Design and build project success factors mulitvariate analysis

	sustainability

Article
Analysis of Key Failure Factors in Construction Partnering—A Case Study of Taiwan

Keywords: construction partnering; key failure factor; principle components analysis; project management; critical success factors

1. Introduction

For Taiwan, the construction industry is considered a critical foundation of the domestic business environment. The annual value of the construction industry makes up around 4–6% of Taiwan’s total GDP (gross domestic product). However, the industry is plagued by the failure to deliver value in construction projects due to cost wastage, schedule delays, and so forth [2]. The relationship between project owners and professionals in Taiwan’s construction projects is at times antagonistic, which hinders project progress and efficiency. The problem in Taiwan’s construction industry often stems from project owners engaging low cost contractors, and these contractors (professionals) in turn reacting to a perceived exploitation by the project owners, the result of which is that the contractor’s loyalty can diminish to the point where they are perceived as untrustworthy. This can happen multiple times within a single project. Replacing contractors not only introduces new risks and complexity to the project, but consumes time and effort better spent on ensuring quality outcomes for the project.

The failure of different organizations in the construction industry to work cohesively in a partnership can result from an environment of suspicion and commercial competition [3]. In the construction industry, teams working in partnership often continue to represent their own respective organizations, each with their own specific economic objectives, culture, and management styles. In this arrangement, each organization involved in the project will tend to act independently while potentially holding adversarial attitudes. As a result, construction project partnerships frequently experience communication and co-operation problems that can seriously impact productivity and delivery of positive outcomes. As such, the issues frequently experienced in the construction industry, such as disappointing end results, excessive supervision, wasted time and money, and poor team morale, can cause cost overruns and project delays, in turn often resulting in conflicts and lawsuits [4,5]. Furthermore, mistrust is often generated by a failure of integrity and unworthy information between partners [6]. Conversely, with a culture of trust and acceptance amongst stakeholders, project partnering can yield benefits for those involved in the partnership process [7]. Therefore, stakeholders of any construction project need to consider the key factors that can have a negative impact on a construction project’s success and implement targeted measures to build a positive partnership culture.

Need for Further Research

Partnering can be considered present via a range of features, characteristics, and interaction behaviors, creating a shared culture. It’s the shared culture which extends beyond organizational boundaries and creates a relationship under the umbrella of partnering [13]. Also, partnering can be considered an enacting strategy that can be applied to a range of contract models rather than being simply viewed as an alternative contract form. Construction partnering is common in contemporary industry practice for the completion of larger and more complex projects. Successful partnering requires due consideration of the interests of all involved parties at all levels, including management, owners, general contractors, subcontractors, and worksite employees [14,15]. The partnering process aims to formalize working arrangements between different parties via a mutually developed, formal strategy of commitment and communication focused on achieving “win-win” results for different partners [16]. According to Wilson et al. [17], partnering can achieve quick and efficient results together with reduced start-up costs. Advantages of partnering include risk sharing, cooperative problem solving, increasing competitive advantages, and opening new markets, as well as improved ability to deliver the project to the customers’ requirements.

workshops, (2) mutual goals and objectives effectively communicated, and (3) team-building sessions. However, partnering factors related to organizational outcomes were found to be of less interest to researchers. Chan et al. [23] reviewed 29 construction partnering studies to identify the associated benefits from project partnerships. Key benefits from partnering include closer commercial relationships, better control of cost, time, and quality. Hosseini et al. [24] identified the discrepancies between theory and practice to clarify the confusion of partnering. The discrepancies were established from a detailed literature review and 39 interviews with respondents from 44 construction partnering projects. The study found that either practitioners misunderstood what partnering actually entails or the base requirements are exceedingly rigorous and do not reflect the actual purpose of the concept.

Construction partnering is frequently touted as a way to accomplish a mutually advantageous outcome for project owners and contractors, which have been investigated in previous studies [24–27]. However, there is limited understanding of the KFFs which play a role in unsuccessful construction partnering outcomes. Accounting for both the KSFs and the KFFs provides a more balanced and comprehensive understanding of the factors which influence partnership outcomes and provides knowledge required to develop strategies for project partnership success.

The exiting literature on construction partnering provides many established partnering factors relating to unsuccessful project outcomes [25,28,29]. Based on a comprehensive review of the literature 15 FVs associated with project partnering failure were selected. These 15 FVs were selected as the basis for the industry questionnaire. The chosen FVs are as follows: Absence of genuine and open communication (FV1), A win-win attitude is absent between partners (FV2), Absence of a commitment to co-operation between partners (FV3), Absence of a positive relationship in partnership (FV4), Unresolved disagreements (FV5), Not all partners willing to negotiate (FV6), Authority from owner is not readily given (FV7), Complex Organizational bureaucracy (FV8), Limited professional knowledge of managers (FV9), Partnership priorities surpassed by commercial performance pressure (FV10), Absence of training/support during partner assignment (FV11), Bidding approach restricts flexibility (FV12), Blueprint and regulation problems (FV13), Major contractors absent in partnering (FV14), Partners not suitable for a given project (FV15).

Using a Likert-type scale for the questions with responses ranging from 1 (strongly unimportant) to 5 (strongly important), the questionnaire included the 15 selected FVs in construction partnering and other targeted questions to capture information on the respondent’s professional background and experience. To ensure the validity of the survey a test questionnaire was sent to selected construction professional to complete and provide feedback. After this the survey was sent out to construction industry professionals working in Taiwan. Targeted subjects were selected from four key groups, being government agency employees, project owners, designers and construction contractors.

The final survey population selected for the study focused on construction practitioners and professionals operating in Taiwan. The questionnaires were distributed through a variety of targeted methods and channels to maximize response rate and industry representation. A total of three hundred thirty-three questionnaires were disseminated with two hundred twenty-one valid questionnaires completed and returned, representing an overall response rate of 67%. As shown in Table 1, more than 20% of respondents were equipped with a minimum of 15 years’ construction work experience. Furthermore, there is a relatively even distribution in the years of work experience in construction of respondents. Of the 221 respondents, the following categories of construction work experience <5 years, 5–10 years, 10–15 years, and >15 years, each accounted for approximately a quarter of all respondents. This diverse spread in the years of experience in construction industry across respondents ensures a good representation of opinions from a range experience levels.

Table 1. Summary information of survey respondents.

Table 2. Ranking of Failure Variables (FVs) based on the survey results with rankings based on the different project participants surveyed.

Participants

Dispute resolution typically occurs using the methods of negotiation, mediation, arbitration, and litigation. Negotiations between partners involved in a dispute can be used as a forum to discuss and resolve issues resulting in conflict to the approval of both parties. If successful, no other parties are required to be involved and proceedings can be kept relatively informal. The next step in elevating conflict resolution is mediation. In mediation, partners experiencing conflict engage the services of

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Avoiding partnership failure necessitates continuous project information exchange between partners. Ideally the communication channels should reflect organizational structures and specify information that should flow through each channel both from the top down and bottom up. The frequency and timing of communication must allow decision makers to receive timely information, but not overload them with superfluous information. Furthermore, the flow of communications from management to rest of the organization must be well timed to ensure workers feel engaged and respected. To compliment well-structured formal communications, an open and positive working environment requires informal communication lines within the project team.

3.1.3. Manager(s) with Limited Professional Knowledge (FV9)

3.1.4. Absence of a Commitment to Co-operation Between Partners (FV3)

Partnerships are founded on a commitment of partners to operate in co-operation rather than competition and conflict, eventually leading to a more amicable relationship. Without such a commitment from all partners, the partnership will indeed fail. Bennett and Jayes [39] identified that the continuity and establishment of long-term co-operation offers one way of achieving greater equality within a partnership. The nature of the construction is such that members of a partnership are used to operating in a highly adversarial cutthroat environment. Although numerous examples of trust and co-operation are being established well within partnerships, numerous situations also exist where the state of co-operation is either fragile or non-existent [40].

According to Bennett and Jayes [39], the equity created through a win-win attitude fosters a relationship with a balance of rewards and risk that is based on the efforts of each partner to achieve common goals. Creating an atmosphere that supports a win-win attitude is an important means of preventing partnership failure. A win-win attitude involves partners actively working together to for a common purpose, with each party agreeing to approach each situation in an anti-adversarial style.

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Throughout the course of any large construction project, disputes will arise between project partners regardless of how well planned and administered. Disputes can vary greatly in nature from small disagreements which can be easily resolved to large complex disputes resulting in litigation. How well the partners involved in the project negotiate and resolve conflict and disputes will significantly impact on the overall success of the project. Inefficient resolution of disputes that arise between project partners often results in delays to the project while a resolution is found. Moreover, if project partners are not willing to negotiate the ability to respond promptly to emerging issues is greatly limited. Such situations limit the ability of the partners in being agile in ensuring the best overall outcome for the project. In worst case scenarios where negation fails to solve problems resolution through formal processes may be required. Resolution of disputes through officially binding processes such as formal arbitration is lengthy and involves substantial costs [43]. In a project partnership where all partners are willing to negotiate to overcome disagreements and progress the project in the most appropriate way. To be willing to negotiate partners must communicate openly and accept compromise for the good of the project deliverables.

This has seen the rise in alternative dispute resolution methods to avoid the lengthy and resource expenditure of formal litigation. Having an incentive for cooperative partnering is the first step in creating a project environment which avoids the need for escalating dispute resolution methods [44]. To achieve cooperative partnering each of the project partners need to be willing to negotiate with each other. Through a willingness to negotiate actively by all parties as required, resolutions to issues can be resolved quickly and the project can continue to progress.

Given the relatively high ranking of this FV the issue of authority from the owner not being readily given is likely a pervasive issue for most if not all partners involved in construction projects. For authority to be given freely there needs to be an established relationship of trust that each partner will use the authority to act in the best interest of the owner and the overall project objectives. Establishing such trust founded upon building a working relationship which includes characteristics such as open communication and a commitment to cooperation.

3.2. Principle Components Analysis

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Table 3. Cont.

first four factors which all have eigenvalues above one. Given the results a four-factor model based on the remaining components. This indicates that a significant proportion of the variance is explained in

the first four factors which all have eigenvalues above one. Given the results a four-factor model the Kaiser Rule of selecting all factors with an eigenvalue greater than one [47] were deemed the most based on the Kaiser Rule of selecting all factors with an eigenvalue greater than one [47] were deemed suitable for further analysis. To improve the interpretability of the PCA results Varimax rotation was the most suitable for further analysis. To improve the interpretability of the PCA results Varimax used to simplify the initial PCA results. The rotation process simplifies components by maximizing the rotation was used to simplify the initial PCA results. The rotation process simplifies components by variance of the loadings within components. As a result, this increases the loadings which are high post extraction, and lowers the loadings which are low post extraction [47]. which are high post extraction, and lowers the loadings which are low post extraction [47]

collaboration barriers, collaboration barriers, and organizational management barriers, respectively. These four KFFs in combination explains 63.61% of the overall variance, and all Cronbach’s α values These four KFFs in combination explains 63.61% of the overall variance, and all Cronbach’s α values were greater than 0.65, signifying a satisfactory level of reliability.

were greater than 0.65, signifying a satisfactory level of reliability.

Table 4. Cont.

The top ranked FV in KFF1 is FV7 which relates to the owners not giving authority to the project partners. Provision of authority is crucial in allowing project partners to execute the required regular duties in the project. The effectiveness of shared authority relates to leadership in the partnering organizations. There must be a mutual understanding of the importance of shared authority on achieving positive outcomes [49]. A lack of authority reduces the ability of project partners to be agile in responding to challenges and issues that arise during the project. Partnerships can fail if partners are not given appropriate authority to contribute meaningfully to the partnership. Furthermore, partnership failure can result from possible conflicts between commercial interests and types of collaboration

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The three FVs in this particular KFF all add up to collaboration barriers in a partnership. Open and honest communication with continuous information exchange in a partnership is a key requirement for successful collaboration in construction partnerships. An ongoing commitment to win-win outcomes was also found to be the other key contributor to the perception of partnership success. A win-win attitude inspires equity between the parties within the partnership.

KFF3: Partnering barriers

The organizational management barrier KFF is comprised of attributes related to the structure and management of the partnering organizations in combination with the professional ability of the management team (FV9 and FV8), as well as the ability to manage blueprint and regulation FV13. A typical construction project requires a multitude of skills, materials, and technologies that are usually delivered by several different parties. The complementary expertise of these various parties working in partnership can bolster the performance capability of a partnership given appropriate organizational management [2].

Project success or failure is greatly influenced by organizational management and the management team’s ability to lead effectively, as well as manage complex blueprint and regulatory requirements. This raises the question of what constitutes effective management, and what skills managers must possess to ensure partnerships success. To this, there is some consensus that management is an art founded on the application, judgment, and common sense. Effective managers must possess proficiency in seven key business functions: planning, organizing, staffing, directing, motivating, leading, and controlling. Furthermore, effective managers need to have a sufficient level of proficiency in the technology used by the projects they manage to understand technical challenges faced in construction projects. Therefore, managers require familiarity and conceptual ability relating to the common tools and techniques used in technical disciplines such as construction engineering. Moreover, effective managers require certain soft skills to support the needs of their teams such as enthusiasm, stamina, and a desire for demanding work as teams need to be able to cope with frequent technical and political challenges.

Table 5. ANOVA results for construction partnering based on participants’ perceptions.

Table 6. Correlation values between the final four Key Failure Factors (KFFs).

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Table 7. Key failure factors (KFFs) for partnership failure and suggested leading indicators of partnership failure.

To support the practical implementation of measures to prevent potential partnership failures, leading indicators were presented to guide the identification of potential actions or conditions which have the possibility to lead to project failure. The leading indicator as a warning sign assumes that a condition or combination of combinations will provide a warning sign of potential failure. As the project progresses through the project cycle the potential causes of failure change. Therefore, the proposed leading indicators of partnership failure change and evolve through the project lifecycle.

The study presented is limited to the challenges experienced in construction partnering within Taiwan. Further study is required to investigate international experiences in project partnering, explicitly the factors which influence failure and success. Such investigation would help to better understand the intricacies of construction partnering outcomes in Taiwan and provide a comparison with international experience.

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