TITLE:
The Effects of Trust and Contractual Mechanism on Working Relationships—An Empirical Study in Engineering Construction Projects
AUTHORS:
Shuping Guo, Ping Lu, Yinqiu Song
KEYWORDS:
Trust; Contractual Mechanism; Working Relationships; Project Performance
JOURNAL NAME:
American Journal of Industrial and Business Management,
Vol.3 No.6,
October
21,
2013
ABSTRACT: Inefficiency is usually one of the perceived ills within the construction projects and relationships among participants needing improvement. With the rising trend of partnerships in engineering construction projects, trust as an essential element in partnerships has become of increasing concern too. A growing stream of study has discussed the importance of trust in promoting interpersonal relationships among project participants. And formal contract has been closely watched which can mitigate exchange hazards. However, the relation between trust and contract is controversial. Based on cross-sectional survey data, regression analysis was used to test the impact of trust on satisfaction with working relationships and project performance in engineering construction projects in China. Likewise, the moderating effect of contractual mechanism on the relationship between trust and working relationships is explored. The results show that working relationships are positively associated with trust and satisfying working relationships have significant impact on project performance. The empirical findings also support the moderating effect of contractual mechanism. The conclusions enrich the research of working relationship, and provide some practical implications for enterprises.