How to Foster Relational Behavior in Construction Projects: Direct and Mediating Effects of Contractual Complexity and Regulatory Focus

Abstract

Maintaining the interorganizational relationship is a vital goal in the construction industry, and how to promote relational behavior in the project has received widespread attention. A contract is one of the commonly used control mechanisms in project management. Due to the contradictory conclusions of existing research, there is a lack of explicit guidance and detailed elaboration on how a contract impacts relational behavior. According to regulatory focus theory, this paper examines how different dimensions of contractual complexity affect motivation for different relational behaviors. This research decomposes contractual complexity as control, coordination, and adaptation from a functional perspective, classes regulatory focus into prevention focus and promotion focus and differentiates relational behavior as flexibility, information exchange, and solidarity. By conducting a questionnaire survey, the results reveal that the paths of three contractual functions on relational behavior and the mediating roles of prevention and promotion focus differ. Specifically, contractual control directly affects three dimensions of relational behavior, contractual coordination increases information exchange by triggering a prevention focus, and contractual adaptation enhances flexibility, information exchange, and solidarity by evoking a promotion focus and also directly enhances solidarity. These findings explain the motivation of behaviors in interorganizational relationships from the perspective of social psychology and offer new insights into how to cultivate relational behavior and the linkage between contractual and relational governance in construction projects. This study is helpful for construction practitioners in developing a nuanced understanding of interorganizational cooperation from the view of ex ante contract design and social psychology. Project managers need to allocate their resources properly, focus on different aspects of contract design and shape different regulatory focuses to foster specific relational behavior. First, drawing up a detailed contract is costly, and construction practitioners can choose what to focus on when resources and efforts are limited. On the premise that the contract is adequate to reduce the possibility of opportunism, practitioners should spend time and effort infusing flexibility into a contract by affording guidance on uncertain matters. Second, when executing a construction project, if contractual complexity has been established, it is also possible to promote relational behavior by adjusting the regulatory focus of the parties. Project managers should pay attention to the psychological state of both parties in the construction project, since situational triggers can evoke changes in the psychological state of the parties, which in turn affects the motivation for behavior.