Uncertainty, opportunistic behavior, and governance in construction projects: The efficacy of contracts

Jingya You, Yongqiang Chen, Wenqian Wang*, Chenxi Shi

*Corresponding author for this work

Research output: Contribution to journalJournal articlepeer-review

119 Citations (Scopus)

Abstract

Uncertainty makes exchanges subject to substantial opportunistic behavior that is generally believed to be curbed by the contract. However, how the contract governs the relationship between uncertainty and opportunistic behavior has not been elaborated. This paper examines the effects of uncertainty on the supplier's opportunistic behavior and the moderating effects of contractual complexity. This research classifies uncertainty into environmental uncertainty and behavioral uncertainty and distinguishes contractual complexity from a functional perspective, with elements including control, coordination and adaptation. Using data from 220 owners and general contractors in the Chinese construction industry, this research reveals that a positive relationship exists between uncertainty and opportunistic behavior. Contractual control and adaptation have effects on weakening the relationship between environmental uncertainty and opportunistic behavior, while contractual coordination can mitigate the opportunistic behavior induced by behavioral uncertainty. These findings offer new insights into uncertainty management and a nuanced understanding of contractual governance in projects.
Original languageEnglish
Pages (from-to)795-807
Number of pages12
JournalInternational Journal of Project Management
Volume36
Issue number5
Early online date1 May 2018
DOIs
Publication statusPublished - Jul 2018

User-Defined Keywords

  • Contractual complexity
  • Contractual functions (control, coordination, adaptation)
  • Environmental uncertainty
  • Behavioral uncertainty
  • Opportunistic behavior

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