Abstract
The flexible contract is an important mechanism for owners to govern contractors in construction projects. Given the limited explanatory power of the justice mechanism and the important role of relational factors, this study explored the role of ongoing trust and justice perception in the relationship between contractual flexibility and the contractor’s cooperative behavior and aimed to further reveal the potential influence paths through an empirical analysis. We found the following: (1) apart from justice perception, ongoing trust is another crucial mediation factor in the relationship. (2) Together with the former, ongoing trust plays significantly multiple mediation effects and constitutes the main indirect influence paths, among which the parallel one is strongest and the chain one comes third. (3) Moreover, both factors are more likely to be impacted by contract executing flexibility, compared with contract content flexibility. These findings enrich relational mechanism research and provide some guidance for the owner to build contractual flexibility to govern contractors’ behavior.
Highlights
Cooperation between the owner and the contractor forms the foundation of effective construction project outcomes [1]
Considering the inability of rigid contracts to adapt to the changing circumstances [4] and the weak legal institutions and high wasteful litigation [5], the owner inclines to sign a flexible contract to set up afterwards adjustable rules in advance, which can motivate the contractor [6], reduce opportunistic behavior [7], and achieve greater efficiency [1]
(3) both factors are more likely to be impacted by contract executing flexibility, compared with contract content flexibility
Summary
Cooperation between the owner and the contractor forms the foundation of effective construction project outcomes [1]. Due to the one-off, high complexity, diverse interests and information asymmetry between project parties, as well as asset specificity, cooperative relationships are hard to build and maintain automatically [2]. Under this condition, project contracts become the premise of project parties’ cooperation [3]. The previous research of this study’s authors has demonstrated that justice perception only plays a partial mediation effect between contractual flexibility and cooperative behavior [12], which means there are other important factors that still need to be studied
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