Impacts of Different Types of Owner-Contractor Conflict on Cost Performance in Construction Projects

Abstract

Interactionism posits that all social structures have inherent conflicts within them that can yield positive or negative effects on organizational performance. Based on this theory, three essential types of conflict between the owners and contractors in construction projects were identified, namely, (1) relationship-related conflict, (2) process-related conflict, and (3) task-related conflict. Next, the authors of this paper presented four hypotheses to test the correlations among these three conflict types as well as influencing relationships between these conflicts and project cost performance. A total of 209 managers from the Chinese construction industry were interviewed to test these hypotheses. Factor analysis, correlation analysis, and regression analysis were performed on the data, revealing that (1) the three types of conflict are all positively correlated, (2) the relationship-related conflict has a negative impact on project cost performance, and (3) the task-related conflict influences project cost performance in an inverse-U shaped manner. These results can help conflict managers better understand the relationship between conflict and project performance, and encourage them to optimize different types of conflict for better project outcomes.