addressed the determinants of effectiveness in relational contracting in the

public sector. The following chapter presents the background of the

Queensland Departments of Public Works and Main Roads and the

historical background of project delivery systems in both organisations.

55

CHAPTER 4

BACKGROUND OF QUEENSLAND DEPARTMENTS

OF MAIN ROADS AND PUBLIC WORKS

4.1 Introduction

The Queensland Departments of Main Roads and Public Works have

identified the need to move towards more relational type of contracts.

Both organisations have their own definitions on relational contracting and

have experiences of partnering projects. This chapter presents the

historical background of both organisations’ project delivery systems and

the changes that have taken place.

4.2 Background of Queensland Department of Main

Roads

The Queensland Department of Main Roads (QDMR) is responsible for

the management of the 34,000 kilometre state-controlled road network,

including highways and other connecting roads in Queensland. This

involves planning, designing, building and maintaining the roads and

associated infrastructure (such as bridges). The road network is managed

to ensure it contributes to the State’s development and progress. QDMR

CHAPTER 4 QDMR & QDPW

56

is a technically oriented public organisation. The many roles played by

QDMR include (Manley & Hampson 2000):

• manager of the State-controlled road network;

• a leading industry client;

• a significant research provider;

• a designer, contractor, sub-contractor, trade-services provider,

consultant and technology provider1.

4.3 Project Delivery Systems

Competitive tenders are generally called for construction projects

managed by QDMR. A number of projects are delivered under sole invitee

contracts with local governments’ and QDMR’s own Road Transport

Construction Services (RoadTek) commercialised units.

QDMR has developed a manual for determining project delivery options

for major works and projects. Main Roads Project Delivery System

(MRPDS) consists of three volumes:

• Volume 1 – Selection of Appropriate Project Delivery Options

• Volume 2 – Tendering for Major Works

• Volume 3 – Major Works Prequalification System

MRPDS is used by those who are responsible for ensuring value for

money is obtained in the delivery of a project. The aim of MRPDS is to

provide guidance for the procurement of major works including:

• developing the best delivery strategy;

• how tenders should be called, compiled and assessed; and

• who should be eligible to tender.

1 Commercial arms within QDMR (RoadTek) operate in a competitive environment within the private sector and local governments.


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The manual provides guidance in developing an appropriate delivery

strategy for the implementation of road infrastructure projects. It provides

thorough guidance in the relational contracting process. A clear message

has been sent out to the construction industry that a culture change is

needed in the industry, where parties from the client to the supply chain

should be working in a cooperative and collaborative manner. QDMR also

believes that the client is the driving force for change and therefore QDMR

should take up a leadership role.

4.4 Partnering and Alliancing in QDMR

During the 60s and 70s, the design and construction of road works was a

well-defined process with engineering solutions and risks were exposed.

The works were either undertaken by day labourers or contracted out

under lump-sum or schedule of rates contracts. In the early 80s, there

was a downturn in road construction activity, with new players entering the

game. This caused an increase in the level of competition in the small

market, where the contractors bid low for the projects and recovered cost

by any means. The most common approach (as is still used widely in the

construction industry) is through claims and adjustment of the quality of

work. The consequence was that QDMR drafted tighter contracts with a

subsequent risk transfer. The relationship between parties turned

adversarial.

In the early 90s, partnering was introduced to Australia. QDMR has been

applying partnering in some road projects since the mid 90s. The

Australian Construction Association conducted an industry survey in 1998,

which found that relationship contracting is believed to be the way forward

in the Australian construction industry, echoing with the messages

identified in both the Egan Report and the Tang Report.


58

QDMR defines partnering as a process applied outside the contract to

align the goals and objectives of the parties to the contract, to facilitate

good communication, teamwork and joint problem solving (QDMR 2003).

As stated clearly in MRPDS, partnering is not a form of contract, but a way

of conducting business. Partnering is a business strategy, not a contract

strategy.

When partnering was first adopted in QDMR’s projects in the mid 90s, it

was found unsuccessful in most of the projects. Continuous amendments

were carried out and the partnering process was reviewed. Realising a

more cooperative and honest environment is needed between the project

parties in order for the project to be successful and have a cost effective

outcome, QDMR has started to adopt a new approach to project delivery,

relationship contracting.

Project alliancing, a particular form of relationship contract, has been tried

and tested as a road infrastructure delivery system by QDMR since 1999.

As discussed in Chapter 2, unlike partnering, project alliancing is a type of

contract. One distinct clause in an alliance contract is a No Dispute

clause, where neither arbitration nor litigation may be used for dispute

resolution. All problems or issues must be solved at the broad level. The

No Dispute document was produced by NWPC in 1990 and was

recognised as a watershed report by the construction industry in Australia

(Skinner 2001). Key features such as more cooperation and better

relationships between parties and fairer risk allocation were highlighted in

the report, pushing forward the message on the urgency of change.

The current tender system for government projects mainly relies on the

lowest bid win. As identified earlier in this chapter, contractors have

become very competitive and have been offering unsustainably low tender

prices. Projects have often suffered from numerous unreasonable claims

and poor workmanship, followed by ‘paper wars’ between the contractor


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and the client, which escalated the development of an adversarial

environment in the project.

This happened until recently, when QDMR reviewed the tender process,

particularly the selection criteria. The weighting of non-price criteria on the

overall score has greatly increased. Non-price criteria include the claim

history in previous projects; project team relationship; and sub-contractors

relationship. A low-bid clause has also been implemented, where QDMR

has the right to reject any unreasonably low bid2. The revised tender

documents and tender evaluation system aim to trigger a change of

attitude in the contractors, before the project begins, also sending a clear

message to the industry. It voices the significance of relationship

management as seen by QDMR, and the urgency of a change of attitude

and culture.

4.4.1 Relationship Management

QDMR has a policy of including the supplementary specification for

‘Relationship Management’ in contracts with a value of $10M or greater

and a period of construction of 12 months or more. Some districts adopt a

partnering arrangement by agreement after contract award for projects of

lesser value and shorter construction periods. South East Region –

Metropolitan District has a section on Relationship Management in the

‘Infrastructure Delivery: Metropolitan District Supplementary

Specifications’.

The specification is intended to establish and maintain good relationships

between the parties within the contract. However, it does not replace

requirements detailed elsewhere within the contract such as the provision

2 10% or more below the median value. However, not all unreasonable low-bids are rejected. There is a clause of taking innovative advantage and process advantage into account during tender evaluation.


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of notices, information exchange and dispute resolution. The specification

details work operations including:

• Relationship Management Workshop – which is preferably held at

the beginning of the project, with duration of 1.5 days maximum.

Representatives of the Principal, the Superintendent and the

Contractor (the Team) attend a facilitated workshop where the

facilitator introduces the concepts of relationship management to

the workshop participants. The Team develops matrix resolution

and a relationship charter that sets the relationship goals and

objectives, core values and guiding principles.

• Team and Relationship Skill Building Activities – are carried out

during the Relationship Management Workshop, expertise and

skills are shared during operational and Relationship Management

meetings. Dinners and/or barbeques are held for informal

communication channels, which also help build up relationships in

the Team.

• Relationship Management Meetings – relationship objectives are

rated individually using a score sheet prior to the monthly

Relationship Management meeting. Scores are discussed during

each meeting, which also give participants a chance to raise any

comments or issues, including personality related issues.

Under the current system, Relationship Management is tendered on a

Lump Sum basis and payment for this item is made progressively, on a

monthly pro-rata basis. However, all facilitator fees are paid directly by the

Principal and are therefore not included in the Contractor’s Lump Sum.


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Type Description

Extended Partnering • Long project duration • Provision for Relationship

Management process in tender invitations/contract documents

• Foundation workshop (1.5 days with dinner)

• Monthly Relationship Management Meetings

• Skilling Workshop later in the project (1.5 days with dinner)

• Mid project review (to review project goals) for larger projects

• Project completion workshop (may or may not be incorporated)

Partnering Plus • Short project duration • Expanded Foundation workshop

(combining Skilling workshop) • Monthly Relationship Management

Meetings

Table 4.1 Formal Relationship Management Process in QDMR Projects

Standard forms of contract such as AS2124, AS4300, AS4000 or other

special forms such as Managing Contractor and Cost Reimbursable

Performance Incentive often have a degree of complexity and some

unknowns. As the degree of unknowns increases, the need for

collaboration and good relationships also increases. Adopting the formal

Relationship Management process in the project encourages positive

collaboration in the project team and development of good relationships.

The Queensland Department of Public Works also recognises the

necessity of culture change, both in the industry and in the organisation.

QDPW too believes the client should be the driving force for change and is

moving in a similar direction to QDMR. The following gives a brief

background of QDPW.


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4.5 Background of the Queensland Department of Public

Works

The Queensland Department of Public Works (QDPW) plays a major role

in the Queensland Government’s capital works building program. This

involves planning, designing, constructing and maintaining government-

owned facilities. QDPW is also responsible for information and

communication technologies in both private and public sector operations,

and Queensland’s cultural and historical records. QDPW is a managerially

oriented public organisation. The many roles played by QDPW include:

• manager of State-owned facilities;

• a leading industry client;

• a significant research provider;

• a designer, contractor, sub-contractor, trade-services provider,

consultant and technology provider3.

4.6 Project Delivery Systems

QDPW has produced some guidelines for determining project delivery

options on all building capital works projects and they include:

• Procurement Selection and Generic Contracts

• Building Industry Contractor Tendering and Selection Process.

Like most Queensland Government departments, publicly invited (open) or

select methods of tendering are generally used for building projects. The

choice on the methods of tendering depends on the project requirements,

and the assessed PQC (Prequalification System for contractors and

consultants) Service Risk Rating. 3 QDPW has five divisions (Building Division, Infrastructure and Major Projects, Queensland Purchasing and Queensland State Archives and Information Economy), six commercialised business units (Project Services, QBuild, QFleet, Goprint, SDS and CITEC) and six corporate and executive services units (Planning and Human Resources, Executive Services, Internal Audit, Legal and Contractual, External Relations and Finance and Information Technology).


63

The project delivery systems used in QDPW can be classified as two main

types:

• Traditional – where the agency has full responsibility for the design

and documentation process and the contractor constructs for a

lump sum amount. An example is the Traditional Lump Sum

Contract, where the Principal provides detailed and comprehensive

construction documentation.

• Non-Traditional – where the contractor has varying degrees of

responsibility for the design and documentation process. Examples

include Design and Construction Lump Sum Contract, Design and

Construction Management Contract, Design and Construction

Management (2-stage tender) Contract, and Document and

Construction Management Contract, where the contractor or

managing contractor has total responsibility for design and

construction; Construction Management Contract, where the

construction manager is engaged to manage construction of the

project as well as providing advice during the project design.

The selection of project delivery system in QDPW is usually a four-step

process:

1. Determine project risk – whether the project is categorised as a low

risk or high risk/significant (HRS) building project;

2. Determine project time – by considering time allocation for design,

tender, construction and contingency such as wet weather,

disputes, variations etc.;

3. Evaluate project constraints and determine if traditional or non-

traditional project delivery system should be used – by evaluating

the project constraints, it will then be possible to determine the

importance of time, cost and quality and the potential risks

associated with adjusting these parameters; and lastly


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4. Determine type of non-traditional project delivery system – after

step 3, if the project is determined as a non-traditional project

delivery system, the Procurement System Matrix is used as a guide

to choose the type of project delivery system.

QDPW does not have a manual to determine the type of project delivery

system for each project. The choice of project delivery system relies

mainly on the risk assessment, rule of thumb from staff expertise, and

further consideration of the client basis (e.g. different government client

agencies), risk profile and scale of project. Major projects would normally

be carried out with non-traditional contracts, and traditional lump sum

contracts for minor projects.

4.7 Partnering, Alliancing and Relational Contracting in

QDPW

In July 2002, QDPW issued a policy statement on the tendering and

selection process for all Capital Works. It is clearly stated in the policy that

QDPW looks for an effective relationship with the construction industry.

QDPW believes that, to have a sustainable industry and an improved

service outcome for the Government, open, cooperative and non-

adversarial relationships are needed in building project. Project teams

with good relationships often achieve high performance.

From the statistics, traditional project delivery systems (e.g. traditional

lump sum contract, design and construct lump sum contract) often lead to

time and cost over-runs upon project completion, as well as creating an

adversarial environment for the project team. Knowing relationship

elements should be injected into the project documents, QDPW is heading

to more use of relationship-based contracts and less use of adversarial

contracts. The most commonly used relationship-based procurement

methods are partnering, relationship contracting and alliancing.


65

In QDPW, partnering is understood as a tag on some forms of contract, a

third document. It is a business strategy, not a procurement strategy;

relational contracting is an agreement and obligation which binds the

contract, making sure the parties in the project team are working closely

together; alliancing is having an alliance with a company, without a fixed

price or a maximum price, but a target cost which usually also includes a

profit margin.

QDPW has carried out a large number of projects using the managing

contractor approach and good results have been achieved. Project teams

were found to work closer together in a more friendly environment and

better relationships were developed, compared with projects carried out

using traditional procurement methods. QDPW is aiming to put out more

contracts that approach alliancing. Most projects have been carried out

using traditional type of contract, based on AS 2124. Under AS 2124, the

Superintendent is not a party to the contract but a person named in the

contract by the two parties to the contract (the Principal and the

Contractor), although in reality, the Superintendent is nominated by the

Principal or client organisation. The major role of Superintendent is

carrying out administrative work and ensuring justice. Many have found

the Superintendent uncooperative, even rather obstructive, causing delays

in work and information transfer, due to the nature of this role.

4.7.1 C21 Construction Contract

Under a C21 Construction Contract, it clearly states that:

‘The parties must do all they reasonably can to cooperate in all maters

relating to the Contract, but their rights and responsibilities under the

Contract (or otherwise) remain unchanged unless the parties agree in

writing to change them.’


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Also,

‘Each party must do all it reasonably can to avoid hindering the

performance of the other under the Contract.’

C21 has a strong emphasis on cooperative contracting and has proven to

be highly effective (Department of Commerce 2003). Under C21, the

contractor carries out both design and construction works. Parties in the

contract must cooperate yet rights and responsibilities in the contract

remain unchanged. C21 offers a greater flexibility, the allocation of risk is

also much more clearly stated since the risks allocated to the contractor

are included in the obligations. The importance of good relationships

between contractor and subcontractors is also highlighted in the contract.

QDPW is moving in a direction very similar to C21, using C21-based

contracts as a driver for change of culture in the project team.

Like QDMR, most building projects with QDPW are awarded through the

competitive tendering system, where the lowest bid tender would win.

QDPW began implementing a 3-stage tendering system in late 2003.

Potential contractors are invited to a round table meeting, where two

contractors would be selected to attend a one-day workshop separately,

followed with an individual interview for the final decision.


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CONTRACT TYPE DESCRIPTION TENDER

PROCESS RELATIONSHIPS WORKSHOP

AS 2124 Principal's Consultant provides:

Competitive tenders

Adversarial None

(Traditional Lump Sum)

Project Brief, Schematic Design, Design Development, and Construction Documentation

Lump Sum - evaluation criteria (90% - 100% price; 0% - 10% non-price)

AS 4300 Principal's Consultant provides:

Competitive tenders

Adversarial None

(Design and Construct)

Project Brief, Schematic Design, Design Development, and Construction Documentation

Lump Sum

Managing Contractor

2-Stages Non-Adversarial Relationship team building workshops

(Design and Construction Management)

Stage I Competitive tenders (lump sum) for Design Fee, Documentation Fee and Construction Fee

Principal's Consultant provides:

Principal provides a Target Guaranteed Construction Sum

Project Brief and Schematic Design

Evaluation criteria (25% - 35% price; 65% - 75% non-price)

Stage II

Contractor's option on carrying out work on additional work list

Bonus sharing for actual costs of construction under Guaranteed Construction Sum

Alliance Schematic Design by Principal's consultants

Submissions called from alliance consortiums

Non-Adversarial Relationship / Team building workshops

Three levels of management: Alliance Board, Alliance Leadership Team and On-Site Project Team

Evaluation criteria (100% non-price)

No blame/No disputes clause

Ongoing facilitation by alliance facilitator / coach

Two consortiums are chosen

Workshops with Preferred consortium

Partnering Bolt-on to conventional conditions of contract

Non-Adversarial Partnering workshops

(NOT a contract) An agreement between parties to act in good faith

Not necessarily applied at the beginning of the project

Table 4.2 Types of Contracts Used in QDPW


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4.8 Conclusion

Both QDMR and QDPW have established methodologies for determining

when to use alternative project delivery systems and how to determine

which delivery system to use. QDMR’s approach is very structured

whereas QDPW’s is based on expertise. QDMR has established a

MRPDS manual, where the first volume of the manual deals with the

choice of project delivery system. Both departments have their own

definitions of partnering, alliancing and relational contracting (please refer

to Chapter 2 for details).

Traditional contracts operating under AS2124, AS4300, AS4000 or similar

were found to be adversarial. Contractors were selected mainly on the

basis of lowest price in a competitive bid and the Superintendents saw

their role as gatekeepers, safeguarding the client’s interest.

Partnering was implemented by putting a partnering agreement on top of

the traditional contract and encouraging contractor, consultant and client

to proactively address project risks, identify them before they affect the

project and take action, jointly agreed to manage the risk. It is seen as a

‘bolt-on’ to conventional conditions of contract. The problem with this

approach is the Superintendents have continued to see themselves as

gatekeepers rather than as team members, and the contractors have kept

one eye on the conditions of contract and claims, whilst going through the

partnering process.

Relationship management/contracting has been implemented by inserting

a provision in tender invitations and/or contract documents. Contractor

and Superintendent working as a team is a goal of Relationship

Contracting, with more open and cooperative relationships. Relationship

Management workshops and monthly Relationship Meetings are held

during the project, with project team including the Client Representative,


69

the Principal, Superintendent, Superintendent Representative, Inspectors,

Contractor Project Manager and foremen. The project team is formed

after the contract award. An external partnering facilitator is employed to

facilitate the Relationship Management workshop held at the beginning of

the project; while monthly workshops are mostly led by the Principal or

alternated between the Principal and the Contractor Project Manager. No

further workshops or external facilitation would be held unless problems

are shown on the project team relationship. Although it is not stated in the

provisions, the Contractor is welcome to bring any major sub-contractors

to the RM workshop and monthly RM meetings. However, bringing sub-

contractors or consultants into RM workshops or monthly RM meetings is

still not a common practice in the construction industry. Some Contractors

believe that sub-contractors would feel uncomfortable being in an office

environment. Research shows that partnering should be moved down the

value chain to be truly successful. Innovative ideas and professional

advice are often received from the specialists, the sub-contractors. The

person who works 365 days on asphalt has to know more about asphalt

than those who do not work directly with it. Technical issues as well as

challenges ahead, which are often overlooked at the beginning, can be

picked up quickly by sub-contractors.

Consultants/Designers are often not brought into any of the meetings.

The quality of designs has raised concern in the industry. A similar tender

system is used for the consultants – the lowest bid wins. Designs are

often carried out by junior engineers, who have little experience. During

construction, design problems which should be addressed or noted during

the design stage or the refinement stage arise. Rather than getting it right

in the first place, resources are spent on rectifying the problems during

project construction, with huge amounts of time wasted on communication.

These are important issues which should be addressed, for the sub-

contractors have the insights on specific problems as well as offering


70

innovative ideas; whereas rapid feedback and clarifications from

consultants are often major issues in all construction projects.

QDMR has no experience in alliancing contracts. However, both QDMR

and QDPW share the same definition of alliancing. Alliancing refers to

either a win-win or lose-lose situation with both client and contractor – risk

is shared and managed. There are three levels in an alliance project:

Project Alliance Board, Alliance Management Team and Project Team. All

three levels are formed before the actual construction begins. Project

Team members are chosen before the project begins. The Project Team

often involves Contractor, key Subcontractors, key Consultants, Principal

and Client. Also, during the course of the project, there is continuous

facilitation by an alliance facilitator/coach. Alliance contracting has only

been applied in large scale projects with high complexity, for a full-blown

alliance contract is a complicated contract which involves a high level of

commitment from all project members, and of resources. Various

professionals comment that alliance contracts should only be applied in

large-scale projects in order to balance the costs and benefits.

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CHAPTER 5

RESEARCH MODEL AND METHODOLOGY

5.1 Introduction

This chapter details the research design and method developed to study

the determinants of effectiveness in relational contracting.

This research was carried out by investigating the national culture,

organisational structure, culture and commitment in two large public sector

organisations in Queensland, Australia, and to identify the key issues

affecting project performance. This research has adopted a triangulated

approach where questionnaires, interviews and case studies were

conducted in order to validate the results. Various scholars have been

critical of an often misplaced emphasis on quantitative elements of

research (Easterby-Smith, Thorpe & Lowe 1991). By employing both

qualitative and quantitative approaches, it helps to eliminate the

disadvantages of each, whilst gaining the advantages of each (Fellows &

Liu 1997).

CHAPTER 5 RESEARCH MODEL AND METHODOLOGY

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5.2 Research Background

The implicated link between organisational culture and organisational

performance has long been recognised in both main-stream management

literature (Handy 1985; Hofstede 1980) as well as in the construction

management literature (Liu & Fellows 2001; Rowlinson 2001). Within the

construction research domain, the impact of culture and organisation on

project performance is becoming an increasingly important topic for the

establishment of a sound partnering or alliancing, or as referred to more

often in recent years, relational contracting, approach to projects.

However, the efficacy of alliancing or partnering has so far produced

mixed results (see for example Bresnen & Marshall 2000a,b,c) and this

research aims to shed light on the practice or pre-requisites for relational

contracting to be successful.

A number of characteristics for successful alliancing have been identified

in recent studies e.g. (Rowlinson 2001; Winch 2000; Winch, Millar &

Clifton 1997). These studies addressed change in the context of the

working relations in project organisations. The main parameters identified

as being significant in shaping how an organisation performed and the

spirit within the organisation were:

• Organisational Culture and Structure (assessed using Handy’s

instrument);

• Commitment (assessed using Allen & Meyer’s instrument);

• Organisation Assessment (assessed using Van de Ven & Ferry’s

instrument); and

• National Culture (assessed using Hofstede’s VSM).

Each of these four variables already has well developed measurement

instruments that could readily be adapted to the Queensland construction

industry to study the collaboration process. By investigating the impact of


73

the various cultural variables on project performance, it would be possible

to define patterns in which relational contracting works most effectively.

Organisational culture and organisation structure must be matched if

participants are to retain commitment to the organisation (Rowlinson

2001). This research takes Rowlinson’s work as a starting point and

develops it further into a study of the key determinants of effectiveness in


The following research objectives and hypothesis were identified during

the literature review.

5.2.1 Objectives

The objectives of this research are:

• To investigate how a collaborative project culture is developed and

enhanced by considering the set of project team characteristics;

and

• To identify the ways in which collaboration can be transmitted

throughout the industry.

5.2.2 Hypothesis

The problems to be addressed in this research are:

• How is a collaborative project culture developed and enhanced by

considering the set of organisational characteristics, project team,

characteristics and national culture?

• What are the ways in which collaboration can be transmitted

throughout the organisation?

The hypotheses to be tested in this research are:


74

• Organisational culture and organisation structure must be matched

if participants are to retain commitment to the organisation

(Rowlinson 2001).

• Parent organisation culture affects temporary project culture.

• Encouragement by organisation to exhibit cooperative behaviour

amongst employees leads to greater cooperation between

individuals

5.3 Research Methodology

The following research model was developed after a review of the

literature as detailed in Chapters 2-4.

Figure 5.1 Research Method

Questionnaire Interviews

Analysis & Testing Chi-square test and

Correlation Analysis

Results Relationships between

commitment, organisational culture, national culture and

organisational structure

Results Patterns on good and

bad practice

Theory and Literature Rowlinson’s Work in

2001

Mapping of Research Findings

Research Outcome Enhance the understanding of the team working process

Understand the dynamics of the team and a profile of projects, participants and procurement systems Identify commonly recurring themes and situations that reflect good and bad practice

Distinguish the determinants of effectiveness in relational contracting

Case Studies

Qualitative Data Quantitative Dat a


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The research was broken down into two distinct phases:

• Investigation of the impact of the various cultural variables on

project performance (Culture Questionnaire and follow up

interviews);

• Analysis of the variables influencing the success of relational

contracts (interviews and case studies).

Questionnaires, interviews and case studies were conducted in this

research in order to validate the results. Both qualitative and quantitative

approaches have different strengths and logics, and are best used to

address different questions and purposes (Maxwell 1996). The qualitative

approach derives primarily from its inductive approach and its emphasis

on words rather than numbers. It focuses on specific situations or people.

By involving inductive, theory-generating, subjective and non-positivist

processes (Lee 1999), the qualitative approach seeks to gain insights and

to understand people’s perceptions of ‘the world’, as individuals and as

groups (Fellows & Liu 1997). Qualitative methods allow selected issues to

be studied in depth and detail. Approaching fieldwork without being

constrained by predetermined categories of analysis contributes to the

depth, openness and detail of qualitative inquiry (Patton 1990). On the

other hand, the quantitative approach tends to relate to positivism and to

gather factual data, then studying the relationships between facts and how

such facts and relationships accord with theories and any previous

research findings (Fellows & Liu 1997).

A grounded theory is one which is inductively derived from the study of the

phenomenon it represents. That is, it is discovered, developed and

provisionally verified through statistical data collection and analysis of data

pertaining to that phenomenon. Therefore, data collection analysis and theory

stand in reciprocal relationships with each other. One does not begin with a

theory, then prove it, rather one begins with an area of study and what is

relevant to that is allowed to emerge (Strauss & Corbin 1990).


76

The research methodology is a grounded, triangulated approach. By

using independently collected data, it was possible to verify the thinking of

key individuals in the organisations as to the strengths and weaknesses of

the systems currently in place. The basic concepts and variables relating

to cooperation, collaboration, organisational issues and performance were

investigated through the interview process with QDPW and QDMR. Data

collection was then conducted through case studies via in-depth interviews

and a questionnaire4 survey. The questionnaire survey was designed by

combining four well-developed instruments which measure variables on

organisational culture, commitment, organisational structuring and national

culture. By investigating the impact of the various cultural variables on

project performance, it would be possible to define patterns in which

relational contracting works or does not work. The four measurement

instruments used in the questionnaire survey are:

5.3.1 Organisational Culture and Structure

Handy (1985) defines four types of organisation culture and structure and

measures these based on an adaptation from a questionnaire compiled by

Dr. Roger Harrison:

Cultures Structures

power web

role temple

task net

person cluster

Table 5.1 Organisation Culture and Structure defined by Handy

4 See Appendix III


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He further indicates that the choice of an appropriate culture is dependent

on history and ownership; size; technology; goals and objectives; the

environment; and the people.

5.3.2 Levels of Commitment

Allen and Meyer (1990) define the focus of commitment and suggest three

dimensions of commitment:

• Affective commitment is an emotional attachment to the

organisation

• Normative commitment is based on acceptance of the

organisation’s set of values

• Continuance commitment is based on the idea that the costs of

leaving the organisation outweigh the opportunity costs of staying.

In this context, the latter view of commitment can be seen as a negative

concept in project performance.

5.3.3 Organisational Structure

Van de Ven and Ferry (1980) measure a whole series of organisational

parameters including individual motivation, work processes and

organisational structure. Winch et al. (1997) found autonomy at work,

work coordination and work control along with job satisfaction,

instrumental motivation and feedback as essential for enabling teamwork

and individual motivation in construction projects.

5.3.4 National Culture

Hofstede (1980) defined four dimensions in national culture:

� The Individualism dimension is concerned with the form and

manner of the relationship between an individual and others in


78

society. In countries with high individualism scores relationships

are loosely structured.

� Power distance refers to the distribution of power within a society.

Large power distances indicate large inequalities between those

with power and those without. Empowerment is often seen as an

alliancing objective and so is perhaps at odds with high power

distance.

� Uncertainty avoidance is to do with how a society reacts to and

manages uncertainty inherent in human situations. In some

societies people are socialised to accept ambiguity and uncertainty

and are not threatened. In others uncertainty is disruptive and

psychologically uncomfortable. This dimension has to be balanced

in alliancing, with an appropriate mix of structuring and innovative

behaviour.

� Masculinity concerns the way society handles basic divisions in

society. Some societies with sharp and strict divisions are termed

masculine; others, where the divisions are loose and blurred are

termed feminine.

5.4 Scope of the Research

Due to time and resource constraints, the research focused on the public

sector in Queensland. Believing the client is the driver of change

(Construction Clients' Forum 1998; Construction Industry Board 1997;

Construction Industry Institute 1991; Egan 1998), both public

organisations, QDPW and QDMR, were asked to nominate professionals

for the questionnaire survey who have had experience on partnering,

alliancing or relationship contracting projects, to control the sample quality.

In order to obtain a fairer view, interviews were conducted with project

team members from both the client and contractor organisations in some

of the case studies.


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5.5 Data Collection

Methods of data collection used in this research are questionnaires,

interviews, direct observation and documentation analysis.

Questionnaires were sent to professionals nominated by QDPW and

QDMR. The nominees had had experience on partnering, alliancing or

relationship contracting projects. A total of 67 questionnaires were sent

out for this research. Questionnaires were sent to eight professionals

nominated by QDPW. Six completed questionnaires (75%) were returned

and an interview was conducted whist collecting each questionnaire. The

professionals then nominated for further study other project participants

who were connected with them. A follow-up survey was conducted by

sending out a sub-questionnaire 5 to 27 people identified in the main

questionnaire6, with a response rate of 77% (twenty questionnaires). The

same process was followed with QDMR. Questionnaires were sent to 12

professionals nominated by QDMR. Ten questionnaires (83%) were

returned and an interview was conducted whist collecting each

questionnaire. Again, the professionals nominated other project

participants who had work relationships with them. The sub-questionnaire

was sent out to 40 people identified in the main questionnaire. A total of

22 questionnaires were returned with a response rate of 55%. To ensure

consistency in the data collected, the author administered each

questionnaire individually. Each respondent was contacted by phone prior

to the collection of the questionnaire to avoid misinterpretation of any

terms and concepts. The completed questionnaire was again gone

through with each respondent face-to-face upon collection.

A total of a 34 thirty to sixty minute interviews were conducted in this

research. Data from seven case studies were collected from QDMR and

QDPW. Interviews were conducted with key project team members

5 Pages 184-196 in Culture Questionnaire – see Appendix III 6 Pages 197-202 in Culture Questionnaire – see Appendix III


80

including project manager, project director, client’s principal, consultant,

superintendent, superintendent representative, engineer, foreman and site

inspector.

In all cases, the researcher was in the role of a neutral observer. Specific

observational data was collected from participation in monthly project

meetings. Interviews were also used for other participants’ experiences

and observations of meetings or events relevant to relationship

contracting. Records collected including meeting minutes and memos,

various forms of partnering assessment sheets and contracting

documents. Observation of a number of monthly site and relationship

meetings was carried out in two case studies in order to examine team

dynamics and communication processes in the project team.

5.6 Data Analysis

The questionnaire survey (Culture Questionnaire) used for this research is

presented in Appendix III. SPSS was used to carry out statistical analysis

in this research. In order to determine relationships between variables and

to measure tests of correlation have been used, Pearson’s product-

moment correlation coefficient was used for interval data measures and

Spearman’s rho for ordinal data measures (Wikipedia 2004). A chi-square

test was used in some relationships to test the linkage between the

attributes of variables and ordinal measures in the sample.

5.7 Summary

The objectives of this research are to investigate how a collaborative

project culture is developed and enhanced; and to identify the ways in

which collaboration can be transmitted throughout the industry. This

research was carried out by investigating the national culture,

organisational structure, culture and commitment in two large public sector


81

organisations in Australia. The research methodology is a grounded,

triangulated approach. The impacts of various cultural variables on project

performance were investigated initially through a questionnaire survey.

The outcome of this process was validated through follow-up interviews

with survey participants; the concepts and instruments used on seven

case studies were identified during the course of the research, where data

collected was used to explain and understand the outcomes of these real

life projects. The results and analysis of the questionnaire survey are

presented in Chapter 6; and Chapter 7 presents the case studies findings

and analysis.

83

CHAPTER 6

CULTURE SURVEY

6.1 Introduction

This chapter reports the impact of the various cultural variables on project

performance in two government departments in Australia, QDPW and

QDMR. The variables focused on are organisation culture, commitment

level, organisation structure and national culture. This questionnaire

survey was carried out as a pilot study. Questionnaires were sent to eight

professionals nominated by QDPW and to 12 professionals nominated by

QDMR, and a sub-questionnaire was sent to 47 people identified in the

main questionnaire. A total of 67 questionnaires were sent out for this

research. Upon questionnaire collection from QDPW and QDMR

professionals, a thirty to sixty minute interview was conducted with each

professional. QDPW and QDMR survey findings were analysed as two

different groups for a detailed comparison between the building work

project and civil work project environments. As was discussed in chapter

4, QDPW and QDMR have very different procedures on the choice of

project delivery system. Both departments have different strategies on the

application of relational contracting. By analysing the data sample

CHAPTER 6 CULTURE SURVEY

84

separately, the relationships between the results are expected to be more

accurate and meaningful.

All figures and tables generated from the survey are detailed in Appendix

IV.

6.2 QDPW Survey Analysis

Questionnaires were sent to professionals nominated by QDPW. The

nominees had had experience on partnering, alliancing or relationship

contracting projects. Questionnaires were sent to eight professionals

nominated by QDPW. Six completed questionnaires (75%) were returned

and an interview was conducted whist collecting each questionnaire. The

professionals then nominated other project participants who were

connected with them for further study. A follow-up survey was conducted

by sending out a sub-questionnaire7 to 27 people identified in the main

questionnaire8, with a response rate of 77% (20 questionnaires). While

this survey was taking place, QDPW was undergoing organisation

restructuring.

6.2.1 Organisational Culture

The results of the organisation culture survey are shown in Table 6.1. It is

clear that a task culture is preferred by those in the organisation. Handy

(1985) describes task culture as being best suited to groups, project teams

or task forces which are formed for a specific purpose, which very much

describes the job nature in QDPW. Individuals in QDPW form his/her own

project team for each project and are highly likely to work with a different

team of people in each project.

7 Pages 197-202 in Culture Questionnaire – see Appendix III 8 Pages 184-196 in Culture Questionnaire – see Appendix III


85

Preferred Culture:

Task – this culture can be found where the market is competitive, the

product life is short, and speed of reaction is important. In this instance this

fits well with the organisation as QDPW generally:

• works as a team, particularly a project team;

• forms a team for a specific purpose – projects;

• is judged by results – the success of the project;

• emphasises work relationships within team.

However, when the results were analysed further it was found that the

culture that was perceived to exist within QDPW was a role culture.

Perceived Culture:

Role culture is often found where economies of scale are more important

than flexibility or where technical expertise and depth of specialisation are

more important than product innovation or product cost. In this context it is

apparent in:

• bureaucracy;

• heavy reliance on procedures and formal authority;

• long product life – QDPW still exists when projects (e.g. schools,

residential blocks, hospitals) have finished. Staff members in

QDPW would not expect to be abandoned after each project is

complete.

Organisational Culture Preferred Culture Perceived Culture Power 0 0.5* Role 0 4 Task 6 1.5* Person 0 0

(n=6) * Same score for Power and Task Culture was calculated from one of the returned

questionnaires.

Table 6.1: Organisational Culture (QDPW)


86

It is interesting to note that similar mismatches between preferred and

perceived cultures were identified in a government department that was

going through an organisational change in Hong Kong (Rowlinson, 2001).

6.2.2 Commitment

The results on levels of commitment, using Allen and Meyer’s (1997)

Affective, Continuance and Normative Commitment Scales, are reported in

Table 6.2. Both affective commitment (emotional attachment to the

organisation) and normative commitment (acceptance of the organisation’s

set of values) were found to be a little stronger than continuance

commitment (costs of leaving the organisation outweigh the opportunity

costs of staying). However, all scores are rather ‘middling’, indicating a

‘non-committal’ level of commitment. It is interesting to note that these

scores are still substantially higher than those reported by Rowlinson in his

study of the Architectural Services Department in Hong Kong. The QDPW

questionnaire responses did not explain how this situation has arisen. It

might be the department was undergoing restructuring and the

professionals were unsure with the organisation values and future

directions. Further research is required on this proposition.

Type of Commitment Mean Median Standard Deviation

Affective 23.2 23.5 4.4 Normative 22.0 22.5 1.5 Continuance 19.0 19.0 1.9

(n=6) * Concepts are measured on a scale of 1 to 7, with 1 indicating low levels of commitment

and 7 indicating high levels, for six variables giving, for each scale, maximum scores of 42 and minimum scores of 6.

Table 6.2: Commitment Levels (QDPW)


87

6.2.3 Organisational Assessment

The objective of this part of the questionnaire was to explore the type of

structure prevalent in QDPW and relate this to the nature of the tasks

being undertaken by the organisation, with a view to identifying

mismatches. From the six returned questionnaires, a follow-up survey was

conducted by sending out a sub-questionnaire (Ref.: Pages 29-35 in

Culture Questionnaire) to 27 people identified in the main questionnaire

(Ref.: Pages 13-28 in Culture Questionnaire). Twenty sub-questionnaires

(77%) were returned and the results on organisational assessment are

shown below.

Van de Ven and Ferry (1980) suggested that organisational units that

undertake work at high levels of difficulty and variability adopt what they

termed a developmental group mode of structure. Table 6.3 presents the

hypothesised patterns of their three design modes in complex

organisations. A developmental group mode is aimed at creating a

programme for handling tasks, problems or issues that have not been

encountered before, and/or are sufficiently difficult or complex, which

require further work for solutions. It is also suggested that a

developmental programme/mode of structure consists of (1) general goals

or ends to be achieved in a specified amount of time, leaving unspecified

the precise means to achieve them, and (2) a set of norms and

expectations regarding the nature of behaviour and interactions among

group members. The characteristics mentioned above seem to fit in with

QDPW’s mission very well. One of the major roles of QDPW is to be part

of the project team in a construction project, including being able to react

to unforeseeable events that occur during the project, whether these

events have natural or man-made causes. It is also common not to have

the project thoroughly strategically planned and specified at the outset,

particularly when dealing with complex ‘multi-clients’, as often happens

with QDPW. Based on the facts and characteristics described above, a


88

developmental group mode of structure is seen as being the most

appropriate structure mode9 for QDPW.

Systematized Impersonal

Mode

Discretionary Personal Mode

Developmental Group Mode

Difficulty & Variability of Tasks, Problems, Issues Encountered by subsystem –

Low Medium High

Salient Dimensions of Managerial Subsystem

1. Organizational Referent Central information

systems Hierarchy & staff Coordination

committees

2. Coordination and Control by: Rules, plans, schedules

Exceptions to hierarchy

Mutual group adjustments

3. Resource & Information Flows among Organizational Levels, Units, & Positions:

a. Direction Diffuse Vertical Horizontal b. Amount High Medium Low c. Standardization &

Codification High Medium Low

4. Perceived Interdependence among Components Low Medium High

5. Frequency of conflict among Components Low Medium High

Table 6.3: Hypothesised Patterns of Systematized, Discretionary and Developmental Modes of Structure in Complex Organisations (extracted from Van de Ven and Ferry, 1980, p. 368-369)

Using the results generated from the survey, Table 6.4 was developed to

test the hypothesised patterns suggested by Van de Ven and Ferry. It is

noted that although QDPW was initially expected to follow the logic of

developmental group mode of structure, the logic of systematised mode is

more closely followed (although it is apparent from Table 6.4 that the

mode displayed is to some extent a hybrid). This again reflects the results

from Handy’s instrument but, as Van de Ven has written extensively on

organisational change, he does provide us with a useful set of tried and

tested methods (tools) to bring about an appropriate organisational

change and to measure the degree of change over time.

9 Note: There is a strong link here to Handy and his task culture – similar concepts operate in task culture and developmental group mode of structure. There should be a strong correlation between these two concepts.


89


Mode




1. Organizational Referent Central information systems?

Hierarchy & Staff?



a. Direction Diffuse? b. Amount Low c. Standardization &

Codification High Medium

4. Perceived Interdependence among Components

High

5. Frequency of conflict among Components Low

Table 6.4: Hypothesised Patterns of Structure Mode in QDPW

Reasons for Relationship

Figures 6.1-6.4 in Appendix IV show that the relationship between QDPW

and Other Units exists not for receiving/sending work or resources, but for

receiving/sending technical assistance and information. It is also noted in

Figure 6.4 that the units with which QDPW has relationships give a higher

rating (or expectation) for information transfer between parties than QDPW

does. It is interesting to see both QDPW and the other units have similar

ratings of each other. Also, both groups find their working relationship

highly effective.

Resource Dependence

In the main, both QDPW and Other Units indicate their relationship is

highly dependent on the other party’s resources. Both QDPW and Other

Units agree there is some dependence on the other party to attain their

own goals.


90

Awareness of Relationship

Figure 6.9 shows the relationship between QDPW and Other Units has

existed for over ten years in most cases. This may imply there is a mutual

understanding on Government policy and organisational direction; perhaps

suggesting a reason for both parties finding their working relationship to be

highly effective. Both QDPW and Other Units believe the other party is

quite familiar with each other’s services and goals. A high degree of

personal acquaintance is reported by Other Units, where a low-medium

degree is reported by QDPW.

Consensus/Conflict

The consensus between parties rated by QDPW was found to be low

because many respondents do not know if the other party agrees on the

goal priorities/way of work provided/terms of relationship. Otherwise, both

parties have a medium-high agreement on their operating goals and the

special ways for their works to be carried out, and a high agreement on the

terms of their relationship.

Mean Median Standard Deviation

Goal Priorities QDPW 2.40 3.00 1.86 Other Units 4.35 4.00 0.49

Way of Work/Services are Provided

QDPW 2.90 3.50 1.62 Other Units 4.05 4.00 0.61

Terms of Relationship QDPW 3.10 4.00 1.65 Other Units 4.45 5.00 0.69

(n=20) * Concepts are measured on a scale of 0 to 5, with 0 indicating not knowing if the other

party agrees on goal priorities/way of work or services provided/terms of relationship, and 5 indicating knowing the other party agrees very much on items.

Table 6.10: Consensus and Conflict between QDPW and Other Units


91

Yet, it is interesting to see from the returned questionnaires from QDPW, a

total of seven stated they do not know if the other party agreed on their

goal priority; four do not know if the other party agreed on the ways of

work/services provided and four do not know if the other party agreed on

the terms of relationship.

This finding suggests an issue that needs further investigation with QDPW

– if roles/relationships cannot be clearly stated or specifically laid down,

how should this be addressed by client departments?

The average frequency of conflict for both QDPW and Other Units is found

to be low. There is no correlation between degree of personal

acquaintance and frequency of conflict, suggesting no matter how well

each other is known on a personal basis, the frequency of conflict is

neither positively or negatively affected.

Methods of Conflict Resolution


Avoiding Issues 0.70 1.00 0.57 Smoothing Over Issues 0.80 1.00 0.77 Confronting Issues 3.40 5.00 2.30 Hierarchy 0.75 0.50 1.16

(n=20) * Concepts are measured on a scale of 1 to 5, with 1 indicating the conflict resolution was

almost never and 5 indicating it was used almost always

Table 6.14: Frequency of Use of Methods of Conflict Resolution (QDPW)

When disagreements arise, the most frequently used resolution method

was by an open exchange of information about the conflict or problem and

a working through of differences to reach a mutually agreeable solution. A

significant correlation is found between effectiveness of working

relationship and frequency of conflict from QDPW, suggesting the lower


92

the effectiveness of working relationship, the higher frequency of conflict.

However, there was no significant correlation from Other Units on the

tested variables. The resolution of disagreements reflects an intra-

organisational partnering/alliancing approach within QDPW.

Domain Similarity

Domain similarity refers to the extent to which QDPW and Other Units in a

relationship obtain their money from the same source; have the same

goals, work, technology and professional skills; and provide the same

kinds of products and services to the same client/customers.

A medium degree of domain similarity is found on funding source,

clients/customers, employee skills and technology. Most of the items are

found to be significantly correlated with the others. It is noted that

Operating Goals is highly correlated with all the items. This is expected

because the project team should have the same goals during work, and

one of the fundamental philosophies in alliancing is to have common goals

in the project team. Also, it is realised that the higher the domain similarity

of funding source is between both parties, is the more likely that a high

domain similarity of operating goals and technology exists; and the higher

the domain similarity of employee skills, the higher the domain similarity of

technology. Such is often observed from units in the same organisation.

An example would be the contract administration unit and the legal and

contractual unit in QDPW. It is suggested by Van de Ven and Ferry (1980)

that the best situation for units with high domain similarity is to have a

satisfaction relationship with other parties.


93

Communications

Working Relationship Effectiveness

(QDPW)

Working Relationship Effectiveness (Other Units)

Written Reports

Face-to-Face Talks

Telephone Calls

Group Meetings

Working Relationship Effectiveness (QDPW)

Sig. 1 -

0.537* 0.015

0.301 0.198

0.574** 0.008

0.315 0.176

0.227 0.335


Sig. 0.537* 0.015

1 -

0.015 0.951

0.232 0.324

0.135 0.570

0.168 0.478

Written Reports

Sig. 0.301 0.198

0.015 0.951

1 -

0.366 0.113

0.665** 0.001

0.395 0.084

Face-to-Face Talks

Sig. 0.574** 0.008

0.232 0.324

0.366 0.113

1 -

0.467* 0.038

0.336 0.147

Telephone Calls

Sig. 0.315 0.176

0.135 0.570

0.665** 0.001

0.467* 0.038

1 -

0.536* 0.015

Group Meetings

Sig. 0.227 0.335

0.168 0.478

0.395 0.084

0.336 0.147

0.536* 0.015

1 -

** Correlation is significant at the 0.01 level (2-tailed) * Correlation is significant at the 0.05 level (2-tailed) (n=20)

Table 6.19: Correlation between Working Relationship Effectiveness and Methods of Communication (QDPW & Other Units)

Amongst the four types of communication, group meetings are carried out

less frequently. Face-to-face talks are found to have a high correlation

with the effectiveness of QDPW’s working relationship with other parties.

One common behaviour observed from successful alliancing projects or

projects using relationship contracting is frequent face-to-face talks

between parties. Issues or foreseeable problems are often resolved

before conflicts arise, allowing relationships between parties to be nurtured

and sustained. During one of the follow up-interviews, one interviewee

pointed out face-to-face talks or meetings were an issue between project

teams - due to the distance between parties, physical meetings were not

feasible and telephone conferences were used instead. With today’s

technology, one suggestion to achieve some of the benefits of face-to-face


94

talks or meetings is to use video conferencing or Netmeeting© via the

internet. Although physical presence is still not possible, these

technologies do allow behaviour or body language of the other party to be

observed.

A very strong correlation is found between consensus and quality of

communication, indicating there is a higher degree of agreement in

situations when it is easier to get ideas across, whereas there is no

significant correlation between consensus and difficulty in getting in touch.

One suggestion given is most of the participants in this survey are not

based on site, and participate in more than one project at one time.

He/She might not be as easy to locate as someone working regularly in

the office.

A positive correlation is found between difficulty getting in touch and

hindered performance in Other Units. This suggests the more difficult it is

to get in touch with QDPW, the more the performance of QDPW is

hindered by Other Units. This is purely a consequence of the nature of

construction in that all works are inter-related. For example, if there is a

problem on the quality of concrete, consent from QDPW is required for the

person-in-charge. Should the person not be contactable on a day, work

will then be delayed for one day and so on. Quality of information flow has

always been crucial in the project team. This is again confirmed by the

positive correlation between difficulty in getting ideas across and

frequency of dispute, suggesting a poor quality of communication often

leads to a higher frequency of dispute. All of these issues have surfaced

as anecdotal evidence in case studies.

Resource Flows

Three sets of data have missing values.


95

Significant correlations are found between variability of resource flow and

standardisation of relationship, suggesting that a higher degree of official

communication channels and standard operating procedures, rule and

policies, and a higher uniformity of resource flows may well in fact lead to

a higher frequency of interruptions and problems encountered in

transferring work objects and materials between parties. A more formal

and standardised relationship does not necessarily lead to a more uniform

resource flow. More problems or interruptions might well be encountered.

(The view was expressed that not everything can be ‘solved’ or ‘clarified’

or ‘problems reduced’ by having everything down in black and white. The

number of rules and procedures does not run in parallel with improved

relationships). Thus, these findings back up the observations on

organisation culture and organisation mode – a task culture and

developmental group mode fit the needs of a project-based organisation,

albeit a temporary multi-intra-organisation, rather than the role culture and

systematised mode which appear to be evident as the predominant

cultures in QDPW. A theme that has emerged in this survey research and

in the case studies is that QDPW’s management of its own clients, the

temporary multi intra-organisation that is imposed on it during projects, is a

key issue in the project delivery process.

Perceived Effectiveness of Relationship

Results indicate that both QDPW and Other Units have a medium-low

level of influence on each other.

A positive correlation is found between the extents of commitment by

QDPW and Other Units, suggesting that there is the potential to increase

the extent of commitment by other parties if more evidence of commitment

is made apparent by either QDPW or Other Units. A positive correlation is

also noted between the extent of commitment and the degree of


96

relationship productiveness, suggesting the level of commitment by each

party has a significant impact on the level of productive relationship.

The power of informal relations, intra-organisational alliancing even, is

apparent from Table 6.43 in that the level of standardised relationship has

a negative correlation with the equality of transactions, meaning the more

formalised the relationship is, i.e. the more the agreement between parties

is written down or contracted, the less acceptable are ‘payoffs’ from the

other party, which actually move the project forward.

97


Table 6.43: Correlation between Perceived Effectiveness of Relationship and Relationship Indices (QDPW)

Commitments (OU)

Commitments (QDPW)

Productive Relationship Time & Effort

Relationship Satisfaction

Equality of Transactions

Relationship Clearly

Specified Standardised Relationship

Resource Flow to QDPW

Resource Flow from QDPW

Poor Communi-

cation Quality

Freq. of Communi-

cation Domain

Similarity Resource

Dependence Awareness Personal

Acquaintance Consensus

Commitments (OU)

Sig.N

1 -

20

0.466(*) 0.038

20 0.419 0.066

0.371 0.108

20

0.223 0.344

20

-0.106 0.657

20

-0.316 0.175

20

0.032 0.893

20

-0.054 0.831

18

-0.284 0.268

17

-0.456(*) 0.043

20

-0.331 0.153

20

0.141 0.552

20

-0.222 0.361

19

-0.097 0.683

20

0.183 0.440

20

0.282 0.228

20 Commitments (QDPW)

Sig.N

0.466(*) 0.038

20

1 -

20

0.866(**) 0.000

20

0.313 0.179

20

0.533(*) 0.016

20

0.236 0.316

20

0.222 0.346

20

-0.179 0.451

20

0.002 0.994

18

0.104 0.691

17

-0.661(**) 0.002

20

-0.059 0.804

20

0.055 0.817

20

0.354 0.137

19

-0.038 0.874

20

0.444(*) 0.050

20

0.397 0.083

20 Productive Relationship

Sig.N

0.419 0.066

20

0.866(**) 0.000

20

1 -

20

0.475(*) 0.035

20

0.769(**) 0.000

20

0.128 0.591

20

0.263 0.263

20

-0.215 0.363

20

0.246 0.325

18

0.294 0.252

17

-0.625(**) 0.003

20

0.138 0.563

20

0.046 0.848

20

0.462(*) 0.046

19

0.253 0.281

20

0.650(**) 0.002

20

0.562(**) 0.010

20 Time & Effort

Sig.N

0.371 0.108

20

0.313 0.179

20

0.475(*) 0.035

20

1 -

20

0.612(**) 0.004

20

-0.185 0.435

20

0.209 0.377

20

0.093 0.696

20

0.335 0.174

18

0.415 0.098

17

-0.198 0.404

20

0.225 0.340

20

-0.198 0.402

20

0.351 0.140

19

0.248 0.291

20

0.418 0.067

20

0.234 0.321

20 Relationship Satisfaction

Sig.N

0.223 0.344

20

0.533(*) 0.016

20

0.769(**) 0.000

20

0.612(**) 0.004

20

1 -

20

0.000 1.000

20

0.180 0.448

20

-0.124 0.604

20

0.172 0.495

19

0.199 0.443

17

-0.507(*) 0.022

20

0.211 0.373

20

-0.065 0.784

20

0.357 0.134

19

0.268 0.253

20

0.558(*) 0.011

20

0.381 0.097

20 Equality of Transactions

Sig.N

-0.106 0.657

20

0.236 0.316

20

0.128 0.591

20

-0.185 0.435

20

0.000 1.000

20

1 -

20

0.131 0.581

20

-0.457(*) 0.043

20

-0.039 0.878

18

0.277 0.282

17

0.036 0.882

20

0.352 0.127

20

0.255 0.278

20

0.109 0.655

19

0.223 0.345

20

0.045 0.850

20

-0.097 0.684

20 Relationship Clearly Specified

Sig.N

-0.316 0.175

20

0.222 0.346

20

0.263 0.263

20

0.209 0.377

20

0.180 0.448

20

0.131 0.581

20

1 -

20

0.084 0.724

20

0.195 0.439

18

0.489(*) 0.046

17

-0.255 0.277

20

0.517(*) 0.020

20

0.000 1.000

20

0.502(*) 0.029

19

0.366 0.112

20

0.497(*) 0.026

20

0.352 0.128

20 Standardised Relationship

Sig.N

0.032 0.893

20

-0.179 0.451

20

-0.215 0.363

20

0.093 0.696

20

-0.124 0.604

20

-0.457(*) 0.043

20

0.084 0.724

20

1 -

20

-0.315 0.203

18

-0.406 0.106

17

-0.009 0.970

20

-0.235 0.319

20

-0.145 0.542

20

0.000 0.999

19

-0.169 0.477

20

-0.251 0.286

20

-0.011 0.963

20 Resource Flow to QDPW

Sig.N

-0.054 0.831 18

0.002 0.994

18

0.246 0.325

18

0.335 0.174

18

0.172 0.495

18

-0.039 0.878

18

0.195 0.439

18

-0.315 0.203

18 1 -

0.623(**) 0.008

17

0.254 0.309

18

0.510(*) 0.031

18

0.357 0.146

18

0.400 0.111

18

0.568(*) 0.014

18

0.488(*) 0.040

18

0.590(*) 0.010

18 Resource Flow from QDPW

Sig.N

-0.284 0.268

17

0.104 0.691

17

0.294 0.252

17

0.415 0.098

17

0.199 0.443

17

0.277 0.282

17

0.489(*) 0.046

17

-0.406 0.106

17

0.623(**) 0.008

17 1 -

0.016 0.952

17

0.549(*) 0.023

17

-0.107 0.683

17

0.432 0.095

17

0.219 0.398

17

0.468 0.058

17

0.081 0.758

17 Communication Quality

Sig.N

-0.456(*) 0.043

20

-0.661(**) 0.002

20

-0.625(**) 0.003

20

-0.198 0.404

20

-0.507(*) 0.022

20

0.036 0.882

20

-0.255 0.277

20

-0.009 0.970

20

0.254 0.309

18

0.016 0.952

17

1 -

20

0.210 0.374

20

-0.064 0.789

20

0.015 0.951

19

0.225 0.341

20

-0.510(*) 0.022

20

-0.442 0.051

20 Freq. of Communication

Sig.N

-0.331 0.153

20

-0.059 0.804

20

0.138 0.563

20

0.225 0.340

20

0.211 0.373

20

0.352 0.127

20

0.517(*) 0.020

20

-0.235 0.319

20

0.510(*) 0.031

18

0.549(*) 0.023

17

0.210 0.374

20

1 -

20

0.281 0.231

20

0.454 0.051

19

0.533(*) 0.016

20

0.453(*) 0.045

20

0.143 0.546

20 Domain Similarity

Sig.N

0.141 0.552

20

0.055 0.817

20

0.046 0.848

20

-0.198 0.402

20

-0.065 0.784

20

0.255 0.278

20

0.000 1.000

20

-0.145 0.542

20

0.357 0.146

18

-0.107 0.683

17

-0.064 0.789

20

0.281 0.231

20

1 -

20

-0.054 0.825

19

0.387 0.092

20

0.223 0.346

20

0.483(*) 0.031

20 Resource Dependence

Sig.N

-0.222 0.361

19

0.354 0.137

19

0.462(*) 0.046

19

0.351 0.140

19

0.357 0.134

19

0.109 0.655

19

0.502(*) 0.029

19

0.000 0.999

19

0.400 0.111

18

0.432 0.095

17

0.015 0.951

19

0.454 0.051

19

-0.054 0.825

19

1 -

19

0.695(**) 0.001

19

0.354 0.137

19

0.194 0.426

19 Awareness

Sig.N

-0.097 0.683

20

-0.038 0.874

20

0.253 0.281

20

0.248 0.291

20

0.268 0.253

20

0.223 0.345

20

0.366 0.112

20

-0.169 0.477

20

0.568(*) 0.01 18

0.219 0.398

17

0.225 0.341

20

0.533(*) 0.016

20

0.387 0.092

20

0.695(**) 0.001

19

1 -

20

0.406 0.076

20

0.486(*) 0.030

20 Personal Acquaintance

Sig.N

0.183 0.440

20

0.444(*) 0.050

20

0.650(**) 0.002

20

0.418 0.067

20

0.558(*) 0.011

20

0.045 0.850

20

0.497(*) 0.026

20

-0.251 0.286

20

0.488(*) 0.040

18

0.468 0.058

17

-0.510(*) 0.022

20

0.453(*) 0.045

20

0.223 0.346

20

0.354 0.137

19

0.406 0.076

20

1 -

20

0.730(**) 0.000

20 Consensus

Sig. N

0.282 0.228

20

0.397 0.083

20

0.562(**) 0.010

20

0.234 0.321

20

0.381 0.097

20

-0.097 0.684

20

0.352 0.128

20

-0.011 0.963

20

0.590(*) 0.010

18

0.081 0.758

17

-0.442 0.051

20

0.143 0.546

20

0.483(*) 0.031

20

0.194 0.426

19

0.486(*) 0.030

20

0.730(**) 0.000

20

1 -

20

** Correlation is significant at the 0.01 level (2-tailed) * Correlation is significant at the 0.05 level (2-tailed)


99

6.2.4 Culture

The results of the calculations following Hofstede’s method for the Value

Survey Model are presented in Table 6.44. Australian professionals

scored low on Hofstede’s power distance index, indicating the low

acceptance of a hierarchical or unequal distribution of power in

organisations. A medium score is perceived in Hofstede’s uncertainty

avoidance index, suggesting Australian professionals are semi-

comfortable with uncertain or unknown circumstances, and would create

formal rules and procedures to deal with those situations. The degree of

individualism was found high in the same sample, suggesting people

would look after themselves and their direct family in preference to seeing

themselves belonging to the larger group (organisation), which takes care

of their interests in exchange for loyalty. Finally, Australian professionals

scored low on Hofstede’s masculinity index, implying people tend to

sympathise with the underdog, rather than admire the achiever;

interpersonal relations, gender equality and interdependence are

emphasised.

PDI UAI IDV MAS

Hofstede 36 51 90 61

Survey Findings 16 42 90 33

Keys: PDI – Power Distance Index UAI – Uncertainty Avoidance Index IDV – Individualism Index MAS – Masculinity Index

(n=16)

Table 6.44: Scores for Australian Professionals on Hofstede Indices

Table 6.45 shows that employees in QDPW rate personal time, challenges

at work and freedom to adopt their own approach at work as very

important for their ideal job. However, working in a successful company

and the size of the organisation is considered to be not so important or


100

desirable. The findings reflect characteristics found in low power distance

countries with individualism culture. The respondents agree that it is very

important to have a good working relationship with their direct superior.

Being consulted by their superiors is important, as it is expected in a

country with high femininity culture, yet it is found less important than the

immediate work place relationships. It is suggested that although

respondents at QDPW work together in the organisation, each of them is

engaged in various project teams. One of the main philosophies in

relational contracting is to have a good working relationship with the

project team.

Mean Median Standard Deviation Personal Time 1.83 2.00 0.41 Challenge 2.17 2.00 0.41 Stress 2.67 2.50 0.82 Physical Condition 2.33 2.00 1.03 Relationship with Superior 1.67 2.00 0.52 Employment Security 2.50 2.50 0.55 Freedom 2.50 2.50 0.55 Cooperation 2.00 2.00 0.63 Consult by Superior 2.17 2.00 0.75 Contribution to Company 2.17 2.00 0.41 High Earning 2.17 2.00 0.41 Serve the Country 3.67 4.00 0.52 Desirable Living Area 2.00 2.00 0.00 Opportunity for Advancement 2.33 2.00 0.52 Job Adventure 2.17 2.00 0.41 Successful Company 3.00 3.00 0.63 Help the Others 2.67 2.50 0.82 Job Definition 2.67 2.50 0.82

(n=6)

* Concepts are measured on a scale of 1 to 5, with 1 indicating utmost importance and 5 indicating little to no importance on the said criteria for an ideal job.

Table 6.45: Importance of Criteria for an Ideal Job (QDPW)

It is interesting to note that Hong Kong professionals also scored highly on

Hofstede’s power distance index (Rowlinson and Root, 1996), yet

relatively low on individualism index. Rowlinson and Root suggested

Hong Kong professionals are more ‘situation accepting’ and are afraid to


101

express disagreements with superiors. Whereas with QDPW, findings

indicate professionals accept the inequalities, yet they are not afraid to

disagree with their superiors. Open communications in project

environments are crucial for successful implementation of relational

contracting.

Mean Median Standard Deviation Organisation’s rule should not be broken under any circumstances

3.17

3.00

0.75

Trust 2.00 2.00 0.00 Dislike of work 4.00 4.00 0.00 More desirable to work in a large corporation

3.33

3.00

0.82

(n=6) * Concepts are measured on a scale of 1 to 5, with 1 indicating strongly agree with the

statement and 5 strongly disagree.

Table 6.46: Levels of Agreement on Statements (QDPW)

Respondents find they do not often feel stress at work. Also, the majority

disagree that a large corporation is a more desirable place to work than a

small company, and theory X (see McGregor 1960 for more information) is

strongly rejected – these all match nicely with what Hofstede suggested

would be found in an organisation with a low masculinity index. The

survey results show that relationship and cooperation with co-workers are

rated of high importance, yet the importance of having sufficient time left

for one’s personal life is rated the highest, suggesting work is less central

in people’s lives, which again goes with an organisation with a low

masculinity index as suggested by Hofstede. It is also agreed by the

majority that formal procedures should be retained in order to ensure both

personal and the firm’s objectives are met. QDPW professionals were

found operating in role culture and systematised structure mode. This

study also revealed that Australian professionals are weaker in uncertainty

avoidance (compared with other countries in Hofstede’s indices);

suggesting ineffective rules were imposed to satisfy people’s emotional

need for formal structure (Hofstede, 1991). It was observed during follow-


102

up interviews that decision-making processes were often prolonged due to

layers of procedures followed with extensive amount of meetings.

Mean Median Standard Deviation Personal relationship are important in managing project/contract

1.67

2.00

0.52

Formal procedures are necessary for the successful management of a project

2.00

2.00

0.63

Informal arrangements are necessary for the successful management of a project

2.67

2.50

0.82

Personal relationships amongst the project members are more important than those in your employer’s organization

2.33

2.50

0.82

One must be willing to sacrifice personal relationships with members of the project team to ensure the successful completion of the project

2.67

2.50

0.82

One must be willing to sacrifice personal relationships with members of the project team to ensure their firm’s objectives are met

2.83

2.50

0.98

One must be willing to sacrifice personal relationships with members of the project team to ensure one’s personal objectives are met

3.50

4.00

0.84

One must be prepared to disregard formal procedures in order to ensure the successful completion of the project

2.67

2.00

1.03

One must be prepared to disregard formal procedures in order to ensure one’s firm’s objectives met

3.17

3.00

0.75

One must be prepared to disregard formal procedures in order to ensure one’s own objectives are met

3.50

4.00

0.84



Table 6.47: Agreement to Statements in Relation to Project Success or Achieving Objectives (QDPW)

Survey results shown in Table 6.47 and follow-up interviews with

respondents found that QDPW professionals view personal relationships

as an important aspect in managing projects. One common statement

obtained from the interviewees was they find having a good personal

relationship with their project team members helps to minimise the chance

of conflicts during work. This observation is reinforced by the

disagreement with the statement that ‘one must be willing to sacrifice

personal relationships with members of the project team to ensure one’s


103

personal objectives are met’. However, with reference to the survey

results presented earlier (please refer to Table 6.9), the degree of personal

acquaintance is found to be low. Also, the majority agree that personal

relationships need to be sacrificed to ensure a successful project

completion and to meet the firm’s objectives. This suggests that, after all,

work is work, and with reference to earlier survey results (please refer to

Table 6.1), task culture is preferred by those in the organisation. It is also

interesting to note that although QDPW professionals find formal

procedures are necessary for project management success, at the same

time, they also agree formal procedures may need to be disregarded to

ensure successful project completion. This again verifies the mismatch

between the perceived role culture and the preferred task culture, where

QDPW professionals are restrained by rules and procedures, with a lack of

flexibility.

6.2.5 Overview of QDPW Data

Levels of commitment were found to be average in QDPW. A relational

contracting approach cannot succeed if the collaborating organisations do

not accept its ethos. Hence, commitment to the goals and objectives of

the organisation is crucial in implementing new approaches to contract

strategy. Also, QDPW personnel should be following a developmental

group mode and do prefer working in a task culture but are actually in a

role culture and follow the systematised mode. Hence, the results support

one another. It appeared that there is a mismatch between how the

organisation in general operates – the role model, and what the

professionals working in the project side of the organisation actually want

to be and to achieve – the task model. Interestingly, out of the twenty-five

problems indicated by participants in the questionnaire survey, over 50%

have a direct relationship with communication, such as timely response,

continued and open communication, quality response and respect of


104

different views. One of the recurring suggestions to overcome the

problems is more face-to-face meetings.

The level of awareness between QDPW and Other Units increases as the

frequency of communication increases. It is also noted that when there is

a high domain similarity, there is a lower amount of conflict between

parties. Also, high productive relationships actually occur when there is

higher quality of communication, reinforcing the importance of

communication quality and frequency. Though it is often the case for a

person to be involved in more than one project at the same time, one

common issue pointed out by the participants from QDPW in this survey is

more face-to-face and continuing open communication is needed. To find

time to get around the table for discussions is often a challenge, and this

inability leads to problems such as late provisions or approvals, late

response to queries, poor quality of response, cost and programme

problems, opinions on design elements, etc, which mostly relate to

information flow issues. ‘Finding time’ for communication seems to be a

major issue in QDPW.

It was expected that there would be a correlation between resource

dependence and frequency of communication. However, no significant

correlation was found. It may well be that the frequency of communication

remains at a high level, not necessarily of high quality, due to the nature of

the construction industry. Site inspections will be carried out whether work

is carried out by in-house personnel or contracted out; project meetings

will still be held periodically e.g. partnering meetings and regular site

meetings. A significant issue is that site meetings and project meetings

are held separately from partnering meetings/workshops, suggesting

project teams in relationship contracting projects have more set meetings

(higher frequency of communication) than traditional types of contract,

allowing each party to become more familiar with other parties’ goals and

services and, perhaps significantly, for the communication to take place at


105

all levels within the organisation. The organisational cross-sectional

nature of the participants taking part in meetings in relationship contracting

projects perhaps has a positive impact on the quality of communication

and information flow and is a stimulus to timely and appropriate action.

Weaker uncertainty avoidance was found in the Australian professional;

ineffective rules and procedures might be imposed to satisfy people’s

emotional need for formal structure. However, findings suggested that the

number of rules and procedures does not run in parallel with improved

relationships, as more problems or interruptions might be encountered.

Similarly with relationship contracting, transferring maximum amount of

risk to the contractor for a greater control over the project does not

necessarily lead to project success or better relationships in the project

team.

6.3 QDMR Survey Analysis

Questionnaires were sent to twelve professionals nominated by QDMR.

The nominees had had experience on partnering, alliancing or relationship

contracting projects. Ten completed questionnaires (83%) were returned

and an interview was conducted whilst collecting each questionnaire. The

professionals then nominated for further study other project participants

who were connected with them. A follow-up survey was conducted by

sending out a sub-questionnaire to forty people identified in the main

questionnaire, with a response rate of 55% (22 questionnaires).

6.3.1 Organisational Culture

The results of the organisational culture survey are shown in Table 6.48. It

is clear that a task culture is preferred by QDMR staff. Handy (1985)

describes task culture as being best suited to groups, project teams or

task forces which are formed for a specific purpose, which very much


106

describes the job nature in QDMR. Similar to QDPW, individuals in QDMR

form his/her own project team for each project and are highly likely to work

with a different team of people in each project.

Preferred Culture:

Task – this culture can be found where the market is competitive, the

project life is short, and speed of reaction is important. In this instance this

fits well with the organisation as QDMR generally:

• works as a team, a project team;

• forms as a team for a specific purpose – projects;

• is judged by results – success of the project;

• emphasises work relationships within teams.

However, when the results were analysed further, it was found that the

culture that was perceived to exist in QDMR was a mix between power,

role and task culture.

Organisational Culture Preferred Culture Perceived Culture Power 0 2.5b Role 0.5a 4b,c Task 8.5a 3.5c Person 1 0

(n=10) a Same score for Role and Task Culture was calculated from one of the returned

questionnaires. b Same score for Power and Role Culture was calculated from one of the returned

questionnaires. c Same score for Role and Task Culture was calculated from one of the returned

questionnaires.

Table 6.48 Organisational Culture (QDMR)


107

Perceived Culture:

Power culture is frequently found in small entrepreneurial organisations,

and it relies on a central power source. The organisation depends on trust

and empathy for its effectiveness and on telepathy telephone and personal

conversation for communication. In QDMR it is apparent in:

• power-orientated;

• politically minded – (relationship management) decisions made are

hindered by politicians;

• risk-taking – sharing risk with the Contractor and open

communication by adopting relationship management;

• organisation with maximum independence from heads of

departments – principals have great control over his/her project

teams and projects.

Role culture is often found where economies of scale are more important

than flexibility or where technical expertise and depth of specialisation are

more important than product innovation or product cost. In this context it is

apparent in:

• bureaucracy;

• heavy reliance on procedures and formal authority;

• long product life – QDMR still exists when projects (e.g. highway

up-grade, road and bridge construction) have finished. Staff

members in QDMR would not expect to be abandoned after each

project is completed.

A reason suggested for this mix of perceived culture is that there is a

different culture between different districts e.g. metropolitan and outer

districts. Such culture differences may be due to resources availability

(e.g. metropolitan district has closer access to resources), communication

and information flow. For example, departments in metropolitan districts

have a higher information flow and there is a higher frequency of


108

communication between staff. There is a higher chance of more

interaction with each other by working in the same area. Also, directors in

the organisation are based in the metropolitan district, where most

decisions and policies are made. It is interesting to note that similar

findings on the mismatches between preferred and perceived cultures

were also reflected in the QDPW results and in Rowlinson’s study of the

Architectural Services Department in Hong Kong. Professionals in the

departments prefer working in a task culture, but are observed to be

working in a role culture.

6.3.2 Commitment

The results on levels of commitment, using Meyer and Allen’s (1997)

Affective, Continuance and Normative Commitment Scales, are reported in

Table 6.49. Affective commitment (emotional attachment to the

organisation) was the strongest amongst the three types of commitment,

where there was little variance from the responses, whereas the scores for

both normative (acceptance of the organisation’s set of values) and

continuance commitment (costs of leaving the organisation outweigh the

opportunity costs of staying) were more ‘middling’.



(n=10) * Concepts are measured on a scale of 1 to 7, with 1 indicating low levels of commitment and

7 indicating high levels, for six variables giving, for each scale, maximum scores of 56 and minimum scores of 9.

Table 6.49: Commitment Levels (QDMR)

It is interesting to find that the scores on all three commitment dimensions

are higher than those reported in QDPW, and than those reported in

Rowlinson’s study in Hong Kong (other than scores on the continuance


109

commitment dimension). For the implementation of relational contracting

to be successful, there needs to be a high degree of support and

commitment to the organisation’s values, with the benefits and philosophy

of relational contracting filtered to all levels.

6.3.3 Organisational Assessment

Van de Ven and Ferry (1980) suggested that organisational units which

undertake work at high levels of difficulty and variability adopt what they

termed a developmental group mode. As with QDPW, Van de Ven and

Ferry’s characteristics of an organisation with a developmental group

mode of structure also fit in very well with QDMR’s mission. A major role

in QDMR is to be part of the project team in a construction project,

including being able to react to unforeseeable events that occur during the

project, whether these events have natural or man-made causes. It is

common not to have the project strategically planned and specified at the

outset, complex problems (e.g. political, environmental) often come up

during construction such as interferences from the local council or an

indigenous community. Based on the facts and characteristics described

above, as with QDPW, a developmental group mode is seen as being the

most appropriate structure mode for QDMR.

Using the results generated from the survey, Table 6.50 is developed to

test the hypothesised patterns suggested by Van de Ven and Ferry. Like

QDPW, although QDMR was initially expected to follow the logic of

developmental group mode, in reality, the logic of a cross between

systematised impersonal mode and discretionary personal mode is more

closely followed. This again reflects the results from Handy’s instrument.

The mismatches between the organisation culture as perceived by the

professionals and the organisational structure in both departments are

apparent.


110


Mode




1. Organizational Referent Hierarchy & staff 2. Coordination and Control by: Rules, plans,

schedules


a. Direction Diffuse b. Amount Medium c. Standardization &

Codification Medium

4. Perceived Interdependence among Components

High

5. Frequency of conflict among Components Low Medium

Table 6.50: Hypothesised Patterns of Structure Mode in QDMR


Figures 6.61-6.64 show the relationships between QDMR and Other Units

exist mostly for receiving/sending information. It is also noted in Figure

6.62 that receiving/sending resources has only a minor value for the

reason for relationship with both QDMR and Other Units. It is interesting

to see both groups have similar ratings of each other except Other Units

has higher ratings on resources than QDMR in general. Also, both groups

find their working relationships highly effective.

Resource Dependence

In the main, both QDMR and Other Units indicate their relationship is of

median to high dependence on the other party’s resources. Also, both

groups agree that QDMR has a higher dependence on Other Units in

order to attain its goals, but not the reverse. However, in the follow-up

interviews, QDMR staff commented Contractor not ‘fully utilising’ QDMR

resources, such as professional knowledge/expertise on environmental

issues.


111


Figure 6.69 shows the relationship between QDMR and Other Units has

existed for over ten years or six to ten years in most cases. This may

imply there is a mutual understanding of Government policy and

organisational direction in general; perhaps suggesting a reason for both

parties finding their working relationship to be medium to highly effective.

Both QDMR and Other Units believe the other party is quite familiar with

each other’s services and goals. Both groups indicate the personal

acquaintance with the other party is good, where a higher degree of

personal acquaintance is reported by Other Units than QDMR.

Similar findings are recorded in QDPW. Both QDMR and QDPW have

had long relationships with the other parties. The fact that the degree of

relationship awareness was rated higher by both groups of Other Units

than the departments might suggest QDMR and QDPW have overlooked

the other parties’ knowledge or understanding of the departments’ goals;

or perhaps QDMR and QDPW find the other parties do not truly

understand the departments’ objectives and goals. Either way, QDMR

and QDPW should look into their client/contractor management for better

understanding of each party’s business and goals. Relational contracting

is about opening up communication and working with goals aligned.

There will not be common goals and objectives in a project if members do

not openly communicate and discuss each other’s objectives for

consensus.

Consensus/Conflict

The consensus between QDMR and Other Units is rated medium-high by

both parties. Both parties also find their performances are hindered by

each other at a relatively low degree.


112

The average frequency of conflict for both QDMR and Other Units is found

to be low. Again, similar to QDPW, there is no correlation between degree

of personal acquaintance and frequency of conflict between QDMR and

Other Units. This reinforces the suggestion that no matter how well people

know each other on a personal basis, the frequency of conflict is neither

positively nor negatively affected.


When disagreements arise, the most frequently used resolution method

was an open exchange of information about the conflict or problem and a

working through of differences to reach a mutually agreeable solution.

Table 6.61 shows a significant negative correlation is found between

effectiveness of working relationship and conflict resolution by avoiding

issues and smoothing over issues, suggesting the less frequent use of

conflict resolution by avoiding/smoothing over issues, the more effective

the working relationship is. However, there is no significant correlation

from Other Units on the tested variables.

Similar findings are recorded in QDPW’s survey. Follow-up interviews with

respondents confirmed Australian professionals prefer confronting issues

when disagreements arise. A conclusion can be drawn from the findings

so far – the Australian culture is very well suited to relational contracting.

Professionals are not afraid of confronting issues. Instead, this open

exchange of information is accepted and very welcome in the construction

industry. Open communication is a crucial element in relational

contracting.

Domain Similarity

Domain similarity refers to the extent to which QDMR and Other Units in a

relationship obtain their money from the same source; have the same


113

goals, work, technology and professional skills; and provide the same

kinds of products and services to the same clients/customers.

A high degree of domain similarity is found on funding source, whereas a

low degree of domain similarity is found on work kind. Significant

correlations are found between Work Kind and Clients/Customers,

Operating Goals and Technology. QDMR is often the client itself in most

projects. When QDMR and Other Units are carrying out the same work,

they should also be working towards common goals, which is one of the

fundamental philosophies in relational contracting. Similar results are

noted in QDPW. This is expected because respondents in both

organisations were working in project teams. A project team would not

work as effectively if team members do not reach common goals. It is

also realised that the higher the domain similarity of work kind is between

both parties, is the more likely that a high domain similarity of technology

exists. Sharing of knowledge and exchange of ideas are the themes of



114

Communication


(Project Services)


Written Reports

Face-to-Face Talks

Telephone Calls

Group Meetings

Working Relationship Effectiveness (Project Services)

Sig. 1 -

-0.181 0.421

0.143 0.524

-0.260 0.242

-0.106 0.638

-0.226 0.312


Sig. -0.181 0.421

1 -

0.171 0.447

0.298 0.179

0.247 0.268

0.206 0.358

Written Reports

Sig. 0.143 0.514

0.171 0.447

1 -

0.427* 0.047

0.720** 0.000

0.457* 0.033

Face-to-Face Talks

Sig. -0.260 0.242

0.298 0.179

0.427* 0.047

1 -

0.568** 0.006

0.633** 0.002

Telephone Calls

Sig. -0.106 0.638

0.247 0.268

0.720** 0.000

0.568** 0.006

1 -

0.479* 0.024

Group Meetings

Sig. -0.226 0.312

0.206 0.358

0.457* 0.033

0.633** 0.002

0.479* 0.024

1 -

* Correlation is significant at the 0.05 level (2-tailed) ** Correlation is significant at the 0.01 level (2-tailed) (n=22)

Table 6.65: Correlation between Working Relationship Effectiveness and Methods of Communication (QDMR & Other Units)

Table 6.64 in Appendix IV shows the most frequently used communication

method is telephone calls, followed by face-to-face talks. However, there

is no significant correlation between the frequency of communication and

working relationship effectiveness. Also, although there is a high

frequency of contact between the parties, the amount of time they spend

for each other is relatively low. The quality of communication is found to

be average (based on the degree of difficulty of getting in touch and

getting ideas across to other party). It is interesting to note from Table

6.69 that although both QDMR and Other Units find it relatively easy to get

in touch with the other party, the degree of difficulty in getting in touch and

getting ideas across is rated higher by Other Units. It is also noted from

the survey findings that Other Units finds the existing quality of


115

communication low when comparing with QDMR. The higher the degree

of difficulty in getting ideas across to Other Units, the more the

performance of QDMR is hindered by Other Units and visa versa. Positive

correlation is also found between difficulty in getting ideas across and

frequency of disputes (see Table 6.70). Similar findings are reflected in

the QDPW results; the more difficulty in getting in touch with QDPW, the

more QDPW performance is hindered by Other Units. This reinforces the

relationship between quality of communication and work performance.

However, the quality of communication in both departments is average

only.


Tables 6.79-6.82 show both QDMR and Other Units have a medium-low

level of influence on operations and goals/services on each other.

Survey results show that both QDMR and Other Units found there to be a

high extent of commitments by each party. Also, both parties found the

relationship has been very productive. Both parties believed that the time

and effort spent have been worthwhile, and both are very satisfied with the

relationship. However, both QDMR and Other Units found the equality of

transactions below average, suggesting the give-and-take relationship with

other party was unbalanced. Both parties felt ‘we get somewhat less than

we ought’ from the relationship.

Table 6.89 shows a positive correlation is found between the extent of

commitment by QDMR and Other Units, suggesting that there is the

potential to increase the extent of commitment by other parties if more

evidence of commitment is made apparent by either QDMR or Other Units.

The same positive correlation is also found in the QDPW survey.


116

Positive correlations are also found between the extent of commitment by

both parties, the degree of productive relationship and the relationship

satisfaction level, suggesting these variables are interrelated. High

commitment from both parties would result in a more productive

relationship. During the follow up interview, one comment which appeared

from time to time is that a high level of commitment from all parties is

needed in order for the relationship and the project to be successful. All

unsuccessful relationship management/partnering projects have one

common theme – lack of commitment from all levels. The significant

influence of commitment by project parties on a productive relationship is

verified in this survey by QDPW and QDMR.

Positive correlations are also found with equality of transactions and the

extent of a productive and satisfactory relationship. Also, a positive

correlation is found between equality of transactions and personal

acquaintance, implying the better both parties know each other on a

personal basis, the higher the degree of transaction equality. It was

pointed out by various interviewees that personal relationships are very

important for successful partnering/relational contracting. Parties became

more cooperative, problems are discussed rather than disputed, there is

positive problem solving rather than confrontation, and there is sharing of

information which leads to reduction of risks and unreasonable claims.

The observation was reflected by the positive correlation between

consensus and resource dependence. The power of informal relations as

identified earlier in the QDPW survey result is verified.


117

Commit-ments (OU)

Commit-ments

(QDMR) Productive

Relationship Time & Effort

RelationshipSatisfaction




Resource Flow to QDMR

Resource Flow from

QDMR

Poor Commu-nication Quality

Freq. of Commu-nication

Domain Similarity

Resource Dependence Awareness

Personal Acquain-

tance Consensus

Commitments (OU)

Sig. 1 -

0.571** 0.005

0.567** 0.006

0.233 0.297

0.543** 0.009

0.386 0.076

0.333 0.130

0.115 0.609

-0.028 0.902

-0.303 0.170

-0.091 0.688

0.065 0.773

-0.317 0.151

0.231 0.302

-0.068 0.764

0.250 0.261

0.031 0.893

Commitments (QDMR)

Sig. 0.571** 0.005

1 -

0.558** 0.007

0.484* 0.022

0.648** 0.001

0.154 0.494

-0.130 0.564

-0.117 0.605

0.172 0.443

-0.364 0.096

-0.168 0.455

-0.066 0.771

0.251 0.260

0.254 0.254

0.101 0.653

0.369 0.091

0.114 0.614

Productive Relationship

Sig. 0.567** 0.006

0.558** 0.007

1 -

0.610** 0.003

0.824** 0.000

0.508* 0.016

0.081 0.721

0.203 0.364

0.096 0.670

-0.403 0.063

-0.566** 0.006

-0.148 0.511

-0.082 0.718

-0.066 0.769

-0.012 0.957

0.551** 0.008

0.090 0.692

Time & Effort

Sig. 0.233 0.297

0.484* 0.022

0.610** 0.003

1 -

0.696** 0.000

0.331 0.132

-0.112 0.621

0.133 0.556

0.197 0.380

-0.165 0.464

-0.585** 0.004

0.280 0.207

0.145 0.519

0.145 0.519

0.262 0.238

0.746** 0.000

0.404 0.062


Sig. 0.543** 0.009

0.648** 0.001

0.824** 0.000

0.696** 0.000

1 -

0.474* 0.026

-0.206 0.358

0.025 0.911

0.100 0.657

-0.421 0.051

-0.563** 0.006

-0.199 0.374

-0.083 0.715

-0.175 0.436

-0.159 0.479

0.533* 0.011

-0.022 0.923


Sig. 0.386 0.076

0.154 0.494

0.508* 0.016

0.331 0.132

0.474* 0.026

1 -

-0.049 0.829

-0.003 0.989

0.146 0.516

-0.077 0.734

-0.437* 0.042

-0.058 0.798

-0.254 0.254

-0.412 0.057

-0.019 0.925

0.433* 0.044

0.068 0.764

Relationship Clearly Specified

Sig. 0.333 0.130

-0.130 0.564

0.081 0.721

-0.112 0.621

-0.206 0.358

-0.049 0.829

1 -

0.457* 0.033

-0.275 0.215

0.072 0.749

0.231 0.300

0.551** 0.008

-0.186 0.407

0.362 0.097

0.308 0.163

-0.050 0.826

0.328 0.136

Standardised Relationship

Sig. 0.115 0.609

-0.117 0.605

0.203 0.364

0.133 0.556

0.025 0.911

-0.003 0.989

0.457* 0.033

1 -

0.202 0.368

0.255 0.252

-0.216 0.335

0.323 0.143

-0.056 0.804

0.255 0.253

0.430* 0.046

-0.271 0.223

0.190 0.396


Sig. -0.028 0.902

0.172 0.443

0.096 0.670

0.197 0.380

0.100 0.657

0.4\146 0.516

-0.275 0.215

0.202 0.368

1 -

0.033 0.884

-0.120 0.595

-0.059 0.796

0.218 0.330

0.166 0.461

0.157 0.486

0.030 0.895

0.008 0.972

Resource Flow from QDMR

Sig. -0.303 0.170

-0.364 0.096

-0.403 0.063

-0.165 0.464

-0.421 0.051

-0.077 0.734

0.072 0.749

0.255 0.252

0.033 0.884

1 -

0.248 0.267

0.189 0.400

0.054 0.813

-0.018 0.937

0.178 0.428

-0.246 0.269

0.052 0.818

Communication Quality

Sig. -0.091 0.688

-0.168 0.455

-0.566* 0.006

-0.585** 0.004

-0.563** 0.006

-0.437* 0.042

0.231 0.300

-0.216 0.335

-0.120 0.595

0.248 0.267

1 -

0.033 0.884

-0.228 0.307

0.284 0.200

-0.215 0.377

-0.454* 0.034

-0.140 0.535

Freq. of Communication

Sig. 0.065 0.773

-0.066 0.771

-0.148 0.511

0.280 0.207

-0.199 0.374

-0.058 0.798

0.551** 0.008

0.323 0.143

-0.059 0.796

0.189 0.400

0.033 0.884

1 -

0.137 0.545

0.514* 0.014

0.591** 0.004

0.110 0.625

0.716** 0.000

Domain Similarity

Sig. -0.317 0.151

0.251 0.260

-0.082 0.718

0.145 0.519

-0.083 0.715

-0.254 0.254

-0.186 0.407

-0.056 0.804

0.218 0.330

0.054 0.813

-0.228 0.307

0.137 0.545

1 -

0.082 0.717

0.365 0.095

0.181 0.421

0.379 0.082

Resource Dependence

Sig. 0.231 0.302

0.254 0.254

-0.066 0.769

0.145 0.519

-0.175 0.436

-0.412 0.057

0.362 0.097

0.255 0.253

0.166 0.461

-0.018 0.937

0.284 0.200

0.514* 0.014

0.082 0.717

1 -

0.308 0.163

-0.059 0.793

0.432* 0.045

Awareness

Sig. -0.068 0.764

0.101 0.653

-0.012 0.957

0.262 0.238

-0.159 0.479

-0.019 0.935

0.308 0.163

0.430* 0.046

0.157 0.486

0.178 0.428

-0.215 0.337

0.591** 0.004

0.362 0.095

0.308 0.163

1 -

0.089 0.693

0.701** 0.000

Personal Acquaintance

Sig. 0.250 0.261

0.369 0.091

0.551** 0.008

0.746** 0.000

0.533* 0.011

0.433* 0.044

-0.050 0.826

-0.271 0.223

0.030 0.895

-0.246 0.269

-0.454* 0.034

0.110 0.625

0.181 0.421

-0.059 0.793

0.089 0.693

1 -

0.308 0.163

Consensus

Sig. 0.031 0.893

0.114 0.614

0.090 0.692

0.404 0.062

-0.022 0.923

0.068 0.764

0.328 0.136

0.190 0.396

0.008 0.972

0.052 0.818

-0.140 0.535

0.716** 0.000

0.379 0.082

0.432* 0.045

0.701** 0.000

0.308 0.163

1 -

* Correlation is significant at the 0.05 level (2-tailed). ** Correlation is significant at the 0.01 level (2-tailed) (n=22)

Table 6.89: Correlation between Perceived Effectiveness of Relationship and Relationship Indices (QDMR)

119


6.3.4 Culture

Results on Hofstede’s culture indices are presented in Table 6.44 below.

PDI UAI IDV MAS




(n=16)



(n=10) * Concepts are measured on a scale of 1 to 5, with 1 indicating utmost importance and 5

indicating little to no importance on the criterion for an ideal job.

Table 6.90: Importance of Criteria for an Ideal Job (QDMR)

It is interesting to find from Table 6.91 below that both QDPW and QDMR

professionals have similar ratings on the same tested criteria for an ideal

job. Both QDMR and QDPW professionals rate personal time, desirable

living area and cooperation with team members very important for an ideal

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job. Cooperation with team members is a fundamental requirement for

relational contracting. Good working relationship in the project team is one

of the main philosophies in relational contracting. As shown in Table 6.90

above, it is interesting to see QDMR professionals rated contribution to

company’s success utmost importance for an ideal job (the most important

criteria), yet working in a successful company and the size of the

organisation is considered to be not so important or desirable. These

results actually indicate a strong linkage with the high score on the

affective commitment dimension. QDMR professionals have a strong

emotional attachment to the organisation, and they also find contributing to

the company’s success highly important in a job. It appears that QDMR

professionals and the organisation have a common and positive goal

alignment to the company success. In any successful project, it is not

uncommon to find ‘goal alignment in the project team’ as one of the major

criteria. Likewise, relational contracting might not be implemented as

effectively if project team members at all levels have no common goal.

Survey results also show that working in a well-defined job situation where

the requirements are clear is not considered to be as important by QDMR

professionals.

121


t-value Standard Deviation

Null Hypothesis

Personal Time -0.250 0.516 0.810 Challenge 1.260 0.563 0.230 Stress -0.483 0.935 0.640 Physical Condition -0.619 0.834 0.550 Relationship with Superior -1.320 0.488 0.210 Employment Security -0.258 0.751 0.800 Freedom 2.070 0.561 0.057 Cooperation 0.327 0.592 0.750 Consult by Superior 0.174 0.743 0.860 Contribution to Company 1.520 0.594 0.150 High Earning -0.564 0.458 0.580 Serve the Country 1.430 0.767 0.170 Desirable Living Area 0.000 0.535 1.00 Opportunity for Advancement 0.367 0.704 0.720 Job Adventure 0.462 0.699 0.650 Successful Company -0.243 0.797 0.810 Help the Others 0.564 0.915 0.580 Job Definition -1.47 0.704 0.160

(n=10)

Table 6.91: Difference between the Means of QDPW and QDMR on the Importance of Criteria for an Ideal Job using t-test

Mean Median Standard Deviation Organisation’s rule should not be broken under any circumstances 2.80 2.00 1.14 Trust 1.80 2.00 0.42 Dislike of work 3.90 4.00 0.32 More desirable to work in a large corporation 4.00 4.00 0.47

(n=10) * Concepts are measured on a scale of 1 to 5, with 1 indicating strongly agree with statement

and 5 strongly disagree.

Table 6.92: Level of Agreement on Statements (QDMR)

Both QDPW and QDMR respondents reported that they do not often feel

stress at work. Also, the majority disagree that a large corporation is a

more desirable place to work than a small company, and theory X is

strongly rejected – these all match well with what Hofstede suggested

would be found in an organisation with a low masculinity index. Both

QDPW and QDMR respondents agree that personal relationships are

122


important in managing a project/contract; respondents strongly disagree

that personal relationships should be sacrificed for meeting personal

objectives, which again goes with an organisation with a low masculinity

index as suggested by Hofstede. However, it is interesting to see the

diverse opinions in QDMR and QDPW on sacrificing personal relationships

with project team members to ensure successful project completion.

Mean Median Standard Deviation Personal relationship are important in managing project/contract 1.50 1.50 0.53 Formal procedures are necessary for the successful management of a project 1.70 2.00 0.48 Informal arrangements are necessary for the successful management of a project 2.50 2.00 1.08 Personal relationships amongst the project members are more important than those in your employer’s organisation 2.70 3.00 0.95 One must be willing to sacrifice personal relationships with members of the project team to ensure the successful completion of the project 3.90 4.00 0.74 One must be willing to sacrifice personal relationships with members of the project team to ensure their firm’s objectives are met 4.00 4.00 0.47 On must be willing to sacrifice personal relationships with members of the project team to ensure one’s personal objectives are met 4.20 4.00 0.42 One must be prepared to disregard formal procedures in order to ensure the successful completion of the project 3.40 4.00 1.08 One must be prepared to disregard formal procedures in order to ensure one’s firm’s objectives met 3.60 4.00 0.97 One must be prepared to disregard formal procedures in order to ensure one’s own objectives are met 3.70 4.00 0.95



Table 6.93: Agreement to Statements in Relation to Project Success or Achieving Objectives (QDMR)

According to questionnaire responses and in subsequent interviews, both

formal procedures and informal arrangements are considered necessary

for the successful management of a project. The majority’s view was that

relationship management is more successful in projects when it has been

123


made formal in contract documents. This finding gives an excellent

example of the importance of embedding informal arrangements in formal

mechanisms.

6.3.5 Overview of QDMR Data

Levels of commitment found in QDMR are generally middling, except

affective commitment, which was relatively strong. Affective commitment

is developed through perceptions of satisfactions and trust. This finding is

very positive because strong affective commitment means participants

strongly identify themselves with the organisation. They feel comfortable

working in the organisation and are happy with the membership. They are

unwilling to leave the organisation regardless of attractive packages

offered outside. QDMR professionals should be following a developmental

group mode and do prefer working in a task culture but are actually in a

mix between role/task culture and follow the systematised/discretionary

mode. The mismatch between the parent organisation culture and the

project culture is apparent.

The degree of personal acquaintance with the other party is rated slightly

higher by Other Units than QDMR. During a number of interviews, it was

pointed out by contractors that on some occasions, they would identify

specific members to be put in the project team, based upon the choice of

Superintendent from QDMR. Such behaviour advocates the degree of

personal acquaintance is crucial in choosing the right mix of people in a

project .

The most frequently used resolution method was by an open exchange of

information when disagreements arise. The resolution of disagreements

reflects an intra-organisational relationship management approach within

QDMR. One of the criteria for successful relationship management or

alliancing is open and honest communication between project team

124


members – by confronting issues. This suggests that a social

infrastructure already exists within QDMR which is in harmony with

relational contracting approaches and this should be further nurtured and

documented as a learning and skills issue.

It was surprising to find both parties believe their performances are

hindered by each other to a low degree. It was expected with the nature

of construction work, that the degree of performance is hindered by the

other party’s responses on for example design or quality of material

problems. Perhaps with civil construction works, as the site is often very

long, work can still continue even if a problem has arisen on one of the

sections. Work on site does not need to stop; whereas in building

construction, the site area is more restricted and all works are interrelated.

A typical example is brick works at level four cannot start before the floor

has been constructed.

A strong correlation is found between the greater difficulties in get ideas

across to Other Units, and the more the performance of QDMR is hindered

by Other Units and vice versa. This is purely a consequence of the nature

of construction because all works are interrelated. An example is constant

reminders from QDMR on issues such as site tidiness – by covering

manholes everyday after work. Should the messages/ideas not be

received by the other party(s), rework is required such as cleaning out the

debris every time, especially after a storm, or the asphalt base may even

be damaged. The consequences may not just be a delay of work by a day

or so, there may also be an additional cost on labour and materials.

Quality of information flow has always been crucial in the project team.

This is again confirmed by the positive correlation between difficulty in

getting ideas across and frequency of dispute, suggesting a poor quality of

communication often leads to a higher frequency of dispute.

125


Resource dependence was found to have a positive correlation with

frequency of communication as expected. Constant communication is

needed for the exchange of knowledge, such as QDMR’s expertise and

Other Units’ technical and practical knowledge. A strong correlation was

also found between frequency of communication and the level of

awareness. Also, it is shown that the higher level of awareness of the

other party, the higher degree of consensus. Positive correlation between

frequency of communication and degree of consensus suggests ‘keep

talking’ helps to bring about agreement and resolve problems, which is

one of the crucial elements in relational contracting – open and continuous

communication.

Communication quality has significant correlations with relationship

satisfaction and productive relationship, suggesting better communication

quality would improve relationship productivity and result in a more

satisfied relationship. Higher level of personal acquaintance has an effect

on better communication quality. One common issue pointed out by the

participants from QDMR is the sense of urgency seems to be often

neglected. The urgent need for better communication was raised by over

50% of the participants in follow-up interviews. Communication quality

and frequency are significant issues for both QDMR and QDPW.

6.4 Discussion

This survey has investigated the impact of the various cultural variables on

project performance. The basic concepts and variables relating to

cooperation, collaboration, organisational issues and performance were

examined through questionnaire survey and follow-up interviews with

QDPW and QDMR respondents. Cultural barriers to change exist at both

management and operation levels. There was a mismatch in both

departments between the organisational culture as perceived by the

professionals and the organisational structure that was being

126


implemented. Professionals in the departments preferred working in a

task culture, but in fact they were working in a role culture. Matrix

organisation is particularly suitable to construction project environment

(Bresnen 1990; Rowlinson 2001), and such an organisation will only work

effectively with a task culture. In the Hong Kong study conducted by

Rowlinson, the mismatch between the actual organisation culture and

organisation structure is one of the factors that created barriers against

implementing changes in the department.

Relational contracting suits the Australian culture very well. Professionals

were not afraid to express their ideas or disagreements. Direct

confrontation between individuals was accepted and preferred for

collaboration as well as conflict resolution. Australian professionals have

strong individualist attitudes; open discussion of matters is preferred,

which has an implication for decision-making styles and problem-solving

techniques. Further support for this argument is the finding that being

consulted by one’s direct supervisor is very important. Australian

professionals are not afraid to express disagreements with their

supervisors. However, uncertainty avoidance was an issue that might

impact the efficiency of implementing relational contracting. Ineffective

rules and procedures might be imposed to satisfy people’s emotional need

for formal structure. This study has demonstrated Australian professionals

prefer a flat organisation structure and have a strong desire for

decentralisation, yet also a medium level of formality. Both QDPW and

QDMR professionals were actually working in a role culture and

systematised structure mode. Although having roles clearly specified

assists the relationships between parties, excessive formalisation, rules

and procedures do not necessarily contribute to relationship productivity

and might in fact have a negative effect on the decision-making process.

Decision-making processes were prolonged due to extensive layers of

procedures that affected work efficiency. The importance on having both

formal and informal mechanisms in place was highlighted in the study.

127


Findings showed that should one’s level of commitment increase, the other

party’s commitment level would also increase significantly. Strong support

and commitment from project parties is crucial for project success and

implementation of changes. Also, findings showed that the more the

parties are satisfied with their relationships, the more productive their

relationships would be; and both levels of relationship satisfaction and

productivity would increase with the degree of personal acquaintance.

Australian professionals strongly agreed personal relationships are

important in managing projects. The importance of personal relationship

in the project process is agreed by the respondents and shown in

statistical analysis.

Low to medium levels of commitment were found in the professionals,

except the high level of affective commitment that was found in the QDMR

work group. Commitment to the goals and objectives of an organisation is

crucial in facilitating successful implementation of relational contracting.

As noted earlier, one party’s commitment levels have a significant effect

on the others’. The mismatches on organisation culture and structure

were more apparent in QDPW than QDMR. It is suggested the degree of

match and mismatch between organisation culture and structure has an

impact on the staff’s commitment levels.

The advantages and importance of face-to-face and continuous open

communication were identified in both the survey and interviews.

However, finding time for communication seemed to be a major problem in

QDPW. This is clearly an issue QDPW needs to investigate. The effect of

communication quality and frequency on parties’ relationships was clearly

shown in this study, and both QDPW and QDMR professionals clearly

stated better communication is needed. This is obviously an issue both

departments should address promptly.

128


QDPW professionals need to go through an extensive amount of

procedures when attempting to resolve or discuss an issue, yet the

decision might be overruled, which subsequently leads to more meetings

for discussing the issue and the way forward. Professionals are not

empowered to make decisions and this might be a possible reason why

QDPW professionals appear to be unwilling to take up responsibilities and

‘forever prolong the decision-making process’. This observation is a clear

example of power culture and role culture mix.

129

CHAPTER 7

CASE STUDIES

7.1 Introduction

This chapter presents the findings from seven case studies collected from

QDPW and QDMR. Different types of information were collected including

meeting minutes and written material documenting the purpose and nature

of relationship contracting. Interviews were conducted with key project

team members – both contractor and client staff. Individuals including

project manager, project director, Principal, consultant, superintendent,

superintendent representative, engineer, foreman and site inspector were

interviewed. Observation of a number of monthly site and relationship

management meetings in Case Studies 2 and 6 was carried out in order to

examine team dynamics and communication processes in the project

teams.

7.2 Findings

Details of each case study can be found in Appendix V.

130

CHAPTER 7 CASE STUDIES

7.2.1 Case Study 1

The contract was awarded based on the lowest bid win tender system.

The project was seriously underbid; which led to a lack of money in the

contract prior to project construction. A Relationship Management (RM)

process was adopted throughout the project. Both client and contractor

staff in the project team, from inspectors/foremen to client’s

Principal/contractor’s Project Manager, attended the RM Foundation

Workshop. There was a lack of collaboration and open communication in

the project team. The Contractor refused discussion with the Client while

setting the project charter objectives; all proposed items were drafted by

the Contractor Project Manager, while disagreements from the Client on

the objectives were not taken into account. One major disagreement

between project parties was whether or not the finance issue was to be

part of the charter objectives. Communication and relationships in the

project team started poorly from the first day.

There was a lack of buy-in on relationship management at the Contractor’s

senior management level. The existence of ‘us and them’ attitudes

became apparent as the project progressed. There was poor

communication in the project team; issues and ideas were not raised or

discussed openly during meetings. There was no open or informal

communication; all matters were communicated through formal letters with

strong references to contractual clauses. During project construction, the

Contractor put in an excessive amount of claims, attempting to increase

the project income. Such behaviour forced the Client to spend a large

amount of time and resources on checking and responding to the

Contractor’s claims. Rather than working towards ‘best for project’, both

parties were working towards their self-interest, reflecting zero goal

alignment in the project team. There was no appropriate platform for the

RC culture to develop. Further, there were strong personality clashes

131


between project team members, especially at the senior management

level, putting pressure on project team relationships.

The lack of empowerment from both Contractor and Client senior

management levels was clearly identified in this case study. Engineers

were not empowered to make any decisions; all discussions carried out at

engineer levels were ‘reviewed’ and disrupted by senior management

levels, with issues remaining unresolved and accumulating. The decision-

making process was prolonged; project members at the operational level

were put under pressure on problem resolutions and were unable to close

up issues.

There was a high staff turnover in the project, suggesting a lack of

commitment from the parent organisation to relational contracting

principles and the project. Project staff were taken away from the project

and put into other projects by the organisation. In this project, only two

Contractor staff were involved from the beginning till project completion;

staff including the Project Manager were pulled out from the project. Also,

newcomers to the project were not given induction courses to RM. In

consequence, the sense of unity and working as a team were largely

affected. The declining project team relationship was reflected in monthly

relationship process assessments. The project team relationship went

downhill from the beginning of the project. Although a partnering facilitator

was commissioned halfway into the project and held a partnering

workshop with the project team, and the project team relationship did

improve (as reflected in the assessment) in the following month, but

gradually declined again for the remaining period. There were ongoing

contractual disputes in the project and the project team relationships

turned sour.

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7.2.2 Case Study 2

The contract was awarded based on the lowest bid win system. In this

case, the contract was not underbid and the RM process was adopted in

the project. Prior to the RM Foundation Workshop, the Contractor

nominated the major Subcontractor (asphalt) for the workshop and on-

going involvement in RM process. Client, Contractor and Subcontractor

staff from various levels attended the RM Foundation Workshop, carried

out monthly relationship process assessment and attended follow-up

monthly RM meetings. Project charter objectives were discussed in a

team fashion and were set with consent by all participants. Goal

alignment in the project team was established at the beginning. There

was strong commitment from the parties’ parent organisations and there

was little staff turnover in the project.

Open communication took place between project team members since the

project began. Team members identified open communication as a crucial

element in relationship effectiveness. Direct communication methods such

as telephone conversation and face-to-face talk were preferred. An

expression used was ‘if the issue can be talked through in a few minutes,

why spend two hours writing a two page letter?’ Project team members

made use of both formal and informal communication channels. All issues

and disagreements were raised during meetings and were discussed. The

Project team believed issues must be dealt with speedily in order to avoid

project delay and extra costs. There was buy-in of relationship

management at all levels. The principles of relational contracting were

practised and promoted to all levels; the Subcontractor was also exposed

to the relational contracting system and experienced relational contracting

in practice. There was open communication at all levels and parties’

relationships were proven to be highly effective.

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The decision-making matrix was strictly followed at all levels. If any issues

could not be resolved promptly in the monthly meetings, they were taken

aside for further discussion between the Client and the Contractor at the

senior management level; the work relationship at the project level was not

affected and was maintained throughout the project. Project team

members at the operational level were able to work in a task culture and

focus on their works as well as closing up issues.

The Contractor in this project had a long working relationship with the

Client and was very familiar with the relationship management process.

There was a high degree of personal acquaintance between both Client

and Contractor senior management. Individuals at the senior

management levels understood each organisation’s policy and each

individual’s working style, which helped in developing the effective working

relationship in the project team.

7.2.3 Case Study 3

The consequences of not having a sufficient amount of money in the

contract were apparent. The project was broken down into three contracts

(packages). On the contract that was seriously underbid, work did not

finish on time, and there was high staff turnover including bankruptcy of

two Contractor firms. Both Contractors tried to recover cost throughout the

construction process. A Relationship Management Foundation Workshop

was held at the beginning of the project for the project team; however,

there was a lack of goal alignment. Contractors focused on minimising

loss during work, whereas the Client spent extra time ensuring the quality

and schedule of work, resulting in diverse interests in the project team.

Upon each Contractor bankruptcy, most workers at the operational level

were re-employed, by the second Contractor and by the Client at the later

stage. The work process was significantly affected during each transition

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period. However, it was interesting to find that the relationship remained

satisfactory through the project. There was strong commitment from the

Client’s senior management to relational contracting principles. They tried

to keep the direct impact on the project team to a minimum by re-

employing the Contractor’s staff. Although the project team was exposed

to relational contracting principles and there was strong commitment from

the Client side, the project team was in distress and the team spirit was

damaged. A relational contracting culture was not able to fully develop in

the project team.

The other two contracts in the project were not underbid. Good

relationships were established in the project team on the first day. Strong

commitment to relational contracting principles was received from both

Client and Contractor organisations and there was buy-in at all levels. The

major subcontractor was nominated by the Contractor to be involved in the

relational contracting process, including the Relationship Management

Foundation Workshop, monthly partnering assessment and partnering

meetings. The same Contractor won both contracts, and therefore the

same project team worked through both contract works. There was a right

mix of people in the project team. Open and informal communication

happened at all levels throughout the project. The relationship remained

at a satisfactory level in the project team.

Only one workshop was held for each package. The partnering facilitator

was involved only in the foundation workshops. It was pointed out that

relational contracting was useful in ice-breaking and getting

communication going in the project team; yet the benefits of relational

contracting in the project were constrained by the limited involvement of

the partnering facilitator. Although the relationship management process

and team relationship were reviewed by project team members monthly

throughout the project, the involvement of an external facilitator (not part of

the project team) would have allowed missing/unseen issues to be

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identified. A mid-project workshop should be held, run by the same

facilitator (foundation workshop), to capture third person opinions; and to

refocus and raise the project team spirit on relationship management and

to improve the project team skills, such as communication and problem

solving skills. Interviewees commented that relational contracting

principles were like an adjunct to the project rather than part of the project.

This statement reinforces the importance and value of further relationship

management workshops in a project, with a partnering facilitator. It was

also suggested that a financial element, such as bonus sharing, should be

inserted into relationship management contracts, to encourage stronger

commitment from Contractors.

7.2.4 Case Study 4

The contract was awarded based on the lowest bid win system. The

contract was not underbid and there was sufficient money in the contract.

A partnering foundation workshop was held at the beginning of the project;

stakeholders from all parties (Client, Client’s Representative and

Contractor) attended. The workshop provide an ice-breaking platform for

the parties, where open communication was established with problems

and issues discussed in an open manner, shortening the decision-making

process and saving both time and money. Monthly partnering meetings

were held amongst parties’ senior management levels only, with

partnering assessment carried out prior to each meeting. Participants

from project parties were given opportunities to discuss project issues

including project process and team relationships in face-to-face meetings.

Project team members were chosen in order to get the right mix for the

project team, which provided a good platform for building good

relationships in the project team. The decision making matrix was strictly

followed in the project. Disturbances to project progress at the operational

level were kept to a minimum, which helped to maintain good project team

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relationships as there was little pressure from the parent organisations.

There was continuous strong commitment on the relational contracting

process from all parties at the senior management level, however, project

team members at the operational level were not involved in the relational

contracting process (foundation workshop and monthly partnering

meetings). It was pointed out that relational contracting is a strategy issue

and therefore should involve the senior management level only.

It was noticed there was a miscalculation in the project cost by the

Contractor early in the project. However, the project finished on schedule

and within budget, without receiving excess claims from the Contractor. It

was suggested the Contractor saw the benefits of relationship contracting

and wanted to establish a good relationship with both the Client and

Client’s Representative for future job opportunities. Rather than

concentrating on personal interests, project parties worked towards the

same goal, best for project, where issues were openly discussed and work

was conducted in a collaborative manner.

7.2.5 Case Study 5

Relational contracting principles were introduced to potential Contractors

in the tendering stage. Short-listed Contractors went through a selection

workshop facilitated by the Client and Client Consultant individually with

future project team members. Contractors were given a better

understanding of the project, which subsequently reduced the risk of an

underbid tender due to misunderstandings. Potential project team

members were given an opportunity to meet and assess each other’s

capacity and personality for future work cooperation. The workshop

allowed project members to openly discuss and communicate any

foreseeable project issues before construction, and to have a deeper

understanding of the project.

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All workshop attendees found the workshop useful and that materials

produced during the workshop might be of assistance in the project.

Attendees were exposed to relational contracting principles and put the

principles into practice. Feedback was received from Contractors on

further improvements to the relational contracting process. Good

relationships between the nominated Contractor and Client were built prior

to project construction. Upon contract award, a Relationship Foundation

Workshop was held within the project team, where relational contracting

principles were reinforced.

The project was evaluated base on the tender price, and with a strong

focus on non-price criteria. A strong foundation was built at a pre-contact

stage, which allowed the relational contracting culture to develop promptly

in the project team, with a united and correct mindset. Because issues

were raised prior to the project start day, the project team could focus on

the same goal – best for project. There were strong commitments from

the Client and Client’s consultant on relational contracting; the principles

were put forward to the industry, achieving an industry training objective

through the selection workshop. Also, both Client (and Client’s consultant)

and Contractor sides were able to gain a greater understanding of

relational contracting from a different point of view as well as refine the

process for the future.

7.2.6 Case Study 6

Relational contracting principles were adopted in the project since the

project began. Project team members at all levels (from senior

management level to the foremen) attended the Relationship Management

Foundation Workshop, which was run by a partnering facilitator.

Relational contracting principles were introduced to the project team,

which also acted as an ice-breaking platform; project team members were

exposed to each other’s personalities and established open

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communication. Project charter objectives were developed through team

discussion and consent. Although the contract was awarded based on the

lowest bid win system, there was enough money in the contract. Strong

commitment was received from the senior management level on both

Client and Contractor side; the Contractor would ensure half of its staff

would attend the monthly relationship management meeting, where either

or both Project Manager and Deputy Project Manager would be present.

A good relationship in the project team was established in the first day. All

issues and matters were openly discussed and ideas were exchanged

within the team, which minimised the chance for hidden agendas. Both

formal and informal communication channels, such as a monthly project

bulletin email sent by the Project Manager, were used across the team.

Team relationships and communication were developed through social

events such as barbeques and lunches. The contractor was very

proactive in the relational contracting process, indicating a strong buy-in of

relational contracting principles.

News (both project and organisation) and incidents were shared during

monthly meetings. Project team members at the operational level were

allowed to see the big picture of the project; whereas team members from

the senior management level were made aware of issues which had

impacts on the operational levels. Acknowledgements and respect were

shown from the project team on comments and suggestions raised during

meetings. Such behaviour encouraged continuous open communication

and collaboration amongst team members. Also, follow-up actions took

place on issues raised in each meeting. Such behaviour is very important

for project work to be conducted effectively, and to develop a relational

contracting culture, where actions were taken rather than just paying lip

service to issues.

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To ensure a right mix of people in the project team, an unsuitable member

was identified and removed from the team, with the role immediately

replaced. There was a high staff turnover in the project and signs of early

crisis warning were detected at the first quarter of the project period. The

partnering facilitator was immediately contacted and attended the following

monthly meeting. Early signs of crisis were identified and pointed out to

the project team. The project team was also reminded about the

relationship management process and principles. This was particularly

important to the project newcomers, to understand the system and be

introduced with the right mindset. The Relational contracting culture was

developed in the project team with buy-in and benefits were seen at all

levels.

7.2.7 Case Study 7

Relational contracting principles were applied in the project at project

design stage. Both Client and the design team (Consultant) attended a

relationship workshop facilitated by an external facilitator early in the

design stage, where relational contracting principles were introduced. The

workshop also provided a platform for the group to establish open

communication, which encouraged face-to-face discussions and

clarification of any queries relating to the project design, as well as revision

of the Client design brief in a team manner.

A second relationship workshop was held during tender selection. Each of

the two short-listed Contractors attended a relationship workshop

facilitated by an external facilitator with the Client, Client’s Representative

and Consultant. Contractors were able to gain a better understanding of

the project, which subsequently reduced the risk of underbid tender due to

misunderstandings. Also, potential project team members were given an

opportunity to meet and be familiar with each other’s capacity and

personalities prior to project construction, providing a strong foundation for

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the future project relationship. The workshop allowed the project group to

openly communicate and point out any foreseeable project issues before

construction. Rather than spending time to identify and correct mistakes

during construction, all matters concerned were addressed at the planning

stage, with solutions implemented to ensure a smooth run and minimise

extra cost in the project process.

The first step for building a successful project team requires the right mix

of people. During the tender review process, Contractors were asked to

raise any concerns or past unsatisfactory experiences with the proposed

consultant, allowing views from all parties to be captured and evaluated

while forming a project team. The Consultant was working alongside the

Contractor as part of the project team. All issues in relation to the project

design were discussed openly and resolved promptly with the direct

involvement of the Consultant. Genuine effort on putting in the best and

right team for the project was made by both Contractor and Client.

There were frequently face-to-face meetings between the Client (Client’s

Representative), Contractor and Consultant at senior management level

during the project. The Contractor recognised establishing good

relationships with project parties also meant future job opportunities.

There was no hidden agenda between the parties. An open book system

was adopted in the project; the Client and Project Director had access to

the Contractor’s financial situation, putting further weight on open

communication and development of trust. There were effective working

relationships between Client’s Representative and Contractor in the

project, especially for exploring innovative solutions and bringing down

costs due to the overheated market. Subcontractors were also brought

onboard for both relationship management workshops and monthly

meetings during construction. The Subcontractors’ technical expertise

was shared amongst the team, and coordination issues which had great

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impact on the project process were examined and included in the project

plan.

There was strong buy-in of relational contracting at all levels. Clauses with

strong references to relational contracting philosophy were stated in the

contract. Different project levels saw how they were benefited from

relational contracting principles and process in practice. Because of the

strong support and commitment from all parties’ senior management level

during the project construction, there were speedy decisions from the

higher level; project team members on-site were able to focus on getting

the job done. Common goal alignment on ‘best for project’ was apparent

at all levels.

There was open and honest communication in the project team at all

levels. Knowledge and ideas were shared between all parties including

Subcontractors. Relationships between Contractor and Subcontractors

were good, and better than on projects delivered under traditional

contracts. The relational contracting culture in the project team was

developed and maintained through on-going workshops, where major

relationship management workshops were facilitated by an external

facilitator for the best outcome for all parties. The importance of a third

party facilitator was identified in the project. With all project parties’

genuine effort, the project finished on time, within project budget and at

top quality.

7.3 Discussion

The research study identified common characters for successful and failed

relationship contracts arising from the case studies. In Australia, there are

four levels (namely the Inspector, Engineer, Project Manager and Director

levels) at which relational contracting (RC) needs to operate, and each

level has its own issues.

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Different issues at different levels

At the Inspector/Foreman level, the issue in the relationship is getting the

job done. At the Engineer level, the issue is quality and claims, and

keeping the job moving. However, the Engineers are not empowered to

make final decisions such as claim issues, and are sandwiched between

inspectors/foremen and Superintendent/Project Manager. The main focus

for the individuals is actually the quality of work life and, similarly to

inspectors/foreman, getting the job done. At the Superintendent

(Representative)/Project Manager level, the major issue is performance

measures and claims, and contract administration. Lastly, at the

Principal/Director level, the major issue is strategy and claims

management. It can be seen that the relationships within the project team

are focused on very different issues at these four different levels. The

benefits of RC need to be recognised at all levels for it to be applied

effectively. On the other hand, the RC process needs to be set up in a

way that would benefit the project team.

Understanding RC principles

Good project team relationships were found in all successful RC contracts;

where strong support and commitment were received from all levels in the

project team. In most cases, RC principles were introduced to participants

through RC foundation workshops and their observations during monthly

RC meetings, when project construction was taking place. In some

instances, the RC arrangement was applied from the tender selection

stage, where participants believed their knowledge of RC had increased

during the process. RC workshops in the tender selection and

construction stages allowed foreseeable issues to be raised and solved.

The project team was alerted and took precautions while dealing with the

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potential issues, rather than spending extra resources including time and

money to rectify mistakes.

Tender system

Having sufficient money in the contract was identified as a fundamental

characteristic of successful RC contracts. Contractors’ positive or

negative behaviours were found to have strong relationships with meeting

the project profit line or not. Contractors tend to bid low when submitting a

tender, and focus on recovering cost during construction. It was pointed

out in chapter 4 that the current tender selection/evaluation process in the

Queensland Government depends largely on the lowest bid win, while

non-cost criteria have been neglected. The system has driven some

Contractors to put in unreasonably low tender prices in order to secure the

job; and aim to recover profit through on-going claims during the project.

Such behaviour was reflected in various case studies and subsequently

led to a lack of goal alignment in the project team. Projects finished after

their due date, with a long battle on legal provisions, where additional time,

cost and human resources were spent. A strategic issue arises here – the

tender evaluation/selection process needs to be reviewed; where the

value of non-cost criteria should be increased by including relationship

aspects such as the Contractor’s past performance, their relationship with

Subcontractors, and attitude towards and experience with RC .

Commitment at all levels

RC would not succeed without continuous and strong support from the

senior management level in parent organisations. Many participants were

new to RC, and therefore did not understand the RC principles and

system. Also, RC was often misunderstood by the Contractor as a ‘mates

rates’ approach. It is crucial for project participants to be exposed to the

right concept of RC and the system. Relationship foundation workshops

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should be held upon contract award for the whole project team, including

both senior management and operational levels; newcomers to the project

team should be given induction to RC principles and operation. As was

pointed out earlier, different levels in the project team have different

issues, buy-in of RC at all levels would only be strong when each level

understands and benefits from the RC process. Most importantly,

participants at operational level will become participants at senior

management level in future. This also raises an education and training

issue, where RC principles should be introduced at an early stage, before

entering the industry. The benefits of practising RC principles prior to

construction stage were highlighted in the case studies.

Education and training

During interviews, it became apparent that the endorsement of the RC

arrangement depends mostly on the client body. Clients must be

educated to recognise the benefits of RC. They must be weaned away

from the practice of letting projects to the lowest tender submission. They

must have the right attitude towards RC; and must acknowledge that the

Contractor is entitled to a reasonable profit. The perception of RC as a

one-off approach was also observed. RC should not be seen as a one-off

approach which can be switched on and off as necessary. It is in fact an

overriding philosophy and a sea-change in the industry’s culture, leading

to changed attitudes and collaborative, proactive project management.

There is a need to promote the concept of RC as ‘business as usual’ and

effectively drag the industry into a new era. This is an education and

training issue that needs to be addressed at trades and

tertiary/professional levels; and needs to be driven by the involvement of

the construction industry groups – clients, contractors’ and suppliers’

associations, professional institutions and consultants associations.

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Short-term benefits

Short-term benefits need to appear and be recognised at project level to

retain continuous commitment from the project participants. The RC

process provides more opportunities for open and face-to-face

communication and discussion between participants. When the ‘protective

barrier’ of ‘paper warfare’ is broken down by a collaborative approach, the

need to formally document every discussion or event disappears and the

traditional, contract specified route for resolution of discrepancies is

circumvented. Participants are more comfortable at devolving decision-

making to appropriate levels within the organisation and greater job

satisfaction ensues.

‘More enjoyable to go to work’ was a commonly cited view of RC. When

the adversarial nature of the conventional contract is replaced by

collaborative, proactive working, participants find work more rewarding and

enjoyable - people enjoy going to work in an atmosphere which allows

each to make a positive contribution to moving the project forward; where

a sense of accomplishment is obtained.

Right mix of people

Getting the right mix of people in the project team is crucial for the success

of RC. Project participants need to have the right personalities and

attitude towards the application of RC. Strong commitment from the senior

management levels is needed. In some instances the author came across

examples embodied in the phrase ‘one bad apple can ruin the barrel’, this

reinforces the importance of getting the right mix of project team

participants. Both Client and Contractor must be prepared to replace the

unsuitable participant in the project team as soon as possible to relieve

stress being placed on project team relationships and project progress.

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RC process and benefits

Through formal RC processes such as RC workshops and monthly RC

meetings, participants were exposed to issues arising from different levels,

allowing the big picture to be seen. Project participants became more

proactive, cooperative and collaborative in solving problems and

exchanging ideas. Trusting relationships amongst project participants

were enriched through informal process such as social functions

(barbeques, lunches) and informal communications. It is noted that the

informal RC process was not practised in any of the unsuccessful projects.

By building a level of trust and being convinced of the Contractor’s

competence and trustworthiness, the Client’s staff can be freed from the

chore of being on the spot all the time in order to supervise. When the

situation arises, not only is work more enjoyable but time can be spent on

more creative issues and more focus can be given to creating an excellent

project.

In a similar manner, the Contractor can usefully make savings also. The

Client is capable of providing assistance on the technical and knowledge

aspects of the project and can, in a RC approach, provide faster, better

and more solutions to construction problems. More harmonious working

relationships allow both parties to focus on work issues rather than other

contractual issues. The Client becomes more proactive in helping the

Contractor, saving both cost and time, so Contractor staff can move onto

another project. The lower level of necessity to use formal channels and

documentation allows for more focus on project problem-solving, but this

new regime is dependant on trust being established. Undoubtedly, the

sources of claims and variations still need to be documented, but this is

not the main focus of either party.

In situations where external circumstances, such as an overheated

market, adversely affect a Contractor’s ability to perform to the highest

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standard, RC focuses on maintaining project performance whilst accepting

that a commercial solution to problems will be sought. Project participants

are allowed to focus on attaining timely, quality completion and

maintaining reputation and honesty, which then allows commercial issues

to be resolved in a more appropriate setting whilst maintaining a proactive

attitude on site.

RC encourages open and honest communication in the project team. RC

processes, such as the relationship selection workshop and relationship

foundation workshop, provide an ice-breaking platform for project

participants. The role of facilitator is crucial in this process. By facilitating

from the outset an atmosphere that promotes open communication and

willing cooperation, a brainstorming approach to project solving and a

value engineering approach can be brought to bear on project issues and

solutions. To maintain and develop non-adversarial attitudes and RC

culture, continuous RC workshops should be used throughout the life of a

project, ensuring open and continuous communication in the project team.

RC was successful where there was a strong sense of acknowledgement

and respect in the project team, and there were lots of positive

communications in the project team during monthly RC meetings. In

cases where RC failed, there was negative communication and a strong

blame culture. There was a lack of forward planning; former issues and

past incidents were focused on and repeated. Another common

characteristic found during relationship downturn or in failed RC projects

was a lack of prompt follow-up actions. Even where there was high

frequency of open communication and discussion during project team

meetings, if problems identified were not taken care off or reacted upon, it

created frustrations in the team, especially at the foreman and engineer

levels. The RC arrangement was perceived to be an adjunct to the

project, and lip service was paid rather than constructive actions. This not

only limits RC benefits, but a negative impression towards RC in practice

might be gained due to extra time and efforts that were spent in

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arrangements such as monthly RC meetings, without any evident concrete

improvements in the project delivery process. Training and education

needs to be focused on the skills and techniques and philosophy of RC, in

order to facilitate the move from adversarial to proactive relationships in

the project team.

Role of facilitator

The role of facilitator is crucial in the RC process. However, the cost of

employing an external facilitator is also very high, which subsequently

affects the frequency of the facilitator’s involvement in the process. Most

participants felt that the facilitator should be a neutral party to the project

but there are situations where one or other party has supplied a facilitator

and the process has been successful. Either employing a third party as a

facilitator or a Contractor supplying its own facilitator are scenarios which

can work successfully.

7.3.1 Postscripts

RC and Subcontractors

The roles of Contractor and Client in successful RC implementation are

clear in this study. However, implementation of RC also requires

involvements from the supply chain to be truly effective. Participants

realise the benefits of a Subcontractor’s involvement in project process,

including knowledge exchange, innovative construction methods and

integration of design. However, some participants disagree that

Subcontractors should be brought into the RC process because

Subcontractors have difficulties in accepting RC, due to different culture

and interpersonal skills, and would expect to be paid extra for sharing

expertise. Recent studies by Dainty, Briscoe and Millett (2001) indicate

that Subcontractors held generally negative views of partnering and supply

chain management. Those Subcontractors believed some Main

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Contractors did not understand the principles of partnering and alliancing

fully, and their motivations for adopting such approaches were not for

engaging mutual trust, support and benefit throughout the supply chain

(Ibid, p. 844); so there was a lack of integration of Subcontractors in the

project organisation structure.

This takes us back to square one. Subcontractors would keep having

difficulties and negative views on adapting RC culture and process if they

were not integrated into the project organisation structure at all. Major

Subcontractors’ engagement in the RC process has also proven beneficial

and successful (see case studies 2 & 3).

The involvement of a Subcontractor in the RC process is voluntary in the

current system, and it depends solely on the Contractor. Clients need to

take the lead on formal Subcontractor engagement in project organisation

structure; for example, by stating in contract documents that the Main

Contractor is required to involve major Subcontractor(s) in the RC process.

This allows Subcontractors to be exposed to the project structure and

immediate knowledge sharing as well as minimising error during

information transfer. For effective integration between project parties,

Subcontractors need to be familiar with RC principles and RC in practice,

and this raises the training and education issue. Continuous training and

education is needed to promote the concept of RC as ‘business as usual’

effectively in the industry.

Project parties must have the right attitude to RC. The Client must

acknowledge the Contractor is entitled to a reasonable profit; and the

same principle also needs to be applied between Main Contractor and

Subcontractors. The Contractor should treat Subcontractors fairly, where

all parties are on a level playing field. An appropriate attitude from the

Contractor may be encouraged by an inclusion of non-price criterion

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during tender evaluation regarding the Main Contractor’s relationship with

Subcontractors.

Inflexible Contract

Research in case studies shows a relationship contract is still inflexible.

The situation is apparent when it is the Client’s money, the Client’s

Representative’s contract. The Client needs to have the right mindset

about RC and understand RC principles, which raise the importance of

client management. Whether RC will be adopted in projects or not

depends mostly on the Client. One major role of the Client’s

Representative is to safeguard the Client’s interest. The mindset of selling

all project risks to the Contractor/delivery team, which subsequently leads

to unfair risk sharing, is still strong in Clients and Client’s Representatives.

One must be aware that this is the major driver of an adversarial

relationship between Client and Contractor (see Chapter 4). There must

be mutual obligations for the Client in RC; risks cannot be transferred to

the Contractor solely but need to be shared between project parties for

effective RC application. Incentive systems based upon risk/reward

mechanisms have been adopted for a level playing field, and to encourage

positive cooperation behaviour between project parties, through

formalising a RC arrangement in the contract. This prompts concern

about whether the RC arrangement would supersede the contract; or on

the other hand if a formal RC contract can safeguard against any

breakdown of the RC arrangement. Although different types of contract

might have different implications for project parties’ behaviour and attitude,

the formality of a contract provides a structured framework of RC process

and arrangement. Case studies presented earlier in this chapter show

that, through RC arrangements and an on-going maintenance process (for

example project participants were put in the same office), proactive and

collaborative behaviours between project participants were developed and

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maintained throughout the project, suggesting the driver of project parties’

behaviour and attitude is not contract formality but on-going process.

A RC arrangement was found successful in some cases, but unsuccessful

in others. Where RC has failed, RC principles were not fully endorsed in

the project and not all project participants held the right attitude towards

RC. One may argue RC is not suitable for all projects, and not everyone is

suited to the RC culture. One might even find a RC arrangement a waste

of time and it should be abolished at once when the system is not working.

Yet, without relationship management, the project could have been worse!

Through monthly relationship process meetings, project participants at all

levels are placed in a structured setting for face-to-face communication.

Although communications and information transfers are carried out in

formal settings as opposed to proactive collaboration, communication

channels are still open and project members at the operational level can

focus on keeping the job going. The relationship might not be good, but

people are bound in a RC environment and they are still talking. Project

team members are exposed to project issues at all levels. However, in a

traditional contract environment, there would be no direct communication

between project parties, only through legal proceedings. In consequence,

it creates an adversarial environment in the project team and extra

pressure at the operational level. Engineers are sandwiched in the

middle, unable to provide quick decisions and directions to the workers

due to the long wait in the ‘paper-war’, preventing foremen/inspectors from

getting their jobs done.

Based on the research findings, an Input-Process-Output map is

presented overleaf.

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Figure 7.1: Input-Process-Output Map based on Research Findings

Parent Organisation Culture � Leadership and

Management • Commitment

� Internal Factors

• Selection of project team members

• Filtration of RC concept to all levels

� Process Set-up

• Relationship management process structure

• Relationship maintenance process

� Tender System

• Documentation • Evaluation

(Process Maintenance)

Relational Contracting Environment � Project Culture

• Commitment • Goal alignment • Communication • Relationship

management understanding

� Relationship Start-

up • Foundation

workshop • RM process

attendees • Involvement of

major sub-contractor(s)

� Relationship

Process Evaluation • Monthly

relationship meeting

� Process

Maintenance • On-going

facilitations • Training and

education • On-going

Workshops � Learning Register

• Problem solving techniques

• Team building � Physical site

location

Outcomes � Organisation Level

• Fast track project problem resolutions and variations

• Staff up-skilling • Future job

opportunities � Individual Level

• Job satisfaction • Relational

contracting culture

• Ability to meet or close up issues at own level

� External Factors • Market

condition e.g. over-heated market

• Resource and materials availabilities

• Political influence

INPUT PROCESS OUTPUT

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CHAPTER 8

CONCLUSION

8.1 Introduction

The aim of this research has been to identify the key determinants of

effectiveness in relational contracting in the construction industry.

Based on the research findings, the following conclusions are drawn.

Relational contracting appears to suit the Australian culture very well.

Continuous commitment to relational contracting is required at all levels for

successful implementation. This leads to a third finding, that

organisational culture and structure must be matched if participants are to

retain commitment to the organisation. Relational contracting

implementation should be a continuous process, which needs to be

constantly maintained and facilitated to retain effectiveness. Lastly, this

research suggests that, through education and training, relationship

management culture is embedded in people’s mindset, shifting the

industry culture towards a more proactive and collaborative nature.

154

CHAPTER 8 CONCLUSION

8.2 Research Hypotheses

In general, the results of this research support the research hypotheses

listed below.

Hypothesis 1: Organisational culture and organisati on structure

must be matched if participants are to retain commi tment to the

organisation.

Findings in chapter 6 suggest the degree of match and mismatch between

organisation culture and structure has an impact on staff’s commitment

levels. Hypothesis 1 is accepted. Findings also point out mismatches

exist between actual and perceived organisational culture and structure.

The reasons for these mismatches appear to be different cultures between

parent organisation and intra-organisation (project); which leads to

hypothesis 2 below.

Hypothesis 2: Parent organisation culture affects t emporary

project culture.

Senior management set the tone for relational contracting and must

provide infrastructure for relational contracting to succeed. Findings in

chapter 6 and 7 also point out strong and continuous commitment from

senior management is crucial for relational contracting to be successful at

the project level. Parent organisation culture, whether it is adversarial or

collaborative in nature, directly affects how the project team operates and

its temporary project culture.

Hypothesis 3: Encouragement by organisation to exhi bit

cooperative behaviour amongst employees leads to gr eater

cooperation between individuals.

Findings in chapter 7 shows formalised relational contracting

arrangements in project organisations increase the frequency of

cooperation and collaboration between project participants. Project

155


participants become more proactive, cooperative and collaborative in

solving problems. Hypothesis 3 is accepted.

8.3 Conclusions

The research findings suggest relational contracting suits the Australian

culture very well. Australian professionals prefer physical interactions and

direct confrontation when dealing with matters. Well-run relational

contracting projects are satisfying to work in; they make work enjoyable

and lead to enhanced professional development. However, not everyone

is suited to relational contracting. Getting the right mix of people in a

project team has been identified as one of the most crucial elements for

the success or failure of a relationship contract. In order to maintain

harmony and an effective working atmosphere, senior management and/or

the parent organisation must be prepared to remove unsuitable member(s)

from the project team. Through a structured context, relational contracting

increases both formal and informal communications amongst team

members. Higher frequency of communication does not necessarily lead

to better team relationships or more collaborative problem solving

behaviour. Instead, good team relationships and collaborative behaviour

are found where respect and acknowledgment are expressed amongst

team members. The range participants from across the organisation who

take part in meetings in relational contracting projects appears to have a

positive impact on the quality of communication and information flow, and

is a stimulus to timely and appropriate action. Informal communication is

essential for relational contracting but it needs to be undertaken in an

appropriately structured environment with appropriate procedures.

This research suggests the degree of match and mismatch between

organisation culture and structure has an impact on staff’s commitment

levels. This study corroborates previous work in that the fundamental

element for successful implementation of changes is strong buy-in from

156


top management. This research indicates buy-in is not only crucial at the

senior management level, but at all levels for successful implementation.

In this case, the relational contracting concept needs to filter down to all

levels in the project team if team members are to retain commitment and

buy-in to relational contracting. This research identifies there are four

levels in Australia at which relational contracting needs to operate and that

each level has its own issues which must be reflected upon. Research

findings show that a lack of prompt follow-up actions or not closing up

issues leads to downturn or failure in relational contracting.

This research points out that mismatches between organisation and

project (temporary intra-organisation) cultures must be recognised and

accepted by organisation staff. The parent organisation obviously

influences project culture; commitment to the goals and objectives of an

organisation is crucial in facilitating successful implementation of relational

contracting or organisational changes. Having sufficient money in a

contract remains vital for project success. The tender selection/evaluation

process needs to be reviewed; where the value of non-cost criteria should

be increased by including relationship aspects.

Relational contracting should not be seen as a one-off approach which

can be switched on and off as one wishes. It is an overriding philosophy

and sea-change in the industry culture. Concepts of relational contracting

should be promoted as ‘business as usual’. Relational contracting needs

to be constantly maintained and facilitated to retain effectiveness.

Relational contracting maintenance and review process should be set up

before a project begins. Facilitation is needed to enable open, blame-free

communication and this facilitation must be ongoing throughout the life of

a project. The role of facilitator in achieving a relational contracting culture

is highlighted in this research.

157


A relationship contract can be inflexible. This situation is apparent when it

is the Client’s money and the Client’s Representative’s contract. The

Client’s Representative acts as a gatekeeper in the project to safeguard

the Client’s interest by transferring all project risks to the

Contractor/delivery team. The unfair risk sharing mindset remains strong

in both Clients and Client’s Representatives. Also, whether to adopt a

relational contracting approach in a contract depends highly on the Client.

The Client needs to be educated on the benefits of relational contracting

and to adopt the right attitude towards relational contracting. Client

management is a crucial issue for the prosperity of relational contracting.

The involvement of Subcontractors in the relational contracting process

has proven highly valuable for knowledge exchange and innovations.

However, the participation of the Subcontractor in the relational contracting

process is voluntary in the current system and it depends solely on the

Contractor. Major Subcontractors should be introduced to the relational

contracting process and be formally engaged in the project organisation

structure. Project parties must have the right attitude to relational

contracting. The Client must acknowledge that the Contractor is entitled to

a reasonable profit; and the Contractor should treat Subcontractors fairly,

where all parties are on a level playing field. This research suggests an

appropriate attitude from the Contractor may be encouraged by an

inclusion in tender evaluation of a non-price criterion on the Main

Contractor’s relationship with Subcontractors.

Project parties need to be familiar with relational contracting principles and

relational contracting in practice for effective integrations. This brings us to

the last conclusion of this research, that education and training is an

imperative element for achieving effective relational contracting.

Relationship management culture must be championed in organisations

through in-house workshops. Relationship management culture and

correct principles should be embedded in people’s mindset at an early

158


stage. This research suggests the relational contracting concept should

be promoted through continuous training and education in universities and

institutions.

8.4 Limitations of the Research

A limitation of this research is the dearth of private sector data. The

findings from the questionnaire survey and interviews rely heavily on the

public organisational members. Observations and interviews at

multidiscipline levels as a methodology nevertheless provide some

protection from biased data when examining the project team as a whole.

However, the findings on organisation culture and structure only reflect the

public sector, rather than both public and private sectors in the

construction industry.

Due to time and resource constraints, the study of both sectors at multiple

multidiscipline levels remained a challenge for the researcher. In

achieving an overall prospective of the industry on relational contracting, it

is acknowledged that some depth and reliability achievable through

researching the private sector has been foregone. The findings from this

research have provided a significant platform on relational contracting

process for further research.

8.5 Areas for Future Research

Although this research focused on the public sector in Queensland, the

data collected from interviews and case studies also captured the

contractor side. An attempt has been made to develop a relational

contracting process framework. However, further research is required to

test the proposed framework by connecting with the key findings that

relational contracting much be constantly maintained and facilitated in

159


order to be successful and turn it into an acceptable model for practical

application.

Although it is widely accepted that the client is the driver of change, this

research argues strong commitment and support are equally important

from all levels in the project team, which includes members from the

contracting side. As has been pointed out extensively in Chapter 6, there

is a strong relationship between the degree of personal acquaintance and

relationship productiveness. Similar research should also be conducted in

the private sector. By comparing and contrasting both sets of results, a

360-degree perspective on relational contracting will be generated, which

should enhance better understanding and more proactive collaborations

between both sectors.

APPENDIX I TRANSACTIONAL & RELATIONAL CONTRACTING

161

(adapted from Darwin et al. 2000 – p.41)

Transactional pole Relational pole

Communication is limited and formal Communication is extensive, and is both formal and informal

Everything is measured in monetary terms Many aspects are difficult to measure, either in monetary or in other terms. Parties do not measure them

The beginning and end of the contract relationship are clearly defined

The beginning and end, if any, of the contract relationship are gradual

Initial planning is complete and specific – only remote contingencies are not covered

There is limited specific planning at the beginning

There is little or no bargaining as the contract proceeds

The contract involved extended mutual planning – a “joint creative effort”

The contract agreement binds the partners totally

The agreement is tentative

Almost no cooperation is required after the start of the contract

The success of the contract is entirely dependent on further cooperation in both performance and further planning

Each particular benefit and burden is specifically assigned to one party

There is undivided sharing of both benefits and burdens

Specific rules and rights are applicable, based on agreement. These are usually measured in monetary terms

Rules and benefits are non-specific and non-measurable

No altruistic behaviour is expected or occurs

There is significant expectation of altruistic behaviour

Problems in performance or among the participants are not expected, except perhaps those planned for. If they occur, they are expected to be governed by specific rights

The possibility of trouble is anticipated and is dealt with by cooperation

AP

PE

ND

IX II

D

EF

INIT

ION

S O

F P

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TN

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, AL

LIA

NC

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& R

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16

3

PARTNERING ALLIANCING RELATIONAL CONTRACTING

Queensland Government – Dept. of Main Roads

• not a form of contract • a process applied outside the contract to

align the goals and objectives of the contract parties

• to facilitate good communication, teamwork and joint problem solving

• can be used in conjunction with any form of contract

• not necessarily legally binding • a way of conducting business in which two or

more organizations make long-term commitments to achieve mutual goals

• (project alliance) an agreement between two or more entities that undertake to work co-operatively

• share project risk and reward between parties

• achieve agreed outcomes based on principles of good faith and trust, with an open book approach towards cost

• a purpose built contract in which the client and the contractor form an alliance to build the works

• both parties develop and agree on the target cost estimate for the project

• a board drawn from both organizations manages the contract

• not a form of contract • a good relationship between two or more

parties that contributes towards the successful completion of a contract

• the provision of a collaborative or team approach to the achievement of project outcomes that are best for the project

Construction Best Practice Programme

Bronder & Pritzl

Cheung

• a structured management approach to facilitate team working across contractual boundaries

• fundamental components include mutual objectives, agreed problem resolution methods and an active search for continuous measurable improvements

• exists when the value chain between at least two organizations with compatible goal structures are combined for the purpose of sustaining and achieving significant competitive advantages

• can be collaborative or cooperative

• cooperative and proactive contracting environment

• flexibility and adjustments provisions to cater for unanticipated contingencies

• relation dispute resolution • parties are mutually dependent to each other • trust and cooperation are greatly heightened

AP

PE

ND

IX II

D

EF

INIT

ION

S O

F P

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TN

IER

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, AL

LIA

NC

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& R

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16

4


Construction Industry Institute

Howarth, Gillin & Bailey

Alsagoff & McDermott, Jones, Rahman & Kumaraswamy

• experimental partnering, packaged partnering and committed partnering

• a long-term commitment between two or more organizations for the purpose of achieving specific business objectives by maximizing the effectiveness of each participant’s resources

• requires changing traditional relationships to a shared culture without regard to organizational boundaries

• relationship is based on trust, dedication to common goals and an understanding of each other’s individual expectations and values

• service alliances • requires the lowest level of interdependence

between partners with the smallest amount of changes and the lowest level of joint commitment

• provide economies of scale • provide the ability for the partners to

undertake large-scale projects with a limited purpose

• difficulties arise due to the diversity of the interests and goals of the partners

• result in a loss of commitment from members

• opportunistic alliances • Provide access to the resources of the

partner organization • Motivated by the existence and recognition

of a market opportunity • Partners might exploit one \another’s

resources and then move on to pursue the opportunity alone

• stakeholder alliance • the closest link between member

organizations of all • seek to build strong, long-term relationships • assist in achieving the organizational goals

by major stakeholders

• based on recognition of mutual benefits and win-win scenarios through more cooperative relationships between parties

• embrace and underpin various approaches such as:

• partnering • alliancing • joint venturing • collaborative working arrangements • better risk sharing mechanisms • long-term • develop and change over time • involve substantial relations between parties • the norm for complex transactions to be

conducted in high complexity environments, where complete contingency arrangements are impossible

AP

PE

ND

IX II

D

EF

INIT

ION

S O

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TN

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, AL

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& R

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16

5


European Construction Institute, Liu & Fellows

Wood & Gray

Blau, MacNeil, Rousseau & Parks, Darwin, Darwin et al.

• a method of improving communication mechanisms and technologies

• a method of responding to innovative construction

• creates a less stressful working environment • reduces transaction costs resulting from

uncertainty, competition and information asymmetry

• organizations enter collaborative relations • to reduce the complexity of their

environment • to gain more control over environmental

factors • may create new dependencies • may increase environmental complexity and

turbulence • may therefore increase transaction costs

• entails long-term social exchange between parties

• mutual trust • interpersonal attachment • commitment to specific partners • altruism • cooperative problem solving

Green

Hamel

Darwin, Jorde & Teece, Kanter, Lynch, Bolton et al.

• concerns with maximizing effectiveness • demands each project exceeds the

performance of the previous one • measure of success hinges on cost

improvement • more onto the buying power than to any

independent appraisal • to exercise increased control over the

construction supply chain • common goal with TQM – continuous

improvement

• can be collaborative or cooperative • collaborative alliances • organizations aware that their partners are

capable of disarming them • clear objectives • understand partner’s objective will affect

their success

• closely associated with partnerships and strategic alliances

• especially with contractors who avoid adversarial approaches to contract management

• entail long-term collaborative based on • informality • shared problem solving • reciprocity • high trust

AP

PE

ND

IX II

D

EF

INIT

ION

S O

F P

AR

TN

IER

ING

, AL

LIA

NC

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& R

C

16

6


Bennett and Jayes

Love & Gunasekaran

MacNeil

• a management approach used by two or more organizations to achieve specific business objectives by maximizing the effectiveness of each participant’s resources

• mutual objectives between organizations • agreed method of problem resolution • an active search for continuous measurable

improvements

• can be collaborative or cooperative • collaborative alliancing • help to establish the inter-organizational

relations • organizations engage in collaborative

behaviour for a specific purpose • a “psychological barrier” may exist between

partners • may fear that their partners may out-learn or

deskill them • cooperative alliances • encourage partners to commit their resources

to the relationship to gain mutual learning • lower level of competition • partners feel more committed to work

together • partners exchange their knowledge and

resources

• construction contracts are typical relational contracts

• involve numerous parties and subcontracts with heavy informational exchange in the construction activities

• parties are mutually depend to each other • provides the means to sustain ongoing

relations in long and complex contracts by adjustment processes of a more thoroughly transaction-specific, ongoing administrative kind

DETR

Hutchinson & Gallagher

Rahman & Kumaraswamy

• involves two or more organizations working together to improve performance through agreeing mutual objectives

• devises a way for resolving disputes • commits themselves to continuous

improvement • measures progress • shares the gains • a tool to tackle fragmentation

• an integrated high performance team selected on a best person for the job basis

• sharing all project risks with incentives to achieve gamebreaking performance in pre-aligned project objectives

• a framework of no fault, no blame and no dispute

• uncompromising commitments to trust, collaboration, innovation and mutual support

• objective is to achieve outstanding results

• “ongoing dynamic state” of relations among the contracting parties

• promises to do something in the future, in the process of “exchange” to the future

• involve transactional discreteness • partnering practices relational contracting

principles

AP

PE

ND

IX II

D

EF

INIT

ION

S O

F P

AR

TN

IER

ING

, AL

LIA

NC

ING

& R

C

16

7


Construction Industry Board

Hampson & Kwok

• establishment of agreed and understood mutual objectives

• methodology for quick and cooperative problem resolution

• culture of continuous, measured improvement

• successful strategic alliances • trust • commitment • interdependence • cooperation • communication • joint problem solving

Peters, Walker & Hampson

• relies solely on the commitment of individuals • not legally binding • aims and goals are agreed • dispute resolution and escalation plans are

established • partners retain independence • partners may suffer or gain from the

relationship individually

• 2 types of alliancing – strategic alliancing and project alliancing

• parties form a cohesive entity • parties shares risks and rewards according

to an agreed formula • strategic alliance • inter-organisational arrangement • relationship between parties extends beyond

a specific project • ongoing mutually beneficial business • project alliancing • defined end • parties brought together for a specific project • legally enforceable

AP

PE

ND

IX II

D

EF

INIT

ION

S O

F P

AR

TN

IER

ING

, AL

LIA

NC

ING

& R

C

16

8


Gaede, Reading Construction Forum, Matthews, Matthe ws & Rowlinson, Kumaraswamy & Matthews

• categorized as project partnering and strategic partnering

• project partnering • undertaken on a single project • partnering relationship terminated at the end

of project and new relationship commenced on the next project

• strategic partnering • takes place when two or more firms use

partnering on a long-term basis • usually undertaken in more than one project

or continuing construction activity

Watson, Reading Construction Forum

Manivong & Chaaya

• second generation partnering • “seven pillars” – strategy, membership,

equity, integration, benchmarks, project processes, feedback

• strategic decision

• project alliancing • a project delivery method • several participants join together to share

risks and outcomes on a project

Kubal

Kwok et al.

• required national lobbying in order for partnering to be used across industry

• project alliance • a cooperative arrangement between two or

more organizations • forms part of the organisations’ overall strategy • contributes to achieving their major goals and

objectives for a particular project

AP

PE

ND

IX II

D

EF

INIT

ION

S O

F P

AR

TN

IER

ING

, AL

LIA

NC

ING

& R

C

16

9


Watson, Kumaraswamy & Matthews, Matthews & Rowlinso n

• third generation partnering • construction industry should be building

virtual organizations with its supply chain to provide a complete service that is efficient, creative and innovative

• collaborative in producing and marketing a range of services that clients are eager to invest in

• cost saving construction time reducing

Wood & McDermott, Wilson & Wilson

• single-source, long-term relationships • business-focused • directed a t solving problems, rather than

simply selling products • trust is a key component • industry moves from competitive, adversarial

to cooperative relations based on reciprocity and solidarity

• encourages parties to adopt higher ethical standards with trust-based partnering

APPENDIX III CULTURE QUESTIONNAIRE

171

1 QUESTIONNAIRE 1

1.1 Description

Handy, C. (1985) Understanding Organisations , 3rd, Edition, Penguin, London. Handy defines 4 types of organisation: "Each organization, each part of an organization, has a culture, and a structure and systems appropriate to that culture. Individuals will each have a preferred culture.

Cultures Structures

power web

role temple

task net

person cluster

The choice of the appropriate structure will be determined by: • History and ownership; • Size; • Technology; • Goals and objectives; • The environment; • The people.

Within each organization the activities can be divided roughly into four sets:

• Steady state; • Innovation; • Breakdown; • Policy.

Each of these sets has its appropriate culture, structure and systems. Organizations that are differentiated in their cultures and who control that differentiation by integration are likely to be more successful. The management of differentiated organizations is not easy. Part Two will be mainly concerned with drawing attention to some of the problems. The problem is aggravated by the tendency of many management theorists and writers to remain rooted in their preferred culture. For instance:

1. Classical management theory was talking about role cultures - the management of the steady state.


172

2. Modern management thinkers concentrate on the task culture and have found their favourite organizations among the project-based companies of the US aerospace industry and the innovative ends of more traditional organizations.

3. Journalists, historians, and biographers have found the power cultures, centred around a key figure or figures, easier to focus on, more tempting to describe.

4. Sociologists, religious and youth leaders, have been concerned with the clash between the organization and the individual with a 'person' orientation.

Adapted from a questionnaire compiled by Dr Roger Harrison" By using Handy’s paradigms, the team can map where the organisation culture and organisation structure lie. If there is a mismatch, then this will have to be addressed before the change in the organisation can be successful – see Rowlinson’s paper on the HK Government organisation for an example of this. Reference: Rowlinson, S.M. (2001) “Matrix Organizational Structure, Culture and Commitment: a Hong Kong Public Sector Case Study of Change”, Construction Management and Economics, 19, 669-673.


173

1.2 Instructions Please complete this questionnaire individually.

(a) For yourself, your own values and beliefs; (b) For your own organisation.

Rank each statement in order of salience, put ‘1’ against the statement which best represents the dominant view in your own beliefs, ‘2’ for the next closest. Then go back and do the same for your organisation.


174

1.3 Questionnaire

Own Ranking

Organisation’s Ranking

1. A good boss

is strong, decisive and firm but fair. He/She is protective, generous and indulgent to loyal subordinates.

is impersonal and correct, avoiding the exercise of his/her authority for her/his own advantage. She/He demands from subordinates only that which is required by the formal system.

is egalitarian and influenceable in matters concerning the task. He/She uses his/her authority to obtain the resources need to get on with the job.

is concerned and responsive to the personal needs and values of others. She/He uses her/his position to provide satisfying and growth stimulating work opportunities for subordinates.

2. A good subordinate

is compliant, hard-working and loyal to the interests of his/her superior.

is responsible and reliable, meeting the duties and responsibilities of her/his job and avoiding actions which surprise or embarrass her/his superior.

is self-motivated to contribute his/her best to the task and is open with his/her ideas and suggestions. He/She is nevertheless willing to give the lead to others when they show greater expertise or ability.

is vitally interested in the development of her/his own potentialities and is open to learning and receiving help. She/He also respects the needs and values of others and is willing to give help and contribute to their development.

3. A good member of the organisation gives first prior ity to

the personal demands of the boss.

the duties, responsibilities and requirements of her/his own role, and the customary standards of personal behavior.

the requirements of the task for skill, ability, energy and material resources.

the personal needs of the individual involved.


175

Own Ranking


4. People who do well in the organisation

are shrewd and competitive with a strong drive for power.

are conscientious and responsible with a strong sense of loyalty to the organisation.

are technically competent and effective, with a strong commitment to getting the job done.

are effective and competent in personal relationships, with a strong commitment to the growth and development of people.

5. The organisation treats the individual

as though his/her time and energy were at the disposal of the persons higher in the hierarchy.

as though her/his time and energy were available through a contract having rights and responsibilities on both sides.

as a co-worker who has committed his/her skills and abilities to the common cause.

as an interesting and worth-while person in her/his own right.

6. People are controlled and influenced by

the personal exercise of economic and political power (rewards and punishments).

impersonal exercise of economic and political power to enforce procedures and standards of performance.

communication and discussion of task requirements leading to appropriate action motivated by personal commitment to goal achievement.

intrinsic interest and enjoyment in the activities to be done; and/or concern and caring for the needs of the other persons involved.

7. It is legitimate for one person to control another’ s activities

if he/she has more authority and power in the organisation.

if her/his role prescribes that she/he is responsible for directing the other.

if he/she has more knowledge relevant to the task at hand.

if the other accepts that the first person’s help or instruction can contribute to the other’s learning and growth.


176

Own Ranking


8. The basic of task assignment is

the personal needs and judgment of those in authority.

the formal divisions of functions and responsibility in the system.

the resource and expertise requirements of the job to be done.

the personal wishes and needs for learning and growth of the individual organisation members.

9. Work is performed out of

hope of reward, fear of punishment or personal loyalty towards a powerful individual.

a respect for contractual obligations backed up by sanctions and personal loyalty towards the organisation or system.

satisfaction in excellence of work and achievement and/or personal commitment to the task or goal.

enjoyment of the activity for its own sake and concern and respect for the needs and values of the other persons involved.

10. People work together

when they are required to by higher authority or believe they can use each other for personal advantage.

when coordination and exchange are specified by the formal system.

when their joint contribution is needed to progress the task.

when the collaboration is personally satisfying, stimulating or challenging.

11. Competition

is for personal power and advantages.

is for high status position in the formal system.

is for excellence of contribution to the task.

is for attention to one’s own personal needs.


177

Own Ranking


12. Conflict

is controlled by the intervention of higher authority and often fostered by them to maintain their own power.

is suppressed by reference to rules, procedures and definitions of responsibility.

is resolved through full discussion of the merits of the work issues involved.

is resolved by open and deep discussion of personal needs and values involved.

13. Decisions

are made by the person with the higher power and authority.

are made by the person whose job description carries the responsibility.

are made by the persons with most knowledge and expertise about the problem.

are made by the persons most personally involved and affected by the outcome.

14. The appropriate control and communication structure

command flows from the top down in a simple pyramid so that anyone who is higher in the pyramid has authority over anyone who is lower. Information flows up through the chain of command.

directives flow from the top down and information flows upwards within functional pyramids which meet at the top. The authority and responsibility of a role is limited to the roles beneath it in its own pyramid. Cross functional exchange is constricted.

information about task requirements and problems flows from the center of task activity upwards and outwards, with those closest to the task determining resources and support needed from the rest of the organisation. A coordinating function may set priorities and overall resource levels based on information from all task centers. The structure should shift with the nature and location of the tasks.

information and influence flow from person to person, based on relationships which are voluntarily entered into for purposes of work, learning, mutual support and enjoyment, and shared values. A coordinating function may establish overall levels of contribution needed for maintenance of the organisation. These tasks are assigned by mutual agreement.


178

Own Ranking


15. The environment 1 is responded to as though it were

a competitive jungle in which all are against all and those who do not exploit others are themselves exploited.

an orderly and rational system in which competition is limited by law and conflicts yield to negotiation and compromise.

a complex of imperfect forms and systems which are to be re-shaped and improved by the achievements of the organisation.

a complex of potential threats and support. It is to be manipulated by the organisation to extract nourishment from it, pull its teeth and use it as a play and work space for the enjoyment and growth of member.

Thank you for your time.

Please turn over for Questionnaire 2.

1 Environment here refers to your work environment.


179

2 QUESTIONNAIRE 2

2.1 Description Allen, N.J. & Meyer, J.P. (1990), The Measurement a nd Antecedents of Affective, Continuance and Normative Commitment to the Organis ation, Journal of Occupational Psychology , 63, 1-18. In studying commitment, the team will be able to draw conclusions as to where strengths and weaknesses lie in the organisation at present and to develop plans to address these. An alliancing approach cannot succeed if the collab orating organisations do not accept its ethos. Hence, commitment to the goals and objectives of the organisation is crucial in implementing new approaches to contract strategy. Allen and Meyer define three “types” of commitment:

• Affective commitment is an emotional attachment to the organisation • Normative commitment is based on acceptance of the organisation’s set of

values • Continuance commitment dimension is based on the idea that the costs of

leaving the organisation outweigh the opportunity costs of staying


180

2.2 Affective, Continuance and Normative Commitment Scales 2.2.1 Affective Commitment Scale Please use the scaling below to rate the following items. 1 – Strongly disagree

2 – Moderately disagree 3 – Slightly disagree 4 – Neither agree nor disagree 5 – Slightly agree 6 – Moderately agree 7 – Strongly agree Note: Please check only one box for each item. 1 2 3 4 5 6 7

1. I would be very happy to spend the rest of my career in this organisation.

2. I really feel as if this organisation’s problems are my own.

3. I do not feel like “part of the family” at my organisation.

4. I do not feel “emotionally attached” to this organisation.

5. This organisation has a great deal of personal meaning for me.

6. I do not feel a strong sense of belonging to my organisation.


181

2.2.2 Continuance Commitment Scale Please use the scaling below to rate the following items. 1 – Strongly disagree


1. It would be very hard for me to leave my organisation right now, even if I wanted to.

2. Too much of my life would be disrupted if I decided I wanted to leave my organisation right now.

3. Right now, staying with my organisation is a matter of necessity as much as desire.

4. I believe that I have too few options to consider leaving this organisation.

5. One of the few negative consequences of leaving this organisation would be the scarcity of available alternative.

6. If I had not already put so much of myself into this organisation, I might consider working elsewhere.


182

2.2.3 Normative Commitment Scale Please use the scaling below to rate the following items. 1 – Strongly disagree


1. I do not feel any obligation to remain with my current employer.

2. Even if it were to my advantage, I do not feel it would be right to leave my organisation now.

3. I would feel guilty if I left my organisation now.

4. This organisation deserves my loyalty.

5. I would not leave my organisation right now because I have a sense of obligation to the people in it.

6. I owe a great deal to my organisation.


Please turn over for Questionnaire 3.


183

3 QUESTIONNAIRE 3

3.1 Description Van de Ven A.H. and Ferry, D.L. (1980) Measuring and Assessing Organisation s. Wiley, New York. This instrument measures a whole series of organisational parameters including individual motivation, work processes and organisational structure. Winch et al found autonomy at work, work coordination and work control along with job satisfaction, motivation and feedback instrumental in ensuring effective cooperation and collaboration. Some of these dimensions relate to how an organisation structures itself and how others relate to how individuals manage and are managed. It is anticipated that the dimensions investigated here will pinpoint weaknesses and strengths in organisation structure and also help in determining the skill sets required for successful alliance team building. This questionnaire will be targeted at specific individuals who have been identified as holding key positions in the project management process as it is very detailed and will take quite some time to complete. It is anticipated that it will be used in conjunction with interviews of these individuals. Some of the information collected here mirrors information collected in QPASS, the QMR annual employee survey. However, the objective in this research is to target projects and project participants and their relationships throughout the organisation. Hence, the general overview provided by QPASS, although providing a very good overview, cannot assist in collecting this very specific data.


184

3.2 OAI Focal Unit Questionnaire 3.2.1 General Instructions Definitions: This questionnaire asks many questions about your unit and other units.

• Your unit includes you (as the supervisor) and all individuals who report directly to you. If you are not a supervisor, then your unit includes your immediate supervisor and all individuals (your co-workers) who directly report to your immediate supervisor.

• Other units refer to any other groups, departments, levels, or divisions within or outside of your organisation that your unit coordinates with.

This questionnaire asks you to answer each question five times, once for each of the five most important other units that your unit coordinates with. These other units are listed in the columns to the right of the questions. For each question there is a five-point answer scale with brief descriptions of what the numbers on the scale represent. You are to descriptions of what the numbers on the scale represent. You are to choose one number that most accurately reflects your answer to each question for each other unit and write it in the appropriate column. For example, if you were asked the following question, and your answers were “daily”, “monthly”, “hourly”, “never” and “weekly” for other units 1 – 5, respectively, then you would write the numbers “4”, “2”, “5”, “1” and “3” in the appropriate columns for the other units like this:

How often were you in contact with this other unit during the past six months?

YEARLY MONTHLY WEEKLY DAILY HOURLY Unit 1 Unit 2 Unit 3 Unit 4 Unit 5

1 2 3 4 5 4

2

5

1

3

If you do not understand any question, BE SURE TO ASK US FOR HELP. We realise that not all questions are simple, and that is why we are here to answer any questions you have.


185

3.2.2 Introductory Questions The following questions are very important for properly coding and analysing the data. As indicated before, all responses will be kept strictly confidential.

1. Name of the ORGANISATION in which you work:

2. Name of DIVISION in which you work:

3. Name of OFFICE or CITY in which you work:

4. Name of UNIT in which you work:

5. YOUR NAME:

6. Your present JOB TITLE or POSITION:


186

3.2.3 The External Relations of Your Unit

In varying degrees your unit does not exist in isolation. As the figure illustrates, your unit may have to maintain many relationships with other units, levels, and divisions within your organisation, as well as with various groups and agencies outside of your organisation. These relationships may exist for a variety of purposes, such as: coordinating work flows; obtaining money, personnel, equipment, and technical services and responding to or initiating administrative directives and rules. This questionnaire focuses on these external relationships your unit maintained during the past six months. In the space below, draw a picture that indicates the major units, levels and groups within and outside your organisation that your unit had contact with during the past six months. Identify these other units by name. Use the figure above as a guide for drawing your picture below.

PICTURE OF EXTERNAL RELATIONS MAINTAINED BY MY UNIT We now focus on the most important ”other units” that your unit maintained or developed contacts with during the past six months to accomplish your unit’s goals and responsibilities.

MY UNIT

Higher Admin. Levels

YOUR UNIT

Lower Operating Levels

Other Divisions

Other Units

Gov’t & Civic

Agencies

Suppliers Outside Firms

Customers Clients

Labor & Trade Unions


187

In all questions, the term “other units” refers to any other groups, offices, levels, or divisions within or outside of your organisation that your unit coordinates with.

1. NAMES OF OTHER KEY UNITS

2. REASONS FOR RELATIONSHIP WITH OTHER UNIT

3. IMPORTANCE

From the picture you drew, write the names of the most important other units that your unit had to coordinate with during the past 6 months. (Select up to five of the most important other units.)

State as clearly as possible the reasons why your unit had to coordinate or work with this other unit during the past six months.

How important was this other unit in attaining the goals of your unit the past 6 months? (Write a number from scale below) 1 – NOT VERY IMPORTANT 2 – SOMEWHAT IMPORTANT 3 – QUITE IMPORTANT 4 – VERY IMPORTANT 5 – ABSOLUTELY CRUCIAL

Unit 1

Unit 2

Unit 3

Unit 4

Unit 5


188

UNIT 1 UNIT 2 UNIT 3 UNIT 4 UNIT 5

In the columns on the right, please write the name of the five other units that you selected on the previous page. Then answer the following questions for each other unit individually by writing in the appropriate column the most accurate number from the answer scale for each question.

NAME:

NAME:

NAME:

NAME:

NAME:

(please tick) NO

YES

NO

YES

NO

YES

NO

YES

NO

YES

4. Does this other unit exist within your organisation?

If Yes: a. Do you supervise this other

unit in your organisation’s hierarchy?

b. Do you formally report to this other unit in your organisation’s hierarchy?

If No: c. Do you have a contractual

relationship with this other unit?

d. Is it mandatory by government or trade regulations that you coordinate with this other unit?

5. During the past six months, how much was your unit involved with this other unit for each of the following reasons: (use scale below)

a. To receive or send work or clients (e.g. customers, raw materials, or work objects)?

b. To receive or send resources (money, personnel, equipment, office space)?

c. To receive or send technical assistance (e.g. consultation or staff services in functional areas)?

d. To receive or send information for purpose of coordination, control, planning or evaluation?

NOT AT ALL

A LITTLE

SOME WHAT

QUITE A BIT

VERY MUCH

1 2 3 4 5


189


6. To what extent have the terms of the relationship between your unit and this other unit:

Extent: Extent: Extent: Extent: Extent:

a. Been explicitly verbalized or discussed?

b. Been written down in detail?

TO NO EXTENT

LITTLE EXTENT

SOME EXTENT

CONSID-ERABLE EXTENT

GREAT EXTENT

1 2 3 4 5

7. For how many years has your unit been directly involved in some fashion with this other unit?

yrs yrs yrs yrs yrs

8. Prior to the past six months, to what extent has your unit had effective working relationships with this other unit? (write best scale no. in each column)

NO PRIOR CONTACT

TO NO EXTENT

LITTLE EXTENT

SOME EXTENT


GREAT EXTENT

0 1 2 3 4 5

9. For this other unit to accomplish its goals and responsibilities, how much does it need the services, resources, or support from your unit?

NOT AT ALL

VERY LITTLE SOME

QUITE A BIT

VERY MUCH

1 2 3 4 5

10. For your unit to accomplish its goals and responsibilities, how much do you need the services, resources, or support from this other unit? (use scale for Q.9)

11. How well informed are you about the specific goals and services of this other unit?

NOT AT ALL

LITTLE IN-FORMED

SOME-WHAT IN-FORMED

QUITE IN-FORMED

VERY WELL IN-FORMED

1 2 3 4 5

12. How much say or influence does this other unit have on the internal operations of your unit?

NONE LITTLE SOME QUITE A

BIT VERY MUCH

1 2 3 4 5


190

13. How much say or influence does your unit

have on the internal operations of this other unit? (use scale for Q.12)

14. Write your name and address of the primary individual that you contact or communicate with when dealing with

this other unit.

UNIT 1:

Name:

Contact No.:

Address:

UNIT 2:

Name:

Contact No.:

Address:

UNIT 3:

Name:

Contact No.:

Address:

UNIT 4:

Name:

Contact No.:

Address:

UNIT 5:

Name:

Contact No.:

Address:


191


15. How many years and months have you personally known the contact person in this other unit?

Y

M

Y

M

Y

M

Y

M

Y

M

16. How well are you personally acquainted with the contact person in this other unit?

NOT PERSONAL ACQUAINT-

ANCE

NOT VERY WELL

SOME-WHAT WELL

QUITE WELL

VERY WELL

1 2 3 4 5

17. How much do you and this contact person agree or disagree on:

a. The goal priorities of your unit?

b. The specific ways work is done or services are provided by your unit?

c. The specific terms of the relationship between your unit and this other unit?

DON’T KNOW

DIS-AGREE MUCH

AGREE A LITTLE

AGREE SOME-WHAT

AGREE QUITE A BIT

AGREE VERY MUCH

0 1 2 3 4 5

18. To what extent does this other unit:

a. Obtain its funding from the same source as your unit does?

b. Do the same kind of work as your unit does?

c. Have the same clients or customers as your unit?

d. Have operating goals similar to your unit’s goals?

e. Have employees with similar professional or trade skills as those required of personnel in your unit?

f. Use the same technology, equipment, or information sources as your unit in doing its work?

DON’T KNOW

TO NO EXTENT

LITTLE EXTENT

SOME EXTENT


GREAT EXTENT

0 1 2 3 4 5

19. To what extent did individuals in this other unit hinder your unit in performing its functions during the past six months?

(use scale for Q.18)


192


20. Consider now the equality of the give-and-take relationship with each unit. Compared to other units that you are involved with, how fair do you feel are the “payoffs” to your unit from this unit?

WE GET MUCH LESS

THAN WE OUGHT

WE GET SOME-WHAT

LESS THAN WE OUGHT

BALANCED

WE GET SOME-WHAT MORE

THAN WE OUGHT

WE GET MUCH MORE

THAN WE OUGHT

1 2 3 4 5

21. During the past 6 months, how frequently have people in your unit communicated or been in contact with people in the other unit?

NOT ONCE

1-2 TIMES

ABOUT MON-THLY

ABOUT EVERY 2 WKS

ABOUT WEEKL

Y

AOUT DAILY

MANY TIMES DAILY

0 1 2 3 4 5 6

22. Specially, how frequently did your unit communicate with this other unit through each of the following ways during the past 6 months: (use scale for Q.21)

a. Through written letters, memos, or reports of any kind?

b. Through personal face-to-face discussions?

c. Through telephone calls?

d. Through group or committee meetings between three or more people from your unit and this other unit?

23. In general, what percent of all these communications with this other unit were initiated by people in your unit during the past 6 months?

% % % % %

24. Overall, how much difficulty do you experience in getting ideas clearly across to individuals in this other unit when you communicate with them?

NO CONTACT NONE LITTLE SOME

QUITE A BIT

VERY MUCH

0 1 2 3 4 5

25. When you wanted to communicate with individuals in this unit, how much difficulty have you had getting in touch with them? (use scale for Q.24)


193


The next 2 questions may be difficult to answer. Make the most approximate estimate you can. Write “0” if your answer is none or not applicable.

26. During the past 6 months:

a. What percent of your total working hours did you spend on matters directly related to the operations, work or projects of this other unit?

% % % % %

b. What percent of all the work done by your unit came from this other unit? % % % % %

c. What percent of all technical assistance and services did you receive from this other unit?

% % % % %

d. What percent of your unit’s operating budget (money, personnel, supplies, equipment) was obtained from this other unit?

% % % % %

27. During the past 6 months:

a. What percent of all the work completed by your unit was sent to this other unit? % % % % %

b. What percent of all resources allocated by your unit was given to this other unit? % % % % %

c. What percent of all person-hours of technical assistance or services provided by your unit was given to this other unit?

% % % % %

28. During the past 6 months, how much the same were these work materials, resources or services each time they were sent to or received from this other unit?

ALMOST ALL THE

SAME EACH TIME

MOSTLY THE SAME EACH TIME

ABOUT HALF THE

SAME EACH TIME

MOSTLY DIFFERENT EACH TIME

ALMOST ALL

DIFFERENT EACH TIME

1 2 3 4 5

29. To what extent did your unit encounter interruptions or delays to the normal flows of work, resources or services from or to this other unit during the past six months?

TO NO EXTENT

LITTLE EXTENT

SOME EXTENT

MUCH EXTENT

VERY GREAT EXTENT

1 2 3 4 5


194


30. During the past 6 months, how often did exceptions or problems arise in sending or receiving work, resources or services to / from this other unit?

NOT ONCE

1 OR 2 TIMES

ABOUT MONTHLY

ABOUT WEEKLY

ABOUT DAILY

SEVERAL TIMES A

DAY

1 2 3 4 5 6

31. To coordinate activities with this other unit during the past six months, to what extent:

a. Have standard operating procedures been established (e.g. rules, policies, forms etc.)?

b. Are formal communication channels followed?

TO NO EXTENT

LITTLE EXTENT

SOME EXTENT

MUCH EXTENT

VERY GREAT EXTENT

1 2 3 4 5

32. During the last six months, how often were there disagreements or disputes between people in your unit and this other unit?

NOT ONCE

ABOUT ONCE A MONTH

ABOUT EVERY 2 WEEKS

ABOUT ONCE A WEEK

SEVERAL TIMES A WEEK

EVERY DAY

1 2 3 4 5 6

33. When these disagreements or disputes occurred, how often were they handled in each of the following ways during the past 6 months?

a. By ignoring or avoiding the issues?

b. By smoothing over the issues?

c. By bringing the issues out in the open and working them out among the parties involved?

d. By having a higher level manager or authority resolves the issues between the parties involved?

ALMOST NEVER

SELDOM ABOUT

HALF THE TIME

OFTEN ALMOST ALWAYS

1 2 3 4 5

34. How well are any differences worked out at this time between your unit and this other unit?

VERY POORLY

POORLY ADEQUATE

-LY QUITE WELL

VERY WELL

1 2 3 4 5


195

To conclude this section, please answer the following questions using the scale below:

TO NO EXTENT

LITTLE EXTENT

SOME EXTENT

CONSID-ERABLEEXT

ENT

GREAT EXTENT

1 2 3 4 5


35. To what extent has this unit carried out its responsibilities and commitments in regard to your unit during the past 6 months?

36. To what extent has your unit carried out your responsibilities and commitments in regard to this other unit during the past 6 months?

37. To what extent do you feel the relationship between your unit and this other unit is productive?

38. To what extent is the time and effort aspect in developing and maintaining the relationship with this other unit worthwhile?

39. Overall, to what extent were you satisfied with the relationship between your unit and this other unit during the past 6 months?

40. During the past 6 months, to what extent has your unit changed or influenced the services or operations of this other unit?

41. During the past 6 months, to what extent has this other unit changed or influenced the services or operations of your unit?


196

3.2.4 A Self-Appraisal of You Unit’s External Relat ions Now make a self-assessment of the relationships your unit maintains with each of the other units. Hopefully, the questions you have answered so far have stimulated you to make such a self-assessment.

Describe the major problems you have encountered in relating or coordinating with each of the other units during the past 6 months.

Suggest some specific ways for overcoming these problems with each of the other units.

UNIT 1 Problems:

Suggestions:

UNIT 2 Problems:

Suggestions:

UNIT 3 Problems:

Suggestions:

UNIT 4 Problems:

Suggestions:

UNIT 5 Problems:

Suggestions:


197


Please turn over to the last questionnaire, Questionnaire 4.


198

3.3 OAI Other Unit Questionnaire 3.3.1 General Instructions This questionnaire focuses on the relationships your organisational unit has had during the past 6 months with one or more other units from the XYZ Firm. These other units are designated on the next page. You are asked to answer the questions for only the units specified. For most questions there is a five-point answer scale with brief descriptions of what the numbers on the scale. Represent. You are to choose one number that most accurately reflects your answer to the question for each designated other unit and write it in the appropriate column. For example, if you were asked the following question, and your answers were “daily” and “monthly” for units 1 and 2 from the XYZ Firm, then you would write the numbers “4” and “2” in the respective columns like this:

How often were you in contact with this other unit during the past six months? YEARLY MONTHLY WEEKLY DAILY HOURLY Unit 1 Unit 2 Unit 3 Unit 4 Unit 5

1 2 3 4 5 4

2

If you do not understand any question, BE SURE TO ASK US FOR HELP. We realize that not all questions are simple, and that is why we are here to answer any questions you have.


199

3.3.2 Introductory Questions The following questions are very important for properly coding and analysing the data. As indicated before, all responses will be kept strictly confidential.

1. Your NAME:

2. Your ADDRESS:

3. Name of ORGANISATION in which you work:

4. Name of OFFICE or DIVISION in which you work:

5. Name of UNIT in which you work:

6. Your present JOB TITLE or POSITION:

7. How many years and months have you held this position? Years, Months.

8. How many years and months have you worked in your organisation?

Years, Months.


200

3.3.3 Inter-Unit Relations In a previous survey, the contact persons from the following unit(s) in XYZ firm reported they coordinated in some way with your organisational unit during the past 6 months.

UNIT 1: Name

Contact Person

UNIT 2: Name

Contact Person

UNIT 3: Name

Contact Person

UNIT 4: Name

Contact Person

UNIT 5: Name

Contact Person

We would like your perspective on these inter-unit relations. Please answer the questions for each of the designated other units individually. Put in the appropriate columns the number from the answer scale that reflects your most accurate answer to each question for each other unit. Be sure to use the column with the same unit number as that designated above to answer the questions for each of the other units. If no names are shown above for units 2 – 5, then leave those columns blank. UNIT 1 UNIT 2 UNIT 3 UNIT 4 UNIT 5

1. How well are you personally acquainted with the contact person in this other unit?

NO

PERSONAL ACQUAIN-

TANCE

NOT VERY WELL

SOMEWHAT WELL

QUITE WELL

VERY WELL

1 2 3 4 5

2. How much do you and this contact person

agree or disagree on:

a. The goal priorities of your unit? b. The specific ways work is done or

services are provided by your unit? c. The specific terms of the relationship

between your unit and this other unit?

DON’T KNOW

DES-AGREE MUCH

AGREE A LITTLE

AGREE SOME-WHAT

AGREE QUITE A

BIT

AGREE VERY MUCH

0 1 2 3 4 5

3. How well informed are your about the specific goals and services of this other unit?

NOT AT ALL LITTLE

INFORMED SOMEWHAT INFORMED

QUITE INFORMED

VERY WELL INFORMED

1 2 3 4 5


201


4. Prior to the past 6 months, to what extent has your unit had effective working relationships with this other unit?

NO PRIOR CONTACT

TO NO EXTENT

LITTLE EXTENT

SOME EXTENT


GREAT EXTENT

0 1 2 3 4 5

5. During the past 6 months, how much was your unit involved with this other unit for each of the following reasons:

a. To received or send work or clients (e.g. customers, raw materials, or work objects)?

b. To received or send resources (money, personnel, equipment, office space)?

c. To receive or send technical assistance (e.g. consultation or staff services in functional areas)?

d. To receive or send information for purpose of coordination, control, planning or evaluation?

NOT AT ALL

A LITTLE SOME-WHAT

QUITE A BIT

VERY MUCH

1 2 3 4 5

6. Consider now the equality of the give-and-take relationship with each unit. Compare to other units that you are involved with, how fair do you feel are the “payoffs” to your unit from this unit?

WE GET MUCH LESS

THAN WE OUGHT

WE GET SOMEWHAT LESS THAN WE OUGHT

BALANCED

WE GET SOMEWHAT MORE THAN WE OUGHT

WE GET MUCH

MORE THAN WE OUGHT

1 2 3 4 5

7. For this other unit to accomplish its goals and responsibilities, how much does it need the services, resources, or support from your unit?

NOT AT ALL

VERY LITTLE SOME

QUITE A BIT

VERY MUCH

1 2 3 4 5

8. For your unit to accomplish its goals and responsibilities, how much do you need the services, resources or support from this other unit? (use scale for Q.7)

9. How much say or influence does this other

unit have on the internal operations of your unit?

NONE LITTLE SOME QUITE A

BIT VERY MUCH

1 2 3 4 5

10. How much say or influence does your unit have on the internal operations of this other unit? (use scale for Q.9)


202


11. To what extent have the terms of the relationship between your unit and this other unit:

a. Been explicitly verbalized or discussed? b. Been written down in detail?

TO NO EXTENT

LITTLE EXTENT

SOME EXTENT


GREAT EXTENT

1 2 3 4 5

12. During the past 6 months, what percent of your total working hours did you spend on matters directly related to the operations, work or activities of this other unit? (indicate percent)

% % % % %

13. During the past 6 months, how frequently

have people in your unit communicated or been in contact with people in this other unit?

NOT ONCE

1-2 TIMES

ABOUT MONTH-

LY

ABOUT EVERY 2 WKS

ABOUT WEEKLY

ABOUT DAILY

MANY TIMES DAILY

0 1 2 3 4 5 6

14. When you want to communicate with individuals in this unit, how much difficulty have you had getting in touch with them?

NO CONTACT NONE LITTLE SOME

QUITE A BIT

VERY MUCH

0 1 2 3 4 5

15. Overall, how much difficulty do you experience in getting ideas clearly across to individuals in this other unit when you communicate with them? (use scale for Q.14)

16. During the past 6 months, how often were

there disagreements or disputes between people in your unit and this other unit?

NOT ONCE

ABOUT ONCE A MONTH

ABOUT EVERY 2 WEEKS

ABOUT ONCE A WEEK

SERVAL TIMES A WEEK

EVERY DAY

1 2 3 4 5 6

17. To what extent did individuals in this other unit hinder your unit in performing its functions during the past 6 months?

DON’T KNOW

TO NO EXTENT

LITTLE EXTENT

SOME EXTENT


GREAT EXTENT

0 1 2 3 4 5

18. How well are any differences worked out at this time between your unit and this other unit?

VERY POORLY POORLY

ADEQUATE-LY

QUITE WELL VERY WELL

1 2 3 4 5


203

UNIT 1 UNIT 2 UNIT 3 UNIT 4 UNIT 5 19. Overall, how important was this other unit in

attaining the goals of your unit during the past 6 months?

NOT VERY IMPORTANT

SOMEWHAT IMPORTANT

QUITE IMPORTANT

VERY IM;PORTANT

ABSOLUTE-LY CRUCIAL

1 2 3 4 5

Finally please answer the following questions using the scale below:

TO NO EXTENT

LITTLE EXTENT

SOME EXTENT


GREAT EXTENT

1 2 3 4 5


20. To what extent has this unit carried out its

responsibilities and commitments in regard to your unit during the past 6 months?

21. To what extent has your unit carried out

your responsibilities and commitments in regard to this other unit during the past 6 months?

22. To what extent do you feel the relationship

between your unit and this other unit is productive?

23. To what extent is the time and effort spent

in developing and maintaining the relationship with this other unit worthwhile?

24. Overall, to what extent are you satisfied

with the relationship between your unit and this other unit during the past 6 months?

25. During the past 6 months, to what extent

has your unit changed or influenced the services or operations of this other unit?

26. During the past 6 months, to what extent

has this other unit changed or influenced the services or operations of your unit?


204

4 QUESTIONNAIRE 4 4.1 Description

Hofstede, G.H. (1980) Culture ’’’’ s Consequence s. Sage, Beverly Hills. Two key objectives have emerged in this study:

• to provide information which makes for a better understanding of the way culturally produced attitudes towards team members and perceptions of co-workers behaviour impede or facilitate communication, collaboration and effectiveness;

• to explore the impact that conditions of contract have on communication, collaboration and effectiveness and to examine the link, if any exists, between contracts and the evolution of a project culture.

Hofstede's established methodology provides a basis for identifying patterns of differences in orientations amongst employees (which together with the role of the individual as a function of his/her professional background in the case of Engineer or Architect or QS) gives a guide towards the existence and relative importance of national (and occupational) sub-cultures, together with an indication of their relative strength in relation to any industry wide "common-culture", so important to an 'adaptive system' which aims to change approaches to collaboration. This questionnaire will be distributed to specifically targeted project participants whose experience is directly relevant to partnering and alliancing issues. The final part of the questionnaire investigates specifically cooperative behaviours in the project context. The four psychological dimensions or axes used to differentiate between cultures are: Power Distance (PDI) - This dimension deals with the issue of human inequality and how within different groups power is resolved. Within the work environment, this is generally evidenced in the superior-subordinate relationship. The Power Distance Index is a measure of the interpersonal power or influence between (boss) and (subordinate)?(Hofstede 1984:71). Hofstede suggests that the there is a socially determined equilibrium between subordinates seeking to reduce the size of the power distance between themselves and their boss, whilst their superior seeks to maintain it. A low PDI indicates a perceived equality of ability, autonomy and independence being highly valued, whilst a high PDI indicates prevalence for authoritarian behaviour, conformity and centralised decision making. Uncertainty Avoidance (UAI) - Different groups have learnt to deal with uncertainty in different ways, often because they find themselves faced with different levels of uncertainty. Adams (1995) writes of the risk thermostat in relation to individuals’ ability to deal with, and be comfortable when exposed to, risk. The principle behind uncertainty avoidance is that at a societal level, the environment people are exposed to results in societies adopting a socially determined risk thermostat, reflected in the values of the group and the norms of behaviour etc. which are an expression of the group values.


205

Masculinity (MAS) - Men and women are different. This is a fundamental biological fact which different societies cope with in different ways. The issue investigated here is whether this biological difference has (as opposed to should have) an effect on their roles in social activities (and hence their work values). Individualism (IDV) - The final dimension looks at the relationship between the individual and the collective. Within sociology, this aspect is often referred to as Gemeinschaft (low individualism) at one extreme and Gesellschaft (high individualism) at the other. Within the work environment this is often explicitly linked to the individual relationship with his employing organisation. The Values Survey Module (VSM) will be supplemented by a series of questions addressing attitudes to contracts and contract procedures in order to investigate how culture, situation (context) and contract interact to produce responses to typical situations experienced on site in relation to potential areas of dispute. This approach was adopted previously in the study in Hong Kong by Rowlinson (2001). Reference: Rowlinson, S.M. (2001) “Matrix Organizational Structure, Culture and Commitment: a Hong Kong Public Sector Case Study of Change”, Construction Management and Economics, 19, 669-673.


206

4.2 Introduction The questionnaire is divided into 3 parts: Part I - Asks about yourself and your work background to enable us to classify your

answers to the following parts. Part II - Asks your views on your ideal job and how you like to work. Part III - Asks some questions on how you work on projects and how you perceive the

used of standard forms of contracts on projects. How to Complete This Questionnaire:

1. Please read through the following questions carefully. The questionnaire should not take more than 10 minutes to complete.

2. Answer each question by checking the box representing your answer. 3. Only check one box unless otherwise instructed. 4. Please give answers that represent your views not those of your employer.


207

4.3 Questionnaire 4.3.1 Part I 1. Are you:

Male

Female

2. How old are you?

Under 20

20 – 24

25 – 29

30 – 34

35 – 39

40 – 49

50 – 59

60 or over

3. How long have you been working in the construction industry; include any industrial experience forming part of a “sandwich” degree course but exclude any time spent as a student in full-time education.

Less than 2 years

2 – 4 years

5 – 9 years

10 – 19 years

20 – 29 years

More than 30 years

4. How many years of formal school education did you complete? (Starting with primary school; count only the number of years each course should officially take, even if you spent less or more years on it; if you took part-time or evening courses, count the number of years the same course would have taken you full-time but do not count periods of industrial experience on sandwich courses.)

10 years or less

11 years

12 years

13 years

14 years

15 years

16 years

17 years

18 years or more


208

5. Which one of the following most closely represents your professional background?

Architect

Civil Engineer

Structural Engineer

Services Engineer

Quantity Surveyor

Builder

Project Manager

Building Surveyor

Other (please specify)

6. Which of the following professional bodies are you a member of (you may check more than one)? If you are not a member of any body, which professional association best represents your interests as an individual?

RICS

AIB

AIQS

IEAust

AIPM

RAIA

AILA


7. In which one of the following roles have you gained the majority of your experience in the construction industry?

Client

Consultant

Main Contractor

Sub-Contractor

Supplier



209

4.3.2 Part II Please think of an ideal job – disregarding your present job. In choosing an ideal job, how important would it be to you to consider the following criteria? Note: Please check only one box for each item.

Of U

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Impo

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Of L

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Of V

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N

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1 2 3 4 5 8. Have sufficient time left for your personal or

family life?

9. Have challenging tasks to do, from which you can get a personal sense of accomplishment?

10. Have little tension and stress on the job?

11. Have good physical working conditions (good ventilation and lighting, adequate work space, etc)?

12. Have a good working relationship your direct superior?

13. Have security of employment?

14. Have considerable freedom to adopt your own approach to the job?

15. Work with people who cooperated well with one another?

16. Be consulted by your direct superior in his/her decisions?


210

Of U

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1 2 3 4 5 17. Make a real contribution to the success of

your company or organisation?

18. Have an opportunity of high earnings?

19. Serve your country?

20. Live in an area desirable to you and your family?

21. Have an opportunity for advancement to higher level jobs?

22. Have an element of variety and adventure in the job?

23. Work in a prestigious, successful company or organisation?

24. Have an opportunity for helping other people?

25. Work in a well-defined job situation where the requirements are clear?

26. How frequently, in your work environment, are subordinates afraid to express disagreement with their superiors?

Very frequently

Frequently

Sometimes

Seldom

Very seldom


211

The descriptions below apply to four different types of managers. First, please read through these descriptions:

Manager 1 Usually makes his/her decisions promptly and communicates them to his/her subordinates clearly and firmly. Expects them to carry out the decisions loyally and without raising difficulties.

Manager 2 Usually makes her/his decisions promptly, but, before going ahead, tries to explain them fully to his/her subordinates. Gives them the reasons for the decisions and answers whatever questions they may have.

Manager 3 Usually consults with his/her subordinates before he/she reaches his/her decisions. Listens to their advice, considers it, and then announces his/her decision. He/she then expects all to work loyally to implement it whether or not it is in accordance with the advice they gave.

Manager 4 Usually calls a meeting of her/his subordinates when there is an important decision to be made. Puts the problem before the group and invites discussion. Accepts the majority viewpoint as the decision.

27. Now, for the above types of manager, please mark the one which you would prefer to

work under:

Manager 1

Manager 2

Manager 3

Manager 4

28. And, to which one of the above four types of managers would you say your own superior most closely corresponds?

Manager 1

Manager 2

Manager 3

Manager 4

He/she does not correspond closely to any of them.

29. What kind of work do you do?

a. I am a manager (that is, I have at least one hierarchical subordinate) – go to f .

b. I am not a manager and I work most the time in an office – go to e .

c. I am not a manager and I do not work most of the time in an office – go to d .

d. If you are not a manager and you do not work most of the time in an office, what do you do:

Work for which normally no vocational training, other than on-the-job training, is required (unskilled or semi-skilled work).

Work for which normally up to four years of vocational training is required (skilled worker, technician, non-graduate engineer, nurse, etc.).

Work for which normally a higher-level professional training is required


212

(graduate engineer, doctor, architect, etc.).

e. If you are not a manager and you work most of the time in an office, what do you do:

Work for which normally no higher-level professional training is required (clerk, typist, secretary, non-graduate accountant).

Work for which normally a higher-level professional training is required (graduate accountant, lawyer, etc.).

f. If you are a manager, are you:

A manager of people who are not managers themselves (that is, a first-line manager).

A manager of other managers.

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30. A company or organisation’s rules should not be broken – even when the employee thinks it is in the organisation’s best interests.

31. Most people can be trusted.

32. Quite a few employees have an inherent dislike of work and will avoid it if they can.

33. A large corporation is generally a more desirable place to work than a small company.

34. How often do you feel nervous or tense at work?

I always feel this way

Usually

Sometimes

Seldom

I never feel this way

35. How long do you think you will continue working for this company or organisation?

Two years at the most

From two to five years

More than five years (but I probably will leave before I retire)

Until I retire


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4.3.3 Part III Please indicate your degree of agreement or disagreement with the following statements: Note: Please check only one box for each item.

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36. Personal relationships are important in managing projects/contracts.

37. Formal procedures are necessary for the successful management of a project.

38. Informal arrangements are necessary for the successful management of a project.

39. Personal relationships amongst the project members are more important than those in your employer’s organisation.

Please indicate how frequently you believe the following statements to be true:

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40. One must be willing to sacrifice personal relationships with members of the project team to ensure the successful completion of the project.

41. One must be willing to sacrifice personal relationships with members of the project team to ensure their firm’s objectives are met.

42. One must be willing to sacrifice personal relationships with members of the project team to ensure one’s personal objectives are met.


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43. One must be prepared to disregard formal procedures in order to ensure the successful completion of the project.

44. One must be prepared to disregard formal procedures in order to ensure one’s firm’s objectives met.

45. One must be prepared to disregard formal procedures in order to ensure one’s own objectives are met.

Please think of the projects you have been involved with during your career – not just in your present job. How important are the following factors.

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1 2 3 4 5

46. To be seen to be using the prescribed procedures when dealing with;

a. Valuations

b. Changes to Design and Specification

c. Changes to Program

d. Settlement of final Account

47. To be able to develop informal arrangements when dealing with;

a. Valuations

b. Changes to Design and Specification

c. Changes to Program

d. Settlement of final Account

48. What importance does the Standard Form of Contract have on the following;

a. Determining your role


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b. Determining your personal relationships with the rest of the project team

c. Your expectations of the likelihood of disputes occurring

d. Control of your behavior

e. Control of the client’s behavior

f. Control of the other members of the project team

49. Which family of Standard Forms of Contract do you most prefer to work with?

AS2124 and variants

AS4305 and variants

General Conditions of Contract for design and construction (AS4300 & variants)

Construction Management Conditions of Contract (AS4910)


50. Which of the following contracts do you perceive is most likely to avoid conflicts and disputes? (you do not need to have had direct experience of the contract to hold a valid opinion)

AS2124 and variants

AS4305 and variants




They have no effect.

51. Which of the following contracts do you perceived is most likely to lead to conflicts and disputes? (you do not need to have had direct experience of the contract to hold a valid opinion)

AS2124 and variants

AS4305 and variants




They have no effect.

217

APPENDIX IV SURVEY RESULTS

QDPW Survey Results

Organisational Culture Organisational Culture Preferred Culture Perceived Culture

Power 0 0.5* Role 0 4 Task 6 1.5* Person 0 0

(n=6) * Same score for Power and Task Culture was calculated from one of the returned

questionnaires.

Table 6.1: Organisational Culture (QDPW)

Commitment Type of Commitment Mean Median Standard

Deviation Affective 23.2 23.5 4.4 Normative 22.0 22.5 1.5 Continuance 19.0 19.0 1.9

(n=6) * Concepts are measured on a scale of 1 to 7, with 1 indicating low levels of commitment

and 7 indicating high levels, for six variables giving, for each scale, maximum scores of 42 and minimum scores of 6.

Table 6.2: Commitment Levels (QDPW)

218


Organisational Assessment Systematized

Impersonal Mode



Difficulty & Variability of Tasks, Problems, Issues Encountered by subsystem –

Low Medium High


1. Organizational Referent Central information

systems Hierarchy & staff Coordination

committees


Exceptions to hierarchy

Mutual group adjustments


a. Direction Diffuse Vertical Horizontal b. Amount High Medium Low c. Standardization & Codification High Medium Low

4. Perceived Interdependence among Components Low Medium High

5. Frequency of conflict among Components Low Medium High

Table 6.3: Hypothesised Patterns of Systematized, Discretionary and Developmental Modes in Complex Organisations (extracted from Van de Ven and Ferry, 1980, p. 368-369)

Systematized

Impersonal Mode




1. Organizational Referent Central information systems?

Hierarchy & Staff?



a. Direction Diffuse? b. Amount Low c. Standardization & Codification High Medium

4. Perceived Interdependence among Components High

5. Frequency of conflict among Components Low

Table 6.4: Hypothesised Patterns of Design Mode in QDPW

219


Resource Dependence * Concepts are measured on a scale of 1 to 5, with 1 indicating no resources were received

and 5 indicating large amount of resources received Mean Median Standard

Deviation QDPW 4.10 4.00 1.02 Other Units 3.75 4.00 1.21

(n=19)

Table 6.5: Other Units Resource Dependence on QDPW

Mean Median Standard Deviation QDPW 4.10 4.00 1.17 Other Units 3.55 4.00 1.19

(n=19)

Table 6.6: QDPW Resource Dependence on Other Units

* Concepts are measured on a scale of 1 to 5, with 1 indicating the importance of the other

party is not very important and 5 indicating it is absolutely crucial Mean Median Standard Deviation To QDPW 3.24 4.00 0.67 To Other Units 3.40 3.00 0.94

(n=20)

Table 6.7: Resource Importance between QDPW and Other Units


* Concepts are measured on a scale of 1 to 5, with 1 indicating goals and services are not informed at all and 5 indicating they are very well informed


(n=20)

Table 6.8: Goals Informed between QDPW and Other Units

* Concepts are measured on a scale of 1 to 5, with 1 indicating there is no personal

acquaintance and 5 indicating the personal acquaintance is very well Mean Median Standard Deviation QDPW 2.80 3.50 1.54 Other Units 4.25 4.00 0.85

(n=20)

Table 6.9: Degree of Personal Acquaintance (QDPW & Other Units)

220


Consensus/Conflict * Concepts are measured on scale of 0 to 5, with 0 indicating no knowing if the other party

agrees on goal priorities/way of work or services provided/terms of relationship/hindered performance, and 5 indicating knowing the other party agree very much on items


Goal Priorities QDPW 2.40 3.00 1.86 Other Units 4.35 4.00 0.49

Way of Work/Services are Provided

QDPW 2.90 3.50 1.62 Other Units 4.05 4.00 0.61

Terms of Relationship QDPW 3.10 4.00 1.65 Other Units 4.45 5.00 0.69

(n=20)

Table 6.10: Consensus and Conflict between QDPW and Other Units


QDPW 1.85 2.00 0.99 Other Units 4.45 5.00 0.69

(n=20)

Table 6.11: Hindered Performance by Other Parties (QDPW & Other Units)

* Concepts are measured on scale of 1 to 6, with 1 indicating no disagreement or dispute

during the last six month, and 6 indicating they happen everyday Mean Median Standard Deviation

QDPW 2.15 2.00 1.04 Other Units 1.70 2.00 0.66

(n=20)

Table 6.12: Frequency of Conflict (QDPW & Other Units)

221


Personal

Acquaintance (QDPW)

Personal Acquaintance (Other Units)

Frequency of Conflict (QDPW)

Frequency of Conflict

(Other Units) Personal Acquaintance (QDPW)

Sig. 1.00

- 0.241 0.307

-0.210 0.374

-0.374 0.104


Sig. 0.241 0.307

1.00 -

-0.104 0.662

-0.141 0.552

Conflict (QDPW)

Sig. -0.210 0.374

-0.104 0.662

1.000 -

-0.008 0.974

Conflict (Other Units)

Sig. -0.374 0.104

-0.141 0.552

-0.008 0.974

1.000 -

(n=20)

Table 6.13: Correlations between QDPW and Other Units on Personal Acquaintance and Frequency of Conflict

Methods of Conflict Resolution * Concepts are measured on a scale of 1 to 5, with 1 indicating the conflict resolution was

almost never and 5 indicating it was used almost always Mean Median Standard

Deviation Avoiding Issues 0.70 1.00 0.57 Smoothing Over Issues 0.80 1.00 0.77 Confronting Issues 3.40 5.00 2.30 Hierarchy 0.75 0.50 1.16

(n=20)

Table 6.14: Frequency on Use of Methods of Conflict Resolution (QDPW)

222



(QDPW)


Avoiding Issues

Smoothing Over Issues

Confronting Issues Hierarchy


Sig. 1 -

0.537** 0.007

-0.216 0.180

-0.375 0.052

-0.405(*) 0.038

0.000 0.500


Sig. 0.537** 0.007

1 -

-0.141 0.276

-0.187 0.215

0.202 0.196

0.212 0.185

Avoiding Issues

Sig. -0.216 0.180

-0.141 0.276

1 -

0.816(**) 0.000

0.176 0.229

0.435(*) 0.028


Sig. -0.375 0.052

-0.187 0.215

0.816(**) 0.000

1 -

0.226 0.169

0.471(*) 0.018

Confronting Issues

Sig. -0.405(*)

0.038 0.202 0.196

0.176 0.229

0.226 0.169

1 -

0.432(*) 0.029

Hierarchy

Sig. 0.000 0.500

0.212 0.185

0.435(*) 0.028

0.471(*) 0.018

0.432(*) 0.029

1 -


Table 6.15: Correlation between Working Relationship Effectiveness and Methods of Conflict Resolution (QDPW)

Domain Similarity * Concepts are measured on scale of 0 to 5, with 0 indicating no knowing the extent of

domain similarity, and 5 indicating great extent of domain similarity Mean Median Standard

Deviation Funding Source 3.20 4.00 1.77 Work Kind 2.55 3.00 1.00 Clients or Customers 3.35 3.50 1.35 Operating Goals 2.85 3.50 1.63 Employee Skills 3.15 3.50 1.31 Technology 3.20 3.50 1.28

(n=20)

Table 6.16: Domain Similarity (QDPW)

223


Funding Source Work Kind

Clients or Customers

Operating Goals

Employee Skills Technology

Funding Source

Sig. 1 -

0.143 0.547

0.455(*) 0.044

0.669(**) 0.001

0.214 0.365

0.493(*) 0.027

Work Kind

Sig. 0.143 0.547

1 -

0.319 0.171

0.473(*) 0.035

0.739(**) 0.000

0.403 0.078


Sig. 0.455(*) 0.044

0.319 0.171

1 -

0.719(**) 0.000

0.386 0.093

0.749(**) 0.000

Operating Goals

Sig. 0.669(**)

0.001 0.473(*) 0.035

0.719(**) 0.000

1 -

0.529(*) 0.017

0.745(**) 0.000

Employee Skills

Sig. 0.214 0.365

0.739(**) 0.000

0.386 0.093

0.529(*) 0.017

1 -

0.609(**) 0.004

Technology

Sig. 0.493(*) 0.027

0.403 0.078

0.749(**) 0.000

0.745(**) 0.000

0.609(**) 0.004

1 -


Table 6.17: Correlation between Types of Domain Similarity (QDPW)

Communications * Concepts are measured on scale of 0 to 6, with 0 indicating not once the other party was

contacted 6 indicating many times daily Mean Median Standard

Deviation Written Report 4.40 4.00 1.23 Face-to-Face Talks 4.45 4.00 1.19 Telephone Calls 4.30 4.50 1.26 Group Meetings 2.55 3.00 1.15

(n=20)

Table 6.18: Frequency of Communication (QDPW)

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(QDPW)


Written Reports

Face-to-Face Talks

Telephone Calls

Group Meetings


Sig. 1 -

0.537(*) 0.015

0.301 0.198

0.574(**) 0.008

0.315 0.176

0.227 0.335


Sig. 0.537(*) 0.015

1 -

0.015 0.951

0.232 0.324

0.135 0.570

0.168 0.478

Written Reports

Sig. 0.301 0.198

0.015 0.951

1 -

0.366 0.113

0.665(**) 0.001

0.395 0.084

Face-to-Face Talks

Sig. 0.574(**)

0.008 0.232 0.324

0.366 0.113

1 -

0.467(*) 0.038

0.336 0.147

Telephone Calls

Sig. 0.315 0.176

0.135 0.570

0.665(**) 0.001

0.467(*) 0.038

1 -

0.536(*) 0.015

Group Meetings

Sig. 0.227 0.335

0.168 0.478

0.395 0.084

0.336 0.147

0.536(*) 0.015

1 -


Table 6.19: Correlation between Working Relationship Effectiveness and Methods of Communication (QDPW & Other Units)


QDPW 4.60 5.00 1.19 Other Units 5.05 5.00 0.89

(n=20)

Table 6.20: Frequency of Contacts between QDPW and Other Units


QDPW 31% 10% 35% Other Units 34% 15% 36%

(n=20)

Table 6.21: Percent of Time Spent between QDPW and Other Units


QDPW 0.61 0.55 0.19 (n=20)

Table 6.22: Contacts Initiated by QDPW

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* Concepts are measured on scale of 0 to 5, with 0 indicating no contact, 1 indicating little

difficulty and 5 indicating high difficulty Mean Median Standard Deviation

QDPW 2.60 3.00 1.00 Other Units 1.55 1.50 0.61

(n=20)

Table 6.23: Difficulty on Getting in Touch (QDPW & Other Units)


QDPW 1.95 2.00 0.76 Other Units 1.80 2.00 0.70

(n=20)

Table 6.24: Difficulty on Getting Ideas Across (QDPW & Other Units)

Consensus Difficulty Getting in Touch Difficulty Getting Ideas

Across

Consensus Sig.

1 -

-0.125 0.599

-0.594(**) 0.006

Difficulty Getting in Touch Sig.

-0.125 0.599

1 -

0.470(*) 0.037

Difficulty Getting Ideas Across

Sig. -0.594(**)

0.006 0.470(*) 0.037

1 -


Table 6.25: Correlation between Consensus and Quality of Communication (QDPW)

226


Difficulty Getting in

Touch (QDPW)


Touch (Other Units)

Difficulty Getting Ideas

Across (QDPW)


Across (Other Units)

Other Units

Hindered QDPW

QDPW Hindered

Other Units

Dispute (QDPW)

Dispute (Other Units)

Difficulty Getting in Touch (QDPW)

Sig. 1 -

-0.140 0.556

0.390 0.089

0.182 0.441

-0.225 0.340

0.222 0.346

0.061 0.798

0.290 0.215

Difficulty Getting in Touch (Other Units)

Sig. -0.140 0.556

1 -

0.063 0.792

0.400 0.080

0..586(**) 0.007

-0.046 0.848

0.113 0.635

0.305 0.192

Difficulty Getting Ideas Across (QDPW)

Sig. 0.390 0.089

0.063 0.792

1 -

0..379 0.100

-0.151 0.526

0.036 0.879

0.262 0.265

0.496(*) 0.026

Difficulty Getting Ideas Across (Other Units)

Sig. 0.182 0.441

0.400 0.080

0.379 0.100

1 -

0.107 0.653

0.424 0.063

0.366 0.112

0.783(**) 0.000

Other Units Hindered QDPW

Sig. -0.225 0.340

0.586(**) 0.007

-0.151 0.526

0.107 0.653

1 -

-0.009 0.969

-0.079 0.739

0.089 0.708

QDPW Hindered Other Units

Sig. 0.222 0.346

-0.046 0.848

0.036 0.879

0.424 0.063

-0.009 0.969

1 -

-0.080 0.738

0.533(*) 0.016

Dispute (QDPW)

Sig. 0.275 0.241

-0.223 0.345

0.257 0.274

0.139 0.560

-0.507(*) 0.023

-0.077 0.746

1 -

-0.116 0.625


Sig. 0.290 0.215

0.305 0.192

0.496(*) 0.026

0.783(**) 0.000

0.089 0.708

0.533(*) 0.016

-0.008 0.974

1 -


Table 6.26: Correlation between Quality of Communication, Frequency of Conflict and Hindered Performance between Parties

Resource Flows * Concepts are measured on scale of 1 to 5, with 1 indicating almost all the same resources

each time and 5 indicating almost all different each time Mean Median Standard Deviation

Work 0.29 0.20 0.35 Money or Budget 0.16 0.00 0.30 Technical Assistance 0.23 0.08 0.34

(n=17)

Table 6.27: Resource Flows from Other Units to QDPW

227



Work 0.34 0.20 0.32 Money or Budget 024 0.01 0.36 Technical Assistance 0.28 0.20 0.30

(n=17)

Table 6.28: Resource Flows from QDPW to Other Units

Variability of Resource Flows

Mean Median Standard Deviation Same Each Time* 2.40 2.50 1.35 Problems Encountered** 2.05 2.00 1.15 Interruptions*** 2.00 2.00 1.17

(n=17)

* Concepts are measured on scale of 1 to 5, with 1 indicating resources received/sent were almost all the same each time and 5 indicating almost all different each time

** Concepts are measured on scale of 1 to 6, with 1 indicating no problem was encountered and 6 indicating several times a day

*** Concepts are measured on scale of 1 to 5, with 1 indicating interruptions encountered were to no extent and 5 indicating to very great extent

Table 6.29: Variability of Resource Flows (QDPW)

Resource Flows Same Each Time

Resource Flow Problems

Encountered Resource Flow Interruptions




Sig. 1 -

0.835(**) 0.000

0.731(**) 0.000

0.133 0.577

0.665(**) 0.001

Resource Flow Problems Encountered

Sig. 0.835(**)

0.000 1 -

0.707(**) 0.000

0.008 0.974

0.624(**) 0.003

Resource Flow Interruptions

Sig. 0.731(**)

0.000 0.707(**)

0.000 1 -

0.138 0.561

0.649(**) 0.002


Sig. 0.133 0.577

0.008 0.974

0.138 0.561

1 -

0.084 0.724


Sig. 0.665(**)

0.001 0.624(**)

0.003 0.649(**)

0.002 0.084 0.724

1 -

** Correlation is significant at the 0.01 level (2-tailed) (n=20)

Table 6.30: Correlation between Variability of Resource Flow and Relationship Formalisation (QDPW)

228


Formalisation of Interunit Relationship * Concepts are measured on scale of 1 to 5, with 1 indicating to no extent and 5 indicating

great extent Mean Median Standard Deviation

QDPW 3.35 3.00 0.81 Other Units 3.50 3.00 0.89

(n=20)

Table 6.31: Relation Explicitly Verbalised (QDPW & Other Units)


QDPW 3.90 4.00 1.12 Other Units 2.75 2.50 1.45

(n=20)

Table 6.32: Relation Written Down in Detail (QDPW & Other Units)

Interunit Influence * Concepts are measured on scale of 1 to 5, with 1 indicating no influence and 5 indicating

very much influence Mean Median Standard Deviation

QDPW 2.00 1.50 1.17 Other Units 2.40 2.00 1.00

(n=20)

Table 6.33: Other Units' Operations Influenced by QDPW

* Concepts are measured on scale of 1 to 5, with 1 indicating to no extent and 5 indicating


QDPW 2.90 3.00 0.91 Other Units 2.25 2.00 0.79

(n=20)

Table 6.34: QDPW Changed Other Units' Goals/Services

* Concepts are measured on scale of 1 to 5, with 1 indicating no influence and 5 indicating


QDPW 2.85 3.00 1.31 Other Units 2.30 2.00 1.34

(n=20)

Table 6.35: QDPW's Operations Influenced by Other Units

229




QDPW 2.80 3.00 1.15 Other Units 2.00 2.00 0.56

(n=20)

Table 6.36: Other Units Changed QDPW Goals/Services

Perceived Effectiveness of Relationship * Concepts are measured on scale of 1 to 5, with 1 indicating to no extent and 5 indicating


QDPW 4.20 4.00 0.41 Other Units 4.25 4.00 0.64

(n=20)

Table 6.37: Extent of Commitments Carried Out by Other Units (QDPW)


QDPW 4.20 4.00 0.52 Other Units 4.30 4.00 0.57

(n=20)

Table 6.38: Extent of Commitments Carried Out by QDPW


QDPW 4.10 4.00 0.447 Other Units 4.30 4.00 0.66

(n=20)

Table 6.39: Productive Relationship (QDPW & Other Units)


QDPW 4.20 4.00 0.52 Other Units 4.30 4.00 0.73

(n=20)

Table 6.40: Time and Effort (QDPW & Other Units)


QDPW 4.15 4.00 0.49 Other Units 4.35 4.50 0.81

(n=20)

Table 6.41: Relationship Satisfaction (QDPW & Other Units)

230


* Concepts are measured on scale of 1 to 5, with 1 indicating “we get much less than we ought” and 5 indicating “we get much more than we ought”


(n=20)

Table 6.42: Transaction Equality (QDPW & Other Units)

231


Commitments (OU)

Commitments (QDPW)

Productive Relation-ship Time & Effort


Equality of Transact-ions



Resource Flow to QDPW

Resource Flow from QDPW

Poor Communi-

cation Quality

Freq. of Communi-

cation Domain

Similarity Resource

Dependence Awareness Personal

Acquaintance Consensus

Commitments (OU)

Sig.N

1 -

20

0.466(*) 0.038

20 0.419 0.066

0.371 0.108

20

0.223 0.344

20

-0.106 0.657

20

-0.316 0.175

20

0.032 0.893

20

-0.054 0.831

18

-0.284 0.268

17

-0.456(*) 0.043

20

-0.331 0.153

20

0.141 0.552

20

-0.222 0.361

19

-0.097 0.683

20

0.183 0.440

20

0.282 0.228

20 Commitments (QDPW)

Sig.N

0.466(*) 0.038

20

1 -

20

0.866(**) 0.000

20

0.313 0.179

20

0.533(*) 0.016

20

0.236 0.316

20

0.222 0.346

20

-0.179 0.451

20

0.002 0.994

18

0.104 0.691

17

-0.661(**) 0.002

20

-0.059 0.804

20

0.055 0.817

20

0.354 0.137

19

-0.038 0.874

20

0.444(*) 0.050

20

0.397 0.083

20 Productive Relationship

Sig.N

0.419 0.066

20

0.866(**) 0.000

20

1 -

20

0.475(*) 0.035

20

0.769(**) 0.000

20

0.128 0.591

20

0.263 0.263

20

-0.215 0.363

20

0.246 0.325

18

0.294 0.252

17

-0.625(**) 0.003

20

0.138 0.563

20

0.046 0.848

20

0.462(*) 0.046

19

0.253 0.281

20

0.650(**) 0.002

20

0.562(**) 0.010

20 Time & Effort

Sig.N

0.371 0.108

20

0.313 0.179

20

0.475(*) 0.035

20

1 -

20

0.612(**) 0.004

20

-0.185 0.435

20

0.209 0.377

20

0.093 0.696

20

0.335 0.174

18

0.415 0.098

17

-0.198 0.404

20

0.225 0.340

20

-0.198 0.402

20

0.351 0.140

19

0.248 0.291

20

0.418 0.067

20

0.234 0.321

20 Relationship Satisfaction

Sig.N

0.223 0.344

20

0.533(*) 0.016

20

0.769(**) 0.000

20

0.612(**) 0.004

20

1 -

20

0.000 1.000

20

0.180 0.448

20

-0.124 0.604

20

0.172 0.495

19

0.199 0.443

17

-0.507(*) 0.022

20

0.211 0.373

20

-0.065 0.784

20

0.357 0.134

19

0.268 0.253

20

0.558(*) 0.011

20

0.381 0.097

20 Equality of Transactions

Sig.N

-0.106 0.657

20

0.236 0.316

20

0.128 0.591

20

-0.185 0.435

20

0.000 1.000

20

1 -

20

0.131 0.581

20

-0.457(*) 0.043

20

-0.039 0.878

18

0.277 0.282

17

0.036 0.882

20

0.352 0.127

20

0.255 0.278

20

0.109 0.655

19

0.223 0.345

20

0.045 0.850

20

-0.097 0.684

20 Relationship Clearly Specified

Sig.N

-0.316 0.175

20

0.222 0.346

20

0.263 0.263

20

0.209 0.377

20

0.180 0.448

20

0.131 0.581

20

1 -

20

0.084 0.724

20

0.195 0.439

18

0.489(*) 0.046

17

-0.255 0.277

20

0.517(*) 0.020

20

0.000 1.000

20

0.502(*) 0.029

19

0.366 0.112

20

0.497(*) 0.026

20

0.352 0.128

20 Standardised Relationship

Sig.N

0.032 0.893

20

-0.179 0.451

20

-0.215 0.363

20

0.093 0.696

20

-0.124 0.604

20

-0.457(*) 0.043

20

0.084 0.724

20

1 -

20

-0.315 0.203

18

-0.406 0.106

17

-0.009 0.970

20

-0.235 0.319

20

-0.145 0.542

20

0.000 0.999

19

-0.169 0.477

20

-0.251 0.286

20

-0.011 0.963

20 Resource Flow to QDPW

Sig.N

-0.054 0.831 18

0.002 0.994

18

0.246 0.325

18

0.335 0.174

18

0.172 0.495

18

-0.039 0.878

18

0.195 0.439

18

-0.315 0.203

18 1 -

0.623(**) 0.008

17

0.254 0.309

18

0.510(*) 0.031

18

0.357 0.146

18

0.400 0.111

18

0.568(*) 0.014

18

0.488(*) 0.040

18

0.590(*) 0.010

18 Resource Flow from QDPW

Sig.N

-0.284 0.268

17

0.104 0.691

17

0.294 0.252

17

0.415 0.098

17

0.199 0.443

17

0.277 0.282

17

0.489(*) 0.046

17

-0.406 0.106

17

0.623(**) 0.008

17 1 -

0.016 0.952

17

0.549(*) 0.023

17

-0.107 0.683

17

0.432 0.095

17

0.219 0.398

17

0.468 0.058

17

0.081 0.758

17 Communication Quality

Sig.N

-0.456(*) 0.043

20

-0.661(**) 0.002

20

-0.625(**) 0.003

20

-0.198 0.404

20

-0.507(*) 0.022

20

0.036 0.882

20

-0.255 0.277

20

-0.009 0.970

20

0.254 0.309

18

0.016 0.952

17

1 -

20

0.210 0.374

20

-0.064 0.789

20

0.015 0.951

19

0.225 0.341

20

-0.510(*) 0.022

20

-0.442 0.051

20 Freq. of Communication

Sig.N

-0.331 0.153

20

-0.059 0.804

20

0.138 0.563

20

0.225 0.340

20

0.211 0.373

20

0.352 0.127

20

0.517(*) 0.020

20

-0.235 0.319

20

0.510(*) 0.031

18

0.549(*) 0.023

17

0.210 0.374

20

1 -

20

0.281 0.231

20

0.454 0.051

19

0.533(*) 0.016

20

0.453(*) 0.045

20

0.143 0.546

20 Domain Similarity

Sig.N

0.141 0.552

20

0.055 0.817

20

0.046 0.848

20

-0.198 0.402

20

-0.065 0.784

20

0.255 0.278

20

0.000 1.000

20

-0.145 0.542

20

0.357 0.146

18

-0.107 0.683

17

-0.064 0.789

20

0.281 0.231

20

1 -

20

-0.054 0.825

19

0.387 0.092

20

0.223 0.346

20

0.483(*) 0.031

20 Resource Dependence

Sig.N

-0.222 0.361

19

0.354 0.137

19

0.462(*) 0.046

19

0.351 0.140

19

0.357 0.134

19

0.109 0.655

19

0.502(*) 0.029

19

0.000 0.999

19

0.400 0.111

18

0.432 0.095

17

0.015 0.951

19

0.454 0.051

19

-0.054 0.825

19

1 -

19

0.695(**) 0.001

19

0.354 0.137

19

0.194 0.426

19 Awareness

Sig.N

-0.097 0.683

20

-0.038 0.874

20

0.253 0.281

20

0.248 0.291

20

0.268 0.253

20

0.223 0.345

20

0.366 0.112

20

-0.169 0.477

20

0.568(*) 0.01 18

0.219 0.398

17

0.225 0.341

20

0.533(*) 0.016

20

0.387 0.092

20

0.695(**) 0.001

19

1 -

20

0.406 0.076

20

0.486(*) 0.030

20 Personal Acquaintance

Sig.N

0.183 0.440

20

0.444(*) 0.050

20

0.650(**) 0.002

20

0.418 0.067

20

0.558(*) 0.011

20

0.045 0.850

20

0.497(*) 0.026

20

-0.251 0.286

20

0.488(*) 0.040

18

0.468 0.058

17

-0.510(*) 0.022

20

0.453(*) 0.045

20

0.223 0.346

20

0.354 0.137

19

0.406 0.076

20

1 -

20

0.730(**) 0.000

20 Consensus

Sig. N

0.282 0.228

20

0.397 0.083

20

0.562(**) 0.010

20

0.234 0.321

20

0.381 0.097

20

-0.097 0.684

20

0.352 0.128

20

-0.011 0.963

20

0.590(*) 0.010

18

0.081 0.758

17

-0.442 0.051

20

0.143 0.546

20

0.483(*) 0.031

20

0.194 0.426

19

0.486(*) 0.030

20

0.730(**) 0.000

20

1 -

20


Table 6.43: Correlation between Perceived Effectiveness of Relationship and Relationship Indices (QDPW)

233


Culture

PDI UAI IDV MAS




(n=16)



Personal Time 1.83 2.00 0.41 Challenge 2.17 2.00 0.41 Stress 2.67 2.50 0.82 Physical Condition 2.33 2.00 1.03 Relationship with Superior 1.67 2.00 0.52 Employment Security 2.50 2.50 0.55 Freedom 2.50 2.50 0.55 Cooperation 2.00 2.00 0.63 Consult by Superior 2.17 2.00 0.75 Contribution to Company 2.17 2.00 0.41 High Earning 2.17 2.00 0.41 Serve the Country 3.67 4.00 0.52 Desirable Living Area 2.00 2.00 0.00 Opportunity for Advancement 2.33 2.00 0.52 Job Adventure 2.17 2.00 0.41 Successful Company 3.00 3.00 0.63 Help the Others 2.67 2.50 0.82 Job Definition 2.67 2.50 0.82


indicating little to no importance on the said criteria for an ideal job.

Table 6.45: Importance of Criteria for an Ideal Job (QDPW)

234



Organisation’s rule should not be broken under any circumstances

3.17

3.00

0.75

Trust 2.00 2.00 0.00 Dislike of work 4.00 4.00 0.00 More desirable to work in a large corporation

3.33

3.00

0.82



Table 6.46: Levels of Agreement on Statements (QDPW)

Mean Median Standard Deviation Personal relationship are important in managing project/contract

1.67

2.00

0.52

Formal procedures are necessary for the successful management of a project

2.00

2.00

0.63

Informal arrangements are necessary for the successful management of a project

2.67

2.50

0.82

Personal relationships amongst the project members are more important than those in your employer’s organization

2.33

2.50

0.82

One must be willing to sacrifice personal relationships with members of the project team to ensure the successful completion of the project

2.67

2.50

0.82

One must be willing to sacrifice personal relationships with members of the project team to ensure their firm’s objectives are met

2.83

2.50

0.98

On must be willing to sacrifice personal relationships with members of the project team to ensure one’s personal objectives are met

3.50

4.00

0.84

One must be prepared to disregard formal procedures in order to ensure the successful completion of the project

2.67

2.00

1.03

One must be prepared to disregard formal procedures in order to ensure one’s firm’s objectives met

3.17

3.00

0.75

One must be prepared to disregard formal procedures in order to ensure one’s own objectives are met

3.50

4.00

0.84



Table 6.47: Agreement to Statements in Relation to Project Success or Achieving Objectives (QDPW)

235


QDMR Survey Results

Organisational Culture Organisational Culture Preferred Culture Perceived Culture

Power 0 2.5b Role 0.5a 4b,c Task 8.5a 3.5c Person 1 0

(n=10) a Same score for Role and Task Culture was calculated from one of the returned

questionnaires. b Same score for Power and Role Culture was calculated from one of the returned

questionnaires. c Same score for Role and Task Culture was calculated from one of the returned

questionnaires.

Table 6.48: Organisational Culture (QDMR)

Commitment



(n=10) * Concepts are measured on a scale of 1 to 7, with 1 indicating low levels of commitment and

7 indicating high levels, for six variables giving, for each scale, maximum scores of 56 and minimum scores of 9.

Table 6.49: Commitment Levels (QDMR)

236


Organisational Assessment Systematized

Impersonal Mode




1. Organizational Referent Hierarchy & staff 2. Coordination and Control by: Rules, plans,

schedules


a. Direction Diffuse b. Amount Medium c. Standardization &

Codification Medium

4. Perceived Interdependence among Components High

5. Frequency of conflict among Components Low Medium

Table 6.50: Hypothesised Patterns of Design Mode in QDMR

Resource Dependence

* Concepts are measured on a scale of 1 to 5, with 1 indicating no resources were received and 5 indicating large amount of resources received


QDMR 3.50 3.00 1.06 Other Units 4.00 4.00 0.82

(n=22)

Table 6.51: Other Units Resource Dependence on QDMR

Mean Median Standard

Deviation QDMR 3.91 4.00 0.75 Other Units 4.32 4.00 0.72

(n=22)

Table 6.52: QDMR Resource Dependence on Other Units

* Concepts are measured on a scale of 1 to 5, with 1 indicating the importance of the other

party is not very important and 5 indicating it is absolutely crucial Mean Median Standard Deviation

To QDMR 3.95 4.00 0.79 To Other Units 3.50 3.50 1.06

(n=22)

Table 6.53: Resource Importance between QDMR and Other Units

237


Awareness of Relationship * Concepts are measured on a scale of 1 to 5, with 1 indicating goals and services are not

informed at all and 5 indicating they are very well informed Mean Median Standard Deviation

QDMR 3.82 4.00 0.85 Other Units 3.82 4.00 0.91

(n=22)

Table 6.54: Goals Informed between QDMR and Other Services

* Concepts are measured on a scale of 1 to 5, with 1 indicating there is no personal

acquaintance and 5 indicating the personal acquaintance is very well Mean Median Standard Deviation

QDMR 3.18 3.00 1.01 Other Units 4.00 4.00 0.93

(n=22)

Table 6.55: Degree of Personal Acquaintance (QDMR & Other Units)

Consensus/Conflict * Concepts are measured on scale of 0 to 5, with 0 indicating no knowing if the other party

agrees on goal priorities/way of work or services provided/terms of relationship/hindered performance, and 5 indicating knowing the other party agree very much on items


Goal Priorities QDMR 3.82 4.00 1.14 Other Units 3.55 3.50 0.96

Ways of Work/Services Are Provided

QDMR 3.59 4.00 1.05 Other Units 3.55 4.00 0.91

Terms of Relationship QDMR 3.82 4.00 0.85 Other Units 3.68 4.00 1.00

(n=22)

Table 6.56: Consensus and Conflict between QDMR and Other Units

238



QDMR 2.14 2.00 0.94 Other Units 1.55 1.00 1.01

(n=22)

Table 6.57: Hindered Performance by Other Parties (QDMR & Other Units)

* Concepts are measured on scale of 1 to 6, with 1 indicating no disagreement or dispute

during the last six month, and 6 indicating they happen everyday Mean Median Standard Deviation

QDMR 2.09 2.00 0.92 Other Units 2.09 2.00 1.34

(n=22)

Table 6.58: Frequency of Conflict (QDMR & Other Units)

Personal

Acquaintance (QDMR)



(QDMR)


(Other Units) Personal Acquaintance (QDMR)

Sig. 1 -

0.409 0.059

-0.327 0.138

-0.260 0.243


Sig. 0.409 0.059

1 -

-0.391 0.072

-0.230 0.303

Frequency of Conflict (QDMR)

Sig. -0.327 0.138

-0.391 0.072

1 -

0.378 0.083

Frequency of Conflict (Other Units)

Sig. -0.260 0.243

-0.230 0.303

0.378 0.083

1 - (n=22)

Table 6.59: Correlations between QDMR and Other Units on Personal Acquaintance and Frequency of Conflict

239



* Concepts are measured on a scale of 1 to 5, with 1 indicating the conflict resolution was almost never and 5 indicating it was used almost always


Avoiding Issues 1.27 1.00 0.63 Smoothing Over Issues 1.68 1.00 0.89 Confronting Issues 3.50 4.00 0.86 Hierarchy 1.95 2.00 0.90

(n=22)

Table 6.60: Frequency on Use of Methods of Conflict Resolution (QDMR)


(QDMR)


Avoiding Issues


Confronting Issues Hierarchy

Working Relationship Effectiveness (QDMR)

Sig. 1 -

-0.181 0.421

-0.438* 0.041

-0.525* 0.012

-0.258 0.246

0.157 0.485


Sig. -0.181 0.421

1 -

0.112 0.619

0.198 0.376

-0.151 0.501

-0.158 0.483

Avoiding Issues

Sig. -0.438* 0.041

0.112 0.619

1 -

0.752** 0.000

-0.351 0.109

0.023 0.919


Sig. -0.525* 0.012

0.198 0.376

0.752** 0.000

1 -

-0.155 0.491

-0.078 0.730

Confronting Issues

Sig. -0.258 0.246

-0.151 0.501

-0.351 0.109

-0.155 0.491

1 -

-0.216 0.335

Hierarchy

Sig. 0.157 0.485

-0.158 0.483

0.023 0.919

-0.078 0.730

-0.216 0.355

1 -

* Correlation is significant at the 0.05 level (2-tailed) (n=22) ** Correlation is significant at the 0.01 level (2-tailed)

Table 6.61: Correlation between Working Relationship Effectiveness and Methods of Conflict Resolution (QDMR)

240


Domain Similarity

* Concepts are measured on scale of 0 to 5, with 0 indicating no knowing the extent of domain similarity, and 5 indicating great extent of domain similarity


Funding Source 4.18 5.00 1.50 Work Kind 2.00 2.00 1.11 Clients or Customers 3.23 3.00 1.11 Operating Goals 3.45 3.00 0.91 Employee Skills 3.55 3.50 1.14 Technology 3.68 4.00 0.78

(n=22) * Concepts are measured on scale of 0 to 5, with 0 indicating no knowing of the extent of

domain similarity, and 5 indicating great extent of domain similarity.

Table 6.62: Domain Similarity (QDMR)

Funding Source Work Kind


Operating Goals

Employee Skills Technology

Funding Source

Sig. 1 -

0.371 0.089

0.260 0.243

0.180 0.422

-0.061 0.789

0.337 0.126

Work Kind

Sig. 0.371 0.089

1 -

0.540** 0.010

0.563** 0.006

0.299 0.176

0.494* 0.019


Sig. 0.260 0.243

0.540** 0.010

1 -

0.175 0.435

0.048 0.833

0.363 0.097

Operating Goals

Sig. 0.180 0.422

0.563** 0.006

0.175 0.435

1 -

0.162 0.471

0.347 0.114

Employee Skills

Sig. -0.061 0.789

0.299 0.176

0.048 0.833

0.162 0.471

1 -

0.364 0.096

Technology

Sig. 0.337 0.126

0.494* 0.019

0.363 0.097

0.347 0.114

0.364 0.096

1 -


Table 6.63: Correlation between Types of Domain Similarity (QDMR)

241


Communication * Concepts are measured on scale of 0 to 6, with 0 indicating not once the other party was

contacted 6 indicating many times daily Mean Median Standard

Deviation Written Report 3.73 3.00 1.49 Face-to-Face Talks 4.27 4.50 1.55 Telephone Calls 4.41 5.00 122 Group Meetings 2.50 2.50 1.26

(n=22)

Table 6.64: Frequency of Communication (QDMR)


(Project Services)


Written Reports

Face-to-Face Talks

Telephone Calls

Group Meetings

Working Relationship Effectiveness (Project Services)

Sig. 1 -

-0.181 0.421

0.143 0.524

-0.260 0.242

-0.106 0.638

-0.226 0.312


Sig. -0.181 0.421

1 -

0.171 0.447

0.298 0.179

0.247 0.268

0.206 0.358

Written Reports

Sig. 0.143 0.514

0.171 0.447

1 -

0.427* 0.047

0.720** 0.000

0.457* 0.033

Face-to-Face Talks

Sig. -0.260 0.242

0.298 0.179

0.427* 0.047

1 -

0.568** 0.006

0.633** 0.002

Telephone Calls

Sig. -0.106 0.638

0.247 0.268

0.720** 0.000

0.568** 0.006

1 -

0.479* 0.024

Group Meetings

Sig. -0.226 0.312

0.206 0.358

0.457* 0.033

0.633** 0.002

0.479* 0.024

1 -


Table 6.65: Correlation between Working Relationship Effectiveness and Methods of Communication (QDMR & Other Units)

Mean Median Standard Deviation QDMR 4.61 5.00 1.07 Other Units 4.91 5.00 1.02

(n=22)

Table 6.66: Frequency of Contact between QDMR and Other Units

242



QDMR 14% 8% 0.21 Other Units 22% 10% 0.26

(n=22)

Table 6.67: Percent of Time Spent between QDMR and Other Units


QDMR 0.55 0.50 0.11 (n=22)

Table 6.68: Percent of Contact Initiated by QDMR

* Concepts are measured on scale of 0 to 5, with 0 indicating no contact, 1 indicating little

difficulty and 5 indicating high difficulty Mean Median Standard Deviation

QDMR 1.55 1.00 0.74 Other Units 2.18 2.00 0.91

(n=22)

Table 6.69: Difficulty on Getting in Touch (QDMR & Other Units)


QDMR 1.95 2.00 0.79 Other Units 2.36 2.00 0.66

(n=22)

Table 6.70: Difficulty on Getting Ideas Across (QDMR & Other Units)

Consensus Difficulty Getting in Touch Difficulty Getting Ideas

Across

Consensus Sig.

1 -

-0.249 0.263

0.000 0.999

Difficulty Getting in Touch Sig.

-0.249 0.263

1 -

0.382 0.080

Difficulty Getting Ideas Across

Sig. 0.000 0.999

0.382 0.080

1 -

(n=22)

Table 6.71: Correlation between Consensus and Quality of Communication (QDMR)

243



Touch (QDMR)


Touch (Other Units)


Across (QDMR)


Across (Other Units)

Other Units

Hindered QDMR

QDMR Hindered

Other Units

Dispute (QDMR)


Difficulty Getting in Touch (QDMR)

Sig. 1 -

-0.297 0.179

-0.037 0.869

0.258 0.246

-0.044 0.847

0.157 0.487

-0.076 0.736

0.188 0.403

Difficulty Getting in Touch (Other Units)

Sig. -0.297 0.179

1 -

0.213 0.342

0.283 0.202

0.304 0.168

-0.009 0.967

0.321 0.145

-0.171 0.447

Difficulty Getting Ideas Across (QDMR)

Sig. -0.037 0.869

0.213 0.342

1 -

0.218 0.330

0.653** 0.001

-0.027 0.904

0.203 0.364

0.049 0.828

Difficulty Getting Ideas Across (Other Units)

Sig. 0.258 0.246

0.283 0.202

0.218 0.330

1 -

0.147 0.514

0.762** 0.000

0.493* 0.020

0.446* 0.037

Other Units Hindered QDMR

Sig. -0.044 0.847

0.304 0.168

0.653** 0.001

0.147 0.514

1 -

-0.032 0.888

0.370 0.090

-0.048 0.832

QDMR Hindered Other Units

Sig. 0.157 0.487

-0.009 0.967

-0.027 0.904

0.762** 0.000

-0.032 0.888

1 -

0.507* 0.016

0.804** 0.000

Dispute (QDMR)

Sig. -0.076 0.736

0.321 0.145

0.203 0.364

0.493* 0.020

0.370 0.090

0.507* 0.016

1 -

0.378 0.083


Sig. 0.188 0.403

-0.171 0.447

0.049 0.828

0.446* 0.037

-0.048 0.832

0.904** 0.000

0.378 0.083

1 -


Table 6.72: Correlation between Quality of Communication, Frequency of Conflict and Hindered Performance between Parties (QDMR & Other Units)

244


Resource Flows

* Concepts are measured on scale of 1 to 5, with 1 indicating almost all the same resources each time and 5 indicating almost all different each time


Work 0.24 0.10 0.32 Money or Budget 0.05 0.00 0.21 Technical Assistance 0.18 0.10 025

(n=22)

Table 6.73: Resource Flows from Other Units to QDMR


Work 0.09 0.01 0.20 Money or Budget 0.03 0.00 0.06 Technical Assistance 0.12 0.08 0.18

(n=22)

Table 6.74: Resource Flows from QDMR to Other Units

Variability of Resources Flows

Mean Median Standard Deviation Same Each Time 2.82 3.00 1.56 Problems Encountered 2.50 2.00 0.96 Interruptions 2.05 2.00 1.09

(n=22) * Concepts are measured on scale of 1 to 5, with 1 indicating resources received/sent were

almost all the same each time and 5 indicating almost all different each time ** Concepts are measured on scale of 1 to 6, with 1 indicating no problem was encountered and

6 indicating several times a day *** Concepts are measured on scale of 1 to 5, with 1 indicating interruptions encountered were to

no extent and 5 indicating to very great extent

Table 6.75: Variability of Resource Flows (QDMR)

245



Resource Flow Problems

Encountered Resource Flow Interruptions




Sig. 1 -

-0.221 0.322

0.396 0.068

0.008 0.972

-0.072 0.749

Resource Flow Problems Encountered

Sig. -0.221 0.322

1 -

0.295 0.183

0.089 0.695

0.000 1.000

Resource Flow Interruptions

Sig. 0.396 0.068

0.295 0.183

1 -

0.326 0.139

-0.120 0.595


Sig. 0.008 0.972

0.089 0.695

0.326 0.139

1 -

0.457* 0.033


Sig. -0.072 0.749

0.000 1.000

-0.120 0.595

0.457* 0.033

1 -

* Correlation is significant at the 0.05 level (2-tailed) (n=22)

Table 6.76: Correlation between Variability of Resource Flow and Relationship Formalisation (QDMR)

Formalisation of Interunit Relationship * Concepts are measured on scale of 1 to 5, with 1 indicating to no extent and 5 indicating


QDMR 3.64 4.00 0.90 Other Units 3.64 4.00 0.79

(n=22)

Table 6.77: Relation Explicitly Verbalised (QDMR & Other Units)


QDMR 3.32 3.00 1.09 Other Units 2.59 3.00 1.10

(n=22)

Table 6.78: Relation Written Down in Detail (QDMR & Other Units)

Interunit Influence * Concepts are measured on scale of 1 to 5, with 1 indicating no influence and 5 indicating


QDMR 2.27 2.00 1.08 Other Units 2.45 2.00 1.01

(n=22)

Table 6.79: Other Units' Operations Influenced by QDMR

246


* Concepts are measured on scale of 1 to 5, with 1 indicating to no extent and 5 indicating great extent

Mean Median Standard Deviation QDMR 2.45 2.00 0.67 Other Units 2.45 2.00 0.74

(n=22)

Table 6.80: QDMR Changed Other Units' Goals/Services

* Concepts are measured on scale of 1 to 5, with 1 indicating no influence and 5 indicating


QDMR 2.45 2.00 1.10 Other Units 2.09 2.00 0.75

(n=22)

Table 6.81: QDMR's Operations Influenced by Other Units



QDMR 2.18 2.00 0.66 Other Units 2.50 2.00 0.86

(n=22)

Table 6.82: Other Units Changed QDMR Goals/Services

Perceived Effectiveness of Relationship * Concepts are measured on scale of 1 to 5, with 1 indicating to no extent and 5 indicating


QDMR 4.32 4.00 0.72 Other Units 4.05 4.00 0.79

(n=22)

Table 6.83: Extent of Commitments Carried out by Other Units (QDMR)


QDMR 4.27 4.00 0.55 Other Units 3.86 4.00 0.83

(n=22)

Table 6.84 Extent of Commitments Carried out by QDMR

247



QDMR 4.23 4.00 0.69 Other Units 4.09 4.00 0.81

(n=22)

Table 6.85: Productive Relationship (QDMR & Other Units)


QDMR 4.36 4.00 0.58 Other Units 4.27 4.00 0.70

(n=22)

Table 6.86: Time and Effort (QDMR & Other Units)


QDMR 4.18 4.00 0.85 Other Units 3.91 4.00 1.02

(n=22)

Table 6.87: Relationship Satisfaction (QDMR & Other Units)

* Concepts are measured on scale of 1 to 5, with 1 indicating “we get much less than we

ought” and 5 indicating “we get much more than we ought” Mean Median Standard Deviation

QDMR 2.91 3.00 0.53 Other Units 2.91 3.00 0.61

(n=22)

Table 6.88: Transaction Equality (QDMR & Other Units)

249


Commit-ments (OU)

Commit-ments

(QDMR) Productive

Relationship Time & Effort






Resource Flow from

QDMR

Poor Commu-nication Quality

Freq. of Commu-nication

Domain Similarity

Resource Dependence Awareness

Personal Acquain-

tance Consensus

Commitments (OU)

Sig. 1 -

0.571** 0.005

0.567** 0.006

0.233 0.297

0.543** 0.009

0.386 0.076

0.333 0.130

0.115 0.609

-0.028 0.902

-0.303 0.170

-0.091 0.688

0.065 0.773

-0.317 0.151

0.231 0.302

-0.068 0.764

0.250 0.261

0.031 0.893

Commitments (QDMR)

Sig. 0.571** 0.005

1 -

0.558** 0.007

0.484* 0.022

0.648** 0.001

0.154 0.494

-0.130 0.564

-0.117 0.605

0.172 0.443

-0.364 0.096

-0.168 0.455

-0.066 0.771

0.251 0.260

0.254 0.254

0.101 0.653

0.369 0.091

0.114 0.614

Productive Relationship

Sig. 0.567** 0.006

0.558** 0.007

1 -

0.610** 0.003

0.824** 0.000

0.508* 0.016

0.081 0.721

0.203 0.364

0.096 0.670

-0.403 0.063

-0.566** 0.006

-0.148 0.511

-0.082 0.718

-0.066 0.769

-0.012 0.957

0.551** 0.008

0.090 0.692

Time & Effort

Sig. 0.233 0.297

0.484* 0.022

0.610** 0.003

1 -

0.696** 0.000

0.331 0.132

-0.112 0.621

0.133 0.556

0.197 0.380

-0.165 0.464

-0.585** 0.004

0.280 0.207

0.145 0.519

0.145 0.519

0.262 0.238

0.746** 0.000

0.404 0.062


Sig. 0.543** 0.009

0.648** 0.001

0.824** 0.000

0.696** 0.000

1 -

0.474* 0.026

-0.206 0.358

0.025 0.911

0.100 0.657

-0.421 0.051

-0.563** 0.006

-0.199 0.374

-0.083 0.715

-0.175 0.436

-0.159 0.479

0.533* 0.011

-0.022 0.923


Sig. 0.386 0.076

0.154 0.494

0.508* 0.016

0.331 0.132

0.474* 0.026

1 -

-0.049 0.829

-0.003 0.989

0.146 0.516

-0.077 0.734

-0.437* 0.042

-0.058 0.798

-0.254 0.254

-0.412 0.057

-0.019 0.925

0.433* 0.044

0.068 0.764


Sig. 0.333 0.130

-0.130 0.564

0.081 0.721

-0.112 0.621

-0.206 0.358

-0.049 0.829

1 -

0.457* 0.033

-0.275 0.215

0.072 0.749

0.231 0.300

0.551** 0.008

-0.186 0.407

0.362 0.097

0.308 0.163

-0.050 0.826

0.328 0.136


Sig. 0.115 0.609

-0.117 0.605

0.203 0.364

0.133 0.556

0.025 0.911

-0.003 0.989

0.457* 0.033

1 -

0.202 0.368

0.255 0.252

-0.216 0.335

0.323 0.143

-0.056 0.804

0.255 0.253

0.430* 0.046

-0.271 0.223

0.190 0.396


Sig. -0.028 0.902

0.172 0.443

0.096 0.670

0.197 0.380

0.100 0.657

0.4\146 0.516

-0.275 0.215

0.202 0.368

1 -

0.033 0.884

-0.120 0.595

-0.059 0.796

0.218 0.330

0.166 0.461

0.157 0.486

0.030 0.895

0.008 0.972

Resource Flow from QDMR

Sig. -0.303 0.170

-0.364 0.096

-0.403 0.063

-0.165 0.464

-0.421 0.051

-0.077 0.734

0.072 0.749

0.255 0.252

0.033 0.884

1 -

0.248 0.267

0.189 0.400

0.054 0.813

-0.018 0.937

0.178 0.428

-0.246 0.269

0.052 0.818

Communication Quality

Sig. -0.091 0.688

-0.168 0.455

-0.566* 0.006

-0.585** 0.004

-0.563** 0.006

-0.437* 0.042

0.231 0.300

-0.216 0.335

-0.120 0.595

0.248 0.267

1 -

0.033 0.884

-0.228 0.307

0.284 0.200

-0.215 0.377

-0.454* 0.034

-0.140 0.535

Freq. of Communication

Sig. 0.065 0.773

-0.066 0.771

-0.148 0.511

0.280 0.207

-0.199 0.374

-0.058 0.798

0.551** 0.008

0.323 0.143

-0.059 0.796

0.189 0.400

0.033 0.884

1 -

0.137 0.545

0.514* 0.014

0.591** 0.004

0.110 0.625

0.716** 0.000

Domain Similarity

Sig. -0.317 0.151

0.251 0.260

-0.082 0.718

0.145 0.519

-0.083 0.715

-0.254 0.254

-0.186 0.407

-0.056 0.804

0.218 0.330

0.054 0.813

-0.228 0.307

0.137 0.545

1 -

0.082 0.717

0.365 0.095

0.181 0.421

0.379 0.082

Resource Dependence

Sig. 0.231 0.302

0.254 0.254

-0.066 0.769

0.145 0.519

-0.175 0.436

-0.412 0.057

0.362 0.097

0.255 0.253

0.166 0.461

-0.018 0.937

0.284 0.200

0.514* 0.014

0.082 0.717

1 -

0.308 0.163

-0.059 0.793

0.432* 0.045

Awareness

Sig. -0.068 0.764

0.101 0.653

-0.012 0.957

0.262 0.238

-0.159 0.479

-0.019 0.935

0.308 0.163

0.430* 0.046

0.157 0.486

0.178 0.428

-0.215 0.337

0.591** 0.004

0.362 0.095

0.308 0.163

1 -

0.089 0.693

0.701** 0.000

Personal Acquaintance

Sig. 0.250 0.261

0.369 0.091

0.551** 0.008

0.746** 0.000

0.533* 0.011

0.433* 0.044

-0.050 0.826

-0.271 0.223

0.030 0.895

-0.246 0.269

-0.454* 0.034

0.110 0.625

0.181 0.421

-0.059 0.793

0.089 0.693

1 -

0.308 0.163

Consensus

Sig. 0.031 0.893

0.114 0.614

0.090 0.692

0.404 0.062

-0.022 0.923

0.068 0.764

0.328 0.136

0.190 0.396

0.008 0.972

0.052 0.818

-0.140 0.535

0.716** 0.000

0.379 0.082

0.432* 0.045

0.701** 0.000

0.308 0.163

1 -

* Correlation is significant at the 0.05 level (2-tailed). (n=22) ** Correlation is significant at the 0.01 level (2-tailed)

Table 6.89: Correlation between Perceived Effectiveness of Relationship and Relationship Indices (QDMR)


251

Culture



indicating little to no importance on the criterion for an ideal job.

Table 6.90: Importance of Criteria for an Ideal Job (QDMR)


252

t-value Standard Deviation

Null Hypothesis

Personal Time -0.250 0.516 0.810 Challenge 1.260 0.563 0.230 Stress -0.483 0.935 0.640 Physical Condition -0.619 0.834 0.550 Relationship with Superior -1.320 0.488 0.210 Employment Security -0.258 0.751 0.800 Freedom 2.070 0.561 0.057 Cooperation 0.327 0.592 0.750 Consult by Superior 0.174 0.743 0.860 Contribution to Company 1.520 0.594 0.150 High Earning -0.564 0.458 0.580 Serve the Country 1.430 0.767 0.170 Desirable Living Area 0.000 0.535 1.00 Opportunity for Advancement 0.367 0.704 0.720 Job Adventure 0.462 0.699 0.650 Successful Company -0.243 0.797 0.810 Help the Others 0.564 0.915 0.580 Job Definition -1.47 0.704 0.160

(n=10)

Table 6.91: Difference between the Means of QDPW and QDMR on the Importance of Criteria for an Ideal Job using t-test


Organisation’s rule should not be broken under any circumstances 2.80 2.00 1.14 Trust 1.80 2.00 0.42 Dislike of work 3.90 4.00 0.32 More desirable to work in a large corporation 4.00 4.00 0.47

(n=10) * Concepts are measured on a scale of 1 to 5, with 1 indicating strongly agree with statement

and 5 strongly disagree.

Table 6.92: Level of Agreement on Statements (QDMR)


253


Personal relationship are important in managing project/contract 1.50 1.50 0.53 Formal procedures are necessary for the successful management of a project 1.70 2.00 0.48 Informal arrangements are necessary for the successful management of a project 2.50 2.00 1.08 Personal relationships amongst the project members are more important than those in your employer’s organisation 2.70 3.00 0.95 One must be willing to sacrifice personal relationships with members of the project team to ensure the successful completion of the project 3.90 4.00 0.74 One must be willing to sacrifice personal relationships with members of the project team to ensure their firm’s objectives are met 4.00 4.00 0.47 On must be willing to sacrifice personal relationships with members of the project team to ensure one’s personal objectives are met 4.20 4.00 0.42 One must be prepared to disregard formal procedures in order to ensure the successful completion of the project 3.40 4.00 1.08 One must be prepared to disregard formal procedures in order to ensure one’s firm’s objectives met 3.60 4.00 0.97 One must be prepared to disregard formal procedures in order to ensure one’s own objectives are met 3.70 4.00 0.95



Table 6.93: Agreement to Statements in Relation to Project Success or Achieving Objectives (QDMR)


254

QDPW Survey Results

Organisational Assessment Reasons for Relationship

Case Number

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

Rel

atio

nshi

p V

alue

5

4

3

2

1

0

Other Units

Project Services

Figure 6.1: Reasons for Relationship – Work (QDPW & Other Units)

Case Number

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

Rel

atio

nshi

p V

alue

5

4

3

2

1

0

Other Units

Project Services

Figure 6.2: Reasons for Relationship – Resources (QDPW & Other Units)

QDPW

QDPW


255

Case Number

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

Rel

atio

nshi

p V

alue

5

4

3

2

1

0

Other Units

Project Services

Figure 6.3: Reasons for Relationship - Technical Assistance (QDPW & Other Units)

Case Number

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

Rel

atio

nshi

p V

alue

5

4

3

2

1

0

Other Units

Project Services

Figure 6.4: Reasons for Relationship – Information (QDPW & Other Units)

Note: Relationship value received or sent between organisation units is measured on a scale of 1 to 5, with 1 indicating no relationship during the past six months and 5 indicating lots of interactions.

QDPW

QDPW


256

Case Number

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

Re

latio

nsh

ip E

ffect

iven

ess

5

4

3

2

1

0

Other Units rate

Project Services

Project Services

rate Other Units

Figure 6.5: Effectiveness of Working Relationship (QDPW & Other Units)

Resource Dependence

Case Number

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

Dep

ende

nce

5

4

3

2

1

0

Other Units

Project Services

Figure 6.6: Other Units Resource Dependence on QDPW

QDPW

QDPW

QDPW


257

Case Number

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

Dep

end

ence

5

4

3

2

1

0

Other Units

Project Services

Figure 6.7: QDPW Resource Dependence on Other Units

Case Number

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

Impo

rtan

ce

5

4

3

2

1

0

Other Units

Project Services

Figure 6.8: Resource Importance between Other Units and QDPW

QDPW

QDPW


258


40%

15%5%

10%

25%

5%

>10

108

7

2

1

Figure 6.9: Length of Relationship between QDPW and Other Units

Project Services Informed Other Units

Very w ell informed

Quite informed

Somew hat informed

Little informed

Not at all

Fre

quen

cy

14

12

10

8

6

4

2

0

Figure 6.10: Goals Informed by QDPW to Other Units

QDPW informed Other Units


259

Other Units Informed Project Services

Very w ell informed

Quite informed

Somew hat informed

Little informed

Fre

quen

cy

8

6

4

2

0

Figure 6.11: Goals Informed by Other Units to QDPW

Degree of Personal Acquaintance

Very w ell

Quite w ell

Somew hat w ell

Not very w ell

missing

Fre

que

ncy

10

8

6

4

2

0

Figure.6.12: Degree of Personal Acquaintance Rated by QDPW to Other Units

Other Units informed QDPW


260


Very w ellQuite w ellSomew hat w ellNot very w ell

Fre

quen

cy

10

8

6

4

2

0

Figure 6.13: Degree of Personal Acquaintance Rated by Other Units to QDPW

Consensus/Conflict

Case Number

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

Goa

l Prio

rity

5

4

3

2

1

0

Other Units

Project Services

Figure 6.14: Agree on Goal Priorities (QDPW & Other Units)

QDPW


261

Case Number

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

Way

s of

Wor

k/S

ervi

ces

Pro

vide

d

5

4

3

2

1

0

Other Units

Project Services

Figure 6.15: Agree on Ways of Work/Services Provides (QDPW & Other Units)

Case Number

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

Te

rms

of R

elat

ions

hip

5

4

3

2

1

0

Other Units

Project Services

Figure 6.16: Agree on Terms of Relationship (QDPW & Other Units)

QDPW

QDPW


262

Case Number

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

Ext

ent

5

4

3

2

1

0

Other Units

Project Services

Figure 6.17: Hindered Performance by Other Parties (QDPW & Other Units)

Case Number

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

Fre

quen

cy

5

4

3

2

1

0

Other Units

Project Services

Figure 6.18: Frequency of Conflict (QDPW & Other Units)

QDPW

QDPW


263


5%

60%

35%

Seldom

Almost never

No dispute

Figure 6.19: Conflict Resolution - Avoiding Issues (QDPW)

5%

5%

55%

35%

About half the time

Seldom

Almost never

No dispute

Figure 6.20: Conflict Resolution - Smoothing over Issues (QDPW)


264

60%

10%

30%

Almost alw ays

Often

No dispute

Figure 6.21: Conflict Resolution - Confronting Issues (QDPW)

5%

5%

40%

50%

Almost alw ays

Seldom

Almost never

No dispute

Figure 6.22: Conflict Resolution – Hierarchy (QDPW)


265

Domain Similarity

35%

20%

10%

35%

Great extent

considerable extent

Some extent

To no extent

Figure 6.23: Domain Similarity on Funding Source (QDPW)

35%

20%

10%

35%

Great extent

considerable extent

Some extent

To no extent

Figure 6.24: Domain Similarity on Kind of Work (QDPW)


266

20%

30% 30%

10%

5%

5%

Great extent

considerable extent Some extent

Little extent

To no extent

Don't know

Figure 6.25: Domain Similarity on Clients/Customers (QDPW)

20%

30% 30%

10%

5%

5%

Great extent

considerable extent Some extent

Little extent

To no extent

Don't know

Figure 6.26: Domain Similarity on Operating Goals (QDPW)


267

10%

40%

20%

20%

5%

5%Great extent

considerable extent

Some extent

Little extent

To no extent

Don't know

Figure 6.27: Domain Similarity on Employee Skills (QDPW)

5%

45%

35%

5%

10%Great extent

considerable extent

Some extent

Little extent

Don't know

Figure 6.28: Domain Similarity on Technology (QDPW)


268

Communications

25%

15%

45%

5%

10%

Many times daily

About daily

About w eekly

About every 2 w eeks

About monthly

Figure 6.29: Frequency of Written Reports (QDPW)

25%

15%

45%

5%

10%

Many times daily

About daily

About w eekly


About monthly

Figure 6.30: Frequency of Race-to-Face Talks (QDPW)


269

15%

35%

30%

5%

15%

Many times daily

About daily

About w eekly


About monthly

Figure 6.31: Frequency of Telephone Calls (QDPW)

5%

10%

40%

30%

10%

5%

About daily

About w eekly


About monthly

1-2 times

Not once

Figure 6.32: Frequency of Group Meetings (QDPW)


270

Case Number

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

Fre

que

ncy

6

6

5

5

4

4

3

3

2

2

1

1

0

Other Units

Project Services

Figure 6.33: Frequency of Contacts (QDPW & Other Units)

Case Number

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

Pe

rcen

t of T

ime

Spe

nt

100

80

60

40

20

0

Other Units

Project Services

Figure 6.34: Percent of Time Spent between QDPW and Other Units

QDPW

QDPW


271

Percent of Contacts Initiated (%)

90807570605010

Fre

quen

cy

10

8

6

4

2

0

Figure 6.35: Percent of Contacts Initiated by QDPW

Case Number

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

Diff

icul

ty

5

4

3

2

1

0

Other Units

Project Services

Figure 6.36: Difficulty on Getting in Touch (QDPW & Other Units)

QDPW


272

Case Number

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

Diff

icul

ty

5

4

3

2

1

0

Other Units

Project Services

Figure 6.37: Difficulty on Getting Ideas Across (QDPW & Other Units)

Resource Flows

Figure 6.38: Work Received from Other Units by QDPW

0%, 6%

1% - 10%, 38%

11% - 40%, 33%

41% - 70%, 6%

>70%, 17%

QDPW


273

0%, 64%1% - 10%, 6%

11% - 40%, 18%

>70%, 12%

Figure 6.39: Money/Budget Received from Other Units by QDPW

0%, 38%

1% - 10%, 28%

11% - 40%, 11%

41% - 70%, 6%

>70%, 17%

Figure 6.40: Technical Assistance Received from Other Units by QDPW


274

0%, 6%

1% - 10%, 29%

11% - 40%, 35%

41% - 70%, 12%

>70%, 18%

Figure 6.41: Work Received from QDPW to Other Units

0%, 40%

1% - 10%, 24%

11% - 40%, 12%

>70%, 24%

Figure 6.42: Money/Budget Received from QDPW to Other Units


275

0%, 12%

1% - 10%, 35%

11% - 40%, 29%

41% - 70%, 6%

>70%, 18%

Figure 6.43: Technical Assistance Received from QDPW to Other Units

Variability of Resource Flows

25%

25%

30%

5%

15%Mostly different eac

About half the same

Mostly the same each

Almost all the same

missing

Figure 6.44: Resource Flows Same Each Time Transacted (QDPW)


276

5%

35%

35%

10%

15%

About Weekly

About Monthly

1 or 2 Times

Not Once

missing

Figure 6.45: Resource Flow Problems Encountered(QDPW)

5%

35%

30%

15%

15%

Much Extent

Some Extent

Little Extent

To No Extent

missing

Figure 6.46: Resource Flow Interruptions (QDPW)


277

Formalisation of Interunit Relationship

Case Number

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

Va

lue

5

4

3

2

1

0

Other Units

Project Services

Figure 6.47: Relation Explicitly Verbalised (QDPW & Other Units)

Case Number

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

Va

lue

5

4

3

2

1

0

Other Units

Project Services

Figure 6.48: Relation Written Down in Detail (QDPW & Other Units)

QDPW

QDPW


278

20%

55%

10%

15%Great extent

Considerable extent

Some extent

missing

Figure 6.49: Standard Operation Procedures Established (QDPW)

50%

30%

5%

15%

Considerable extent

Some extent

Little extent

missing

Figure 6.50: Formal Channels Followed (QDPW)


279

Case Number

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

Va

lue

5

4

3

2

1

0

Other Units

Project Services

Figure 6.51: Other Units' Operations Influenced by QDPW

Case Number

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

Va

lue

5

4

3

2

1

0

Other Units

Project Services

Figure 6.52: QDPW Changed Other Units' Goals/Services

QDPW

QDPW


280

Case Number

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

Va

lue

5

4

3

2

1

0

Other Units

Project Services

Figure 6.53: QDPW's Operations Changed by Other Units

Case Number

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

Va

lue

5

4

3

2

1

0

Other Units

Project Services

Figure 6.54: Other Units Changed QDPW's Goals/Services

QDPW

QDPW


281


Case Number

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

Ext

ent

5

4

3

2

1

0

Other Units

Project Services

Figure 6.55: Extent of Commitments Carried Out by Other Units (QDPW)

Case Number

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

Ext

ent

5

4

3

2

1

0

Other Units

Project Services

Figure 6.56: Extent of Commitments Carried Out by QDPW

QDPW

QDPW


282

Case Number

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

Ext

ent

5

4

3

2

1

0

Other Units

Project Services

Figure 6.57: Productive Relationship (QDPW & Other Units)

Case Number

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

Ext

ent

5

4

3

2

1

0

Other Units

Project Services

Figure 6.58: Time and Effort (QDPW & Other Units)

QDPW

QDPW


283

Case Number

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

Ext

ent

5

4

3

2

1

0

Other Units

Project Services

Figure 6.59: Relationship Satisfaction (QDPW & Other Units)

Case Number

20

19

18

17

16

15

14

13

12

11

10

9

8

7

6

5

4

3

2

1

Ext

ent

5

4

3

2

1

0

Other Units

Project Services

Figure 6.60: Transaction Equality (QDPW & Other Units)

QDPW

QDPW


284

QDMR Survey Results

Organisational Assessment


Case Number

21191715131197531

Rel

atio

nshi

p V

alue

5

4

3

2

1

0

Other Units

QDMR

Figure 6.61: Reasons for Relationship – Work (QDMR & Other Units)

Case Number

21191715131197531

Rel

atio

nshi

p V

alue

5

4

3

2

1

0

Other Units

QDMR

Figure 6.62: Reasons for Relationship – Resources (QDMR & Other Units)


285

Case Number

21191715131197531

Rel

atio

nshi

p V

alue

5

4

3

2

1

0

Other Units

QDMR

Figure 6.63: Reasons for Relationship - Technical Assistance (QDMR & Other Units)

Case Number

21191715131197531

Rel

atio

nsh

ip V

alu

e

5

4

3

2

1

0

Other Units

QDMR

Figure 6.64: Reasons for Relationship – Information (QDMR & Other Units)


286

Case Number

21191715131197531

Re

latio

nshi

p E

ffect

ive

ness

5

4

3

2

1

0

Other Units

rates QDMR

QDMR rates

Other Units

Figure 6.65: Effectiveness of Working Relationship (QDMR & Other Units)

Resource Dependence

Case Number

21191715131197531

Dep

end

ence

5

4

3

2

1

0

Other Units

QDMR

Figure 6.66: Other Units Resource Dependence on QDMR


287

Case Number

21191715131197531

Dep

end

ence

5

4

3

2

1

0

Other Units

QDMR

Figure 6.67: QDMR Resource Dependence on Other Units

Case Number

21191715131197531

Impo

rta

nce

5

4

3

2

1

0

Other Units

QMDR

Figure 6.68: Resource Importance between QDMR and Other Units


288


9%

36%

45%

9%

21 or more

11 - 20

6 - 10

1 - 5

Figure 6.69: Length of Relationship between QDMR and Other Units

QDMR Informed Other Units

Very w ell informed

Quite informed

Somew hat informed

Little informed

Fre

que

ncy

14

12

10

8

6

4

2

0

Figure 6.70: Goals Informed by QDMR to Other Units


289

Other Units Informed QDMR

Very w ell informed

Quite informed

Somew hat informed

Little informed

Fre

que

ncy

12

10

8

6

4

2

0

Figure 6.71: Goals Informed by Other Units to QDMR


Very w ell

Quite w ell

Somew hat w ell

Not very w ell

No personal acquaint

Fre

que

ncy

10

8

6

4

2

0

Figure 6.72: Degree of Personal Acquaintance Rated by QDMR to Other Units


Very w ellQuite w ellSomew hat w ell

Fre

que

ncy

10

8

6

4

2

0

Figure 6.73: Degree of Personal Acquaintance Rated by Other Units to QDMR


290

Consensus/Conflict

Case Number

21191715131197531

Goa

l Prio

rity

5

4

3

2

1

0

Other Units

QDMR

Figure 6.74: Agree on Goal Priorities (QDMR & Other Units)

Case Number

21191715131197531

Way

s o

f Wor

k/S

ervi

ce P

rovi

de

5

4

3

2

1

0

Other Units

QDMR

Figure 6.75: Agree on Way of Work/Services Provides (QDMR & Other Units)


291

Case Number

21191715131197531

Ter

ms

of R

ela

tion

ship

5

4

3

2

1

0

Other Units

QDMR

Figure 6.76: Agree on Terms of Relationship (QDMR & Other Units)

Case Number

21191715131197531

Ext

ent

5

4

3

2

1

0

Other Units

QDMR

Figure 6.77: Hindered Performance by Other Parties (QDMR & Other Units)

Case Number

21191715131197531

Fre

que

ncy

5

4

3

2

1

0

Other Units

QDMR

Figure 6.78: Frequency of Conflict (QDMR & Other Units)


292


9%

9%

82%

About half the time

Seldom

Almost never

Figure 6.79: Conflict Resolution - Avoiding Issues (QDMR)

5%

14%

27%

55%

Often

About half the time

Seldom

Almost never

Figure 6.80: Conflict Resolution - Smoothing over Issues (QDMR)


293

5%

55%

32%

5%

5%Almost alw ays

Often

About half the time

Seldom

Almost never

Figure 6.81: Conflict Resolution - Confronting Issues (QDMR)

5%

23%

36%

36%

Often

About half the time

Seldom

Almost never

Figure 6.82: Conflict Resolution – Hierarchy (QDMR)


294

Domain Similarity

73%

5%

5%

5%

14%

Great extent

Considerable extent

Some extent

Little extent

To no extent

Figure 6.83: Domain Similarity on Funding Source (QDMR)

5%

5%

18%

32%

41%

Great extent

Considerable extent

Some extent

Little extent

To no extent

Figure 6.84 Domain Similarity on Kind of Work (QDMR)


295

9%

36%

32%

14%

9%

Great extent

Considerable extent

Some extent

Little extent

To no extent

Figure 6.85 Domain Similarity on Client/Customers (QDMR)

14%

32%

41%

14%

Great extent

Considerable extent

Some extent

Little extent

Figure 6.86 Domain Similarity on Operating Goals (QDMR)


296

23%

27%

41%

9%

Great extent

Considerable extent

Some extent

To no extent

Figure 6.87 Domain Similarity on Employee Skills (QDMR)

14%

45%

36%

5%

Great extent

Considerable extent

Some extent

Little extent

Figure 6.88 Domain Similarity on Technology (QDMR)


297

Communication

9%36%

32%

18%

5%

Many times dailyAbout daily


About monthly

1-2 times

Figure 6.89: Frequency of Written Reports (QDMR)

27%

23%

23%

9%

14%5%

Many times daily

About daily

About w eekly


About monthly1-2 times

Figure 6.90: Frequency of Face-to-Face Talks (QDMR)


298

18%

36%23%

14%

9%Many times daily

About dailyAbout w eekly


About monthly

Figure 6.91: Frequency of Telephone Calls (QDMR)

27%

23%

32%

9%9%

About w eekly


About monthly

1-2 timesNot once

Figure 6.92: Frequency of Group Meetings (QDMR)


299

Case Number

21191715131197531

Fre

que

ncy

6

5

4

3

2

1

0

Other Units

QDMR

Figure 6.93: Frequency of Contact between QDMR and Other Units

Case Number

21191715131197531

Per

cen

t of T

ime

Spe

nt

100

80

60

40

20

0

Other Units

QDMR

Figure 6.94: Percent of Time Spent between QDMR and Other Units

Percent of Contact Initiated (%)

807570605040

Fre

que

ncy

14

12

10

8

6

4

2

0

Figure 6.95: Percent of Contact Initiated by QDMR


300

Case Number

21191715131197531

Diff

icul

ty

5

4

3

2

1

0

Other Units

QDMR

Figure 6.96: Difficulty on Getting in Touch (QDMR & Other Units)

Case Number

21191715131197531

Diff

icul

ity

5

4

3

2

1

0

Other Units

QDMR

Figure 6.97: Difficulty on Getting Ideas Across (QDMR & Other Units)


301

Resource Flows

14%

5%

23%

36%

23%

>80%,

51% - 70%,

11% - 50%,

1% - 10%,

0%,

Figure 6.98: Work Received from Other Units by QDMR

5%

95%

>80%,

0%,

Figure 6.99: Money/Budget Received from Other Units by QDMR


302

5%

9%

14%

55%

18%>80%,

51% - 70%,

11% - 50%,

1% - 10%,

0%,

Figure 6.100: Technical Assistance Received from Other Units by QDMR

9%

5%

36%

50%

51% - 70%,

11% - 50%,

1% - 10%,

0%,

Figure 6.101: Work Received from QDMR to Other Units


303

9%

23%

68%

11% - 50%,

1% - 10%,

0%,

Figure 6.102: Money/Budget Received from QDMR to Other Units

5%23%

45%

27%

51% - 70%,11% - 50%,

1% - 10%,

0%,

Figure 6.103: Technical Assistance Received from QDMR to Other Units


304

Variability of Resources Flows

18%18%

23%

14%

23%

5%

Almost all differentMostly different eac

About half the same

Mostly the same each

Almost all the same

missing

Figure 6.104: Resource Flows Same Each Time Transacted (QDMR)

18%

27%

41%

14%Aout Weekly

About Monthly1 or 2 Times

Not Once

Figure 6.105: Resource Flow Problems Encountered (QDMR)


305

9%

27%

27%

32%

5%

Much Extent

Some Extent

Little Extent

To No Extent

missing

Figure 6.106: Resource Flow Interruptions (QDMR)

Formalisation of Interunit Relationship

Case Number

21191715131197531

Val

ue

5

4

3

2

1

0

Other Units

QDMR

Figure 6.107: Relation Explicitly Verbalised (QDMR & Other Units)


306

Case Number

21191715131197531

Val

ue

5

4

3

2

1

0

Other Units

QDMR

Figure 6.108: Relation Written Down in Detail (QDMR & Other Units)

9%

55%

27%

9%

Great extent

Considerable extent

Some extent

To no extent

Figure 6.109: Standard Operation Procedures Established (QDMR)


307

9%

36%

41%

14%

Great extent

Considerable extent

Some extent

Little extent

Figure 6.110: Formal Channels Followed (QDMR)

Interunit Influence

Case Number

21191715131197531

Val

ue

5

4

3

2

1

0

Other Units

QDMR

Figure 6.111: Other Units' Operations Influenced by QDMR


308

Case Number

21191715131197531

Val

ue

5

4

3

2

1

0

Other Units

QDMR

Figure 6.112: QDMR Changed Other Units' Goals/Services

Case Number

21191715131197531

Val

ue

5

4

3

2

1

0

Other Units

QDMR

Figure 6.113: QDMR's Operations Influenced by Other Units

Case Number

21191715131197531

Val

ue

5

4

3

2

1

0

Other Units

QDMR

Figure 6.114: Other Units Changed QDMR's Goals/Services


309


Case Number

21191715131197531

Ext

ent

5

4

3

2

1

0

Other Units

QDMR

Figure 6.115: Extent of Commitments Carried out by Other Units

Case Number

21191715131197531

Ext

ent

5

4

3

2

1

0

Other Units

QDMR

Figure 6.116: Extent of Commitments Carried out by QDMR


310

Case Number

21191715131197531

Ext

ent

5

4

3

2

1

0

Other Units

QDMR

Figure 6.117: Productive Relationship (QDMR & Other Units)

Case Number

21191715131197531

Ext

ent

5

4

3

2

1

0

Other Units

QDMR

Figure 6.118: Time and Effort (QDMR & Other Units)

Case Number

21191715131197531

Ext

ent

5

4

3

2

1

0

Other Units

QDMR

Figure 6.119: Relationship Satisfaction (QDMR & Other Units)


311

Case Number

21191715131197531

Ext

ent

5

4

3

2

1

0

Other Units

QDMR

Figure 6.120: Transaction Equality (QDMR & Other Units)

APPENDIX V CASE STUDIES

313

Case Study 1 Bruce Highway 1, Brisbane

Client: Queensland Department of Main Roads

Contractor: National Organisation

Contract Strategy AS 2124 with Extended Partnering

Tender Price AU$25M

Final Project Cost AU$40M

Project Background Case Study 1 is a 6 lanes upgrade project of the Bruce Higway between Gateway Motorway and Dohles Rocks Road. The project was to widen the highway section from 4 lanes to 6 lanes, with the existing flow of traffic maintained. The major issues were the complicated staging and the construction sequencing. Traffic needed to be switched from side to side due to lane closure during construction. The contract was awarded based on the lowest bid wins mechanism. Although the contractor was awarded the contract, the tender price for the project was seriously underbid, which led to a chain of problems including 15 months of on-going claims between the Client and the Contractor, on top of the actual construction period. Extended-Partnering was applied on top of the contract. It is a QDMR departmental policy for all projects with project cost above AU$5M to adopt Extended-Partnering. A one-day workshop was run by an external partnering facilitator, and was attended by all project team members. A follow-up partnering meeting was carried out within the first three months of the project. Attendees of the one-day Partnering workshop are listed in Table CS1.1.

Client Contractor

• Principal • Superintendent • Superintendent

Representative • Two Inspectors

• Project Manager • Three Project Engineers • Environmental Engineer • Two Supervisors • Two Foremen

Table CS1.1 Attendees of the Initial One-Day Partnering Workshop


314

One of the major items on the workshop agenda was discussions between project team members to produce a mission statement and charter objectives (see Table CS1.2) However, the project manager in this case drafted the charter objectives for his staff and was unwilling for any further discussion with the rest of the project team. There were disagreements on the list of objectives the project manager drafted. The opinion on financial issues should not be brought in and assessed as one of the partnering components was raised.

Table CS1.2 Charter Objectives of QDMR Case Study 1

An interviewee commented that communication in the project team was insufficient; problems or ideas were not brought out by the Contractor and would communicate mainly through letters. There was no informal communication or initial communication before receiving the letter from the Contractor, with references to various clauses in the contract. Eventually, the project team only communicated to each other via formal letters and a lot of time was spent on studying the contract and referencing relevant clauses in order to protect self interests, rather than working cooperatively and working towards project objectives. Yet, the objectives for this project might be different between project team members at the beginning of the project, and throughout the whole project. Due to the serious underbid of the contract; the Contractor’s major objective might be to increase the project income through claims in order to reduce the amount of loss. Yet the Client’s aim was to ensure both time and quality are met in the project. However, the Contractor’s behaviour impelled the project team relationship to turn sour; project team members were forced to work for one’s self interest. One particular incident in the project was one of the foremen

Charter Objectives

• A safe project for the workforce, the environment and the travelling public

• Quality achieved first time • No unplanned traffic disruptions • Proactive management of community issues • Expand skills and capabilities of project staff and workforce • Fair commercial dealings • Create flexibility and innovation through energy and teamwork • A cooperative work environment based on honesty, trust and

mutual respect • Timely resolution of issues through effective communication • Progress ahead of program • An enjoyable place to work


315

refused to communicate with any members in the project team for 3 months after an argument broke out. Another major problem in this project was high turnover of Contractor staff, which is also one of the major but common issues in the construction industry. Only 2 Contractor’s staff were involved throughout the whole project. The Project Manager left at the early stage of the project and returned to the project at the very end when the project (including relationship in project team) has turned sour. During the ‘Project Manager free period’, the Project Engineer became the acting Project Manager because he had the best knowledge of the project history and process, although he did not fulfil all the criterions of taking up the Project Manager position. Unfortunately, the Project Engineer also left the project before it finished. Usually, a post-construction partnering assessment would be carried out by the project team upon project completion. Due to the lack of original staff from the contractor side, the post-construction partnering assessment was thence not carried out in this project. Partnering assessments were carried out on a monthly basis, each individual scored against each charter objectives and a partnering summary report with a graph based on the scores was produced monthly. The partnering report showed the average score on partnering assessment has been declining since the project began, meaning the charter objectives were not met and the relationship in project team was turning bad. The same partnering facilitator was contacted by the Client after reviewing the problems encountered in the project team and the partnering assessment report in the 7th partnering meeting (project had been running for seven months). The partnering facilitator was then invited for a partnering workshop with the project team. The Client party found the workshop beneficial and helped the project team to focus on the project objectives again. An overall summary and an action plan were produced after the meeting. The partnering assessment for period 8 showed the average score has improved by nearly one point (the point scale is 1-7) since the last period. Unfortunately, the relationship of the project team did not improve and was not maintained for the remaining project period. There were lots of contractual disputes in this project since the project began; disputes were not resolved until 15 months later after the project construction was completed.

Lessons Learnt Relationship contracting was not successful in this project. Project team atmosphere and project process were greatly affected by the parent company policy and culture. Because of the parent organisation


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influences on the project team, there was a high turnover of Contractor staff in the project. Relationship in the project team did not start off well at the beginning of the project. Project objectives were not developed in a team manner, which consequently lead to a lack of common goals between all parties – the major criterion in relationship contracting. Instead of an open and frank communication, it was a close system communication in the project team. The tender selection was purely based on price – the lowest bid win. In this case, the contract was underbid which resulted in insufficient money in the contract since the beginning. There was not a right mix of project team members. Some team members were uncooperative and there was a lack of collaboration. Although a subsequent workshop was held during the project construction with an external partnering facilitator involved, problems in the team were deeply rooted and the relationship continued to turn sour.


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Case Study 2 Bruce Highway 2, Brisbane


Contractor: Regional Contractor (Bielby Holdings)

Contract Strategy: AS 2124 with Extended Partnering

Tender Price: AU$30M

Final Project Cost: AU$43M (as at July 2004 due to project resumption)

Project Background Case Study 2 is a highway upgrade project. The project was awarded to the Contractor based on the lowest bid wins system. The type of contract used was AS2124 with Extended-Partnering. A designer team is brought into the project due to the lack of in-house expertise in QDMR. A one-day Relationship Management Review Workshop was taken place at the beginning of the project. Key project participants from the Client, Contractor and Subcontractor were invited to attend. Attendees of the one-day workshop are listed in Table CS2.1.

Client Contractor Subcontractor


Representative • 3 Inspectors

• Project Manager • Project Engineer • Senior Foreman

• Project Manager • Supervisor • CQR

Table CS2.1 Attendees of the One-Day Initial Workshop

When the workshop date was set by the Client, the Contractor was asked to nominate anyone he/she thinks would be crucial for the project. In this case, 3 members from a major Subcontractor were invited because large amount of asphalt was needed in the project. The quantity and quality of asphalt and on time delivery were crucial for the project. An outline of the partnering process is presented in Figure CS2.1.


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Figure CS2.1 Structure of Partnering Process

Attendees of the Relationship Management workshop would also attend the Review and Evaluation meetings (also known as partnering meetings) which were held monthly. Each project team members would score against each charter objective on a performance assessment sheet which would be collected for data assessment prior to each partnering assessment meeting. A sample of the partnering assessment summary is shown in Figure CS2.2.

1st (foundation) workshop to be held at the very beginning of the project

2nd (follow-up) workshop to be held after three months when the project has commenced

Monthly Review and Evaluation Meeting to be carried out by the project team

Post-Construction Partnering Review at the end of the project

Additional Partnering Workshop if necessary


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Figure CS2.2 Sample of Partnering Assessment Summary Filled by Individuals


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Charter Objectives

• A safe project • Maintain good working relationships • High level of honesty and openness in dealings • Speedy identification and resolution of all issues • Manage impact on traffic • Effective planning of all parties • Construct a quality project • Timeliness of project completion • A cost-efficient project • Gains positive industry recognition • Minimal impact on environment


All problems or comments received were discussed in each monthly partnering meeting. The charter objectives (see Table CS2.2) were the principle objectives stated on the scoring sheet for performance assessment. It was pointed out that scores given to two consecutive periods by the same person could be very different. For example, a score of 2 was given for item 1 in period 8. Issues were raised in the partnering meeting and discussed. For the following period, a score of 6 would be given for the same item. Open communication in the project team was found very important. Not only it affected the work relationship, it also affected the effectiveness of problem solving. Relationships between project team members were constantly maintained at a good level; communication between the project participants had been opened since the project began. A typical example was the Contractor would talk openly and raise concerns when any problems or risks were foreseen. Informal communication channels such as telephone conversations, face-to-face talks, emails and faxes were also taken place in this project. Written correspondents were still used on specific issues for documentations; issues were often discussed on the telephone or in face-to-face meetings. This attitude was best expressed using the following quote from an interviewee, “if the issue can be talked through in a few minutes, why spending two hours writing a two pages letter?” A resolution matrix, presented in Table CS2.3 below, was developed in the initial workshop. Also, issues which might affect the project progress were made apparent and flagged. Project team realised those issues must be dealt with speedily in order to avoid any project delays and costs, as well as affecting the relationships between parties adversely.


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LEVEL CLIENT CONTRACTOR TIME

1. Foreman

Inspector

C1 C2 C3

c1 c2

3 hours

2. Superintendents’ Representative

Site Engineer

C4 C5

c3 c4

2 days

3. Project Manager

Superintendent

C6 c4 5 days

4. Principals’ Delegates

Contractors Representative

C7 c4 10 days

Ground Rules 1. Resolve issues at the lowest level 2. Unresolved issues to be escalated upwards by both/all members

prior to causing project delays or costs. 3. No jumping levels of authority 4. Ignoring the issue or “no decision” is unacceptable. 5. Time frame may be extended by mutual agreement at any level, for

data gathering. 6. Change to personnel can be notified at site meetings.

Table CS2.3 Resolution Matrix

The ground rules were strictly followed by the project team. Any unresolved issues were escalated upwards by both parties within a set timeframe in order to minimise project delays or costs. All issues were able to be resolved at level 2 or below. The work relationship between both parties was maintained at a good level throughout the project. Also, the Contractor had an incentive of early completion, though there was no bonus or financial reward for early completion in this project. One reason suggested was early project completion would help the Contractor’s cash flow and would also allow his team to move onto another project. This project was finished early and within budget.

Lessons Learnt Relationship management was very successful in this project. Relationship in the project team started off well since the project began. Although this project was awarded base on price and the lowest bid win, the contract was not underbid i.e. there was money in the contract. Also,


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strong commitment from both Client and Contractor at senior management level was received throughout the project. Philosophy of relationship management was understood and adopted at all levels. There were lots of open and informal communications between project team members. Partnering meetings were carried out in a very relax atmosphere and were finished within half an hour in most cases. All parties worked towards the same goal and objectives in the project were strictly followed. The project charter objectives were set with all parties’ consent. Unlike many construction projects, there were only two staff turnovers during the whole project period. The major Subcontractor was brought into the partnering meetings by the Contractor. Certain project issues, asphalt in this case, were able to be discussed and solved with the Subcontractor’s expertise. Both foreman and site inspector from the operation level also attended all partnering meetings, once again reinforcing the level of commitment from both parties on relational contracting. There were not many major disagreements between project parties and when such situations arose and when arguments had reached a certain level, the senior management (Project Manager and Superintendent and the Principal) would take the issues away from the partnering meetings. Separate meetings were held amongst the senior management members for further discussions. One of the aims of partnering meetings was to make all levels award of all project issues without affecting the work progressing at the operation level.


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Case Study 3 Gatton Bypass, Toowoomba


Contractor: Package 1&3:Bielby Holdings Package 2: 2 local contractors +

QDMR commercial arm

Contract Strategies: Package 1: Design and Management Contract with Extended-Partnering

Package 2: AS 2124 with Extended-Partnering

Package 3: AS 2124 with Extended-Partnering

Project Background The existing Gatton Bypass, on the Warrego Highway between Ipswich and Toowoomba, was opened to traffic in 1989. The 21km bypass forms part of the Brisbane – Darwin corridor of the National Highway. The section of highway between Brisbane and Toowoomba was the only section which did not have four lanes but two. Case Study 3 is therefore a duplication project of the Gatton Bypass to 4 lanes. Gatton Bypass duplication was carried out in 3 packages, with separate tenders issued for each package. The main reason for the project to be broken down into 3 separate packages was space limitation on site. Extended partnering was applied on all 3 packages because it is the QDMR policy for any project with a project value above $5M to have partnering applied on top of the project.

Figure CS3.1 Outline of QDMR Case Study 3

Package 3 Package 2 Package 1

5 km 5 km 10 km

Brisbane Toowoomba


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Package 2 was the first contract for tender and tender documents were issued in December 2001. The intention was allow work on the middle section to be finished as early as possible for the connection of package 1 and 3. Both package 1 and 3 went out for tender at the same time in early 2002. An outline of the project background is presented in Table CS3.1.

Project Background Package 2 was tendered twice during construction. Both contractors went bankrupted during construction and QDMR took over at the last stage and completed the work. QDMR employed most of the on-site staff. It was commented that the relationship on-site remained satisfactory, despite the previous 2 contractors went broke.

Package 1 Package 2 Package 3

Tender Issued

Early 2002 December 2001 Early 2002

Type of Contract

Design and Management Contract (intended for innovation and fast tracking the project)

AS 2124 with partnering on top

AS 2124 with partnering on top

Tender Sum

11M 9.5M 8.9M

Complexity

Complicated – connection with existing highway and roundabouts

Straight forward Straight forward

Contractor

Bielby Holdings (brought in subcontractor for the bridge)

Stockport Northern Queensland (Jun 2002) Globle (Apr-May 2003) QDMR to finish the project

Bielby Holdings (brought in subcontractor for the bridge)

Table CS3.1 Project Background of QDMR Case Study 3


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Although it was aimed to complete the work in package 2 first, package 2 turned out to be completed last mainly due to the said incidents. Yet, the duplication project was completed in November 2003, one month ahead of schedule. Budget: AU$46M

AU$44M (current – with package 4 undergoing on up-grading the original 2 lanes by Roadtek)

QDMR role: Provide own team of administration Superintendent, Engineer, Inspector The principle has a strong view on relationship contract

Superintendent, Superintendent Representative and Inspector went directly into Partnering

Relationship Management (Extended-Partnering) Proce dures • 3 partnering workshops were held which ran separately for all 3

packages • The first partnering workshop for all 3 packages was held as a one-

day workshop (QDMR intended to run a 1.5 day workshop but Contractors refused)

• Monthly partnering meeting was held for all packages • Relationship assessment remained satisfactory for all 3 packages • QDMR was responsible for the cost of partnering facilitator and the

cost for running partnering workshops. Contractors were responsible to provide staff for workshops and meetings.

• The role of chairman was rotated. A different person was asked to take up the chairman role in all partnering meetings. Such arrangement was initiated by the project team.

Partnering Philosophy • There is no change on contract terms (i.e. no financial element) • It is a communication tool (share experience talk) • Matrix system must be set up for dispute/problem resolution

QDMR commented there is no change from traditional roles. The Principal (Client) did not involve very much during the partnering process, but more like an observer.

Comments and Suggestions by Project Participants Comments from Contractors:

• Partnering is useful. It is a way of getting the communication going. • The downside of partnering is the lack of financial aspect/contract

significant.


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General Comments from project participants:

• There was only one partnering workshop – It is not enough. • Partnering facilitator was only involved in the first day workshop,

and therefore there was limited benefit for the team relationship – Partnering is like an adjunct for the project at the moment

Suggestions:

• Insert financial aspect – pay/gain mechanism (increase the incentive from Contractor on raising problems, innovations, win-win situation for all)

• Suggestion for financial incentive mechanism e.g. bonus sharing (cost reimbursable)

• Partnering facilitator should be involved in monthly meetings (might get more value from it)

Lessons Learnt Contracts of packages 1 & 3 happened to be awarded to the same contractor. Good relationship between project parties (packages 1 & 3) was established on the first day. There was continuous and open communication in the project team. Strong commitment and involvements were received from both parties’ top management throughout the project. Major Subcontractor was brought into partnering meetings by Contractor. There was little turnover of staff in both packages and the same team of people worked through both packages. There was a right mix of people in the project team since the project began. Package 2 was tendered twice and both Contractors went bankrupted. The major reason for both bankruptcies was both times the contract was seriously underbid – there was not enough money in the contract. Both Contractors tried to recover loss during the whole project period, and there was no goal alignment since the project began. One of the major philosophies of relationship management is working towards the same goal and project team members in package 2 has gone to the completely different direction. There was a high turnover of staff (Contractor and Client staff). Although senior management levels tried minimising distress upon the operation level through strong involvements, the project progress and project team spirit were damaged. The value of partnering facilitator was flagged and general comments on more facilitation carried out by the facilitator would benefit the project team more.


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Case Study 4 Royal Brisbane Hospital (East Block), Brisbane

Client: Queensland Health

Client’s Representative Queensland Department of Public Works

Contractor: National Organisation

Contract Strategy Traditional Lump Sum AS 2124 with Bonus

Tender Price Approx. AU$60M

Final Project Cost AU$60M

Project Background Queensland Health engaged with QDPW for the hospital redevelopments. The redevelopment of Royal Brisbane and Royal Women’s Hospital was divided into 5 phases. One major reason for breaking the redevelopment project into 5 phases is because quality health services were needed to be provided continuously during the redevelopment process, and site constrains issues. Phase 1C at East block formed the second major construction component of the hospital complex. The building houses significant elements of the Royal Brisbane Hospital. East Block (now knows as the Dr. James Mayne Building), Phase 1C was the construction of the second major component of the hospital complex. The building houses significant elements of the Royal Brisbane Hospital including the new Emergency Services, Intensive Care, Burns Unit and other clinical care services. The East Block redevelopment contract was awarded to the contractor in February 2001, with completion achieved in August 2002. The total project cost for East Block was AU$60M. The chosen project delivery system was Traditional Lump Sum AS2124 with variations, where relationship components were applied in the contract. Financial incentive was engaged in this project where Contractor would receive a bonus upon early completion, AU$35k per week, and AU$200k being the maximum amount of bonus. Another variation was Client’s Representative provided consultants for the project. Any missing documents or claims would go through Superintendent Representative; and all claims and variations needed to be approved by the client before taken places.


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Partnering Arrangement Upon the appointment of Contractor, a partnering workshop was held at the beginning of the project. Stakeholders from all parties were invited to attend the partnering workshop. Project participants found the workshop worthwhile. It allowed open communication with problems placed on the table. Decisions were made in a much more direct way, costing less time and money when compare with projects using traditional contracting approach. Good relationship in the project team was established on the first day and was sustained. Monthly partnering meetings were held with the partnering group at senior management level. Each project participant would score against 12-15 items in relation to satisfactory level on work progress, team member relationships etc. on a partnering assessment sheet. All sheets would bee collected for data assessment prior to each monthly meeting, where scores and relationship issues were discussed. The decision matrix of an Escalation Tree was adopted in this project. Escalation Tree is a ‘risk transfer’ method. When problems could not be solved at the site level (or lower level) within a certain amount of time, they were transferred to the higher management level and so on. Escalation Tree prevents problems from grounded on site, minimising disturb on project progress. The project team could concentrate on work and the site relationship remained good all the way throughout the project.

One major risk Client’s Representative foreseen in the project was a miscalculation of AU$1.5M in the project cost by the Contractor. The common practice in the industry is the Contractor would try to make unreasonable and excess claims during work or to minimise cost by using second stream of subcontractors and lower quality tradesmen. In order to avoid poor quality of work due to workmanship, the Client’s Representative required an increase of site supervision by the Contractor. The Clerk of Work also picked up many quality issues on site, which helped to maintain a high standard of quality. The project was found successful and there were no excess claims by the Contractor. One reason suggested was the Contractor recognised the benefits of relationship contracting and wanted to establish a good relationship with for future job opportunities.

Lessons Learnt In order to establish a successful partnering relationship, it is important to have sufficient amount of money in the contract i.e. contract is not underbid and there is money to run partnering workshops and meetings. Also, there needs to be a good start on the relationship in project team or pressure would be put onto the relationship between parties. It is also necessary to bear in mind that ‘one can ruin all’. A good project team relationship can be ruined by one person. Getting the whole team to work


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together is very important. It is therefore crucial to choose the right mix of team members before pursuing the contract as well as building a good relationship on the first day. After building a good relationship in the project team, maintain the relationship is equally important. One comment obstacle of maintaining a good project team relationship identified in this case study is team members were often pressured from their home offices as well as from work on site. Although the project cost was miscalculated by the Contractor, the Contractor did not try to recover loss through unreasonable claims. Relational contracting was treated with the right attitude by all parties and they all worked towards the same goal.


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Case Study 5 Tasmanian Prisons Infrastructure Redevelopment Prog ram – Risdon Prison Project

Client: Department of Justice and Industrial Relations in Tasmania (DoJIR)

Client’s Representative: Queensland Department of Public Works

Contract Strategies: Managing Contractor

Project Background DoJIR engaged with QDPW to assist them the procurement of the Risdon Prison redevelopment project. The role of QDPW was to provide advices on contract administration (and master plan) before the contract was granted to any contractor. The type of contract DoJIR chose to use for this project is Managing Contractor. The chosen strategy involves engaging consultants, developing a schematic design, engaging a Managing Contract (MC) and novating the consultants to the MC. The project was only at its tender selection while this case study was being written. An initial workshop was held with the project team (participants from client, clien’ts representative, consultant and managing contractor organisations), with the concept of relational contracting introduced and the project objectives were developed.

Managing Contractor’s Responsibilities The MC will complete design development, documentation, contract letting, construction and handover phases. Because the project funding is spread over approximately 5 years, the MC will be required to finance the project in part until subsequent funding is made available. The MC’s responsibilities may be extended if the Client chooses the MC to deliver maintenance services for the redeveloped prison for 15 years.


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Tender Process

Figure CS5.1 Tender Evaluation Process for Managing Contractor

Tenders received

Interview with each tenderer

Desktop review of tenders by Tender Evaluation panel

Moderation meeting

Calculate overall score for Stage 1

(preferably only two tenders proceed to

Stage 2)

1

2

3

4

5

STEP

Selection Workshop (facilitated outcomes)

Moderation meeting & selection of preferred

tender

Successful Tenderer appointed

6

7

8

Unsuccessful Tender(s)

Unsuccessful Tender(s)

STAGE 1

STAGE 2


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Figure CS5.1 presents an outline of the tender evaluation process used in this case study. Two tenders were short listed after stage 1 in the tender evaluation process. A full day workshop was held with two short-listed companies individually. The workshop focused on capturing greater understanding of the contractor’s capability of delivering the desired outcomes in a collaborative environment, which was one of the most important considering criteria. The workshops helped both the client and the client’s consultant to explore tenderers’ responses on relationship contracting. A start-up workshop would be held after the Manager Contractor is selected. The Selection Workshop was facilitated by the Client’s Representative. The workshop objectives were to provide an opportunity for potential team members to meet and assess their capacity for work cooperation, as well as allowing the team members to have a greater understanding of the project. The workshop was divided into 2 sessions. The first session was structured using a number of questions relating to relationship contracting in individuals. Questions were discussed in sub-groups and outcomes were collected from all groups to develop a whole group list. The second session focused on 4 case studies that required participants to develop strategies under hypothetical problem situations. Attendees were divided into 3 sub-groups, where each group was a mix between 3 bodies: at least one member from the tender assessment panel, consultants and members of the Contractor team. The proposed MC representative in each group was asked to led the discussion. A meeting was held after each workshop between the tender assessment panel and the consultant and feedback was provided to the Tender Assessment Committee. All attendees of the workshop agreed the workshop objectives were achieved and materials produced during workshop might be of assistance in the project. Contractors were encouraged to submit views on relational contracting and how relational contracting would be useful during project construction. Feedbacks from Contractors on the process and relational contracting were generally positive. Relationships between Client and MC started off well at the beginning of the project. However, other than the relationship management workshop held during the tender stage, no formal partnering or relational contracting approach was adapted in project construction. One reason given was the project and the relationship started off well and the project team found there was no need of formalising the relationship management process (i.e. no follow-up relationship management workshop or meetings).


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Interviewee commented that the philosophy of partnering has been adapted in the project.

Benefits from the Managing Contractor Tender Evalua tion Process • It allows potential project team members to meet and assess their

capacity for future work cooperation • Team members (Client, Client’s Representative, Contractor) are

able to have a greater understanding of the project. • The process imports Relational Contracting components into

potential project team members • It helps to promote Relational Contracting in the construction

industry • It allows a 2-way communication and exchange of ideas on

relational contracting

Lessons Learnt Relationship contracting was introduced to potential contractors at an early stage (during tender assessment). Contractors were given an opportunity for a better understanding of the project. Problems and issues concerned were raised in the workshops, reducing the risk of misunderstanding which might subsequently lead to an underbid tender. There was high profile from the Client with the assistance of Client’s Representative on adapting concepts of relational contracting, promoting relational contracting in the construction industry. The philosophy of relational contracting was made clear and rooted in the potential project team before the project started. During the tender evaluation process, Client and Client’s Representative were able to learn from the attendees how they perceived relational contracting, the benefits and what could be improved to make relational contracting work (or better). With the strong commitment from both Client and Client’s Representative, correct concepts of relational contracting were introduced to the project team.


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Case Study 6 Mt. Lindesay Highway, Brisbane


Contractor: National Contractor

Contract Strategy: AS 2124 with Extended Partnering

Project Background Case Study 6 is a highway upgrade project between Camp Cable Road and South Street. The project included upgrades from one-lane to two-lanes in each traffic direction, construction of pedestrian and local traffic underpass, highway overpass, roundabouts and installations of traffic lights. The project began in early 2004 and was expected to complete by mid 2005. The project was awarded to the Contractor based on the lowest bid wins mechanism. The type of contract used was AS2124 with Extended-Partnering. A one-day foundation workshop facilitated by an external facilitator was held in the first month of the project. Although it was not stated explicitly in any specification, there was consent between the Client and the Contractor that the Client would be responsible for all the relationship management incurring costs such as the employment of facilitator and equipments hire; whereas the Contractor would provide informal gathering such as barbeques or drinks. A project charter was set up by project participants in the foundation workshop, both long-term and short-term issues were raised and an action plan was set up for issue resolutions. During the foundation workshop, the facilitator gave an induction to project participants on the function and elements of relationship management. The major purpose of the workshop was to explore project team members’ personalities and to act as an ice-breaker. Attendees of the foundation workshop and the project charter are shown in Table CS6.1 and Table CS6.2.

Client Contractor


Representative • 3 Inspectors

• Deputy Project Manager on Civil Work

• Project Manager • 2 Supervisors • 2 Foremen

Table CS6.1 Attendees of the One-Day Foundation Workshop


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Charter Objectives

• Timely issue resolution • Maintaining a high level of open, honest and effective

communication • Plan and execute the works in an effective manner • Minimise the environmental impact • Maintaining target program • Quality right the first time • To ensure the safety of the project workforce and the

community • A proactive approach keeping all stakeholders informed and

resolving issues promptly • Achieving a balance between work and lifestyle • Genuine commitment to up-skilling all levels of project team


Relationship Management in the Project Monthly relationship management meetings were chaired by the Principal and the deputy Project Manager (Contractor) alternatively. Project team members rated each charted objectives prior to each monthly meeting. A graph showing the trend of project team relationship was also produced (see Figure CS6.1 for example). Relationship in the project team started off well; open communication was established within the project team since the first day. There was no hidden agenda from both parties. Observations and suggestions on construction techniques were shared during relationship management meetings. Client staff were also invited to Contractor’s weekly program meetings, where comments and suggestions were encouraged.


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Figure CS6.1 Partnering Assessment History by Project Period

Although project team relationship was generally well in the project, data generated from monthly Relationship Management assessments indicated the overall scores on project team relationship deteriorated gradually in the first four months, tension in the project team was becoming a concern. Project participants commented the Superintendent Representative was unsuitable for the project due to one’s personality and the insufficiency of on-site experiences, resulting delays in decision making and confirmation, causing interruptions in work progress. The Superintendent Representative was soon replaced and the project team relationship had been improving steadily. Delegation of power was also identified being a problem, and was dealt with readily at the project early stage. High turnover of project staff is not uncommon in the construction industry. In this project, other than the change over of Superintendent Representative, 50% of Contractor staff in the project team were replaced and no induction courses on relationship management were provided. The philosophy of relationship management and the decision matrix was not well understood by some project team members who did not attend the foundation workshop. Having identified the issue, the same facilitator was invited to the 6th relationship management meeting, where observations and recommendations on the relationship management process were presented to the project team. Project team was also reminded and introduced (newcomers) to the relationship management structure and philosophy. Early signs of crisis were pointed out to the project team for actions. Project team members became more alert to recurring issues such as quality of subcontractor staff, especially in safety. Contractor


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attempted to resolve the safety issues by giving trainings and induction courses on the safety standards and systems and requirements on site to subcontractor staff. It is often Subcontractors have their own systems and work ethics, such arrangement helped standardising the safety system amongst all staff in the project. The subcontractor staff would be dismissed from the project, if there was no improvement upon the receipt of first written warning. Parties including the Contractor, Subcontractor and Client could also exercise the right. Subcontractors’ behaviour of safety on site improved significantly since the arrangement was in place. During the project period, there was an increasing shown of appreciations and acknowledgments by both parties explicitly. Open and effective communication was developed in the project team. An electronic monthly bulletin was circulated by the Project Manager to the project team. The bulletin namely detailed big and small project issues and reported progress to-date, providing an alternative channel of information transfer. Problems and concerns were raised during relationship management meetings, and were discussed in a team fashion. Project parties paid respects to all issues rose, which were taken onboard as team matters. Despite there was a high staff turnover in the project, the project process was not greatly affected, communication and relationship in the project team remained at a good level. Contractor staff were encouraged to attend monthly relationship management meetings. Project participants pointed out relationship management helped to understand individual’s personality and help to break down the ice. One project participant shared her view on relationship management. Her first impression on relationship management was just another nametag and ‘touchy feeling’ appliance. She was dubious on the benefits from such arrangement. After experienced a number of relationship management projects, she found relationship management arrangement enhanced the development of team working environment. Project participants were exposed to the true philosophy of relationship management and different type of personalities in foundation workshops. In this project, team members became more open and willing with sharing information/knowledge (including each organisation’s internal procedures) and resources as the project progressed. Project participants expressed that monthly relationship meetings allowed big and small pictures in the project to be seen. The project team maintained a sense of humour which helped to ease the pressure at various stages of the project. There was increasing team discussion and positive communication, resolving problems as a team rather than looking for ‘who to blame’, working towards best for project.


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Lessons Learnt Relationship management was a success in this project. There was strong commitment from senior management level in both client and contractor organisations. There was a right mix of people in the project team. Individual was removed from the project team when found unsuitable. Good relationship in the project team was established at all levels since the beginning of the project. An external facilitator was employed for the foundation workshop which allowed correct mindset on relationship management to be introduced to the project team since the start of the project. The facilitator was again invited to give an opinion on the project team relationship, and the team became more conscious on early crisis warning. The importance of communication between the project team at all levels was stressed since the first day. Other than formal communication channels such as monthly meetings and written correspondents, team members’ relationship was enhanced through social functions. An innovative communication channel was used in this project, where monthly project bulletin was emailed to the project team. Contractor staff were given the opportunity and were encouraged to attend relationship management meetings. Other than openly discussion of issues, follow-up actions were also taken place. High level of respects and acknowledgements were shown between parties in all matters.


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Case Study 7 Brisbane Magistrates Court

Client: Department of Justice and Attorney-General

Client’s Representative: Queensland Department of Public Works

Managing Contractor: National Contractor

Contract Strategy: Managing Contractor (D&C) with Relationship Management

Tender Price: AU$135.5M

Project Background Case Study 7 is a building project, construction of a new courthouse in Brisbane city centre over a period of 28 months. It was set to be a landmark of the western end of the central business district. The contract strategy chosen was Managing Contractor (Design and Construction) Contract with Relationship Management, where a risk/reward mechanism was also engaged. Managing Contractor would receive bonus payment for achievements of extra works in an incremental way. A guaranteed contract sum was in place to secure the top margin of actual construction sum. This project was the first public sector building project in Queensland which used a full Managing Contractor Contract with Relationship Management. An outline of the project background is presented in Table CS7.1 below.

Tender Price $135.5 million

QDPW Role Project Director Principal Representative

Project Description Ten floor building with two basement levels. Facilities include:

• Hearing rooms; • Detention facilities; • Conference rooms; • Interview rooms; • Prisoner transfer facilities; and • Car parking

Table CS7.1 Project Background


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Project Design and Tender Process The project design was carried out via a design competition, which is a common practice for landmark construction. Consultants were short listed and a refinement process was carried out through workshops, where the design was refined and the project brief produced by Client was reviewed. The project design was signed off by Client at the final workshop. Potential MCs were not involved during the refinement process until the very late stage of Schematic Design. Schematic Design was completed during the tender review period. MC was given the formal schematic design (including specification and a detailed client brief) before the appointment. 4 Managing Contractor tenders were submitted and an interview and review process was carried out for the four contractors. Contractors were given the opportunity to raise their concerns or if they had any unsatisfactory experience with the proposed consultants during the review process. 2 tenders were short-listed. A full day workshop was held with both Contractors separately, facilitated by an external facilitator and the full project team (QDPW, consultant, client). A one day review process was carried out following the workshop and the Contractor was appointed.

Contract Strategy The choice of contract strategy was determined upon the project complexity, high profile, and the needs to meet various Government agencies expectations. Managing Contractor (MC) was engaged at the end of schematic design when the Client has signed off the project design at the final workshop. Due to the design complexity and time constrain, the consultants were novated to the MC since the development design (construction) stage until project completion. Due to the project nature, the Project Director was keen to get Managing Contractor on broad as soon as possible before the development design stage and to receive advices from the Subcontractors during the process. The list of attendees is presented in Table CS7.2 below. Client’s Representative commented such approach is very common for larger size projects, and similar approach has also been adopted in traditional projects e.g. TAFE. In this project, four relationship management workshops were.


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Prior to Appointment of MC

Value Management Relationship Workshop (Refinement Stage)

With external facilitator Client + Consultant

Value Management Relationship Workshop

With external facilitator Client + Consultant + Managing Contractor Tenders

Value Management Relationship Workshop (Schematic Design Stage)

With external facilitator Client + Client’s Rep. + Consultant

Upon Appointment of MC

1st Workshop with Potential Managing Contractor

With external facilitator Client + Client’s Rep. + 2 Short-listed Managing Contractor (separately)

Value Management Relationship Workshop (Development Design Stage)

With external facilitator Client + Client’s Rep. + Managing Contractor + Consultant

2 x larger Value Management Relationship Workshop

Client + Client’s Rep. + Managing contractor + Consultant + major Subcontractors (looked at both technical and coordination issues)

Several in-house half day workshops

Table CS7.2 Major Workshops Attendees

An interviewee found the maximum benefit of RC was gained from the full-day workshops held during the construction period. Full-day workshops were considered unnecessary for the rest of the construction period but half-day workshops were held throughout the project.

Relationship Management in the Project Interviewees found the major principle of relationship management is about focussing on teamwork. Also, everyone must work as ONE team, including Client, Client’s Representative, Contractor (MC in this case) and Consultant. There ought to be open and honest communication during


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work, not covering up any issues, such as claims. Also, team should work in a positive way where MC would also be rewarded for. In this case, stretch scope with risk/reward mechanism was adapted. An interviewee pointed out the biggest problem faced in this project was the over heated market during construction. Although there was strong buy-in of relationship managing from all project participants, the overheated market during the construction stage pushed both labour and material costs high, putting the MC in a very difficult financial situation. Also, the lack of resources available put pressure on meeting the project schedule, in this case, the glass supplier for example, which would subsequently delay product delivery. As a relational contracting approach was applied in the project, the contractor undertook an open book strategy, giving the client full access to the project finance. This level of trust not only triggered frequent communication between the parties on problem resolution; there were also lots of brainstorming and innovative ideas to keep the project cost down and to improve the project performance, in a team fashion.

Formal system Essence of relationship management can be found in the contract documents. Relationship management in the project was structured and formed part of the contract documents, such as general clauses on relationship management workshops and meetings. Monthly meetings were held where team relationship was assessed and discussed. It was also stated in the contract that there would be no liquidated damage between project parties and no extension of time until target completion date. Consultant was novated to Managing Contractor upon its appointment. In order to maintain Managing Contractor’s buy-in on relationship management, a risk /reward mechanism was used in the project, forming one of motivation incentives. Client’s mutual obligation was also stated in the contract document, aiming to develop a collaborative and harmony team relationship between all project partners. The relationship management philosophy was particularly addressed by 2 clauses in the contract documents. One of the clauses detailed what the essences of a relationship contract are; whereas the other clause stated all project participants must work with good faith.

Informal system The need to choose the right mix of people was recognised. Team members needed to have the right attitude or adopt the right attitude i.e. not a hard-dollar attitude. There were strong believes on relationship management and commitment from senior management between Client and Managing Contractor. Although there was no mechanism on the choice of team members, both organisations put in the best/right team for the project. Relationship management concepts were filtered down to the


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operation level and were strongly supported. By having the right mix of team members, good relationships were developed between project team members since the project began. Major subcontractors were brought into relationship meetings and workshops by Managing Contractor where professional advices were given.

Comments and Suggestions by Project Participants • Risks were not shared amongst the project participants. • There was good spirit of relationship management throughout the

project between all parties at all levels. • The contract was still inflexible because it is Client’s money, Client’s

Representative’s contract. • Everyone was protected by the contract other than the delivery

team (Managing Contractor and Consultant); all risks were ‘sold’ to the delivery team.

• A risk sharing mechanism is needed for the project to be fair. • The Client has a reasonable and right attitude towards the project. • There were continuous open discussions including the financial

difficulties the Contractor was facing. • Relational contracting is a great way to associate in building

business. • There were forever meetings. • Subcontractors had difficulties on accepting relational contracting

due to their interpersonal skills. • Subcontractors expected extra payment from Managing Contractor

in exchange for sub-contractors’ knowledge sharing and professional advices.

• Relationship between Managing Contractor and sub-contractors was good (and better compare with most projects under traditional contracting).

• There were lots of innovation in the project because of bringing sub-contractors onboard and pressure from the over-heated market.

• All parties were strongly committed to the project. • Fluctuations and risks were one-sided – there needs to be a clause

in the contract where project problems are shared between all parties.

• Managing Contractor should be brought in earlier (before DD) to the project for active involvement and professional advices.

• Parties were exposed to the different attitudes and way of dealing with issues by other parties.

• Project team was more collaborative and cooperative (compare with projects carried out using traditional contracting approach).

• Consultant was more collaborative and would discuss about design issues with sub-contractor directly.


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Lessons Learnt The project was tendered before the real estate boom. Although the contract was not underbid, MC struggled with the availability and cost of labour and materials during construction. Because relational contracting was applied in the project, there was frequent open and honest communication between all parties. There was an open book system where the financial situation of the project was discussed frequently between parties during project construction. There was strong cooperation and collaboration between project parties and there were lots of innovations in the project. External facilitator was engaged in all major relationship management workshops. Subcontractors were brought onboard since the relationship management workshop and were invited to all monthly relationship management meetings, where their knowledge and expertise were shared. On-going minor workshops were also held for the project team. Good relationships between project team members were established on the first day and there was goal alignment in the project – which is a critical element in relational contracting. Also, there was a strong buy-in on relational contracting at all levels as well as a right mix of people in the project team. Clauses with strong references to the philosophy of relational contracting were stated in the contract and a risk/reward mechanism was employed. However, MC should be brought into the project at an earlier stage, where collaborations with their professional expertise could be carried out to a greater extent.

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Case Studies Failure Reasons Success Reasons

Case Study 1 • Parent company policy and culture • Lots of change over of staff in project • Close communication (as opposed to open

communication) • Selection of project team members • Uncooperative team member(s) • Money in the contract • Selection of tender (depends on the selection

criteria – not just the lowest bid wins) • Objectives of the project • Lack of common goals between all parties (the

major criterion in partnering) • Financial item as part of charter objectives

Case Study 2 • Company policy and culture • No/little change over of staff in project • Open and informal communication between project

team members • Money in the contract • Project was not underbid • Objectives in the project • All parties work towards the same goal • Charter objectives were set with all parties consent • Major subcontractor was brought into partnering

meetings

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Case Study 3 (Package 2) • Contract was seriously underbid • Contractors tried to recover cost during the whole

project period • Parties were working towards different goals at the

beginning • High turnover of staff (2 different contractors +

QDMR personnel at the last stage to finish the project)

(Packages 1 & 3) • There was money in the contract • Right mix of people • Open communication in the project team • Good relationship between Contractor and QDMR

was established at the first day • Strong commitment (and involvements) from top

management on both sides • Main Subcontractor was brought to partnering

meetings

Case Study 4 • There is sufficient amount of money in the contract • Good relationship established in project ream from

the beginning of the project • Right mix of people in project team • Open communication with risks and issues

exposed on the table • Constructor did not put in unreasonable claims

Case Study 5 • Relationship contracting was introduced to potential contractors at an early stage (during tender assessment)

• Allow tenderers to have a better understanding of the project, reducing the risk of misunderstand which subsequently leads to an underbid tender

• High profile from the Client with the assistance of Client Consultant on adopting the concept of relationship contracting

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Case Study 6 • Right mix of people – remove if one is not right • Good relationship at all levels • Strong commitment from senior management level • Financial was not part of the project charter • Open and frank communication at all levels • Innovative communication channel – monthly

project bulletin to project team • Respect and acknowledgment at all matters • Follow-up actions were taken place (not just paying

lip services) • Involvement of facilitator during project to refocus

team on communication and early crisis warning • Contractor threw in BBQs & drinks – informal

communication • Buy-in of RM at all levels • Opportunities for contractor staff to attend RM

meetings • Delegation of power

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Case Study 7 • Relational contracting was introduced to contractors at tendering stage

• Project team had a goal alignment • Strong and continuous commitment by the Client,

Project Director and the Contractor • Right mix of people – Contractor staff were put

together specially for the Client and the project • Buy-in of relational contracting at all levels • Continuous good working relationship at operation

level • Financial incentive (risk/reward mechanism) for the

Contractor • Open and honest communication between parties • Open book system – Client and Project Director

had access to Contractor’s financial situation • Sub-contractors were brought onboard in the

relationship management workshop • External facilitator was employed for the major

workshops • On-going smaller scale workshops for project team • Clauses with strong references to relational

contracting philosophy were stated in the contract

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EFFECTIVENESS IN RELATIONAL CONTRACTING · 2005, organised by AIPM, Hilton on the Park, Australia,...

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