Study Of Impact Of Risk Allocation On The Contractor's Behavior In Construction Projects

In the studies of project governance and management,how to motivate the contractors to achieve continuous improvement of project performance has always been the core of the concerns of theorists and practitioners.It is found that the nature of motivating contractor is an agency's incentive problems under the principle-agent relationship.Similar to the classic studies of how to improve the principle-agent relationship,the studies about motivating the contractor at the initial stage concerned more about the contract governance under the guidance of economic theories.Among them,risk allocation as a core element in the contract is treated as the main method for motivating the contractor.People in the construction industry generally consider that since proper risk allocation is helpful for achieving the common interests of both sides and guarantees the contractor to obtain deserved economic returns during the execution of the project,the contractor should actively fulfill their contractual obligations to assist the owner of the to achieve the goals of project management performance.However,there is a paradox of proper risk allocation in the project management practice that the owner's proper risk allocation not only failed to win the contractor's "reciprocate" in some projects,but also incurred by the contractor's "treachery" negative reciprocity behavior.Even though the owner allocates risks properly,the contractor's unbalanced bidding,shoddy work,malicious claims and other moral hazard is are uncommon,which leads to that the incentive effect of proper risk allocation cannot meet the owner's prior expectations.Therefore,the owner faces the dilemma of risk allocation and improper risk allocation becomes the mainstream of decision-making in the field of project management.The reason is that the owner over emphasizes the economic incentives of proper risk allocation but ignores the contractor's social needs.For the contractor who takes economic interests as priority,the economic incentives of proper risk allocation are unsustainable,and cannot be converted to the endogenous motivative factor.Therefore,how to trigger intrinsic incentive effect of proper risk allocation on the contractors to promote their mutual positive behavior has become the key of research.Under the guidance of sociological and psychological theories,the studies of relationship governance in projects have developed,which provide a reference for improving both parties' relationship by non-economic incentive to motivate the contractor effectively.Among many elements of relationship governance,trust relationship is regarded as the core elements of non-economic incentives,which can affect the contractor's behavior and has inherent joint relationship with risk allocation.Therefore,we introduced trust relationship to explain the effect of risk allocation on the contractor's behavior.With two conducts as the contractor's feeling trusted and the contractor's trust in the owner to interpret the owner and contractor's trust relationship,we established the function chain of risk allocation,the owner and contractor's trust relationship and the contractor's behavior,in order to reveal the mechanism of how the risk allocation influences the contractor's behavior from the perspective of interaction of extrinsic motivation and intrinsic motivation.In accordance with the above research topics,the dissertation carried out the following research works in four areas:1.Review the related literature to obtain the theoretical support and find out the undeveloped space.Based on the scientific questions of this study,the study reviewed the literatures from three areas,such as the paradigm development of incentive in project,the formation and the role of risk allocation in project,and the characteristics and the role of trust in project,in order to provide theoretical support and enlightenment for the subsequent research.2.Analyze the incentive effect of risk allocation in different scenarios.We embedded the trust premium aroused by the trust relationship to change the payoff of both the owner and the contractor and used evolutionary game theory to analyze both parties' strategies evolutionary path with consideration of the trust relationship and without the consideration of trust relationship.It can prove the real impact of trust relationship on the contractor's behavior under the premise of risk allocation and consolidate the theoretical basis of the scientific questions proposed by the study.3.Explore the mechanism of how the risk allocation influences the contractor's behavior in the project.Since there is limited theoretical supports of how the risk allocation influences the contractor's behavior,this study introduced grounded theory method to carry out research exploration.We adopted semi-structured interviews to collect qualitative data and analyzed the data with three steps coding.We found the contractor's feeling trusted and the contractor's trust in the owner to interpret contractor's perception of both parties' trust relationship,and formed the path of the risk allocation's impact on the contractor's behavior with the contractor's feeling trusted and the contractor's trust in the owner as parallelled mediators.4.Verify the mechanism of how the risk allocation influences the contractor's behavior in the construction project.First,we adopted and developed the scales of risk allocation,the contractor's feeling trusted,the contractor's trust in the owner and the contractor's behavior.Second,we verified the hypotheses in the theoretical model through questionnaires and data analysis and confirmed the mediator rile of the contractor's feeling trusted.Finally,we used focus group interviews to discuss the reasons for the unproven assumptions,in order to provide realistic basis of the conclusion.The theoretical contributions of this study lies in the following three aspects: First,we analyzed the impact of trust premium on incentive effect of risk allocation from dynamic perspective.Distinguished with the previous studies,we embedded the owner and contractor's trust relationship and its impact in both parties' game pattern,and analyzed the rules of both parties' strategies evolution.It reveals the process of the evolution and explains the reasons for the partial failure of proper risk allocation.Second,the study innovately introduced the contractor's feeling trusted to explain the owner and contractor's trust relationship in the construction project.Using the contractor's feeling trusted as an independent variable to reflect the owner's trust in the contractor may better presents the impact of the owner's trust under contractor's perception.It not only conforms to the requirements of measuring contractor intrinsic motivation,but also fills the study gap of trust in the construction project area.Third,we built and validated the relationship between risk allocation,the contractor's feeling trusted,the contractor's trust in the owner and the contractor's behavior.Based on the previous studies,we introduced the owner and contractor's trust relationship as mediator to explain the mechanism of how the risk allocation influences the contractor's behavior in the construction project.It widens the horizon of studies on how the risk allocation influences the contractor's behavior and provides theoretical supports for the further studies of motivating the contractors in the construction project.Finally,based on the above findings,the study proposes enlightenment for developing proper risk allocation schemes and improving the owner and contractor's trust relationship,with the expectation of increasing the incentive effects on the contractor,and promote continuous improvement of project performance.