How formal control fosters relational behavior for innovation performance in infrastructure megaprojects

Megaproject innovation has become an increasingly prominent research focus in recent years. Prior studies have proposed that relational behavior-defined as the desired actions facilitating collaboration among participant organizations (POs)-may serve as a critical antecedent to innovation in megaprojects. However, their relationship remains underexplored, with limited insights regarding the ability of formal control in promoting relational behavior. Grounded in agency theory, the present study investigated the influence of the project owner's formal control mechanisms on the relational behavior of POs and the subsequent impact on megaproject innovation performance. In addition, prior cooperation experience-whether POs have collaborated in previous megaprojects-was introduced as a moderating variable affecting the relationship between formal control and relational behavior. Data were collected from 152 Chinese megaprojects using a snowball sampling strategy and analyzed through partial least-squares structural equation modeling (PLS-SEM). The results revealed a significant positive association between relational behavior and megaproject innovation performance. Furthermore, behavior control positively affects relational behavior, whereas outcome control does not demonstrate a statistically significant influence. Contrary to expectations, prior cooperation experience negatively moderates the relationship between behavior control and relational behavior. These findings establish relational behavior as a key antecedent of megaproject innovation performance and contribute to a more detailed understanding of the interaction between formal control mechanisms and relational dynamics by differentiating the effects of behavior and outcome control. The insights from this study offer practical guidance for megaproject practitioners aiming to foster innovation through strategic management of interorganizational relationships. Practical Applications This study offers practical implications for megaproject practitioners seeking to enhance innovation performance through the lens of relational behavior. First, the findings demonstrate that the relational behavior of participant organizations positively influences megaproject innovation performance. Accordingly, it is advisable for POs to acknowledge the significance of relational behavior and to strengthen it through three key strategies: (1) facilitating proactive information exchange by establishing cross-boundary communication teams; (2) fostering high levels of solidarity by promoting a project-centered mindset among POs; and (3) enhancing organizational flexibility through the adoption of dynamic team structures. Second, project owners are encouraged to support the development of POs' relational behavior by implementing behavior control mechanisms. Specifically, owners can introduce coordination protocols, mandate regular reporting on innovation progress, and conduct continuous observation and assessment of POs' behavior. In cases in which internal monitoring resources are insufficient, the engagement of external consultants may serve as a viable approach to ensuring effective oversight. Third, it is important to consider that prior cooperation experience among POs may attenuate the effectiveness of behavior control in promoting relational behavior. In such cases, owners are advised to preserve the positive collaborative routines established through previous partnerships by allowing POs an appropriate degree of autonomy within the framework of behavior control. This balance can help maintain trust and responsiveness while safeguarding the advantages of prior collaboration.