Relationship management implementation in the Australian construction industry from the contractor's perspective

Many studies carried out in relation to construction procurement methods reveal evidence of a need to change of culture and attitude in the construction industry. This culture change would transition from traditional adversarial relationships to cooperative and collaborative relationships. Relational contracting approaches, such as partnering and relationship management, are business strategies whereby client, commercial participants’ and stakeholders’ objectives are aligned for mutual benefit. The efficacy of relationship management in the client and contractor groups is proven and well documented. However, the industry has a slow implementation of relational contracting down the value chain. This paper reports the findings of an empirical study which examined the practices and prerequisites for relationship management implementation success and for supply chain engagement to develop. Questionnaire survey, interviews and case studies were conducted with Australian contracting organisations in this study. The study reveals that the adaption of relational contracting approach in the supply chain is found to be limited and contractors still prefer to keep suppliers and subcontractors at arm’s length. Findings also show that the degree of match and mismatch between organizational structuring and organizational process is found to have an impact on staff’s commitment level and performance effectiveness.