Understanding the conditions of trust between governance and management within project alliancing

This research investigates the conditions of trust between the Alliance Leadership Team (ALT) and Alliance Management Team (AMT) within alliancing projects. The construction industry is notoriously adversarial in project relationships, suffering high losses in productivity. Alliance contracting has historically been regarded effective in delivering successful project outcomes without litigation occurring for highly complex projects. However, recent research has demonstrated that trust and communication is still an issue between the ALT and AMT despite the pain share and gain share commercial arrangements. Although the concept and components of trust have been defined and discussed by various researchers, the volatility of trust under different situations is unknown and requires further investigation. This research demonstrates that trust and mistrust can be viewed as an acceptable dichotomy which can co-exist in a positive state of project relationship, especially under a gain share mode but not entirely so under a pain share mode as mistrust can develop into distrust, which completely erodes trust. The research is carried out in two phases. In Phase 1, the research employed the grounded theory approach with the application of the Soft Systems Methodology (SSM) to develop and map out the current state of trust conditions between the ALT and AMT within alliancing projects. Trust is a messy construct that is difficult to define, hence SSM encapsulates the 'wicked' problems associated with trust from the perspectives of all stakeholders, to be conceptualized into a real world picture then analysed into a structured outcome. A total of twenty three participants working in the ALT and AMT of building and infrastructure alliances were interviewed in Australia and New Zealand in the years 2012-2013. The respondents were then asked a set of semi-structured questions on the conditions of trust between the ALT and AMT relationship within the alliancing projects that they had worked on within their careers. Using thematic coding of the grounded theory approach to categorise the emerging themes and sub themes from the interviews data, a set of rich pictures were then developed to depict the issues within project alliancing relationships in a holistic manner, whilst integrating the identified themes and sub themes together to formulate new emerging theories. Finally the elements of the CATWOE (Customers, Actors, Transformation, Weltanschauung, Owners, Environmental Constraints) analysis were used to demonstrate the measured phenomena. The results led to the development of three trust based framework conceptual models i.e. two 'Adversarial' Trust frameworks and the Emergence-Control trust framework. Two new definitions of trust are also derived out of the Emergence-Control framework i.e. trust in emergence under gain share mode and trust in control under pain share mode. Trust attributes affecting trust, mistrust and distrust conditions are difficult to absolutely be certain due to the volatile nature of the psychological construct therefore, for validating the qualitative data in Phase 2 a quantitative methodology, namely the Analytical Hierarchy Process (AHP), was chosen to present a probability likelihood of every sub-criteria's (trust attributes) impact on the main criteria (trust conditions) under different business situations. Using the situational impact of trust conditions identified from the trust based framework models developed from SSM in Phase 1, the AHP was then employed to investigate the impact of trust, mistrust, and distrust within pain and gain share modes under the mishap, breach temptation, common good and sharing situations. Using a total of forty questionnaires (ten sets of four related questionnaires) a group of ten alliancing respondents were asked to determine the impact of different trust attributes on the trust conditions under the identified business situations using a pairwise comparison survey approach. To ensure that the consistency and control of the validity of the survey responses could be achi ved, a consistency ratio (CR) was applied in the calculation of the AHP scores before the normalization of the final scores to determine the highest weightings of the criteria and sub-criteria. The results of AHP confirm with the SSM results that different trust conditions exist between the ALT and AMT under the gain share and pain share modes of different business situations. This research demonstrates that the cost performance of the alliancing project has more impact on the trust conditions between the ALT and AMT with the change in the business situation exacerbating the effects of the gain share and pain share modes. The results also indicate that trust is not the underpinning factor for achieving a successful team relationship in terms of facilitating optimal cooperation within alliances. Contrary to previous alliancing philosophers with the view that trust is positive and mistrust is negative, this dissertation demonstrates that the co-existence of trust and mistrust can viewed as an advantage in effective cooperation in the form of thorough due diligence and cognitive checks rather than relying on previous relationships as risky projects differ case to case in circumstances and situations from each other. All these findings assist an organization to understand the instinctive nature of human attitude towards collaborative team work when making strategic decisions on procurement selection and organizational alignment of strategy and execution.