Innovating the Practice of Normative Control in Project Management Contractual Relations

Clegg, Stewart; Bjørkeng, Kjersti; Pitsis, Tyrone S.

doi:10.1093/oxfordhb/9780199563142.003.0018

Cited by 7 publications

(6 citation statements)

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“…An adjustment to the contingencies is often adopted outside the formal document orally between cooperative parties (Poppo and Zenger, 2002). Clegg et al (2011) even claim that contracts cannot capture the organic solidarity and functional interdependence in projects. We agree that formal and rigid contract documents are inflexible tools for cooperation.…”

Section: Ijmpb 81mentioning

confidence: 99%

“…The idea that contracts are mainly for safeguarding against risks is often shared by both lawyers and businesspeople. This limited approach leads to a way of thinking that separates the document from the project itself, understanding a contract as the obligatory legal tool which can be forgotten in a safe box and has nothing to do with real cooperation in the project (Corporate Contracting Capabilities, 2008;Clegg et al, 2011). We suggest that broader understanding of the role and function of a contract would better support the contracting parties' business objectives.…”

Section: Conclusion and Future Researchmentioning

confidence: 99%

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Flexible contracting in project business

Kujala

Nystén-Haarala

Nuottila

2015

International Journal of Managing Projects in Business

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Purpose – The purpose of this paper is to increase the understanding of the main challenges of the contracting process and project contracts in the context of project business characterized by a high level of complexity and uncertainty. The authors argue that understanding contracting as a flexible process and as a business tool will contribute to creating more value in projects which are implemented in constantly changing circumstances or which require gradual and iterative development. Design/methodology/approach – This is a conceptual paper with illustrative examples from the software industry. Findings – A prevailing approach for both managing contracts and the contracting process focuses on careful planning and drafting of contracts that protect each party in the case of conflicts and disagreements. The underlying assumption is that all activities can be planned and documented in a formal contract. According to this approach, the contracting process is seen only as a bargaining negotiation and the project contract as a detailed agreement of the responsibilities and safeguarding clauses to protect one’s position in the event of conflicts and failures. However, in the context of project business characterized by complexity and uncertainty, there is a need for flexible project contracts. The authors suggest that there are two fundamentally different approaches to implementing flexibility in both the contracting process and the project contract: postponing the decision until there is adequate information for decision making or making decisions that allow flexible adaptation to changes during the project lifecycle. Practical implications – The authors suggest that organizations in project business should pay closer attention to how contracts are formed and how flexibility is introduced to projects. Organizations are encouraged to see contracts as a business tool, not as rigid documents which are taken into use in case something goes wrong. Originality/value – This paper contributes to the understanding of how to adapt the contracting process to overcome challenges related to uncertainty, especially during the early phases of the project lifecycle. The authors provide a novel perspective on contracting as a process that extends over the lifecycle of a project and on the project contract as an agreement between parties formed during the contracting process. This perspective includes formal contract documents as well as various other documents, oral communication, commitments, actions and incidents.

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Section: Ijmpb 81mentioning

confidence: 99%

Section: Conclusion and Future Researchmentioning

confidence: 99%

Flexible contracting in project business

Kujala

Nystén-Haarala

Nuottila

2015

International Journal of Managing Projects in Business

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“…Based on a 5-year ethnography of alliance partnering in Australia, Clegg et al (2011) claim that normative and cognitive governance mechanisms, assiduously applied, can almost completely replace regulative governance mechanisms. We make the weaker claim that regulative, normative and cognitive mechanisms, contingently applied and carefully aligned, can serve as complements rather than substitutes for one another in an overall governance framework.…”

Section: Sociological and Psychological Points Of Departurementioning

confidence: 99%

Toward a unified theory of project governance: economic, sociological and psychological supports for relational contracting

Henisz

Levitt

Scott

2012

Engineering Project Organization Journal

138

108

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Large, global, cross-sectoral, multi-phased civil infrastructure projects tend to be one-off projects for which transactions have no strong 'shadow of the future', but where elements of relational contracting are still ubiquitous. Such projects evolve through discrete phases-financial and technical feasibility, conceptual design, detailed design, construction, operations and renovation/replacement-each phase of which can be viewed as a discrete transaction during which key participants and stakeholders rotate in and out of the project. This discontinuity of participation across phases in the project's lifecycle creates a heretofore neglected contractual hazard of 'displaced agency'. Similar governance challenges arising from displaced agency are found in longlived aerospace and defence programmes, large-scale software initiatives and other sectors. We review, integrate, extend and apply economic, legal, sociological and psychological governance perspectives on relational contracts to address the extreme governance challenges of civil infrastructure projects. The transaction cost economics literature has pointed out that such projects require relational governance, but has not spelled out strategies to attain and sustain such structures. We set out a framework based on institutional concepts that integrates a range of strategies designed to enhance the efficacy of relational contracts, drawing not only on 'regulative' institutional supports (e.g. laws, regulations, contracts and their enforcement through mediation, arbitration or litigation), but also institutional supports that are 'normative' (e.g. socially shared expectations of appropriate behaviour and social exchange processes) and 'cognitive' (e.g. creating shared identities, scripts or conceptual frameworks to bridge differences in values or interests). We present a set of propositions as a first cut at a contingent, integrated framework to guide future research on governance of engineering projects, and ultimately to help managers select and deploy the appropriate mix of regulative, normative and cognitive governance mechanisms for each project.

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“…Such high dependency on suppliers is usually regulated by contracts that during the years have become more detailed, increasing the focus on the legalism aspect of each deal between the shipyard and the supplier [6]. In the project management literature, contracts are seen as a "glue for good project management and relations, and that they are a good and effective control mechanism, reducing risk for project participants" [7]. Yet, results from the industry show that focus on contracts reduces the likelihood of achieving a good project control since they are usually subject to different interpretations that depend on the economic context.…”

Section: Theoretical Backgroundmentioning

confidence: 99%

The Unexpected Consequences of the Covid 19 on Managing ETO Projects

Kjersem

Giskeødegård

2021

Advances in Production Management Systems. Artificial Intelligence for Sustainable and Resilient Production Systems

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This paper presents findings of the consequences of the recent Covid 19 pandemic on the shipbuilding industry. Through qualitative interviews with key stakeholder on their experiences, the paper identifies an increased emphasis on contracts as regulative for collaboration. This increased focus on legalism in the shipbuilding industry was already triggered by the recent oil crisis yet escalated to a new level by the rules and regulations imposed by the pandemic. The paper argues that the ramifications of this pandemic cannot be understood without interpreting it in respect to the ongoing market transition the industry was already facing when the pandemic hit the world. The findings of increased formal regulation of collaboration, requires further studies and have implications also for the ETO literature.

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Innovating the Practice of Normative Control in Project Management Contractual Relations

Cited by 7 publications

References 0 publications

Flexible contracting in project business

Flexible contracting in project business

Toward a unified theory of project governance: economic, sociological and psychological supports for relational contracting

The Unexpected Consequences of the Covid 19 on Managing ETO Projects

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