Structural equation model of construction contract dispute potential

Molenaar, K; Washington, S and Diekmann, J (2000) Structural equation model of construction contract dispute potential. Journal of Construction Engineering and Management, 126(4), pp. 268-276. ISSN 0733-9364

Abstract

This paper presents the results of a structural equation model (SEM) for describing and quantifying the fundamental factors that affect contract disputes between owners and contractors in the construction industry. Through this example, the potential impact of SEM analysis in construction engineering and management research is illustrated. The purpose of the specific model developed in this research is to explain how and why contract related construction problems occur. This study builds upon earlier work, which developed a disputes potential index, and the likelihood of construction disputes was modeled using logistic regression. In this earlier study, questionnaires were completed on 159 construction projects, which measured both qualitative and quantitative aspects of contract disputes, management ability, financial planning, risk allocation, and project scope definition for both owners and contractors. The SEM approach offers several advantages over the previously employed logistic regression methodology. The final set of structural equations provides insight into the interaction of the variables that was not apparent in the original logistic regression modeling methodology.

Item Type: Article
Index terms: owner, dispute, logistic regression, construction dispute, interaction, modelling, construction industry, structural equation model, risk allocation, construction contract, construction engineering, project scope definition, management research, financial planning, questionnaire, methodology, construction project
Subjects: financial and cost management, analytical methods, research design and methodology, contract type, data collection methods, scope management, dispute resolution, sociology, statistical analysis, behavioral psychology, industry analysis, research methods, engineering methods, financial risk, production management
Topics: Legal Issues, Procurement, Stakeholder Management, Project Management, Research Practice, Engineering Principles, Cost Management
Descriptive scope: 4 PCTA

N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here