Abstract
This study aims to examine the impact of organizational cultural difference and mutual trust on the contract management of nonequity project alliances in the construction industry. A questionnaire survey was conducted to collect the quantitative data for this study. The relationships between the variables were analyzed using hierarchical regression analysis. It was found that the contractual complexity of nonequity project alliances was impacted by the differences in management style, differences in organizational responsiveness, mutual goodwill trust, and mutual competence trust. It was also found that the relationship between differences in organizational responsiveness and contractual complexity was moderated by mutual goodwill trust. The research may provide theoretical basis for the management when making decisions on the selection of project alliance partners and contracts. The findings imply that when the firms seek to form project alliances, they need to recognize the level of organizational cultural differences and then determine the proper contractual complexity of the project alliance. In addition, the establishment of mutual goodwill trust between alliance partners will not only reduce the costs of making contracts but also the costs of implementing the contracts.
Highlights
Academic Editor: Michael Yam is study aims to examine the impact of organizational cultural difference and mutual trust on the contract management of nonequity project alliances in the construction industry
It was found that the relationship between differences in organizational responsiveness and contractual complexity was moderated by mutual goodwill trust. e research may provide theoretical basis for the management when making decisions on the selection of project alliance partners and contracts. e findings imply that when the firms seek to form project alliances, they need to recognize the level of organizational cultural differences and determine the proper contractual complexity of the project alliance
Nonequity alliances, which do not involve share proportion relations, are more popular in the construction project than equity alliances. e collaboration of nonequity alliance partners is mainly reflected by the alliance contract, which specifies the scope of collaboration, the rights and obligations of partners, and the way of resolving disputes [12]
Summary
Is will bring about higher transaction risks to the organizations and alliance To avoid such risks, the alliance tends to use complex contractual arrangements to regulate the partners’ behaviors [22]. E contractual complexity of an alliance is affected by the differences in management style Organizational response is another aspect of organizational culture. E above problems that are incurred by significant differences in organizational responsiveness may require complex contractual arrangements to regulate the behaviors of each party. To avoid the cooperation problems (e.g., communication and conflicts) incurred by the differences in management styles, the alliance partners tend to use complex contracts to regulate the behaviors of the participants and achieve the targets of cooperation. It is likely that mutual goodwill trust may mitigate the distrust and conflicts resulted from organizations cultural differences
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