Win-win approach to subcontracting in building construction: Sri Lankan perspective
Article Sidebar
Main Article Content
Abstract
Subcontracting has long been studied due to subcontractors’ critical role in construction. However, significant issues persist, especially in developing countries like Sri Lanka, impacting project performance. These issues between main contractors and subcontractors stem from a lack of mitigation methods incorporating relationship management into traditional practices. Furthermore, most prior mitigation strategies are not favorable to both parties. This research aims to develop a “win–win” approach to subcontracting, focusing on relationship and performance management, specifically applicable to building construction. A mixed-method research approach was employed, involving literature review, questionnaire survey, and semi-structured interviews. Quantitative data were analyzed using descriptive statistics, while qualitative data were analyzed thematically. Findings reveal that effectively managing critical factors that influence both subcontracting relationships and subcontractor performance can lead to mutually beneficial outcomes. The study identified critical factors affecting the subcontracting relationship as mutual trust, good communication, and a clear understanding of the work scope by the subcontractor, while for subcontractor performance, the critical factors include time and cost management capabilities of the subcontractor, the availability of finance and working capital for both parties, and issues such as material price increase and inflation rate when subcontractors supply materials. The findings emphasize that prioritizing mutual satisfaction throughout the subcontracting process is essential for implementation. Recommendations provided in this study aim to improve these critical factors, offering practical solutions to enhance project efficiency and individual performance. This research provides valuable insights for developing organizational policies or industry guidelines, particularly for the unique challenges being faced in developing countries.
Article Details
Section
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors who publish with this journal agree to the following terms:
a) Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share and adapt the work with an acknowledgement of the work's authorship and initial publication in this journal.
b) Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
c) Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Open Access Citation Advantage Service). Where authors include such a work in an institutional repository or on their website (ie. a copy of a work which has been published in a UTS ePRESS journal, or a pre-print or post-print version of that work), we request that they include a statement that acknowledges the UTS ePRESS publication including the name of the journal, the volume number and a web-link to the journal item.
d) Authors should be aware that the Creative Commons Attribution (CC-BY) License permits readers to share (copy and redistribute the work in any medium or format) and adapt (remix, transform, and build upon the work) for any purpose, even commercially, provided they also give appropriate credit to the work, provide a link to the license, and indicate if changes were made. They may do these things in any reasonable manner, but not in any way that suggests you or your publisher endorses their use.
How to Cite
References
Arditi, D., & Chotibhongs, R. (2005). “Issues in subcontracting practice.” Journal of Construction Engineering and Management, 131(8), 866-876. https://doi.org/10.1061/(ASCE)0733-9364(2005)131:8(866)
Assaad, R., Elsayegh, A., Ali, G., El-Adaway, I., & Nabi, M. A. (2020). “Understanding the sub-contractual relationship for proper management of construction projects.” In Proceedings of Construction Research Congress 2020, 1119-1128. Reston: American Society of Civil Engineers. https://ascelibrary.org/doi/10.1061/9780784482889.119
Baruch, Y. (1999). “Response rate in academic studies: A comparative analysis.” Human Relations, 52(4), 421–438.
https://doi.org/10.1177/001872679905200401
Bassioni, H., Price, A., & Hassan, T. (2004). “Performance measurement in construction.” Journal of Management in Engineering, 20(2), 42-50. https://doi.org/10.1061/(ASCE)0742-597X(2004)20:2(42)
Black, C., Akintoye, A., & Fitzgerald, E. (2000). “An analysis of success factors and benefits of partnering in construction.” International Journal of Project Management, 18(6), 423-434. https://doi.org/10.1016/S0263-7863(99)00046-0
Chamara, H. W. L., Waidyasekara, K. G. A. S., & Mallawaarachchi, H. (2015). “Evaluating subcontractor performance in the construction industry.” In Proceedings of the 6th International Conference on Structural Engineering and Construction Management, 137-147. Kandy: International Conference on Structural Engineering and Construction Management.
Chiang, Y.-H. (2009). “Subcontracting and its ramifications: A survey of the building industry in Hong Kong.” International Journal of Project Management, 27(1), 80-88. https://doi.org/10.1016/j.ijproman.2008.01.005
Choudhry, R., Hinze, J., Arshad, M., & Gabriel, H. (2012). “Subcontracting practices in the construction industry of Pakistan.” Journal of Construction Engineering and Management, 138(12), 1353-1359. https://doi.org/10.1061/(ASCE)CO.1943-7862.0000562
Cronbach, L. J. (1951). “Coefficient alpha and the internal structure of tests.” Psychometrika, 16(3), 297-334. https://doi.org/10.1007/BF02310555
Dainty, A. R. J., Briscoe, G. H., & Millett, S. J. (2001). “Subcontractor perspectives on supply chain alliances.” Construction Management and Economics, 19(8), 841-848. https://doi.org/10.1080/01446190110089727
Easterby-Smith, M., Jaspersen, L. J., Thorpe, R., & Valizade, D. (2021). Management and business research. UK: Sage.
Enshassi, A., Choudhry, R. M., Mayer, P. E., & Shoman, Y. (2008). “Safety performance of subcontractors in the Palestinian construction industry.” Journal of Construction in Developing Countries, 13(1), 51-62.
Eom, C., Yun, S., & Paek, J. (2008). “Subcontractor evaluation and management framework for strategic partnering.” Journal of Construction Engineering and Management, 134(11), 842-851. https://doi.org/10.1061/(ASCE)0733-9364(2008)134:11(842)
Fagbenle, O., Joshua, O., Afolabi, A., Ojelabi, R., Fagbenle, O., Fagbenle, A., & Akomolafe, M. (2018). “A framework for enhancing contractor-subcontractor relationships in construction projects in Nigeria.” In Proceedings of Construction Research Congress 2018, 305-314. New Orleans: American Society of Civil Engineers. https://ascelibrary.org/doi/10.1061/9780784481271.030
Greenwood, D. (2001). “Subcontract procurement: Are relationships changing?” Construction Management and Economics, 19(1), 5-7. https://doi.org/10.1080/01446190010003380
Gündüz, M., Nielsen, Y., & Özdemir, M. (2013). “Quantification of delay factors using the relative importance index method for construction projects in Turkey.” Journal of Management in Engineering, 29(2), 133-139. https://doi.org/10.1061/(ASCE)ME.1943-5479.0000129
Harris, F., McCaffer, R., Baldwin, A., & Edum-Fotwe, F. (2021). Modern construction management. UK: Wiley.
Hinze, J., & Tracey, A. (1994). “The contractor-subcontractor relationship: The subcontractor's view.” Journal of Construction Engineering and Management, 120(2), 274-287. https://doi.org/10.1061/(ASCE)0733-9364(1994)120:2(274)
Hsieh, T. (1998). “Impact of subcontracting on site productivity: Lessons learned in Taiwan.” Journal of Construction Engineering and Management, 124(2), 91-100. https://doi.org/10.1061/(ASCE)0733-9364(1998)124:2(91)
Inayat, A., Melhem, H., & Esmaeily, A. (2015). “Critical success factors in an agency construction management environment.” Journal of Construction Engineering and Management, 141(1), 06014010. https://doi.org/10.1061/(ASCE)CO.1943-7862.0000921
Jin, X. H. S., Zhang, G. K., Xia, B., & Feng, Y. (2013). “Relationship between head contractors and subcontractors in the construction industry: A critical review.” In Proceedings of the 7th International Conference on Construction in the 21st Century: Changes in Innovation, Integration and Collaboration in Construction and Engineering, 1-8. North Carolina: East Carolina University.
Kale, S., & Arditi, D. (2001). “General contractors’ relationships with subcontractors: A strategic asset.” Construction Management and Economics, 19(5), 541-549. https://doi.org/10.1080/01446193.2001.9709630
Laryea, S., & Lubbock, A. (2014). “Tender pricing environment of subcontractors in the United Kingdom.” Journal of Construction Engineering and Management, 140(1), 04013029. https://doi.org/10.1061/(ASCE)CO.1943-7862.0000749
Lee, J. K., Han, S. H., Jang, W., & Jung, W. (2018). “Win-win strategy for a sustainable relationship between general contractors and subcontractors in international construction projects.” KSCE Journal of Civil Engineering, 22(2), 428-439. https://doi.org/10.1007/s12205-017-1613-7
Loosemore, M., & Andonakis, N. (2007). “Barriers to implementing OHS reforms: The experiences of small subcontractors in the Australian construction industry.” International Journal of Project Management, 25(6), 579-588. https://doi.org/10.1016/j.ijproman.2007.01.015
Manu, E., Ankrah, N., Chinyio, E., and Proverbs, D., 2015. Trust influencing factors in main contractor and subcontractor relationships during projects. International Journal of Project Management, 33(7), pp.1495-1508. https://doi.org/10.1016/j.ijproman.2015.06.006.
Martin, L., and Benson, L., 2021. Relationship quality in construction projects: A subcontractor perspective of principal contractor relationships. International Journal of Project Management, 39(6), pp.633-645. https://doi.org/10.1016/j.ijproman.2021.05.002
Meng, X., 2012. The effect of relationship management on project performance in construction. International Journal of Project Management, 30(2), pp.188-198. https://doi.org/10.1016/j.ijproman.2011.04.002.
Mudzvokorwa, T., Mwiya, B., and Mwanaumo, E.M., 2020. Improving the contractor-subcontractor relationship through partnering on construction projects in Zambia. KICEM Journal of Construction Engineering and Project Management, 10(1), pp.1-15. https://doi.org/10.6106/JCEPM.2020.10.1.001
Nunnally, J.C. and Bernstein, I.H., 1978. Psychometric theory. 2nd ed. New York: McGraw-Hill.
Olsson, R., 1998. Subcontract coordination in construction. International Journal of Production Economics, 56–57, pp.503-509. https://doi.org/10.1016/S0925-5273(97)00024-8.
Perera, K.R.S., Gunatilake, S., Vijerathne, D.T., and Wimalasena, N.N., 2016. Risk allocation between main contractors and subcontractors in building projects in Sri Lanka. In: Proceedings of the 5th World Construction Symposium 2016: Greening Environment, Eco Innovations and Entrepreneurship, Colombo: Ceylon Institute of Builders and Department of Building Economics, University of Moratuwa, pp.408-419.
Piasny, J., and Pasławski, J., 2015. Selection of subcontractors as the quality improvement tool in housing construction. Procedia Engineering, 122, pp.274-281. https://doi.org/10.1016/j.proeng.2015.10.036.
Praveen, R., Niththiyananthan, T., Kanarajan, S., and Dissanayake, P.B.G., 2013. Understanding and mitigating the effects of shortage of skilled labour in the construction industry of Sri Lanka. University of Moratuwa Digital Library, Sri Lanka. Accessed June 9, 2024. Available at: http://dl.lib.uom.lk/handle/123/9439
Rodrigo, M.N.N., and Perera, B.A.K.S., 2016. Selection of nominated subcontractors in commercial building construction in Sri Lanka. In: Proceedings of the 2016 Moratuwa Engineering Research Conference (MERCon), Moratuwa: Institute of Electrical and Electronics Engineering, pp.210-215.
Saunders, M., Lewis, P., and Thornhill, A., 2009. Research methods for business students. UK: Prentice Hall.
Shimizu, J.Y., and Cardoso, F.F., 2002. Subcontracting and cooperation network in building construction: a literature review. In: Proceedings of the 10th Annual Conference of the International Group for Lean Construction, Gramado: The International Group for Lean Construction.
Tam, V.W.Y., Shen, L.Y., and Kong, J.S.Y., 2011. Impacts of multi-layer chain subcontracting on project management performance. International Journal of Project Management, 29(1), pp.108-116. https://doi.org/10.1016/j.ijproman.2010.01.005.
Tan, Y., Xue, B., and Cheung, Y.T., 2017. Relationships between main contractors and subcontractors and their impacts on main contractor competitiveness: An empirical study in Hong Kong. Journal of Construction Engineering and Management, 143(7), p.05017007. https://doi.org/10.1061/(ASCE)CO.1943-7862.0001311.
Tesha, D.N.G.A.K., and Luvara, V.G.M., 2017. Main contractors' strategies in managing construction quality of subcontracted works in Tanzania. International Research Journal of Engineering and Technology, 4(6), pp.1-17.
Thomas, H.R., and Flynn, C.J., 2011. Fundamental principles of subcontractor management. Practice Periodical on Structural Design and Construction, 16(3), pp.106-111. https://doi.org/10.1061/(ASCE)SC.1943-5576.0000087
Zou, P.X.W., and Lim, B.T.H., 2006. An empirical study in subcontractor selection and long-term alliance relationship between main contractor and subcontractor. International Journal of Construction Management, 6(1), pp.1–13. https://doi.org/10.1080/15623599.2006.10773078.