The Influence Of Trust And Contract On Dispute Negotiation Strategy In Contractor-Subcontractor Relationship

As construction projects are usually characterized by high degree of uncertainty and technical complexity,disputes are almost inevitable during the construction process.Disputes need to be managed proactively to reach early settlement,for they will aggregate negative impacts on project performance.Among various resolution methods,negotiation is often in the first attempt to be initiated,for it is informal and speedy in nature.Additionally,it is the most efficient form of dispute resolution in terms of time and costs,and preserving the harmonious relationships between the disputants in construction projects.When a negotiator is on behalf of an organization,the factors in the inter-organizational level like contract and trust will have influence on their negotiation behaviors.Based on previous research,we regard trust as a two-dimensional construct,distinguishing the control and coordination functions of contractual governance,to explore their influences on negotiation behavioral strategy;we also examine the moderating effects of bilateral lock-in.The author conducted the survey with a sample included 272 project managers who are from Chinese general contractors and subcontractors and have experience in construction dispute negotiation.The analysis results show that that there is a positive relationship between trust,both goodwill trust and competence trust,and the interest-based negotiation behavioral strategy.However,increasing contractual control governance will increase the adoption of rights-based negotiation behavioral strategy,while contractual coordination governance will reinforce the adoption of interest-based behavioral strategy.Both Chinese general contractors and subcontractors tend to rely more on trust under higher degrees of bilateral lock-in.These results indicate that the view of governance mechanism suits for the Chinese subcontracting industry to some degree.Some of the hypotheses are not supported by empirical results,and the fact may be owe to the unique Chinese culture,also shows that some of existing research outcomes should be applied deliberately in Chinese construction industry.The research findings offer a further and nuanced understanding of how trust and contract affect negotiation behavioral strategy in construction subcontracting.Some suggestions,such as both general contractors and subcontractors should consider how to combine the two kinds of provisions flexibly to promote better cooperation,andboth the parties should consider the degree of bilateral lock-in when deciding how to use the two fundamental governance mechanisms in dispute negotiations.