Combining transaction characteristics and governance mechanisms to suppress opportunism in construction projects: qualitative comparative analysis

Abstract

PurposeThe understanding of how to mitigate opportunism in construction projects is still limited and conflicting. The complexity of causalities and interdependence among antecedents of opportunism (transaction characteristics and governance mechanisms) is the major obstacle to current research. This study takes a holistic perspective to explore the different combinations of conditions that lead to high opportunism and low opportunism in project management.Design/methodology/approachThrough 2 phases of the interview and questionnaire survey, the 91 valid survey data were collected from the buyer–seller relationships in construction projects and analyzed by adopting fuzzy-set qualitative comparative analysis.FindingsA single transaction characteristic is rarely sufficient to explain opportunism, and combinations of different transaction characteristics and governance mechanisms (performance ambiguity, asset specificity, buyer's requirement certainty, informal control, and formal control) have different effects on opportunism. In the case of extremely unsatisfactory transaction characteristics, even the combination of formal and informal control cannot prevent high opportunism. The combination including low-formal control and high-asset specificity easily leads to high opportunism. Besides, performance ambiguity is a vital factor in mitigating high opportunism or achieving low opportunism.Originality/valuePrevious studies have always addressed the role of one or some factors independently and separately. This study is one of the first to explore the different combinations of conditions that result in high opportunism and low opportunism in project management based on transaction costs economics and agency theory.

Opportunism still remained alive: conditional limits of trust and contract in software projects

“…This study shows that supplier opportunism persists even in a trust-based relationship and structurally dependent buyers will be exposed to supplier opportunism for more detailed contract setups, but not in a low degree of contractual complexity. Our findings support previous studies by Guo et al. (2022) and Lu et al.…”

“…This study shows that supplier opportunism persists even in a trust-based relationship and structurally dependent buyers will be exposed to supplier opportunism for more detailed contract setups, but not in a low degree of contractual complexity. Our findings support previous studies by Guo et al (2022) and Lu et al (2015), suggesting that formal control systems are unable to prevent supplier opportunism. Beyond that, in a similar way as Wang et al (2019), this study assumes that contract and trust have different impact strengths in the ex ante and ex post lifecycle assessment for controlling opportunism.…”

“…Biased estimates may account for asymmetric dependence on procedural assets that promote supplier opportunism rather than the bonding effect of bilateral investments. Reinforcing our inference that power-dependence relations, Guo et al. (2022) took notice of the combined effect of transaction hazards and demonstrated that formal control systems are unable to prevent supplier opportunism in case requirements uncertainty and asset specificity coexist in construction projects.…”