When does control curb opportunistic behaviour: evidence from the construction industry

Abstract

The subcontracting organizational arrangement has received limited attention in designing the control mechanism. This study has explored how managerial controls affect opportunistic behaviour and developed a contingency framework to investigate the moderating effect of subcontracting dispersion. By using survey data from 323 general contractors in the Chinese construction industry, this study reveals that both outcome control and clan control curb the occurrence of subcontractors’ opportunistic behaviours while behaviour control scarcely helps. Besides, subcontractor dispersion distinctively moderates these relationships. A high level of subcontractor dispersion amplifies the opportunism-curbing effect of outcome control, but attenuates that of clan control, which leads to more opportunistic behaviours. Only at a lower level of subcontractor dispersion will behaviour control mitigate subcontractors’ opportunistic behaviours. Our configurational analyses reveal the substitute and complementary relationship between different control modes with different levels of subcontracting dispersion. This study contributes to the literature on governing opportunism and managerial control. The findings guide managers of the general contractor to exploit appropriate managerial controls to curb opportunistic behaviours across different organizational designs.