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

Abstract

The nature of the contractual relationship between the contractor and the client creates opportunities for opportunistic behaviour (OB) on the part of the contractor, which can result in project delays, cost overruns, and quality issues. Project governance (PG) is a set of processes, policies, and procedures that aim to ensure the effective management and control of projects. It was identified that PG helps to minimise different issues related to construction projects where different stakeholders are involved. The use of trust and formal control as PG modes in the global construction industry is well-established. However, there is a lack of research specifically focusing on the appropriate PG modes to minimise the effects of Contractors’ Opportunistic Behaviour (COB) in the Sri Lankan construction industry. The purpose of this paper is to examine the use of PG modes to minimise COB. To address this research gap, a qualitative research approach was adopted in this study. A comprehensive literature review was conducted to gather knowledge and theories about PG modes and COB. Furthermore, case studies were conducted to investigate the synergy between the identified PG modes and COB management in the Sri Lankan context. These case studies involved real-world construction projects in Sri Lanka, where the researchers’ collected data through interviews. By analysing the findings of the literature review and case studies, this study aims to provide insights into the suitable PG modes that can be used to minimise the effects of COB in the Sri Lankan construction industry. The findings suggest that PG modes can be effective in COB. The use of a hybrid mode, for example, can create a partnership-like relationship between the client and the contractor, which promotes cooperation and trust while having some contractual obligations. Similarly, the use of a formal control mode, which involves the use of detailed contracts, can help to clarify the rights and obligations of the parties involved and reduce the likelihood of OB. Overall, the paper highlights the importance of PG in managing contractual relationships and minimising OB. It provides practical recommendations for clients and other stakeholders on how to select and implement appropriate PG modes to ensure successful project outcomes.