Building Collaborative Trust in Construction Procurement Strategies
Description
This book explores the concept of trust as a tool in improved construction procurement strategies, and provides important insight into the influence of trust on the success of construction projects and redevelopment programs. It is a practical guide that offers readers a solid outline and expert strategies for improving project outcomes through collaboration--ultimately proving that teamwork can really make the dream work.
Building Collaborative Trust in Construction Procurement Strategies: A Practical Guide incorporates a toolkit, complete with flowcharts, to introduce certain trust building interventions within projects. It shows how initiatives and factors that influence collaborative trust can be easily implemented and embedded in construction management for improved practice. It also covers potential challenges, risks, problems, and barriers when it comes to trust. In addition, the book looks at the influences for collaborative trust in the construction industry as well as implications in practice for it in construction. It finishes by looking at the future of collaborative trust in construction procurement.
* Teaches the importance and influence of trust on collaborative working and partnerships principles
* Examines to what extent trust within collaborative working arrangements influences the success of collaborative working practices
* Covers the effect that certain factors and trust building mechanisms have on collaborative working and partnerships and how they can be embedded into procurement of projects
* Discusses what constitutes best practice and how trust in collaborative procurement practices influences the success of construction projects
Building Collaborative Trust in Construction Procurement Strategies: A Practical Guide is an excellent book for construction management professionals, including clients, consultants, and contractors. It will also serve as a helpful text for undergraduate and postgraduate students and academics.
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Person
Jason Challender, PhD, is Director of Estates and Facilities at the University of Salford, UK, a member of its Senior Leadership Team, and responsible for overseeing a large department of approximately 350 estates and construction related staff. He is a Fellow and Board Director of the Royal Institution of Chartered Surveyors.
Peter Farrell, PhD, is a Reader in Construction Management at the University of Bolton, UK, with over twenty-five years' experience in higher education and sixteen years' experience in industry. He is a Fellow of both the Chartered Institute of Building and the Royal Institution of Chartered Surveyors.
Peter McDermott, PhD, is Professor of Construction Management and Procurement in the Built Environment at the University of Salford, UK, Chair of the North West Construction Hub, and a founding member and Joint Coordinator of CIB Commission W92 on Procurement Systems.
Content
Author Biographies xi
Foreword by Mark Farmer xiii
Foreword by Emeritus Professor Peter Brandon xv
Preface xvii
Acknowledgements xix
List of Figures xxi
List of Tables xxv
1 Introduction 1
References 4
2 Context of the Lack of Trust in the Construction Industry 7
2.1 From Where Has the Lack of Trust Emerged? 7
2.2 Calls for More Research into the Study of Trust in Construction Contracting 9
2.3 Deficiencies with Traditional Construction Procurement 10
2.4 Overall Context of Collaborative Working and Partnering Within the Construction Industry 14
2.5 Why is Trust Important in Achieving More Successful Project Outcomes? Trust as a Collaborative Necessity 15
2.6 The Importance for Collaborative Working and Trust in Construction 17
2.6.1 Statistical and Academic Context 17
2.6.2 Government Context: Reports, Codes of Practice, and Recommendations for Change 19
2.6.3 Government Context: Construction Procurement in the Public Sector 23
2.6.4 Industry and Professional Context 23
2.7 Problems Challenging the Philosophy of Partnering: The Influence and Absence of Trust 24
2.8 Summary 29
References 30
3 The Theory of Trust: Concept, Components, and Characteristics 37
3.1 Introduction to Chapter 37
3.2 What is Trust, Distrust, and Mistrust? 37
3.3 Potential Benefits of Trust: Incentives to Trust 39
3.4 Composition and Characteristics of Trust 39
3.4.1 Trust as a Multi-dimensional Construct 39
3.4.2 Components of Trust 40
3.5 Categories and Classifications of Trust 40
3.5.1 Integrity, Intuitive Trust, and Competence Trust 41
3.5.2 Calculus, Relational, and Institution-Based Trust 42
3.5.3 System-Based, Cognition-Based, and Affect-Based Trust 42
3.6 Importance, Influence, and Effects of Different Types of Trust 43
3.6.1 The Relative Importance of Different Categories of Trust Within a Construction Context 43
3.6.2 Influences from Conditional and Unconditional Trust 46
3.7 Relationships Between Trust and Distrust 48
3.8 The Dynamic Nature of Trust 49
3.9 The Fragility and Robustness of Trust in a Constantly Changing and Dynamic Environment 49
3.10 Summary 51
References 52
4 The Challenge of Trust Initiation and Formation 55
4.1 Evolution of Trust from Social Sciences Perspective 55
4.2 The Notion of Trustworthiness 57
4.3 Mechanisms, Factors, and Processes for the Development of Trust 57
4.4 Measuring the Quality of Trust 60
4.5 Trust-building Mechanisms: Constructs and Attributes 62
4.6 Relationship Between Trust and Conflict 64
4.7 Trust as an Independent (Cause) and Dependent (Effect) Variable 65
4.8 Relationships Between Trust, Risk, and Control 65
4.9 Relationship Between Trust and Interdependence (Reliance) 68
4.10 Summary 70
References 71
5 Introduction and Background to Collaborative Working and Partnering 75
5.1 What is Collaborative Working and Partnering? 75
5.2 Different Types and Variations of Collaborative Working 76
5.3 Mechanisms for Agreeing Tender Prices Under Partnering Contracts 78
5.4 Perfection Through Partnering Procurement: The Philosophy and Benefits of Teamwork and Integration of the Whole Supply Chain 79
5.5 Potential Problems and Risks for Collaborative Working and Project Team Integration 83
5.6 Summary 86
References 87
6 The Importance, Reliance, and Influence of Trust in Construction Partnering 91
6.1 The Reliance and Importance of Trust for Construction Partnering 91
6.2 Propensity to Trust Theories, Applied to Collaborative Working 96
6.3 Trust as a Collaborative Necessity 100
6.4 Relationship Between Trust and Collaborative Working as a Measure of Performance for Improved Project Outcomes 103
6.5 Summary 105
References 107
7 Potential Problems, Barriers, and Risks for Trust in Collaborative Working 111
7.1 Introduction to the Problem of Trust in Collaborative Working Relationships 111
7.2 Potential Obstacles, Risks, and Difficulties 112
7.2.1 Adversarial Practices, Relationships, and Behaviours 112
7.2.2 The 'One-Off' Project-Based Nature of Construction Contracting 113
7.2.3 Resistance to Change Old Familiar Working Practices 114
7.2.4 Commercial, Economic, and Contractual Pressures 115
7.2.5 Influence of Legislative and Governance Measures 119
7.2.6 Organisational Barriers 121
7.3 Methods to Address Potential Risks, Barriers, and Problems for Trust in Partnering Practices 122
7.3.1 Incentives and Problem Solving Through Teamwork 123
7.3.2 Partner Selection Processes, Key Personnel, Management Skills, and Training 125
7.3.3 Risk Workshops 127
7.3.4 Issue Resolution Processes 127
7.4 Summary 128
References 129
8 Factors Which Influence the Development of Trust in Construction 133
8.1 Introduction to the Factors for Influencing Collaborative Trust in Partnering Strategies 133
8.2 Influence of Motivational Factors on Collaborative Trust in the Construction Industry 138
8.2.1 Potential Benefits of Motivational Initiatives 138
8.2.2 Types of Motivational Initiatives 138
8.2.3 Communication and Cooperation 139
8.2.4 Training, Education, and Continual Professional Development 140
8.2.5 Relationships and Teamwork 141
8.2.6 Fairness and Equality 142
8.3 Influence of Ethical Factors on Collaborative Trust in the Construction Industry 143
8.3.1 The Importance of Ethical Considerations for Partnering 143
8.3.2 The Definition of Ethics 144
8.3.3 Ethics from a Professional Perspective 144
8.3.4 Governance and Regulation 145
8.4 Influence of Organisational Factors on Collaborative Trust in the Construction Industry 145
8.4.1 The Temporary Organisational Nature of Construction Projects 145
8.4.2 Alignment of Organisational Strategies 146
8.4.3 Management Systems and Processes for Sharing Information 147
8.4.4 Blending of Beliefs, Values, and Attitudes Within Organisational Environments 149
8.5 Influence of Economic Factors on Collaborative Trust in the UK Construction Industry 150
8.5.1 Economic Rewards and Risks 150
8.5.2 Aligning Commercial Interests; Financial Incentives 150
8.6 Summary 152
References 154
9 Developing a Framework of Trust-Building Mechanisms for the Partnering Toolkit 161
9.1 Previous Studies as Context for the Influence of Trust-Building Mechanisms in Generating Trust Within Construction Partnering 161
9.2 Regular Workshops and Review Meetings with Mutually Aligned Objectives 169
9.3 Fair and Equitable Incentivisation Schemes: Transparency and Sharing of Data 172
9.4 Partnering Charters Encapsulating Ethical Considerations 175
9.5 Senior Management Commitment, Effective Open-Communication Strategies, and Issue-Resolution Processes 176
9.6 Co-location Arrangements 180
9.7 Social Networking, Teambuilding, and CPD Events 180
9.8 Integrated Project Insurance (IPI) Initiative 182
9.9 Compatibility and Complementary Nature of Management Systems and Joint Evaluation Processes 183
9.10 Styles of Leadership and Recognition and Alignment of Organisational Strategies and Mutual Objectives 183
9.11 Partner Selection Processes to Achieve Aligned Synergies 184
9.12 Summary 185
References 187
10 A Partnering Toolkit Based on Integrated Trust-Building Mechanisms 191
10.1 Introduction and Purpose of a Partnering Toolkit 191
10.2 Embedding Trust-Building Mechanisms into the Partnering Toolkit as Part of Collaborative Management Strategies 191
10.2.1 Relationship Management 193
10.2.2 Communications Management 194
10.2.3 Organisation Management 195
10.2.4 Risk Management 196
10.2.5 Financial Management 198
10.3 Incorporating Partnering Toolkit Within Procurement Processes 198
10.3.1 Appointment of a Collaboration Champion Role 198
10.3.2 Staged Approach to Integration of Toolkit Through Different Design Stages 199
10.3.3 Requirement for Measuring the Status of Trust and Collaboration at Regular Stages 201
10.4 Tailoring the Partnering Toolkit to Suit the Nature of Projects and Their Environment 203
10.5 Monitoring of the Partnering Toolkit and Influence on Project Performance 209
10.5.1 Reflective Practice and Action Learning 209
10.5.2 Applying Lessons Learnt for Continual Improvement of the Toolkit 209
10.6 Summary 211
References 212
11 Implications in Practice for Collaborative Trust in Construction 213
11.1 Critical Success Factors for Trust in Collaboration 213
11.1.1 Improvement Measures and Encouraging Best Practice 215
11.2 Embracing Trust-Building Strategies 215
11.3 Fostering Trusting Relationships for Management Outcomes 218
11.4 Nature of Projects and Their Suitability to Trust-Building Strategies and Collaborative Working 219
11.5 Need for Evidence of Project Benefits from Collaboration Management Strategies 220
11.6 Implication for Future Construction Procurement Strategies; Potential Application of the Trust-Building 'Partnering Toolkit' 221
11.7 Summary 222
References 223
12 Reflections and Closing Remarks 227
References 228
Appendix A Glossary of Terms 229
References 234
Appendix B List of Abbreviations 237
Appendix C Collaboration Champion/Facilitator Services 239
C.1 Introduction 239
C.2 Facilitation Services 240
C.2.1 Establishment of the Collaborative Project 240
C.2.1.1 Kick-Off Workshop 240
C.2.1.2 Risk Management Workshop 240
C.2.1.3 Communications and Issue Resolution Workshop 240
C.2.1.4 Performance Measurement Workshop 240
C.2.1.5 Project Management Processes and Systems Workshop(s) 241
C.2.2 Support for the Project Management Cycle 241
C.2.2.1 Support to the Core Group 241
C.2.2.2 Risk Management Meetings 241
C.2.2.3 Communications and Issue Resolution Meetings 241
C.2.2.4 Continual Improvement Meetings 241
C.3 Summary 241
Appendix D Partnering Charter (Details of project removed for confidentiality) 243
Index 245
1
Introduction
Sir Michael Latham was told 'there is no trust in this industry anymore'.
Latham (1993)
Latham in titling his interim report to government 'Trust and Money' (Latham 1993) was signalling the importance he attached to the lack of trust in the UK construction industry. In Constructing the Team (Latham 1994), he described trust as being the gatekeeper to any real progress in improving contractual relations in the United Kingdom. Other commentators, such as Cox and Townsend (1997) were of the view that cultural change would not be easy:
. it is unlikely that trust (based on dependency) will be volunteered in such a deep-rooted traditionally adversarial culture as that of the construction industry.(Cox and Townsend 1997)
The progress since these observations by Latham is the focus for this book. The intent is to describe the state of development and to attempt to change current working practices and improve project outcomes in the construction sector. The meaning of trust has been re-enacted on many construction projects over the years according to professional practitioners, and therein typifies the need to consider measures to improving practice through trust generation. In this regard, the book explores the extent to which trust is a viable tool in collaboratively procuring successful construction projects. In addition, it will provide an important insight into the influence of trust on the success of construction strategies and redevelopment programmes. Trust will be considered in this context from an inter-organisational rather than individual perspective. The terms 'collaborative working' and 'partnering' will be used interchangeably through the book, and both are intended to promote mutual benefits of cooperation, team working, and problem-solving (Larson 1997, p. 190; Wong and Cheung 2004). Their definitions and meaning are more fully explained in Chapter 3. Furthermore, the book investigates current partnering arrangements that exist within the global construction industry, to create a comprehensive understanding of problems of trust which are hindering its overall effectiveness. The book also reviews the overall commitment of organisations to partnering philosophies. The main focus of the book is, however, intended to provide a suitable context for paradigm shifts in practice with measures to increase collaborative trust and act as a catalyst for increasing the success of construction procurement strategies. Calls for changes in working practices have been predicated by perceptions that partnering, within the construction industry, is not being fully committed to through lack of trust. The book identifies those factors and constructs that influence trust in partnering in an effort to create a framework for potential improvements in practice through strategies specifically linked to motivational, organisational, ethical, and economical trust-building initiatives.
The book provides the framework of a 'partnering toolkit' for improved project outcomes. From this perspective, it is intended as a practical guide to raise awareness of best practice and instil more trust in construction contracting. The lack of trust in the construction industry has been documented by authoritative sources over many years. The book will seek to address this ongoing dilemma and recommend improvements to collaborative procurement processes and encourage more successful team integration and collaborative ways of working. This is a deliberate attempt to improve construction practices, which have arguably not been delivering the impact, and benefits that were intended in terms of successful collaborative project outcomes. Various government reports have reinforced this dilemma over the years. Early work in this respect included the Simon Report, Emmerson Report, Banwell Report, and Potts Report (Simon 1944; Emmerson 1962; Banwell 1964). These were followed by Constructing the Team, Latham (1994), Rethinking Construction, Egan (1998), and Accelerating Change, Egan (2002). All the aforementioned reports highlighted the deficiencies with construction-related business approaches in terms of low performance, failure to meet client satisfaction levels, and need for efficiency measures. Another recent example includes Construction 2025, Industry Strategy: Government and Industry in Partnership (HM Government 2013) which identifies that fractious qualities are embedded in the UK construction industry. The report stresses that collaboration and trust across the entire supply chain are crucial to deliver successful projects. More recently, this dilemma has been reiterated and become a major feature of Modernise or Die: The Farmer Review of the UK Construction Labour Market (Farmer 2016). Furthermore, findings from the Low Carbon Construction Final Report (HM Government 2010) confirm the growing need for increased collaboration and integration across the industry, especially between supply chains and clients, in order to make greater contributions to the pursuit of efficiencies.
The mentioned emphasis on the need for improvements in collaboration and integration are especially crucial given the low achievement of UK construction projects, when compared with other sectors. The UK Industry Performance Report, (Construction Excellence 2016) based upon a survey of projects, analyses a number of construction key performance indicators (s). The survey shows that when considering both design and construction phases, 'just' 65% of projects meet budget requirements and 66% meet time predictability targets. Whilst these figures are reported positively by NBS (2018) to be improvements on previous years' performance levels, clients may wish to read them in terms of projects that do not complete successfully; 35% over-budget and 34% late. In terms of satisfaction levels, Construction Excellence (2016) also reports on the percentage of projects or responses that achieve a rating of 8 out of 10 or better. Clients rated their 'overall satisfaction with the finished product' as 90%; 'service received from contractors' 81%; 'value for money' 80%; and 'condition of the facility in respect to defects' 78%. In terms of 'contractor satisfaction with the performance of clients and consultancy teams', 77% rated performance as 8 out of 10 or better. Whilst this 2016 report suggests there are improvements on previous years, questions need to be asked. Why only 8 out of 10 and not 10 out of 10? If clients rate 'condition of the facility in respect to defects' as 78% in 8 out of 10 cases, what about the other 22%? Imagine taking a new car from a showroom, and 22% of customers' rate defects on their cars at less than 8 out of 10 - perhaps 4 or 5? Even with these improved figures, the margins for improvement in construction seem substantive.
In light of the aforementioned satisfaction levels, the book is intended to assist academics, construction-related practitioners and clients in their awareness, understanding, and breadth of knowledge of the issues around building trust between contracting parties on projects. This objective has the overarching aim of delivering projects that are more successful. This is felt to be particularly important as in previous studies into collaborative working, very little attention has been focused on trust-building processes. In addition, scant attention has been paid to the role and development of trust in the practice of construction procurement (Thorgren et al. 2011). There is also a need to address calls for greater insight into how trust is created, mobilised, and developed (Huemer 2004) and for more understanding of the effects and impact of other factors interacting with trust (Huang and Wilkinson 2013). The book has sought to address gaps in the literature gaps through examination of trust-building constructs and mechanisms, and the influence of these on generating trust in construction relationships. For this reason, early chapters are focused on theory and literature from academic sources. Case studies and practical examples have, however, been included to assist readers on how theoretical perspectives can be applied to real-life construction projects and scenarios. The book has also addressed academic calls for greater insight into how trust is created, mobilised, and developed and for more understanding of the effects and impact of other factors interacting with trust. There is frequent reference to construction practitioners' views and opinions throughout, and these have been sought through research carried out in 2015 from a small sample of semi-structured interviews. Participants in these interviews included clients, design consultants, main contractors, and subcontractors. The sample size for participants is not intended to represent fully the population at large, owing to constraints on the study, but it was designed to attract more widespread insights than if only one or two specific participant groups had been targeted.
There have been few books which have been written on the specific subject of incentivising trust in construction specifically through interventions. Those which have been published have largely focused on theoretical studies examining different contracting behaviours and...
