The effect of relationship management on project performance in construction

Construction projects often suffer from poor performance in terms of time delays, cost overruns and quality defects. The causes of poor performance have often been analysed. However, few studies have addressed the influence of supply chain relationships on project performance in construction. To fill in this gap, a questionnaire survey is carried out in the UK construction industry to explore the specific characteristics of supply chain relationships in construction and to assess their impact on project performance. In this study, a supply chain relationship is described by key indicators in ten areas: mutual objectives, gain and pain sharing, trust, no-blame culture, joint working, communication, problem solving, risk allocation, performance measurement, and continuous improvement. The analysis reveals that the deterioration of the relationship between project parties may increase the likelihood of poor performance. Poor performance can be effectively reduced by improving some aspects of the relationship. The adoption of supply chain collaboration and partnering helps to solve the performance problems, in which a long-term collaboration is more favourable for performance improvement than a short-term collaboration. In addition to the questionnaire survey, a series of industrial experts are interviewed to provide a deeper insight into the effect of relationship management on project performance.

Research highlights
► The importance of effective relationship management to project success is highlighted.
► The deterioration of the relationship may increase the likelihood of poor performance.
► Developing a good relationship may help to address performance problems.
► Relationship management has more effect on cost than on time and quality performance.
► Relationship management in project environments has received an increasing attention.