3.4 Contract system

There are two main causes of contractual conflict. The first is the use of inappropriate procurement routes, conditions of contract or contract condition modifications for the project being undertaken. The second arises out of a failure to interpret correctly (by ignorance or wilful intent) the contract conditions in use resulting in misunderstandings, negligence or misrepresentation. Contracts normally include some procedures for resolving disputes and manifest conflict between the parties. They rarely include detailed information regarding the prevention of conflict, nor are they applicable to situations relating to the internal affairs of the separate companies involved for which a quality system is more suitable. There has already been a substantial amount of work done on the selection of appropriate contracts to use (e.g. Skitmore and Marsden, 1988) and the procedure for construction contract claims (e.g. Kirn and Adams, 1989) and it is not the purpose of this paper to reiterate this, but to point out that certain types of conflict exist in this area.

4

Research methodology

A number of previous research workers have collected information from companies within the construction industry, for example Cherns and Bryant (1984), Fisher (1984), and Bresnen and Haslam (1991). In the present work a new procedure was followed which built on the information gathering techniques of these investigators and added to them a novel method of data processing and reduction.

The collection and reduction of the data formed a five tiered hierarchy consisting of: (i) raw data—tapes of recorded interviews, documentation, letters, etc.; (ii) transcribed interviews; (iii) primary level processing—collation and sorting of all contributions relating to conflicts within a single project as (a) general information and personnel, (b) individual conflict episodes; (iv) secondary level processing—cross checking of information, reduction into summary form, and critical analysis of conflicts; and (v) tertiary level processing—assignment of attributes and statistical analyses.

A preliminary investigation was carried out to verify the methodology which is reported elsewhere (Gardiner and Simmons, 1992). A major study followed the preliminary investigation and some results of this are given later in this paper.

A more complete report will be published in due course.

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5

Analysis of preliminary conflict and change data

In the preliminary investigation, 130 data entries were collected from sixteen recorded interviews across six client organisations. Fig. 3 shows the distribution of conflict and change across the four project systems: process output*, organisation, quality and control, and contract. The system having the greatest number of conflicts is organisation (42 occurrences) of which 11 also include change. Fig. 4 shows the distribution of conflict and change across the main subprocesses of a construction project. The subprocess having the most occurrences of conflict and change is design with 53 and 47 examples of conflict and change respectively. The success of the construction subprocess depends to a large extent upon the success of the design subprocess, which depends upon the quality of the briefing subprocess, which in turn depends upon the inception subprocess and the reasons behind the decision to build. A latent conflict originating at inception, perhaps between the concept architect, a user representative and the client’s projects officer which leads to a change once the construction subprocess is under way, is likely to have serious implications of cost and time. Table 1 shows the distribution of conflict and change for the subprocesses briefing, design, and construction within the context of process output. It is perhaps surprising that the highest proportion of conflicts leading to change in this system should be in the construction phase, when the cost of change is probably at its highest.

Many situations were identified in which conflict and/or change occurred. A selection of these are listed in Table 2.

Fig.3. Distribution of conflict and change across project systems

* Since all the data relate to one or more subprocesses only those involving conflict or change in the finished product or output of a subrocess are included here.

6

Conflict, change and strategy

During the main investigation three projects from each of the six client organisations were used as case studies giving a total of eighteen projects studied in detail. Using the methodology developed earlier, many interviews were undertaken, both face-to-face and across the telephone, to collect data to investigate interactions between conflict, change, and project management strategies (PMS).

Systematic error was avoided as far as possible by cross checking conflict episodes with several participants. Examination of the data gathered suggests there is a link between the effects of conflict and change and the management strategies adopted. This inference has applications in project management for many organisations and should certainly be of interest to clients. For regular or sophisticated clients it was noticed that some aspects of strategy already evolve from project to project; documented project procedures (Gardiner, 1991) are updated from time to time to incorporate new knowledge and experience.

A better understanding of the relationship between conflict, change and PMS would enable project managers to make greater and more effective use of

‘feedback’ information in the formulation of their PMS. Fig. 5 illustrates a Fig.4. Distribution of conflict and change across project subprocesses.

Table 1. Distribution of conflict and change across subprocess outputs

116 THE RELATIONSHIP BETWEEN CONFLICT, CHANGE AND PROJECT MANAGEMENT STRATEGY

model of the situation in flow chart form. The model describes the decision making procedure for modifying PMS using conflict and change information from recent projects. Each stage highlights an important concept to be understood or task to be carried out.

A central theme is the hypothesis that PMS can influence the latency of project conflicts in terms of inducing, avoiding, exposing or hiding effects. ‘Bad’

project management strategy can induce conflict in one or more of the four project systems outlined. It can also hide the early stages of conflict so that when conflict does erupt its effects are more damaging and longer term. ‘Good’ project management strategy, on the other hand, generally avoids conflict but where latent conflict does exist, tends to expose it at an early stage when its damaging effects are less or when it may even bring some benefit to the client.

Table 2. Locations of conflict and change

Fig.5. Modification of project management strategy.

118 THE RELATIONSHIP BETWEEN CONFLICT, CHANGE AND PROJECT MANAGEMENT STRATEGY

The model also highlights the importance of change control and the need for techniques to evaluate conflict and project outcomes. Scope and design changes occur in many different project situations. What is important here is the control of change. A system which allowed anybody to change anything would be catastrophic. Similarly, a system which prevented the consideration of any changes could result in a building quite unsuitable for its client, or even the discontinuation of a project. Changes themselves are not usually a problem.

Most problems arise when there is no suitable mechanism to recognise required changes and enable them to occur promptly with minimum disruption. The same mechanism should also help to prevent unnecessary changes taking place without creating additional conflict between the parties.

The final stages of the model draw attention to its capability as a modifier of project management strategy. In this respect the important concepts/tasks are the evaluation of the effects of conflict on project outcome, how these relate to current strategic practice and what can be done to ‘capture’ this new information for the benefit of project managers of future projects. The model should not be operated in isolation but as a continuous cycle, being reapplied with each new project.

7 Conclusion

The investigation suggests that conflict, in one or more of its forms, occurs to some extent in all projects and that this frequently precipitates project change.

Certain factors such as the experience of the client, the degree of competition involved in the appointment of participants, and the amount of uncertainty in a project influence the number and severity of conflicts. The relationship between conflict, change and project management strategies can be exploited by project managers as shown in the model outlined, to harness the functional outcome of conflict, resulting in project change for the better, and to limit the damage caused by dysfunctional conflict.

8

Acknowledgements

We should like to thank all the contributing organisations for their help and time in the preparation of this paper. We are also grateful to the SERC for the research studentship held by one of the authors (PDG).

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