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A platform for research: civil engineering, architecture and urbanism
Incentivizing Relationship Investment for Mega Project Management
Principal-agent theory (PAT) considers that relational risks for contracting parties are significant and may lead to opportunistic behavior. As mega projects often have high asset specificity and facing great uncertainty, the demand for cooperation between different participants is particularly prominent. Effective moves to enhance interorganizational relationships and alleviate the related bottlenecks are therefore encouraged. Construction incentivization is thus advocated because of its flexibility and high acceptability. This study examines the stimulating effect of construction incentivization on interorganizational relationships for mega projects. A PLS-SEM analysis of 142 projects shows that the interorganizational relationship acts as a mediator between construction incentivization and project performance. Furthermore, developers and contractors have different perceptive views on construction incentivization. It is therefore suggested that construction incentivization should go beyond conventional uses and embrace relationship investment as a goal. Furthermore, there is no substitute for negotiated agreement on incentivization arrangements if mutually aligned interests are pursued.
Incentivizing Relationship Investment for Mega Project Management
Principal-agent theory (PAT) considers that relational risks for contracting parties are significant and may lead to opportunistic behavior. As mega projects often have high asset specificity and facing great uncertainty, the demand for cooperation between different participants is particularly prominent. Effective moves to enhance interorganizational relationships and alleviate the related bottlenecks are therefore encouraged. Construction incentivization is thus advocated because of its flexibility and high acceptability. This study examines the stimulating effect of construction incentivization on interorganizational relationships for mega projects. A PLS-SEM analysis of 142 projects shows that the interorganizational relationship acts as a mediator between construction incentivization and project performance. Furthermore, developers and contractors have different perceptive views on construction incentivization. It is therefore suggested that construction incentivization should go beyond conventional uses and embrace relationship investment as a goal. Furthermore, there is no substitute for negotiated agreement on incentivization arrangements if mutually aligned interests are pursued.
Incentivizing Relationship Investment for Mega Project Management
Digital Innovations in
Cheung, Sai On (editor) / Zhu, Liuying (editor) / Zhu, Liuying (author)
2023-05-24
24 pages
Article/Chapter (Book)
Electronic Resource
English
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