An investigation of trust between parties in construction claims using reciprocity theory of social exchange

Abstract

The development of trust has drawn increasing attention in construction studies and practice with trust’s reputation for facilitating cooperation and team-building in organisations and projects. Trust can develop through the interactions between contracting parties within and across construction projects. However, not all situations the contracting parties encounter are positive for trust development. A conflictual situation is a double-edged sword for trust development: Working through the conflict may increase trust, but if it gets out of hand it will destroy trust. Therefore, this research aims to investigate how the interaction between contracting parties during claim events influences the trust between them. Due to the nature of trust as “a psychological state comprising the intention to accept vulnerability based upon positive expectations of the intentions or behaviour of another”, the reciprocity theory of social exchange from a social psychological perspective is adopted in this research. This theory provides one mechanism, which is the form of exchange, to explain how differences in interactions influence the trust between two actors, and proposes three psychological processes - the risk of nonreciprocity, the salience of conflict and the affection for the partner - to explain the form of exchange’s influence on trust. As the adoption or otherwise of relational exchange behaviours reflects different forms of exchange during claim events, a research question is specified as to how the contracting parties’ adoption of relational exchange behaviours during claim events influences the trust between them. In answering this research question, a conceptual model and eleven hypotheses are proposed and investigated with a quantitative approach through questionnaire survey. Three research objectives are fulfilled in this research: 1) investigating the influencing relationship between the partner’s adoption of relational exchange behaviours during claim events and the contracting party’s trust in the partner, 2) investigating the mediating effect of the psychological factors on the aforementioned influencing relationship, and 3) investigating the moderating effect of the formal organisational arrangement and the exchange outcomes on the aforementioned influencing relationship. The results of this research show that 1) the partner’s adoption of relational exchange behaviours can induce risk of nonreciprocity creating a risky environment for the partner to demonstrate trustworthiness, and therefore will improve the contracting party's judgement of the partner’s trustworthiness, 2) the affection for the partner and the salience of conflict can influence the contracting party’s judgement of the partner’s trustworthiness affectively and cognitively, while when relational exchange behaviours exist, trust is more affective, 3) partner’s relational exchange behaviours cannot help improve the contracting party’s intention to behave in a trustworthy manner, except for practitioners with 6 to 9 years’ work experience, and 4) communication effectiveness and formal organisational arrangement can improve the contracting party’s evaluation of the partner’s trustworthiness through the three psychological processes. These results indicate the importance of establishing clear formal organisational arrangement for construction projects, as well as facilitating relational exchange behaviours and improving communication effectiveness during claim events, to prevent the contracting parties from perceiving one another as untrustworthy.