When does control curb opportunistic behaviour: evidence from the construction industry

Abstract

The subcontracting organizational arrangement has received limited attention in designing the control mechanism. This study has explored how managerial controls affect opportunistic behaviour and developed a contingency framework to investigate the moderating effect of subcontracting dispersion. By using survey data from 323 general contractors in the Chinese construction industry, this study reveals that both outcome control and clan control curb the occurrence of subcontractors’ opportunistic behaviours while behaviour control scarcely helps. Besides, subcontractor dispersion distinctively moderates these relationships. A high level of subcontractor dispersion amplifies the opportunism-curbing effect of outcome control, but attenuates that of clan control, which leads to more opportunistic behaviours. Only at a lower level of subcontractor dispersion will behaviour control mitigate subcontractors’ opportunistic behaviours. Our configurational analyses reveal the substitute and complementary relationship between different control modes with different levels of subcontracting dispersion. This study contributes to the literature on governing opportunism and managerial control. The findings guide managers of the general contractor to exploit appropriate managerial controls to curb opportunistic behaviours across different organizational designs.

Keywords:

• Subcontracting
• opportunistic behaviour
• organizational arrangement
• managerial control
• construction industry

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 https://www.levelset.com/blog/2020-report-construction-wasted-time-slow-payment/#The_high_cost_of_poor_coordination_Wasted_time_money

Additional information

Funding

This work was supported by National Natural Science Foundation of China (No. 72031008, No. 71871154, and No. 71901161).

Notes on contributors

Yinqiu Tang

Yinqiu Tang is a postdoctoral fellow in PowerChina Huadong Engineering Corporation Limited. Her research involves the inter-organizational relationship, governance, and risk management in the construction industry. She has published articles in journals, such as IEEE Transactions on Engineering Management, Production Planning and Control, International Journal of Project Management, and Scandinavian Journal of Management.

Yongqiang Chen

Yongqiang Chen is a professor of construction management in the College of Management and Economics at Tianjin University and used to be a Fulbright Scholar at Stanford University. His research interests include project management, contract management, and risk management of international construction projects. He has published books in the field of project management and articles in journals such as IEEE Transactions on Engineering Management, International Journal of Project Management, Journal of Management in Engineering, and Construction Management and Economics.

Hongjiang Yao

Hongjiang Yao is an assistant professor in the School of Management at Shandong University. His research interests include interorganizational governance and project resilience. He has published articles in journals, such as Production Planning and Control, Energy Economics, Journal of Management in Engineering, Journal of Construction Engineering and Management, and International Journal of Managing Projects in Business.

Yuting Chen

Yuting Chen is a Lecturer and Course Director in MSc Construction Project Management in the Construction, Property and Surveying Division in London South Bank University. She is in Integrated Delivery of the Built Environment (IDoBE) research center and her research focuses on project governance, contract management, and risk management. She has published articles in journals, such as Journal of Management in Engineering, Construction Management and Economics, Journal of Construction Engineering and Management, and IEEE Transactions on Engineering Management.