chapter  4
13 Pages

Benefits of adopting relational contracting

It is widely accepted that the construction industry has suffered from little cooperation, limited trust, fragmentation and ineffective communication and cooperation, thus often inducing a confrontational working relationship between different parties (Moore et al., 1992; Chan et al., 2004b). RC has been introduced to be an innovative, non-adversarial, relationship-based approach to the procurement of construction services in many nations, such as the USA, the UK, Australia and Hong Kong over the last decade (Rahman and Kumaraswamy, 2002b; Palaneeswaran et al., 2003; Kumaraswamy et al., 2005). In fact, RC is an approach to manage complex interpersonal relationships between various players in construction projects. Mutual benefits and win-win scenarios are the two foundations of RC and they are achieved by more cooperative relationships between parties (Macneil, 1978; Alsagoff and McDermott, 1994; Jones, 2000; Kumaraswamy et al., 2005; Rowlinson and Cheung, 2004c). Kumaraswamy et al. (2005) opined that RC helps to establish the harmonious working relationships between parties through a mutually developed, formal strategy of commitment and communication, ultimately aiming at win-win situations for all parties concerned.