The Choice of project governance modes to minimise contractors’ opportunistic behaviour

Abstract

In this era of globalisation and fierce competition among businesses, contractors in the construction industry often tend to engage in opportunistic behaviour to gain more benefits at the expense of owners. The past researchers have defined contractors’ opportunistic behaviour (COB) as the behaviour of the contractor that is motivated to pursue self-interests at the expense of the client. The researchers in this field have identified project governance (PG), which considered as management of project management can be used to minimise the COB. Trust and formal control are the major PG modes that are used in the global construction industry. However, there is a dearth of research that identified the suitable PG modes to minimise the effects of COB in the Sri Lankan construction industry. Hence, this study aims to investigate the PG modes that can be used to minimise the effects of COB. Accordingly, qualitative research approach was adopted to achieve the research aim. A comprehensive literature review followed by case studies was conducted to investigate the synergy between the concepts. Information gathered were subjected to content analysis. This study revealed that formal control and combination of trust and formal control as the most suitable PG modes for Sri Lankan construction industry. The research further identified the factors that affect the COB namely, contractors focus on revenue maximisation, external uncertainties, contractual complexity, and dynamic complexity. The study further highlighted the importance of minimising COB to help minimise conflicts and reduce the financial losses incur for project stakeholders. Keywords: Construction industry;