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Reducing opportunistic behaviour through a project alliance

Reducing opportunistic behaviour through a project alliance Purpose – The purpose of this paper is to provide insights into how a project alliance contract is conducive to the development of cooperative relationships between client and contractor organizations involved in a complex project. Design/methodology/approach – A longitudinal case study of a complex construction project was conducted in which the contract was changed at the end of the negotiation period from a design‐build into a project alliance form. Findings – Data show that opportunistic behaviour is reduced when there is an incentive structure, as is to be found in project alliances, for client and contractor organizations to cooperatively realize the project. However, it is not sufficient for project partners to agree upon an appropriate incentive structure. For cooperative relationships to develop, they also have to put substantial efforts into reducing their remaining inclinations to make use of opportunities that arise to deviate from the alliance contract. Practical implications – It is shown that both principals and contractors not only need to carefully select staff for such projects; they also have to work with the people employed such that appropriate attitudes are reinforced and rewarded. Developing cooperative relationships in project alliances needs the surrounding working methods to offer support. Originality/value – The longitudinal character of the case study offers exceptional opportunities for studying the dynamics in preventing and overcoming the deteriorating patterns of opportunistic behaviour that organizations regularly face in many traditional and design‐build projects. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Managing Projects in Business Emerald Publishing

Reducing opportunistic behaviour through a project alliance

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Publisher
Emerald Publishing
Copyright
Copyright © 2011 Emerald Group Publishing Limited. All rights reserved.
ISSN
1753-8378
DOI
10.1108/17538371111164065
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to provide insights into how a project alliance contract is conducive to the development of cooperative relationships between client and contractor organizations involved in a complex project. Design/methodology/approach – A longitudinal case study of a complex construction project was conducted in which the contract was changed at the end of the negotiation period from a design‐build into a project alliance form. Findings – Data show that opportunistic behaviour is reduced when there is an incentive structure, as is to be found in project alliances, for client and contractor organizations to cooperatively realize the project. However, it is not sufficient for project partners to agree upon an appropriate incentive structure. For cooperative relationships to develop, they also have to put substantial efforts into reducing their remaining inclinations to make use of opportunities that arise to deviate from the alliance contract. Practical implications – It is shown that both principals and contractors not only need to carefully select staff for such projects; they also have to work with the people employed such that appropriate attitudes are reinforced and rewarded. Developing cooperative relationships in project alliances needs the surrounding working methods to offer support. Originality/value – The longitudinal character of the case study offers exceptional opportunities for studying the dynamics in preventing and overcoming the deteriorating patterns of opportunistic behaviour that organizations regularly face in many traditional and design‐build projects.

Journal

International Journal of Managing Projects in BusinessEmerald Publishing

Published: Sep 13, 2011

Keywords: Alliance contract; Relational risks; Formal and informal control; Opportunistic behaviour; Project alliance; Construction industry; Employees

References