Explicating the Role of Relationship in Construction Claim Negotiations

Abstract

Construction claim negotiation has become a common managerial process in the construction business. Research on negotiation has overlooked relationships between negotiators as an important contextual factor. This study aims to examine the role of relationships in construction claim negotiations as both explanatory and outcome variable. Based on a systematic literature review, a hypothesized research model was developed. A questionnaire survey was administered to collect data from construction professionals. By performing a set of statistical analyses, the model was validated empirically. The results showed that the relationship construct can be defined based on 16 relationship dimensions, which were then categorized into five categories, namely harmonic, dependable, intimate, openness, and faithful. The study empirically supports the hypothesis that the relationship between the negotiators affects the negotiation process, particularly the adoption of coercive actions and the degree of information sharing, which further influences the preservation of an ongoing relationship. If the initial relationship is cohesive, the negotiators tend to implement information-sharing strategies and are unlikely to take coercive actions. The adoption of coercive actions deteriorates negotiators’ ongoing relationship, while the implementation of information sharing is instrumental to preserving ongoing relationships. This study contributes to the negotiation research by explicating the role of relationships between negotiators in construction claim negotiation. It also adds to the relationship research by viewing negotiations as strains in ongoing relationships between the parties. The findings of this study provide clear directions on how to select suitable negotiators, what best practices to be adopted, and how to become more effective negotiators.