Relationships between Main Contractors and Subcontractors and Their Impacts on Main Contractor Competitiveness: An Empirical Study in Hong Kong

Abstract

Subcontracting is a common practice in the modern construction industry. The performance of construction projects will be adversely affected if the relationships between main contractors and subcontractors are not properly managed. Therefore, the relationships between main contractors and subcontractors are becoming more and more important to the success of construction projects. Based on a comprehensive questionnaire survey in the Hong Kong construction industry, the relationship between main contractors and subcontractors was studied. Main contractors in the local industry can be classified into four clusters according to the nature of their relationship with subcontractors, namely, adversarial, coopetitive, collaborative, and partnering. Furthermore, the impact of these relationships on main contractor competitiveness and the critical factors affecting collaborative/partnering relationships and main contractor competitiveness were also explored. The findings of this research reveal that good relationships with subcontractors are positively and advantageously associated with main contractor competitiveness. A long-term partnering relationship, based on win-win principles, is more likely to benefit both parties in construction practice.