Contractual Governance And Relational Governance In Project Management

This paper studies contractual and relational governance between project owners and contractors in project management. We focus on interaction effect between the contractual and relational governance and the performance of project management, the difference of the performance with different governance mechanisms, and factors influencing on the dyads'choices.The researcher reviewed as many as literatures on project, project management and development of domestic project management study. Base on principal-agency theory, transaction cost economics (TCE) and project organization theories, the researcher carried out the problems, reasons, governance mechanisms and factors in the project management and made some comments about the different main streams in this field. Then, the researcher put forward his research design. Eleven hypotheses were proposed based on the literature review. These hypotheses respectively demonstrate the relation between project management performance and governance, difference of the performance in different governance mechanisms, and the impacts of various factors on project governance choice. The researcher designed the questionnaires based on the prior studies and did a survey in the owners, contractors and supervisors in the construction project industry. Finally, the researcher got 146 valid responses and tested the hypotheses by statistical analysis. Furthermore, a case was studied to provide supplementary evidence to the empirical analysis.The study finds out that the project governance could be divided to four categories, both contractual governance and relational governance significantly impact the project performance, and the performance of the project is the best when the contractual and relational governance are strong. However, the study also shows that strict implementation would impact negatively the performance. Among various factors, asset specificity positively impacts on the strictness of contractual clause and implementation, and relational information communication, and the proneness of fixing the problems together. Uncertainty impacts negatively contractual and relational governance. The more space in the contract and flexible the contract is, the more difficult to share all information and set up a accordant goal. Complexity of project positively impacts on contractual governance, positively impacts on the fixing the problems together and the setting up the accordant goal in the relational governance, but negatively impacts the information communication and sharing. The period of cooperation has no significant effect on the contractual and relational governance.