Building competence to manage contractual claims in international construction environment

Abstract

PurposeThis study was motivated by a belief that existing knowledge on management of a contractual claim in international contracting practice is different from a standardised local practice. The paper is aimed at building competence for managing contractual claims in a standardised practice.Design/methodology/approachComparative studies of British and Finnish contracting practices were used to determine the reason why claims are not pronounced in a standardised practice. Empirical study via direct interviews and questionnaires of a Finnish‐based contractor operating in the Russian markets was used. The players are three‐dimensional in nature where the client, consultants, and contractor come from different countries/practices and two of the projects studied were joint ventures.FindingsThe findings show the effects of: legal system, procurement methods, standardised practice and size of the market on the management of contractual claims. The remedial measures suggested include: operational management, i.e. learning through personal contacts, and management competence development of employees by learning through proper communication and education programmes in a form of continuing professional development.Originality/valueManagement of claims in the construction industry is vital to a successful implementation of the project. It brings about a fair dealing between the project owner and the contractor, improves contractor's cashflow and discourages abandonment of project and disputes. Lack of knowledge in managing claims constitutes a threat to successful implementation of project. The engagement of an expert and knowledge transfer through joint ventures/partnerships are suggested as solutions.