Measuring Project Integration Using Relational Contract Theory

Traditional project design and construction delivery methods are segmental. Researchers and construction practitioners often cite the separation, or \u22silo effect\u22, as a reason for poor project outcomes. Recently, design-build (DB) and construction manager / general contractor (CMGC) delivery methods have gained favor in the delivery of design and construction projects. However, DB and CMGC contracts are still two-party agreements where the contract language remains similar to traditional design-bid-build methods, which poses a problem in that the contract does little to improve interactions between the contracting parties, which is one reason claims and litigation occur regularly in the construction industry. An emerging alternative delivery method poised to break down the silos is integrated project delivery (IPD). The use of project integration introduces an atmosphere built on collaboration, mutual respect, and cooperation. Organizations turn their attention to successful project outcomes instead of individual organizational outcomes. Furthermore, unlike common delivery methods, the interactions between individuals from different organizations in an IPD project become crucial. IPD uses multiparty agreements to tie major organizations together, forming a team that concentrates on the project rather than individual organizational goals. The concept of emphasizing the project and the relationships between organizations equates with relational contract theory. Relational contract theory posits the idea that the relationship between parties is the most critical aspect in obtaining successful outcomes. Relational contract theory states that contracts include many complex aspects of interactions between the different organizations. As more interactions occur, a relationship begins to form in a manner similar to when two people meet on the first day of school and through positive interactions and behaviors over time, they become friends, or through negative interactions and behaviors, a rivalry develops. One crucial part of relational contract theory is the acknowledgement of specific social norms, or expect behaviors, that appear in all contractual transactions and exchanges. The contractual norms are specific behaviors that one can measure based on perceptions. Through a literature review of construction delivery methods, project integration, relational contract theory, modern contract law, and inter-organizational relationships, three research questions were developed to focus on integration and project success. This study provides four major claimed contributions to the construction research body of knowledge. First, relational contracting can define project integration in terms of expected behaviors. Second, IPD contracts highlight integration more than DB and CMGC contracts, and DB and CMGC contracts show more relationalism than DBB contracts. Third, correlations found between the contractual norms and project success provide evidence that implementing project integration and behaving appropriately can positively influence achieving a successful project. Finally, the project integration measurement tool represents a method to investigate how integrated a project team is or is not and a way to understand how to improve the team atmosphere on construction projects