Reducing opportunistic behaviour through a project alliance

Abstract

Purpose

The purpose of this paper is to provide insights into how a project alliance contract is conducive to the development of cooperative relationships between client and contractor organizations involved in a complex project.

Design/methodology/approach

A longitudinal case study of a complex construction project was conducted in which the contract was changed at the end of the negotiation period from a design‐build into a project alliance form.

Findings

Data show that opportunistic behaviour is reduced when there is an incentive structure, as is to be found in project alliances, for client and contractor organizations to cooperatively realize the project. However, it is not sufficient for project partners to agree upon an appropriate incentive structure. For cooperative relationships to develop, they also have to put substantial efforts into reducing their remaining inclinations to make use of opportunities that arise to deviate from the alliance contract.

Practical implications

It is shown that both principals and contractors not only need to carefully select staff for such projects; they also have to work with the people employed such that appropriate attitudes are reinforced and rewarded. Developing cooperative relationships in project alliances needs the surrounding working methods to offer support.

Originality/value

The longitudinal character of the case study offers exceptional opportunities for studying the dynamics in preventing and overcoming the deteriorating patterns of opportunistic behaviour that organizations regularly face in many traditional and design‐build projects.

Citation

Laan, A., Voordijk, H. and Dewulf, G. (2011), "Reducing opportunistic behaviour through a project alliance", International Journal of Managing Projects in Business, Vol. 4 No. 4, pp. 660-679. https://doi.org/10.1108/17538371111164065