A cognitive approach to trust management in construction

Abstract

There is a growing body of literature on trust in construction management but only a few studies have focused on how outcomes of the trustworthiness estimation process influences trust development during project execution. Based on an extensive critique of the extant literature, this study aims to explore whether the estimation of contractor's trustworthiness in construction usually aligns with a cynical, realist or gullible outcome and further how such outcomes influence inter-organisational governance and trust development during project execution. It is argued that in construction, cynical outcomes are usually the case and hence the starting point of contractual relationships. Cynical outcomes – conscious underestimation of contractor's trustworthiness so as to safeguard the transaction – impose starting conditions which often result in negative rather than positive spirals of trust during project execution. In practice, such positions could result in over-allocation of resources to safeguard against opportunism while foregoing potential benefits of trust-induced co-operation. Reaching a realist outcome could inform the selection of appropriate control and managerial strategies. This could also help to improve cost performance by reducing the excessive transaction costs involved in establishing and maintaining control-induced co-operation.