Paper info

TRUST AND DISTRUST IN TEMPORARY CLIENT-CONTRACTOR RELATIONS

Anna Kadefors, Cathrine Gerle and Louise Nyberg

The paper was published at the 17th IMP-conference in Oslo, Norway in 2001.

Adversarial inter-organisational relations have since long been considered a major problemin the construction industry. In Sweden, however, clients have been hesitant to abandontraditional procurement practices, and there are still only a few examples of explicitpartnering projects. The aim of this paper is to identify mechanisms that influence thedevelopment of trust and co-operation in client-contractor relations in construction. 15clients were interviewed to capture current attitudes to closer co-operation with contractors.It was found that although co-operative contractual arrangements were employed, clientsdid not express strong trust in contractors. It is argued that an emphasis on rationalreasoning and economic incentives leads to the adoption of highly specified contracts andclose control. Two other aspects were found to reinforce this tendency by hampering thedevelopment of relational trust. First, traditional, highly specified construction contracts aswell as procurement practices give rise to attitudes and behaviour that contradict commonsenseperceptions of how a trustworthy person acts. Contractors adopt a critical, intolerantattitude to the client and the consultants, and clients become suspicious of contractors.Openness and consistency are discouraged. Second, competitive tendering in uniqueprojects combined with high variations in demand cause problems in arriving at a commonperception of a fair price. Either party is likely to feel badly treated, which induces bothopportunism and fear of retaliation. It is concluded that to foster stable trust relations,formal interest alignment that justifies rationally based trust is needed. Such incentivecontracts also prevent perceptions of unfairness and communicates co-operative intentions. However, to maintain contractor commitment and enable creative co-operation, morecarefully elaborated communication strategies are important.