Reconstructing Cultures for Relational Contracting

Abstract

Although previous research has pointed to potential performance gains through relational contracting (RC), reservations remain as to its value and viability. Even those who wish to use RC need guidelines for introducing it, especially where it clashes with prevalent project cultures. A study was launched from Hong Kong to identify the critical factors which promote RC and team building in the context of specific cultures. This paper consolidates the perceptions of 60 respondents to a questionnaire survey in Singapore, in relation to the hypothesized 24 factors facilitating RC, and 28 factors impeding/deterring RC. It indicates the evident readiness of the Singaporean contracting industry to embrace collaborative working practices. On the whole: (1) all the 24 factors facilitating RC, and 23 of the 28 factors deterring RC, are significant; (2) these two sets of factors could be represented by six and seven “broad factors,” respectively; and (3) except in a few cases, respondents from large and medium companies, as well as with and without experience in RC, have similar perceptions of the importance of different factors. It was perceived that trust should be at the core of RC approaches to construction procurement, but also seen that the current level of trust is low. Identifying the principal “facilitators” and “impediments”/ deterrents to RC, provides pointers to building relationally integrated teams to boost performance to much higher levels, as are now expected from the industry. The literature indicates that the outcome of the survey in Singapore reflects the trends in many countries that are moving toward RC. This research model and approach may be conveniently replicated in other contractual regimes, in order to reinforce these observations.