Atanasov, V; Greenwood, D and Robson, S (2020) The management of disputes as an element of construction transaction costs: An empirical study. In: Scott, L and Neilson, C J (eds.) Proceedings of 36th Annual ARCOM Conference, 7-8 September 2020, Online Event, UK.
Abstract
The process of delivering construction projects is characterised by a multiplicity of transactions between individual organisations whose integration is vital yet problematic. The premise of this paper is that the management and resolution of contractual disputes between these organisations represent a substantial element of their transaction costs. The argument is set in the context of Transaction Cost Economics (TCE) theory, according to which the concepts of bounded rationality, uncertainty, information asymmetry, and opportunistic behaviour together present serious problems for transaction efficiency. The work presented here is part of a wider study examining the impact of advances in information technology (specifically, the availability of information-rich building models) on the more efficient resolution (or even avoidance) of contractual disputes. We argue that there is a prima facie case for this, and therefore for the reduction of transaction costs, by exploiting the potential of digital building models. However, the operationalisation and measurement of transaction costs, especially in the construction context, has proved an intractable barrier to the empirical testing of the applicability of TCE theory. To address this, the initial stage of the work, reported here, is concerned with defining and measuring the resources currently required for the management of certain types of contractual dispute, and is based upon data collection from three project case studies.
| Item Type: | Conference Paper (Paper) |
|---|---|
| Uncontrolled Keywords: | case studies; contractual disputes; information technology; transaction cost economics. |
| Index terms: | testing, resolution, information technology, empirical study, integration, construction project, bounded rationality, opportunistic behaviour, dispute, efficiency, case study, information asymmetry, transaction cost |
| Subjects: | organizational analysis, conflict resolution, financial analysis, research methods, decision-making and reasoning, performance management, production management, professional practice, data collection methods, business, transaction economics, dispute resolution, computing systems |
| Topics: | Legal Issues, Digital Applications, Quality Management, Organizational Design, Cost Management, Business Strategy, Research Practice, Project Management, Engineering Principles, Stakeholder Management |
| Descriptive scope: | 5 PCTEA |
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