The Efficacy Of Construction Contracts On Conflicts

High level of complexity,multi-objective and inconsistent interest among distinct participants have made conflicts common phenomenon in construction projects.As a formal governance mechanism,construction contacts act as the main instrument in constraining owner's behavior and contractor's behavior.There are inconsistent findings in previous studies concerning the relationship between contractual governance and conflicts.Based on existing theories,this study investigates the effects of the complexity of three functions on task conflict and relationship conflict from a functional perspective.Meanwhile,this study takes interdependence into consideration to explore its moderating effects on the relationship between task conflict and relationship conflict.This study obtained data through a questionnaire survey in the Chinese construction industry and the final sample consisted of 232 responses.Firstly,it is reported that common method variance is not a serious problem in this study and the measurement has shown good reliability and validity.Secondly,the data is analyzed using hierarchy analysis through SPSS to test hypotheses,including direct effects,mediating effects and moderating effects.The results are as follows.First,higher contractual control and coordination will reduce the level of relationship conflicts,and higher contractual coordination will also reduce the level of task conflicts.Secondly,task conflicts positively affect relationship conflicts.Third,task conflicts mediate the relationship between contractual coordination and relationship conflicts.Finally,when total interdependence is higher,task conflicts induce more relationship conflicts.On the contrary,high interdependence asymmetry weakens the positive relationship between task and relationship conflicts.This study has provided nuanced answers for the question that how contractual governance affects inter-organizational conflicts.This study differentiates the effects of distinct components of contracts on task and relationship conflicts,which enriches the conflict management literature by investigating the effectiveness of contractual complexity in managing conflicts and reveals the limitation of contractual governance in managing conflicts.Besides,the moderating findings of this study add to the growing stream in conflict research that investigates the boundary conditions of the association between task and relationship conflicts.Furthermore,the findings can guide practitioners in drafting suitable contracts to deal with task and relationship conflicts more effectively and thus reduce transaction costs,which echoes transaction cost theory.