Research On The Governance Of Virtual Enterprise Of Construction Project

The research on the theory of project management has always been a hot research in the field of management research. The theory has experienced from traditional DBB mode, CM Project Management mode, MC Management Contracting mode, D+B Design-construction integrated mode, BOT mode, EPC/Turn-key mode. Etc in the construction project and the mode of project management has becoming mature in the area of construction, the scope of project also becoming comprehensive. But with the expansion of the scale of project, and the increasing technology demanded, the traditional transaction mode has been unable to meet the performance requirements of the project.The problems such as vicious Competition prevails in the domestic market of construction, and in low efficiency of resource allocation between the enterprises, and the degree of social specialization has more and more mature, result in the small and medium construction enterprises needed a shift to the mode of"competition and cooperation". Thus, as a new mode of project management, the theory of Virtual Enterprise was widely introduced into the practice of construction project.The successfully introduction of the mode of Virtual enterprise can help the small and medium construction enterprise contract large-scale projects, and achieved the aim of"all-win"through the complementary of resource advantage . But, the mode of Virtual Enterprise also had some institution defects or scope of application, especially the problems after the cooperation of alliance. Such as asymmetric information or the risk results from the incomplete contract. In addition, the problems also reflected on the negative factors of knowledge spillovers. Dependent on traditional project management theory and methods to solve these problems, showing weakness, could not do, therefore, the paper based on the theory of incomplete contract, transaction cost theory to investigate the governance of Virtual Enterprise could be provide some new ideas for the problems. Generally, project management focus on the performance requirements, such as schedule, quality and cost. And this paper focus on the problems of governance level, so it need combine the nature of construction project to sort out the problems through the life cycle of the Virtual Enterprise. Purpose of the governance Virtual enterprise is to provide a frame system of responsibility, rights and interests, therefore, to analyze the problems of the Virtual Enterprise, it need to transaction characteristics. After compared with the Virtual Enterprise and DBB mode, the paper thinks that Virtual Enterprise has institutional advantages on the contractual relationship, transaction costs and transaction income. But the precondition for the Institutional advantages that to be relevant to solve the above-mentioned problems. To solve the problems, we must trace the source; focus the study on the nature of the problems. Thus, the author trace the source of the problems from the views of contract and capacity of the Virtual Enterprise, analyzed the origin of the Relational risk and Performance risk, as follows: incomplete contract, information asymmetry and the"lock in"caused by transaction-specific investment, the limited awareness among enterprises, synergy efficiency and the knowledge spillovers between the Interactivity of transaction participants.To investigate the governance mechanism of Virtual Enterprise, we firstly need to define the concept of governance and scope of the boundary. The paper also proposed the elastic boundary of the Virtual enterprise, analyzed the limiting factors for the elastic boundary from the views of capacity of governance, governance costs and superiority of resource. Etc. Based on the comparative analysis the nature of governance structure, the innovation of this paper is the analysis of governance structure used by the governance theory. The governance structure of Virtual Enterprise should include three parts, the external environment, the alliance of contractual framework system and relational contracts. The external environment provides the Governance environment, and contractual relations and transaction rules contained in the contractual framework is the operating rules for Virtual Enterprise. Dynamic of the contract reflected as follows: dynamic of transaction rules, payment form of the contract and contract awarded. As a complement of the formal contract, relational contracts can make up for the limitations of the formal contract, especially the relational contract rules and individual social capital behind the relational contracts, shows effective treatment for the controversial issues through the life cycle of Virtual Enterprise. Through the analysis of the governance structure, will help the members to defense the opportunistic behavior, but it be not enough to solve the performance risk of Virtual Enterprise. Therefore, the paper demonstrated the importance of relational capital and dynamic of the contracts by a simple repeated game, and proposed some governance mechanisms around the "relationship risk" and "performance risk", such as mechanism of trust and commitment, self-compliance mechanism, coordination mechanisms and knowledge-sharing mechanisms and so on.Finally, the author analyzed the Wharf Virtual enterprise utilized the research results above, the paper analyzed mainly on the claims and schedule delays in the project life cycle, and explored the incentive for the claims and schedule delays, and given some feasible governance proposal combine the writer's opinion.I hope the ideas of solving the problems in this paper can be effective, and can help the small and medium construction enterprises in identifying and controlling the probable origin of the risk, can be effectively improve the operation of Virtual Enterprise, achieve a "win-win" between the various participants.