An investigation of relational contracting norms in construction projects in Malaysia

The importance of good relationship among parties in the construction industry has been accepted as one of the central issues of an organisation’s success. The growing acceptance to the Relational Contracting approaches that representing partnering, supply chain alliances and other types of collaborative working relationships shows how construction organisations are moving forward from the traditional adversarial culture to a more harmonious working environment. However the application of the Relational Contracting Norms in the context of national culture has received relatively little attention in the literature. This study attempts to fill this void by investigating how good relationships develop within construction projects in Malaysia. It also investigates the adaptability of the relational contracting norms in different cultural setting and explores whether similar relational contracting norms emerge in different projects before developing a relationship development model that is applicable to the academic and practitioners. By using qualitative approach, the main data was collected from 36 semi-structured in-depth interviews across four case studies. The results were validated by 20 follow-up interviews with selected respondents, two stages of expert interviews and cross-case analysis. This study found that good relationships within construction projects in the Malaysian construction industry developed from the interplay of twelve structural and relational dimensions that went through three stages of relationship development process in project setting. It highlights the significant importance of the value and emotion-related dimensions in developing good relationships. A relationship development model was produced based on these twelve dimensions (special contract directive, power, performance, trust, commitment, loyalty, personal relationships, emotions, values, social interaction, work inter-dependency and political connection). The research contributes to construction management literature by supporting the Transaction Cost Economics Theory and extends the Relational Contracting Theory. It proposes seven new dimensions that are incorporated in the newly proposed relationship development model. Although the study was conducted in a specific national culture, it is argued that the model is applicable to other context on the basis that spiritual, emotional and human components of the work experience could be learned by other cultures.