The Contractor-Subcontractor Relationship Types in the Construction Industry in Saudi Arabia

Abstract

Purpose: The purpose of this study is to examine the dyadic relationship between contractors and subcontractors in the Saudi construction industry. The perceptual differences in buyer-supplier relationships from the relational perspective are studied in order to identify the most common types of the contractor-subcontractor relationship in the Saudi construction industry by assessing five dimensions—trust, commitment, decision making, information sharing, and goal congruence. Methodology: To gain insight into and a deeper understanding of the topic, this research adopts a qualitative method using four case studies from the industry: one buyer firm and three suppliers. Twelve interviews were conducted in total, three with the buying firm and three with each subcontractor. Findings/Results: Regarding the research question, the type of relationship between the main contractor and its subcontractors seems to sit between the “repeated transaction” and the “coordinated” type of relationship. However, both types are considered to be adversarial types of relationship, involving characteristics such as lack of trust and low levels of information sharing. Originality/value: Theoretical contribution: the research contributes to the buyer-supplier literature by providing a dyadic study and showing how the buyer and supplier have different views about their relationship. Methodological contribution: a case study approach was used that led to an examination of issues that were not explained by previous studies. Practical contribution: useful information was provided for both contractors and subcontractors, such as the factors that affect their relationship. Identifying these factors and their impact on their relationship will enable both parties to act to remove these barriers and obstacles that prevent them from developing deeper and clearer relationships with their partners.