Management Review

›› 2015, Vol. 27 ›› Issue (7): 187-198.

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Initial Trust, Flexible Contract and Project Management Performance: An Empirical Study on the Intermediary Model

Du Yaling, Li Huiling, Yan Peng, Yin Yilin   

  1. School of Management, Tianjin University of Technology, Tianjin 300384
  • Received:2013-11-26 Published:2015-07-31

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Abstract:

It's vitally important to open the black box of trust influencing project management performance in order to reduce the transaction risk and achieve project success. For this purpose, this paper makes a tentative attempt from the perspective of project governance. Two constructs of contractual flexibility and contractual rigidity are presented. On this basis, a conceptual model including initial trust, flexible contract and project management performance is developed through a thorough literature review. Then 204 pieces of valid data are collected from 87 DBB construction projects selected as research samples, and the statistical test is carried out to test the conceptual model using structural equation modeling. The main findings are as follows: (1) flexible contract has a full mediating effect on the relationship between initial trust and project management performance; (2) the propriety of contractual rigidity has a stronger impact on project management performance directly, while the sufficiency of contractual flexibility has a stronger mediating effect on the relationship between initial trust and project management performance; (3) initial trust has a positive role in developing a flexible contract. In summary, this study can help lead the client to develop a flexible contract more scientifically according to its initial trust in the contractor, and this can contribute to project success.

Key words: initial trust, contractual rigidity, contractual flexibility, project management performance, uncertainty