TRUST IN CONSTRUCTION SUPPLY CHAINS

It is widely accepted within the domain of inter-firm relationships 'trust' is the single most important ingredient for non-adversarial, mutually beneficial, long-term and collaborative firm-firm (and individual-firm) relationships. Despite being recognised as the cornerstone of any interaction process, establishment, development and maintenance of trust based relationships is commonly neglected and often abused in the construction industry. In terms of its main function, trust has three primary roles: it’s a (i) ‘social mechanism’ that works outside formal arrangements; (ii) ‘lubricant’ that enables smoother flow of information, products and services; (iii) ‘glue’ that holds people and organisations together and creates synergy.

The importance of this crucial relationship attribute is well recognised in other industries. For example in aerospace industry it is considered to be the sine qua non of any business transaction. The previous CEO of Boeing has emphasized the necessity of trust-based relationships in his following speech:

“The magic word is ‘trust.’ As a substitute for trying to control a myriad of actions through detailed contracts, constant oversight, and the threat of litigation or dismissal, elevating the level of trust within an organization is the most powerful means in the world of raising performance. Nothing - and I mean nothing - is more conducive to "better, faster, cheaper" than a high level of openness and trust between people in disparate jobs and locations who are working together toward a common end.”

However, the short timeline of relationships, existence of uncertainty in construction projects, opportunistic behaviour and low-profit margins are some of the reasons for lack of trust in construction supply chains. The difficulty of defining, measuring and analysing 'trust' further complicates the subject. For example trust is a multi-dimension- e.g.: the ESPIO dimensions of trust (Economic trust, Social trust, Psychological trust, Inter-personal trust, Organisational trust)- multi-perspective (i.e. can be different in the eyes of the trustee and trustor) and dynamic construct which can be unique for every situation.

In construction projects relationships generally start with low level of trust (or distrust). As time passes, depending on the success/failure of the interaction, trust can be built or distrust persists. The red, blue and green lines in below Figure illustrate this. The black line represents the desired level of trust in, across and beyond a single construction project.

Figure 1 Development of trust in construction projects

Previously I carried out a short review of trust in construction supply chains where I found that this critical relationship attribute is not paid enough attention by the industry or academia. Further to the reasons I outlined above, I think the main barrier that stands in the way of researchers is the abstract nature of the topic. The main concentration in the construction research and the focus construction companies is usually on the development of tangible, physical and real entities of construction projects. Soft and abstract things such as trust and knowledge development etc. generally given less focus. I expect this challenge to be slowly eroded as we are currently changing the way we design, build and work. The shift, in terms of processes, technology and business, creates a very difficult environment to work in the same way as we did previously. As change is inevitable, those who adapt to change will be the winners in today's world. I think construction industry needs to realise this first. I am sure academia can generate the necessary theoretical foundation of the concept if they received support from the industry.   Without industry's support research will stay largely anecdotal and abstract which will not help its conceptual and practical development. In my opinion these two aspects need to go hand-in-hand to make progress.

There are lots of opportunities waiting to be explored in this area. I will talk more about some of these specific opportunities in my future posts.