Trust and productivity in Australian construction projects: a subcontractor perspective

Abstract

Purpose – The purpose of this paper is to explore the association between trust and productivity from a subcontractor perspective. More specifically it investigates: the perceived level of trust that currently exists between subcontractors and main contractors; the factors affecting trust at the project level; the relationship between trust and productivity. Design/methodology/approach – An on-line survey was undertaken with of 112 senior construction managers working for tier-1 and tier-2 subcontractors in the Australian construction industry. The survey was based on a combination of validated questions from Lau and Rowlinson’s (2009) interpersonal trust and inter-firm trust in construction projects framework and Cheung et al.’s (2011) framework for a trust inventory in construction contracting. Findings – In contrast to the large number of research projects which have highlighted a lack of trust in the construction industry, the findings show that level of trust that Australian subcontractors have in main contractors is generally high. However, bid shopping is a continuing problem in the Australian construction industry which acts to undermine trust. The findings also provide strong evidence that high levels of trust influence productivity on site by enabling greater collaboration, better communication and greater flexibility, agility and informality in project relationships. Research limitations/implications – This research was undertaken in the Sydney metropolitan area in Australia and within an economic boom. It is quite possible that outside this regional context which tends to dominated by larger construction firms and in an alternative economic context that the results of this research could be quite different. This possibility needs to be investigated further. Practical implications – The results indicate that this relatively healthy level of trust is down to good communication and empathy on the part of main contractors to the subcontractor’s welfare. While the results showed that bid shopping is clearly a continuing problem in the Australian construction industry, subcontractors also felt that their contracts were clearly defined and that they were given sufficient time to innovate on their projects. This suggest that new communications technologies can be used to build trust through the supply chain. Given that much of the construction supply chain is made up of small- to medium-sized businesses, the challenge of diffusing these new technologies into this business environment should be a priority. Social implications – Trust in basis of effective collaboration which has been shown to produce numerous social benefits such as greater equity and justice in business relationships and higher levels of productivity and safety. Originality/value – The originality of this research is in using theories of trust to give subcontractors a greater “voice” in the construction productivity debate.