CULTURE AND CONFLICT
18 December 2011

Despite the wide acknowledgement that culture has a bearing upon success; opinions within the UK government, the judiciary and construction appear to differ as to the degree by which the various standard forms of contract effectively manage conflict and why. This is an extended review of the available literature upon culture in the context of conflict management. The paper reviews what is generally appreciated by the terms 'culture' and 'conflict'; the composition, manifestation and diagnosis of each; the relationship between the two; the cultural impediments to conflict management; and the identification of the cultural features and characteristics of an environment conducive to effective conflict management.

Whilst conducted from a UK construction industry centric perspective, the value of this review nevertheless lies in the provision of a meaningful, structured discussion and analysis of the bearing culture has upon conflict. It identifies, considers and discusses the various aspects of culture within the context of conflict management, together with the impediments to such. The review also provides a focus and justification for research in the area of construction conflict management, specifically the extent to which, or otherwise, the three main UK standard form construction contracts foster features and characteristics that are conducive to effective conflict management. A future comparison of the standard form construction contracts against such conducive practices may help to better understand and identify possible adjustments that may be made to standard form construction contracts, and the bespoke amendments that parties often introduce to the same before entering into contract, in order to achieve a contract that is more conducive to effective conflict management.

Keywords:

Culture, Conflict, Construction, Contracts, Conflict Management, Dispute

Background

Deal and Kennedy (1982) and Peters and Waterman (1982) fuelled the understanding that culture was influential upon performance, and together with Kotter and Heskett (1992) a consistency of success was noted in cultures in which participants enthusiastically participated. More recently, Van den Berg and Wilderom (2004) observed that organisational culture forms the glue that holds organisations together, encouraging participants to commit and perform. This extended literature review shall indicate the characteristics and common features of a strong cultural glue mix, and what may cause the same to de-bond. The extended literature review forms part of a broader study to analyse the principal UK construction industry standard form contracts to ascertain the extent to which each facilitates, or otherwise, the formation of a strong bond between the mosaic of contracting parties to the construction process.

All significant construction projects in the UK have a written contract, and whilst some have bespoke contracts drafted specifically for the project, most use a standard form of contract or an amended version of such. A contract may determine the rights and obligations of the parties to the contract including their representatives, creating a legal framework upon which the many relationships of those involved in the construction process is based. There are various standard contracts available from three main authoring bodies: The Association of Consulting Architects (ACA), the New Engineering Contract (NEC) and The Joint Contracts Tribunal (JCT) (House of Commons PAC Minutes of Evidence (28 April 2009)).

In questions to Nigel Smith, the UK Office of Government Commerce ("OGC") Chief Executive, at the House of Commons Public Accounts Committee of January 14, Austin Mitchell MP explained (House of Commons PAC Minutes of Evidence (28 April 2009)):

"…in 2005 OGC decided there should only be one construction contract, limiting Whitehall in construction contracts to one supplier."

The OGC had conducted its original review in 2005 in which it had sought to evaluate construction contracts against its Achieving Excellence in Construction ("AEC") criteria. Unfortunately, it appeared that the review had been conducted and implemented poorly, to such a degree in fact that the contract authoring bodies were not made aware of the objective, and as a result they, unsurprisingly, did not engage in any great detail in the process.

The OGC subsequently announced that just one contract, NEC3, met its AEC criteria, and endorsed only the use of NEC3 on all public building projects, including the 2012 Olympics. Not only that, the OGC even set about providing support and training in the use of NEC contracts.

Inevitably, the other two contract authoring bodies raised their reservations over the OGC's actions, but it was to take a number of years before any form of remedial action would be considered. It also begged the question whether it was the OGC's role to favour just one supplier of services to the government over any another.

Austin Mitchell MP continued:

"Under pressure, you commissioned a review by Arups, this had recommended that there be three construction contracts not just one, but the OGC are still sitting on the report and apparently want to stick to the one contract, which again would be a cosy relationship."

In 2008 the OGC instructed Arup to execute a review following independent requests by the JCT and the ACA for the OGC to reconsider. It came as no surprise to the JCT and ACA that Arup found at the end of September that both the JCT Constructing Excellence contract (JCT-CE) and the ACA Project Partnering Contract (PPC2000) also met the criteria, besides the NEC3. Arup reported amongst other things:

"Each contract reviewed satisfies OGC's Evaluation Criteria. Each contract reviewed would enable parties, using them correctly, to achieve OGC's Achieving Excellence in Construction standards from which the Evaluation Criteria are derived."

It continued:

"No single contract is superior to the other two in all respects-each has its own strengths and weaknesses and each is highly adaptable. The difference in the way that each contract is applied by users will be at least as significant as the differences in the processes or terms and conditions provided within the contract."

Whilst the review was not published, the JCT and ACA were nevertheless informed that the review had recommended that all three forms in fact met the OGC's requirements, and that such was to be presented to the Public Sector Construction Client's Forum ("PSCCF") in December 2011.

Regardless, it appears from House of Commons PAC Minutes of Evidence (28 April 2009) that the OGC advised the committee to continue with just one contract. Inevitably, without the publication of the Arup review the construction industry is denied the opportunity to witness for itself the fruits of Arup's work and the contract providers struggled, at the very least, to appreciate the OGC's stance on the matter.

The OGC effectively relayed to the JCT and ACA that it was intent upon ignoring the very findings of the report it had commissioned at an estimated cost of £50,000.00, and that instead it intended to continue with the endorsement of a sole contract regardless. The OGC endorsement however, was subsequently, but quietly, removed from the NEC contracts.

The author of the original review of the construction industry, Sir Michael Latham, observed:

"The construction industry has taken huge strides forward in recent years, but it is still not enough. The OGC has attempted to direct public procurement along the right path to collaborative working, and I am pleased that three contract forms now meet its principles for achieving construction excellence. The widespread adoption of these contracts in the public sector, and hopefully the private sector, will enable the industry to take further steps along the path to best contractual practice."

The 11th and most recent Royal Institution of Chartered Surveyors ("RICS") survey published on 19 March 2010, the RICS 2007 Contracts in Use Survey, recorded the continuing dominance of the JCT suite of contracts, although it observed that this had dropped in relation to previous years since the NEC contracts are seeing an increase in usage. Indeed the survey noted the NEC had been strongly supported in the Egan and Latham Reports.

More recently, observing the construction industry's position in the forefront of the developing area of dispute resolution, the Hon. Mr Justice Ramsey QC (2011) described how the previously held assumption that the industry wanted its disputes decided by detailed investigation of the facts and law assisted by experts had been challenged by the general realisation that disputes should be resolved before they escalated. He noted that this had led to the use of those forms of contract that encourage improved levels of management and the early identification of issues which arise, specifically citing the NEC3 as an example.

The Hon. Mr Justice Ramsey QC (2011) described how such contracts essentially have 'early warning systems' in place which determines that the relationship of the participants include obligations to discuss and share information which allows issues to be properly, effectively and timeously addressed; encouraging the management of conflict and thereby preventing a dispute from crystallising.

Whilst it appears that there is not only a view within academia that cultural traits may have a bearing upon the success of an organisation, but also an influential opinion held within government, the judiciary and construction that not all contracts engender a culture conducive to effective conflict management, or at least may do so with varying degrees of success; it nevertheless appears that opinion varies as to those contracts that effectively encourage conflict management and why.

Introduction

Culture may be the cradle of behaviour. This is a review of available literature upon the effect of culture in the context of conflict management in the construction industry. The paper reviews what is generally appreciated by the terms 'culture' and 'conflict'; the composition, manifestation and diagnosis of each; the relationship between the two; the cultural impediments to conflict management; and the identification of the cultural features and characteristics of an environment conducive to effective conflict management. The study within this extended review focuses upon objectives 1, 2 and 3 below whilst the fourth objective, which is beyond the remit of this paper, will be met through the vehicle of empirical data collection and analysis.

Objectives:

  1. investigate what is understood by the terms 'culture' and 'conflict';
  2. establish the relationship between culture and conflict;
  3. ascertain the cultural features and characteristics of an environment conducive to effective conflict management; and
  4. measure, compare and contrast the various standard forms of construction industry contracts to identify the extent, or otherwise, that such contracts foster features and characteristics that are conducive to effective conflict management.

The value of this study will be to provide a meaningful and structured discussion and analysis of the bearing that culture has upon conflict, in the context of conflict management. It is intended that the study shall identify those aforementioned contracts that foster features and characteristics that are conducive to effective conflict management together with the impediments to such. It shall provide a greater clarity of focus and justification for empirical research in the area of construction conflict management, and form the basis upon which to identify those construction industry standard form contracts in common usage that engender a culture conducive to successful conflict management, or otherwise.

Culture and conflict shall be considered respectively within the paper; investigating the composition, manifestation and diagnosis of each and placing culture within the context of conflict including the relationship between the two and ascertaining the cultural impediments to conflict management. The following reviews much of the literature available upon culture and conflict, revealing the influence culture has upon conflict management within the context of construction contracts.

Culture defined

A relatively modern area of study, Mintzberg and Quinn (1991) recorded that appreciation of culture's significance began to take hold in mainstream management thinking in the 1980's. Put in its simplest of terms

"...culture is to a human collectivity, what personality is to an individual..."
determining

"...the uniqueness of a human group in the same way personality determines the uniqueness of an individual..." (Hofstede (2001))

and forming

"...the basis of social reality for all its members..." (Kimmel (2006)).

The seed of culture therefore rests within the character of the individuals. Individuals are not born cultureless, although Kimmel (2006) avers otherwise, culture is the aggregate of personalities which influences the collective's reaction to stimuli and environment, creating an interdependence of categories within society (Hofstede (2001)). By way of example in a built environment context, even if a society contains different cultural professional groups with their own cultural identities such as Architects, Engineers and Surveyors, those groups together often share certain cultural traits with each other that make their members recognisable to others from outside as belonging to a wider society, in this instance the built environment. Culture is therefore the context in which things are done; taken out of context even legal matters will lack significance (Trompenaars and Hampden-Turner (1997)).

Accordingly, it is possible to study culture from a variety of perspectives and levels, including town, city, county, regional (Hofstede (1984)) and national levels (Trompenaars and Hampden-Turner (1997)); (Hofstede (2001)), but also within occupations (Ankrah (2007)), businesses, organisations (Peters and Waterman (1982); Deal and Kennedy (1982); Handy (1985); Hofstede (1997)), industries (Riley and Clare-Brown (2001)), and institutions.

The product of both nature and nurture, culture may be learnt, understood, transmitted (Hofstede (2001)), exchanged, developed, bargained and re-prioritised to create broader patterns of values, priorities, ideas and needs. Culture is therefore developed through social interaction (Kimmel (2006)) which facilitates greater harmonious cohesion amongst individuals within wider groups creating higher levels of cultures; the process being repeated with the creation of each additional boundary of culture and generating a 'shared perception' containing the "...categories, plans and rules people employ to interpret their world and act purposefully within it" within each collective (Spradley & McCurdy (1971)).

Thus the greater the difference that exists between the perception shared by one group compared to another increases the likelihood for significant misunderstanding, difference, conflict and dispute (Kimmel (2006)) to arise. It can cause one party to interpret another's conduct as misbaviour if it does not act as that party would anticipate members of its own group to act in the same circumstances. Accordingly culture has been defined as 'socially patterned human thought and behaviour', and, as observed by Edward Tylor, manifests itself in amongst other things, "...knowledge, beliefs, arts, morals, laws, customs and any other capabilities and habits acquired by man as a member of society" (Brown (1995)) capable of differentiating groups and individuals (Hofstede (2001)).

Culture is therefore anything but static (Ankrah (2007)), it is a living projection of the reactions and responses of those within (vertically, laterally and diagonally) to pressures upon those inside, their environment, needs and aspirations; codifying how a collective interprets events, actions and words (Ankrah (2007)); and, initiating change, adaptation and conflict (Erez & Gati (2004)). It creates a perception filter that determines the manner in which individuals within the collective look upon and approach everything, giving meaning and intention to every thought and deed; dictating how we communicate, whether sending, receiving or understanding. It is capable of forming a barrier and significantly for this study, determines how conflict is conceived, realised, managed and resolved.

Indeed, in Western cultures man views logic as being identical to the truth, being the only means to ascertaining reality. Freudian theory however, together with the work of Fromm and Jung, challenged the Newtonian model of linear thought, linking the concept of linear logic with that of the integrative concept of comprehensive reasoning. Hall (1981) points out that linear ought not to be preferred to comprehensive reasoning, or vice-versa.

In simple terms, linear reasoning is similar to train tracks running into the distance; the train of logic can only move backwards and forwards, very little else is relevant to it. Comprehensive reasoning on the other hand is similar to a helicopter in flight, in order to remain feasible it must take into account all its surrounding, environmental and supporting factors.

Hall (1981) explains that linear processes are better suited to solving certain problems and the comprehensive processes others, or even a mixture of the two as circumstances may dictate. But in Western cultures it appears that only linear processes are held to be appropriate, at the expense of all other possibilities. The result is that within Western cultures we are taught to reason linearly as opposed to comprehensively; such an approach is enforced by punishment by our institutions when it is not followed.

Laing (1967) believes that the Western world is mad, but Hall (1981) claims that it is not so much man, but his institutions and cultural patterns that determine behaviour, that are mad, citing the "terrifyingly characteristic of bureacracies once they are activated" which Hall (1981) attributes to the delusional aspect of the "...institutionalised necessity to control "everything" and the widely accepted notion that the bureaucrat knows what is best..." simply to achieve bureaucratic neatness.

An example of the foregoing appeared in the internet copy of The Telegraph on 4 July 2011 in an article entitled "Health and safety fears are 'taking the joy out of playtime'" (Bunyan (2011)). In the article the chairman of the Health and Safety Executive, Judith Hackitt, told the Daily Telegraph that bereaucrats were using health and safety rules as a "feeble" excuse to stop people enjoying themselves and that "cynicial" authorities employed them as cover for cost-cutting. Ms Hackitt noted:

"...a litany of what she called "daft decisions" in recent years has included ordering children to wear goggles to play conkers, banning running at a pancake race and stopping firefighters using the station pole."
Culture is, as Hall (1981) explains, man's medium; nothing in life escapes the influence of culture, including personality. It influences how we express ourselves both inwardly and outwardly, the way we think and how we solve problems. Culture is the most obvious and simultaneously the most taken-for-granted aspect of our lives. It is the most subtle of cultural influences that has the greatest bearing upon behaviour.

Theories of Culture

The study of culture is rooted in the fields of social psychology and anthropology, although it is through the anthropological perspective that the study of culture has developed furthest.

Allaire and Firsirotu (1984) explained the range of theories that anthropologists have developed and, inspired by Keesing (1974), proposed the following typology (Figure 1) of schools of thought, providing a means by which to understand the different perspectives. A distinction is drawn between theorists that believe that culture is interwoven with our social system (a "sociocultural system") and those who do not, and instead see culture as separate, "an ideational system".

Sociocultural system
Allaire and Firsirotu (1984) describe how the sociocultural system was the general view of earlier anthropologists, with notable exceptions, and based upon their notions of time, could be divided into four schools. Two of the schools, the funtional and functional-strucuralist, say Allaire and Firsirotu (1984), study culture at specific moments in time, labelled "synchronic"; whereas the diachronic schools of historical-diffusionists and ecological-adaptionists, study the development of cultures over time.

Figure 1 - Allaire and Firsirotu (1984)

In Malinowski's (Malinowski (1944)) functionalist conception, the focus is upon the needs of the individual, viewing culture as an instrument by which a person is placed in a better position to deal with specific problems in the course of satisfying their needs, manifesting itself in myths and legends.

Radcliffe-Brown (Radcliffe-Brown (1952)) and other structural-functionalists on the other hand view culture as an adaptive mechanism that enables people to live within a safe, secure and stable community within a larger environment. Accordingly, for the structural-functionalists culture is a component of the integrated social system but also contains components of social structure in order to regulate both the internal social existence and the external relationship of the system within its environment.

The diachronic (Allaire and Firsirotu (1984)) ecological-adaptionists view culture as socially transmitted patterns of behaviour designed to relate collectives to their environment, thus a change in environment impacts upon culture and the two define each other. Indeed, a culture's harnessing and development of technology impacts upon the environment in which the culture exists, which inturn impacts upon the culture, creating a cyclical causative pattern (Hammond (1978)).

Historical-diffusionists regard culture as the temporal, interactive, superorganic and autonomous product of historical circumstance and process; they focus upon how traits migrate between cultures through diffusion and changes develop from within by acculturation and assimilation.

Ideational system

Allaire and Firsirotu (1984) explain that four very different schools fall within the the ideational system, all postulated upon a "...distinct cultural realm manifested in cognitive structures, processes or products." For three of the four schools culture is contained within the minds of the culture-bearers, whereas in the cognitive school (which Allaire and Firsirotu (1984) note is sometimess called the ethnographic school) culture is "...a system of knowledge, of learned standards for perceiving, believeing, evaluating and acting."

Within the cognitive school Tyler (1969) observes that culture is not material phenomena but instead cognitive organisations of material phenomena, whilst Goodenough (1957) explains that culture consists of whatever is necessary to be known or believed so as to be able to be accepted within a collective.

Levi-Strauss' structuralist school on the other hand holds culture as a reflection of unconscious universal processes consisting of shared symbolic systems; the objective is therefore to reveal the principles that create features such as myths, art and language.

Viewed as standardised cognitive processes, the mutual equivalence school believes that culture produces a general framework for behavioural predictability within a collective, facilitating the organisation of diverse mindsets and motivators without the necessity of overlap in cognitive structure.

Whereas in the symbolic school, as Allaire and Firsirotu (1984) explain, culture should not be searched for within the minds of those within the collective, but instead the "...meanings and thinking shared by social actors". Thus, the symbolic school examines shared codes and or how those within a collective guide their lives.

The various schools offer researchers alternative ways of addressing anthropological enquiries, and although there are those who have advocated a sythesis of various theories in order to create a broader and more inclusive appreciation of culture and its impact (cf. Allaire and Firsirotu (1984)), others have preferred to maintain narrower concepts (Hall and Neitz (1993)) so that by focusing on less, more may be learnt.

Manifestation of Culture & Cultural Composition

Socialisation facilitates the appreciation to honour and respect the values and procedures fundamental to the culture we occupy. Children learn values and procedures that are perceived to be both natural and normal; they are "...common sense..." (Kimmel (2006)). Kimmel (2006) records how Shils (1957) explained that "Social actualities of language, ethnicity, customs and traditions, religion, race, and region evoke existential feelings or emotions called primordial sentiments during each individual's enculturation." Such "...social connections called "primordial bonds"... possess a powerful emotional force" and cultural identity is grounded in such primordial bonds.

Socialisation continually shapes the perception filter of both the individual and the group, constituting subjective reality. It is the product of information that has been gathered and learnt, which itself is the sum of hitherto collated experiences and knowledge; and yet from the invisible and unconscious to the blatant and physical, culture can manifest itself in any number of ways. Between them Schein (1985), Bass (1990) and Hofstede (2001) gave the following examples of visible and invisible cultural manifestations:

  • Invisible - values, beliefs and underlying assumptions.
  • Visible - artefacts, creations, behavioural norms, symbols, heroes and rituals
Hofstede (1997) also represented culture as layers of an onion with values at the centre, followed by rituals, heroes and symbols as consecutive outer layers with practices piercing through all the layers to the 'values' core.

It follows the study of any culture involves an examination of the practices, values and underlying assumptions that inform the practices, although the emphasis upon each layer and questions asked will be determined by the purpose of the investigation.

Van den Berg and Wilderom (2004) however, defined organisational culture as shared perceptions of organisational work practices within organisational units, capable of being derived from the autonomy, external orientation, interdepartmental coordination, human resource orientation and improvement orientation. Smith (2000) urges a similar opinion, rather than a conventional view of culture, i.e. the idea of shared values and beliefs, an operational perspective is called for "...as embodied in the organisation's structures, mechanisms and practices", i.e. culture in action.

Examination of culture through the study of organisational practices is therefore beneficial since not only are practices easier to observe and measure, but they are also conducive to comparison and relation to others. Such an approach resonates with the objectives of this study by which the practices encouraged and prescribed by the various standard forms of contract shall be measured, compared and contrasted to the cultural traits identified through the extended literature review as being conducive to effective conflict management or otherwise.

Culture diagnosis

Ankrah (2007) supported Denison and Mishra's (1995) observation that organisational culture is capable of being diagnosed by measurements and description, within certain limits, and that such may be classified as either qualitative or quantitative. In terms of diagnosis it is suggested that the means and methods by which organisational culture is identified is not different to that of identifying contractual culture, it is simply a determination of the boundaries that separates the two.

The implications for this research therefore is that Van den Berg and Wilderom's (2004) definition can be similarly applied to define construction contractual culture as shared perceptions of project work practice within contractual limits of a construction project or otherwise. Project work practices are therefore the central part of the definition.

Van den Berg and Wilderom (2004) explain that many researchers such as Hibbard (1998) and White (1998) focused upon values to define organisational culture, but Hofstede's (2001) research demonstrated greater differences in practices than in values, although opposite results were discovered amongst national cultures. Hofstede (2001) explained that such results were by reason that values are acquired early in life and within the family, supporting the view that contractual culture can be better defined by contractual practices. Further, values are not ordinarily visible, but contractual values are expressed in contractual practices.

Van den Berg and Wilderom (2004) also observed that in their previous research they had measured practices and values but had found that organisations differed more strongly on practices than values. Accordingly, the implications for this research shall be that values will not be explicitly included within this study's working definition.

Peters and Waterman (1982) influenced the notion that that in a strong organisational culture, participants would possess the same set of values, arguing that the best companies were those in which the participants were strongly committed to the same values. The assumption grew that successful cultures possessed participants who held similar basic values and assumptions; Van den Berg and Wilderom (2004) hold Hibbard (1998) and White (1998) as examples of such.

Van den Berg and Wilderom (2004) explain however, that there is limited academic evidence of a relationship between strong culture and performance, citing Denison (1990), Calori and Sarnin (1991), Gordon and DiTomaso (1992), and, Kotter and Heskett (1992). They also note that Brown (1998), O'Reilly and Chatman (1996), and Wilderom, Glunk and Maslowski (2000) have reviewed those studies critically and found that they lacked a clear connection between conceptual and operational definitions of the strength of organisational culture. More significantly, Van den Berg and Wilderom (2004) state that culture strength generally only reflects the degree of consensus amongst paticipants, which does not demonstrate the degree of culture in several respects. Thus Van den Berg and Wilderom (2004) conclude that the culture strength variable is too limited to be of use to either measure or explain a phenomenon as complex as culture, whether organisational or, as in the context of this study, contractual.

Similar to that of Van den Berg and Wilderom (2004), the focus of this study is upon the perceptions of contractual practices as opposed to objective occurence of the same, thereby highlighting that contractual culture is essentially a perceptual yet contractual phenomenon witnessed by the participants. Accordingly, Van den Berg and Wilderom (2004) explain that the perceptions of a sample of the participants should form part of the assessment, which in this instance will be of the contractual culture.

Although this study adopts an adaptation of Van den Berg and Wilderom's (2004) definition, i.e. contractual culture as the shared perception of contractual practices, Van den Berg and Wilderom (2004) explain that the concept is similar to that of climate, the difference being that whilst both culture and climate concern the internal social psychological environment within an overall context, culture studies are normally qualitative based upon social constructionism, whereas climate studies are usualy quantitative founded in Lewinin field theory accordng to Denison (1996). Such differences now appear to be disappearing according to Van den Berg and Wilderom (2004) who cite Denison (1996) amongst others; but whilst they do not stress a distinction between the two, they nevertheless identify that climate concerns the present position whilst culture is the identification of actual behaviour, with regards to the latter of which this study is focused.

Culture in Construction

Within a construction context, Fenn et al (1997) identify that conflict is pandemic wherever interests compete. Whilst the desire to execute the works as safely, quickly, and with as few defects as possible is shared both by employer and contracting organisations alike; the employer's core interest to obtain the works at the most competitive price, competes with the contracting organisation's core objective to generate as much profit as possible.

Within such a competing environment "To question the universality of your own reality or mindset or to acknowledge that the reality or mindset of others may fundamentally differ from your own is disorientating." (Kimmel (2006)). It is far easier when discusing delays and disruption within a progress meeting on a construction project for example, to believe that the other party will analyse the facts, attribute cause, ascertain effect, apportion responsibilty and liability, and value each party's entitlements and obligations in the same way as one's own approach. To anticipate otherwise demands that a daunting spectrum of alternative approaches be entertained and accounted for, which results in uncertainty and an unsound basis upon which to establish further decisions as to how to proceed. Inevitably negotiating with those from the same or a similar culture as one's own increases the likelihood that "...expectations of commonality..." will be satisfied, but conversely there is a much greater possibility of unforeseen difference when the parties possess dissimilar cultures.

The basis of Cultural differences

The link between an individual's subjective and common culture is, as (Kimmel (2006)) explains, the identification mechanism by which an individual is bound to a cohesive group. Through the use of such primordial bonds a consciousness is created by which the group can be distinguished from those who are not members. It was Sumner (1906) that termed ethnocentrism to describe the acceptance of those whose culture is similar and the rejection of those who are not.

Unless circumstances determine that a collective mediate regularly with other groups, it is inevitable that without being exposed to the opportunity to appreciate the uniqueness of its own culture that a collective may develop the belief that its way of thinking and going about matters is not only best, but the only way of doing so, creating furtile ground in which to sow the seed for misunderstanding, conflict and if left unmediated, dispute.

Upon reaching adulthood, an individual's subjective culture is, in the main, sufficiently established to be rationally articulated internally, and continues to crystallise with age. Consequently, individuals can find it increasingly difficult to appreciate the view of others with mindsets that are different to their own, particularly in circumstances in which an individual is exposed to dwindling intercultural experiences. Indeed, research on intercultural communications (Glenn (1962)) demonstrates that negotiators often adopt an approach that is based upon their own cultural perception on the basis that it is logical in the circumstances; however when those of the other party do not meet with their expectations such is considered objectionable and is attributed to malevolent intentions, idleness and or incompetence.

An example of this in the construction industry can arise from the necessity to issue a notice under the contract, here concerning a possible delay event. An experienced contractor may understand that a particular standard form of contractual provisions determines that in order to maintain its entitlement to an extension of time arising from a possible delay event which may occur if evasive action is not taken by the Architect, the contractor must issue a given notice under the relevant contract clause within a specific period of time. In this instance say that unless design information is received by the contractor by a specified date the Works will suffer delay. The contractor is motivated to issue the notice because failure to do so, regardless of whether the contractor will ultimately seek an extension of time on such basis, may render the contractor unentitled to an extension of time even if the delay event arises. The Architect who receives the notice however, may not perceive that provision of further information is necessary, does not appreciate why the contractor has issued such notice and therefore attributes the notice to malevolent intentions by the Contractor. Moreover the Architect may even perceive the notice to be a veiled attack upon the Architect's performance and an attempt by the contractor to seek an extension of time for delays for which the Contractor is responsible. The Architect therefore dismisses the Contractor's notice and refuses to provide further information on the basis that doing so will, in the Architect's view, amount to an admission that insufficient information had been provided in the first instance. The Architect's refusal is similarly perceived negatively by the contractor, thereafter each begins to progressively distrust the other with each attributing malevolent intention on the part of the other wherever possible and accelerating the rate of deterioration in the relationship.

Ross (1977) labelled the tendency to perceive behaviour and attribute it negatively as fundamental attribution error, and Cohen (1991) observed that many difficulties in international negotiations arose from fundamental attribution errors.

Sending messages between groups with different subjective cultures is therefore difficult and fundamental attribution errors increase the likelihood of misunderstanding, particularly during periods of intense anxiety amongst those participating in the construction contract. The objective of the participants must therefore be to limit the opportunity for fundamental attribution error to arise if conflict is to be managed effectively.

Stereotypes

Kimmel (2006) explains that the cause of fundamental attribution error "...is not random"; that the character traits and motivations we attribute to those who are perceived to act differently are derived from those behaviours from within our own culture which are considered to be inappropriate. They may also be produced by the projection of one's own mindset upon others. A contractor who frequently quotes contract clauses within correspondence and regularly issues notices in support of assertions for additional time and payment entitlement may be considered to be efficient within a contracting culture, but simultaneously conversely "contractually aggresive", a description attributed to the contractor's character and motivation, by the recipients of the same correspondence and notices on the employer's behalf. Similarly, an Architect who considers the contracting organisation's correspondence carefully and or bases his responses upon the opinons advanced by others before responding, or issues information at a less persitent rate than the contractor believes reasonable can similarly be perceived to be lazy, slow and or inept, and or the contractor may attribute to the Architect the motivation of being deliberately evasive and devious.

Employer's resentatives who prefer to believe that it is better not to air differences in front of the employer in order to maintain a perceived professional profile and so as to "save the face" of all in the eyes of the employer, may seek to agree an overall settlement within an amicable agreement at the end of the contract rather than to issue a direct response. But in doing so they risk being perceived by contractors as motivationally evasive and or characteristically devious.

In each case both parties may be demonstrating behavior that is perceived by their own not only to be normal but to be encouraged, but without intercultural training and experience there is a greater likelihood that stereotypes will be perpetuated.

To project one's own mindset in this manner, although naive as Fisher (1998) explains, is nevertheless normal within any society since it is the function of culture to generate homogeneous patterned human thought and behaviour by which everyone can project their perception expectations onto others without surprise or disappointment; providing the sense of security that only predictability can provide and with that mutual cooperation.

Expression of negative attribution however serves only to exasperate matters; encouraging the accused to become less receptive to perspectives and ideas different to their own that may be advanced. Unsurprisingly accusations of being inept and or malevolent generally cause offence, particularly when those being accused intend the opposite and serve only to encourage retaliatory claims. Negative attribution error therefore creates negative emotions and behaviours. In turn it generates further negative attributions and a downward degenerative cycle thereafter follows. Eventually the ultimate attribution error is achieved by which every individual involved is stereotyped as expressing personal dispositions when they do something undesirable in the eyes of the other, and as having no other choice when they do something desirable (Pettigrew (1979)).

Reasoning & Cognition

Kimmel (2006) explains that how we think and reason, i.e. our mindset or cognitive structure, is defined, acquired, influenced and shaped by culture, but that our mindset is unlikely ever to be sufficiently articulated to enable those with different cultures to appreciate the conclusions we reach and the decisions we make.

A theory of reasoning however was developed by Glenn and Glenn (1981) which drew a spectrum of distinction between:

  • intuitive reasoning, i.e. by which authority, principles and precedents hold the greatest weight, at one end of the spectrum; and
  • conceptual reasoning, i.e. by which experience, observation and pragmatism hold the greatest weight, at the other end of the spectrum; and
  • pragmatic reasoning, i.e. by which society has become still more diverse and specialised, the conceptual method is common, collective representations are viewed as testable hypotheses as opposed to absolutes and principles are only ideas to be dispensed with if unsuccessful.
Thus, within under-developed societies in which experiences are generally shared and there is little specialisation, reliance upon historical principles and precedents is prevalent. But as societies progressively develop the emphasis moves away from principles and precedents to experience and observation, i.e. expertise, until eventually the collective representations of a society are manifested within the society's experts.

Every day examples of the Glenn and Glenn (1981) theory in practice can be witnessed by comparison of sub-contrator and main contractor organisations within the construction industry. Although there are exceptions to the rule, generally speaking sub-contractors are normally smaller business units than the main contracting organisations with whom they contract. The larger main contracting organisation generally consist of specialist departments, such as contract management, surveying, and engineering, not to mention specialist administration departments including accounts, secretarial, purchasing and estimating. All of the functions undertaken by the specialist departments within the main contracting organisation are also undertaken within the smaller sub-contract organisations, but because of their size there does not exist the cost effective opportunity to have departments dedicated to the same specialisms to the same degree as they are within main contracting organisations. Instead a number of the specialist functions undertaken within the main contracting organisation may be undertaken by one individual within the sub-contractor so that for example, within the sub-contractor an individual may be responsible for estimating, surveying, engineering and contracts mangement with perhaps a particular emphasis upon one area depending upon the background of the individual.

Within the sub-contractor as a consequence, there may be less specialism, which by necessity increases the likelihood of greater generalisation and inevitably a greater reliance upon the intuitive reasoning of prinicples and precedents, whereas within the main contracting organisations there may be a greater emphasis upon experience and observation resulting in a dichotomy of cultural approaches between the sub-contract and main contracting organisation which can be so great so as not to be understood by the other.

Kimmel (2006) noted that Glenn and Glenn (1981) suggested that with greater specialisation "collective representations become to be seen as hypotheses to be tested rather than absolute truths." As a society progresses consensual reasoning gives way to pragmatic interpretation and what was understood to be a 'principle' matures to become an idea to be applied by derivation from, or guided by experience, observation or experiment; to be amended or dispensed with if found not to work.

Accordingly obtaining an appreciation of the basis of reasoning (mindset) of the other party is critical if both the relationship and conflict between the parties is to be managed effectively. Those who refer to specific clauses contained within a contract, books of authority and judicial precedents demonstrate a reliance upon intuitive reasoning, which Hofstede (1980) described as being high on uncertainty avoidance; whereas those who rely upon intention and conceptual beliefs reveal conceptual reasoning, described by Hofstede (1980) as ranking low upon uncertainty avoidance, exhibiting higher tolerance levels towards risk and ambiguity.

Cognition & Perception

Fisher (1998) explained however, that in order to serve its purpose the cognitive structure, i.e. mindset, must remain stable over long periods, its component elements must largely be compatible and it has to be sufficiently in tune with the "real world" and those around them to meet basic physical and social requirements.

Thus, the mindset enables individuals to perceive selectively in accordance with their cognitive structure. It would be pointless, even counterproductive, to notice everything, so instead the mindset perceives selectively without conscious effort, without the necessity to consciously decide in each event. Further, to aid stability of the mindset, which is necessary to maintain efficiency, perception tends to avoid disturbing established cognitive systems as little as possible and seeks to interpret in a manner that is consistent with the existing mindset. However, mindsets can change but may create 'cognitive dissonance' as Fisher (1998) points out, by which new experiences or information cannot be reconciled within the pre-existing cognitive system so that new explanations have to be created.

Accordingly, as Fisher (1998) observes a peaceful mind is a closed mind, but perception is much more locked than may be appreciated, taking a disproportionate amount of effort to change habitual ways of perception and reasoning. Fisher (1998) explains that evidence indicates that our brains are rigidly programmed as to what data will and will not be processed; the reason being that what we perceive is much greater than that which actually meets the eye with the sequence commencing innocently enough with the stimulus meeting the eye, thereafter however the stimulus triggers connections to previous, similar or related experiences which are continuously bound together until a complete overall picture is perceived within the mindset. The result as Fisher (1998) explains is that people are very selective as to what they directly perceive through their senses; perception is capable without seeing the whole and it is possible to perceive that which was not there creating the potential for misperception.

The mindset being moulded by society and culture, by education and socialisation, social experience, information and knowledge transmitted from other people, the way a person perceives others, interprets what they are doing and why, and how they respond is dictated by sociocultural circumstance, which when extended determines how one society or one group perceives another.

The social perception process, as explained by Fisher (1998), is extensively studied by social psychologists. Their study and evidence supports the idea that just as in physical reality, in social reality people perceive, reason and respond not according to the facts but instead pursuant to the image they form of the facts. Indeed, they emphasise that the individual's mindset deliberately channels the choice of perceptions from which an individual may choose, making it difficult to either detect and or override one's mindset in the interests of objectivity.

Fisher (1998) also explains that a further complication of such 'locked-in perception phenomenon' is that the more abstract a subject is perceived to be the more an individual will draw upon their cognitive system's resources to create meaning. This has particular significance in the area of construction because the bespoke nature of the majority of that which it produces determines a wide and varied possibility of abstract issues from arising in each project, including but not limited to points of law, contract interpretation, risk allocation, measurement, valuation, and delays. Thus, as Fisher (1998) observes, an individual will draw upon a higher proportion of previous experiences and knowledge when summoning a picture of an abstract issue than an individual would otherwise if physically gazing upon the subject itself.

It therefore follows that with regard to abstract issues the potential for variation of interpretation is inevitable, unavoidable and significant, particularly when varying intellectual abilities and perspectives of differing societies and groups are accounted for.

Equally and alternatively, to perceive an intangible issue demands the existence of a supportive cognitive system for without such, it is extremely difficult to construct a picture of an entirely foreign abstract sufficiently so as to be capable of generating meaning, so that perception is "locked-out" rather than "locked-in". In the area of construction conflict management, this can be experienced in circumstances in which no matter how many times or various ways are used to explain an issue, it resists comprehension by the other party who have to acquire or be provided with a completely new complex frame of reference before they may have opportunity to attach the necessary meanings to the facts to understand.

Just as the mindset channels perception, perception may be determined by the way the subject is presented. Fisher (1998) describes how the nature of stimulus is an area of particular study by psychologists, and how it can vary in intensity, strength, duration and repetition, and specifically tuned to fit the intended recipient's needs and interests. The degree of 'spin', i.e. stimulus, within British politics became much discussed within the UK media between 1997 and 2010, particularly during the period in which Tony Blair occupied the office of British Prime Minister, and much has been subsequently written in the UK media regarding concerted efforts to change the perception of Gordon Brown by the British electorate.

Cognition & Context

Accordingly, stimulus has particular application within the context in which it is presented and by the way the context is perceived and understood. Within a not uncommon conflict management scenario within a standard form contract; a contractor's application for an extension of time on account of an Architect's instruction received during a period of alleged culpable delay may potentially be perceived, rightly or wrongly, by an employer to be nothing more than an attempt to obviate the burden of liquidated damages arising from a delay to the completion date of the works for which, but for the concurrent delay alleged by the contractor to arise from the said instruction, the contractor may be liable to bear. Similarly, the same circumstances may be interpreted by the contractor as an attempt by the employer to avoid a loss and expense claim from the contractor due to the Architect issuing a critical instruction during a period of culpable delay.

Simply put, events as they arise during construction may be interpreted in different ways dependent upon the context in which they arise and conversely the meaning may be altered by broadening the context or taking the subject out of context.

Kimmel (2006) explains that it is also common to blame others for how we perceive their reasoning and communications, when greater understanding, both of them and us, is possible by looking at the differences between how we communicate. Within all communications there are significant conceptual dimensions, be they high or low context (Hall (1976)) and restricted or elaborated codes (Berstein (1975)).

Figure 2 - Hall (1981)
The relationship between high and low context communications and meaning

The difference between high and low context is that in the case of a high context communication the majority of the information necessary to appreciate the meaning of the communication is actually embedded within the context in which the communication is presented and comparatively very little information is contained in the explicitly transmitted part of the message. Unsurprisingly, low context communications are the opposite.

Bernstein (1975) observed that restricted code categories appear more often in high context communications, assuming the meanings of the recipient and thereby placing greater stress upon them. Whereas elaborated codes which commonly appear in low context communications, make the meaning explicit, placing greater stress upon the communicator to fit the message to the receiver.

Accordingly appreciating the communicator's and receiver's degree of context by listening for such codes can assist in the understanding of the situation, so that high context communications are commonly adopted in circumstances where the social relationship is important.

This contextual differentiation is characterised with the process of escalation from conflict to dispute, during which period there is a progression from the high contextual content of the written communications between the parties who are familiar with the project to the low contextual exchanges influenced by advisors who seek to establish communications capable of being relied upon by their client and understood by a potential third party decider as supportive of their client's position.

In high context systems, such as in Japan, those in positions of authority are personally and truly responsible for the actions of their subordinates, which as Hall (1981) explains includes down to the lowest man. In low context systems such as the United States of America and the UK, responsibility is diffused throughout the system so that it is difficult to identify those who are personally and truly responsible; Hall (1981) describes that in the event that a scapegoat is required, the lowest ranking scapegoat is chosen. High and low context organisations however are not the sole preserve of each respective system; high and low context organisations exist within high and low context systems. Within construction, the inability of a high context organisation to appreciate the communications of a low context organisation and vice-versa can create escalatory pressures upon conflict, i.e. an environment that is not conducive to effective conflict management.

Action Chains

Hall (1981) explains that the term 'Action Chain' is borrowed from ethology, closely linked to the situational frame and is similar to a dance by which two or more people participate. Like dances, they can vary between simple and complex but used as a means of achieving a common goal. Preparing for work in the morning, getting married and construction of a building are all examples of action chains of varying complexities and lengths. The example of construction of a building also serves as an example as to the existence of elaborate hierarchy of action chains.

Hall (1981) also describes that the degree to which an individual is committed to complete an action chain is one of the many ways in which cultures vary. Generally, those within high context cultures have a high degree of involvement with one another, they are higly interconnected and cohesive. This creates a strong personal and emotional bond between people which inevitably tends to develop a very high level of committment to complete action chains, which can create a reluctance to enter into anything in which the relationships are not well established.

By comparison low context individuals, such as those of north European descent and who primarily function through the use of word based communication systems do not ordinarily experience such profound sense of obligation to complete action chains. They may well therefore break a chain with very little hesitation if matters are not going as they had anticipated or their energies would be more profitably spent if directed elsewhere.

Consequently in circumstances in which it is necessary for those with different expectations and commitments to manage conflict between them, unless the different contextual approaches of the parties are recognised, respected and accommodated by all; it is unlikely that they shall be able to do so effectively.

To compound matters, Spitz (1964) theorised that if a human being is forced to cope with too many broken chains they shall have to compensate and that too many compensations will eventually prevent normal behaviour, which Spitz identifies as 'derailment of dialogue'. It is upon such derailment that Spitz attributes many of the ills of society in general.

Hill (1981) notes how high-context people also tend to be polychronic; that is they are apt to being involved in a lot of different activities with a number of people at any one time, characteristic of Mediterranean cultures. By comparison those who are monochronic tend to originate from within low-context cultures, in part by reason as to how they prefer to manage their lives, being more comfortable to take one matter at a time and finding simultaneous activities, relationships, and situations stressful. It is the high involvement factor however, that creates the higher levels of context, but to the monochronic such behaviour appears to be wildly disorganised, action chains become broken, conflict management becomes less effective and relationships tend to deteriorate.

By contrast, polychronics prioritise being nice, courteous and sociable with others below the completion of the project, but are much more prone to anger once it starts. The polychronic action chains therefore revolves around the human relationships formed; to prioritise attainment of the goal above the relationship with others is a distinctly unattractive characteristic to a polychronic.

From the perspective of effective conflict management, the monochronic and polychronic working together will view the same project from very different perspectives, with different objectives and different priorities.

Conflict Management

Kimmel (2006) notes that there is much greater potential for solution of conflict when viewed from a wide perspective and particularly if those within can alter their mindsets. Since to do so provides an insight and understanding of the other and their issues, thereby avoiding the potential for cultural misunderstanding, misperception and the escalation of conflict to dispute.

The astonshing mosaic of contractual relationships common to the majority of UK construction schemes combined with the largely bespoke nature of its product bestows upon its particpants an obligation to regularly and successfully negotiate with their contractual neighbours to varying degrees and effectively manage conflict between them; create microcultures; utilise and understand both high and low context communications; and, exploit intuitive and conceptual reasoning as circumstances dictate.

Bordon (1991) explains that intuitive reasoning is the principal function used to create and express new ideas, commonly associated with the creative role of an Architect in the construction process, and which is high in contextual meaning. By comparison the conceptual approach is the primary function used to organise and elaborate such ideas, commonly associated with the contractor's role within a construction project. The capacity for differing mindsets is therefore considerable and so where the mindsets are very different, say at the beginning of the project, it is beneficial to adopt low context and conceptual communications in order to share information effectively. Whereas, as a project proceeds and relationships develop higher context communication with their restricted codes become more important to the maintenance of relationships betwen participants.

The idiom 'a problem shared is a problem halved' resonates with Saunders' (1987) observation that combining ideas and approaches through facilitated intercultural exploration can produce successful solutions that may not have been conceived in isolation, improving the relationships between participants and increasing the effectiveness of conflict management.

Conflict and its causes

Since conflict arises in human relationships, culture is embedded in all conflict, determining not only how conflict arises and but also how it is resolved. Whether it plays a central role or influences, conflict arises from matters that are held dear and therefore there is always a cultural element to conflict. Inevitably therefore the process of conflict management becomes more difficult amongst those with different cultural backgrounds since they are less likely to possess a common perception, interpretation and understanding in conflict.

Greenberg & Baron (2008) note however that not all conflict is the same, observing that Dirks and McLean (2003) identify among three significant types of conflict that often occur:

  1. Substantive conflict - describes the conflict produced by a clash of perspectives, and if harnessed properly can be used to to produce an effective decision making process.
  2. Affective conflict - arises from a clash of personality or other interpersonal tension, often manifested in frustration and anger and common when individuals from different backgrounds are brought together to perform a task. It follows therefore, that those with greater similarity of background are less likely to clash.
  3. Process conflict - is generated by disagreements as to how resources and duties are divided within a group and with whom responsibilities will rest. Thus the greater the process conflict the more overall performance shall suffer.
Conflict may consist of any one or more of the above types of conflict and may therefore manifest itself in many forms.

Differentiating between conflict and dispute, Fenn et al (1997) identify that conflict is not only pandemic wherever interests compete but that it may also be managed so as to prevent conflict from escalating into dispute and the creative possibilities of conflict harvested. Whereas dispute on the other hand denotes a loss of creativity, the onset of destruction, the need for resolution, lending itself to third party intervention all of which has a cost, not merely measurable in terms of obvious hard currency but the less obvious and more difficult to measure destruction, opportunities lost and the personal loss to all those involved in its many guises. Thus Fenn et al (1997) establishes the existence of "escalation" from conflict to dispute, and significantly, not only that conflict can be managed effectively but as a consequence, that there is also a clear and present commercial advantage in doing so.

Indeed Cole (1995) proposed that when conflict is "...managed effectively," it "...can contribute to organisational effectiveness, but when mishandled can give rise to counter-productive behaviour, in which both sides lose."

To emphasise the point, Pruitt (2006) explained that "...in its original sense, "escalation" means movement from less extreme to more extreme contentious tactics by one or both parties to a conflict", including the "level of escalation" by which he means "...the severity of contentious tactics... used...", but the underlying causes of conflict stem from a variety of causes, including in particular grudges, distrust, malevolent attributions, destructive criticisms and competition for scarce resources identified by Greenberg & Baron (2008).

A grudge is the desire to seek revenge for a perceived wrong that is toxic to healthy relationships, can lead to the creation of alliances and drawing of informal battle lines which may all the while remain unknown both to the target of attention and others, wasting and misdirecting the energy of those drawn into the pattern of behaviour which would otherwise be more productively put to use upon the overall collective's endeavour.

Similarly the greater the perception that a party cannot be trusted, the more likely that conflict will arise and yet conversely within those projects viewed as desirable places to work, the environment is characterised by high levels of trust.

The malevolent attribution on the other hand is the perception that someone or thing has deliberately set about to hurt them, and where the perception turns to belief, conflict is rendered inevitable. Whereas in those circumstances in which a party who perceives harm suffered believes that such is not deliberate, conflict is not inevitable. It follows that false attributions of harm suffered at the hand another inevitably causes conflict as harm is then perceived to have been suffered by all parties.

Destructive rather than constructive critisism all too often results in avoidable conflict by which the opportunity to understand how a task may be performed better is otherwise lost to anger and suspicion.

Within the construction and engineering environment the scarcest, most valuable principle resource is time and money. It is therefore inevitable that conflict follows the distribution of these available resources amongst the parties to the process; the desire for self-preservation in particular serving only to fuel each party's perceived entitlement to the detriment of others, exacerbating conflict amongst the parties.

Theories of Conflict

Morgan (1986) identified three perspectives to matters of interests, conflict and power labelled unitary, pluralist and radical.

An organisation with a Unitary Perspective disregards power in favour of leadership, collaborating to pursue common goals, avoiding conflict through positive action and when conflict arises it is viewed to be caused by trouble makers. Organisations with a Pluralist Perspective are viewed differently; instead they are seen as a variety of different groups drawn together in which power is considered to be both an inherent and unavoidable positive currency by which conflict is resolved. Within those organisations possessing a Radical Perspective however, conflict is regarded as an inevitability of an opposing class structure in which power is considered to be the product of divisions between groups within the organisation.

The first two are most common within the construction industry. The paternalistic family businesses tend to be unitary whereas competitve firms tend to be pluralistic; regardless according to Morgan (1986), power "...is the medium through which conflicts of interest are ultimately resolved."

Interpersonal behaviour

Greenberg & Baron (2008) describe how interpersonal relationships are complicated, ranging from short to long term and from having very little emotional ties to extremely tight bonds between the participants. In that sense they observe that all relationships are unique. People can work at cross purposes however, and may even be perceived, at the very least, to work in such a way as to harm others. Such processes of working, they explain, are identified as forms of interpersonal behaviour.

Figure 3 below illustrates the major forms of interpersonal behaviour in the workplace identified by Greenberg & Baron (2008).

  • Prosocial - tendency for people to help others, even if it does not appear that they will benefit from doing so.
  • Cooperate - where people help each other and receive help.
  • Compete - people and companies do not always work with, but instead compete against one another; they seek to win and for the other to lose, breading resentment and escalating Conflict.
  • Deviant - when conflict is permitted to escalate to the extreme, the behaviour develops into the deviant form where one party retaliates against the other for perceived wrongs commited against it.
Figure 3 - Greenberg & Baron (2008)
The major forms of interpersonal behaviour

Greenberg & Baron (2008) note however that two processes play a crucial role in all interpersonal relationships; the development of psychological contracts and the building of trust.

Psychological contracts

The psychological contract concept was introduced in 1960 by Argyris (1960). Early definitions sought to incorporate the the expectations of organisations, but in 1989 Rousseau (1989) found that these are difficult to comprehend as a whole and so presented a narrower definition from the perspective of the individual as the central element thus:

"Psychological contracts are defined as the beliefs individuals hold regarding the terms and conditions of exchange agreement between themselves and their organisations."
Greenberg & Baron (2008) explain that whenever people enter into a relationship they have expectations as to what it should be like, including what the other should do and bring to the relationship. In construction it includes the expectation that if the job is built the contractor will be paid for it on time and can be as basic as if the employer leaves a telephone meassage with the contractor he expects it to be returned. Indeed with regard to written contracts, the psychological contract fills the gaps left by the written contract and its function is to reduce insecurity and a feeling of influence (McFarlane Shore and Tetrick (1994) as summarised by Anderson and Schalk (1998)). Shaped by each party's culture, the pyschological contract is based upon each party's perceptions and expectations, accordingly they are not normally recorded in writing and instead guided by the parties' expectations. Inevitably the potential for differences to arise between the perceptions and expectations of the parties is significant and in those circumstances in which the difference is significant, Greenberg & Baron (2008) explain that the potential for interpersonal friction is high (Dabos & Rousseau (2004)).

Citing Rousseau (1995), Greenberg & Baron (2008) explain that whilst psychological contracts can vary and are unique to each relationship, they can nevertheless be described in terms of 3 basic dimensions; transactional, relational and balanced. This is because psychological contracts vary with respect to time and performance requirements, thus the expectations are low with regard to temporary contracts. But with regard to fixed term contracts the expectation is that the contract will be seen to the end. Similarly performance expectations will vary depending upon the closeness of the relationship between their performance and the reward to be received, thus for some the employee may be paid simply on the number of units produced but for others it may be far more complex, the relationship is not merely economic. Thus the time and performance requirements suggest the presence of the 3 basic dimensions of transactional, relational and balanced (Rousseau (1995)).

Transactional contracts are those in which the expectations of the parties are simply economic and brief in duration whereas relational contracts, whilst also informal, are close and personal. For example, a contract with a joiner to hang 100 doors within a hotel refurbishment for an agreed sum per door is simple and brief in duration. Whereas an estimator who works for the same company for 25 years will have forged a relationship with his employer through shared experiences that goes beyond the economic and includes friendship and loyalty by which there is a sense commitment that can only be formed over a long period of time.

A combination of the transactional and relational is the balanced contract, by which the long term characteristics of the relational is brought together with the defined performance reward dimension of the transactional contract. An example is a trainee surveyor who accepts a position within an organisation. In exchange for the trainee's time, effort and talent, the trainee receives a modest salary but in addition, and perhaps more importantly for the trainee, the opportunity to acquire and practise new skills and knowledge within a protective environment under the supervision of an experienced practitioner.

The gravity of the three types of pyschological contracts determine the behaviour of the parties; accordingly those agreements which at not transactional are more likely to encourage parties to exceed their basic obligations, to assist others and display behaviour conducive to effective conflict management.

Greenberg & Baron (2008) point out that the nature of the pyschological contracts reflect the relationships that have been formed. Long term relational contracts demand high levels of conscientiousness and self-esteem, concern for a good job performed well with opportunities for growth beyond that simply measurable in terms of financial reward. Short-term commitments on the other hand do not make the same demands, do not require emotional stability or high levels of social skills and trust. Thus, although not reduced to paper, the degree to which the agreements entered into by the participants encourage the formation of positive pyschological contracts bears heavily upon the subsequent behaviour of the parties.

Trust

Lewicki, McAllister & Bies (1998) identified trust as referring to a person's degree of confidence in the words and actions of another, drawing a distinction between relational contracts where there is a high degree of mutual trust with that of the transactional contract on the other hand. If a building contractor executes valuable additional work that an Architect has failed to instruct timeoulsy, instead relying upon an Architect's promise to issue a written instruction, and if that instruction causes both delay and disruption to the Works and exposes the employer to a potential claim for loss and expense suffered by the building contractor as a consequence; the building contractor will be reliant upon the Archtect making good his promise. If however, the Architect fails to issue the promised written instruction and or instead allows the employer to form the opinion that the reason why the Architect did not issue the instruction timeously was due to a failure on the part of the building contractor; the building contractor will be less enthusiastic to enter into relational contracts in future and more likely to interpret the contract in hand transactionally.

Citing Lewicki & Wiethoff (2000), Greenberg & Baron (2008) observe two distinct kinds of trust, calculus and identification based. Characteristic of many commercial relationships the calculus based agreements are those by which the parties will behave as promised from fear of punishment, whereas identification based agreements are founded upon the acceptance and understanding of the other party's requirements and often arise when the parties know and understand each other well. Thus calculus based trust is formed in the nagative and resonates with transactional contracts; by contrast identification based trust is founded in the positive resonates with relational contracts and is more conducive to effective conflict management.

Greenberg & Baron (2008) claim that parties should strive to achive 3 specific objectives in order to strengthen, at least the perception of, trustworthiness:

  1. always meet deadlines;
  2. follow through as promised; and
  3. spend time sharing personal values and goals.
Whilst relational and transactional contracts arguably offer the opportunity to achieve the first two objectives to varying degrees, transactional contracts nevertheless afford the parties much less opportunity to exchange personal values and goals because of their short-term nature. The engenderment of trust is a critical component of the creation of an environment conducive to effective conflict management, and upon such basis, relational contracts are more conducive to effective conflict management than transactional agreements.

Project citizenship

Greenberg & Baron (2008) identify organisational citizenship behaviour ("OCB"), but in the context of construction projects a similar, albeit adapted, form applies. Adapting OCB the forms of project citizenship include:
  • speaking favourably of the project participants;
  • offering, participating in the development of, and being receptive to, new ideas;
  • being accommodative of fellow participants and understanding their objectives;
  • expressing loyalty to the project and the attainment of a common goal; and
  • helping fellow participants.
The more parties believe that they are being treated fairly by the other the more they trust the other's decisions and the more willing they are to 'go the extra mile' to help the other in time of need (Settoon & Mossholder (2002) and McNeely & Meglino (1994)). Whereas, on the other hand, those who perceive that they are being taken advantage of will not trust the other and will not participate in project citizenship.

Project citizenship can only occur within environments that encourage the participants to feel positive towards the project (Podsakoff et al (2000)) and hold good relationships with the other project participants (Tansky (1993)). But as Greenberg & Baron (2008) point out not all are predisposed to project citizenship; those who are conscientious and or display high levels of empathy are more inclined to engage in project citizenship (Ladd & Henry (2000)) which is unsurprising since it will be those same individuals who are more likely to seek out relational contracts and want others to feel good.

Greenberg & Baron (2008) described that such project citizenship begins within the participants, that it is they who either encourage or otherwise project citizenship, and identify 6 steps that may be adopted to increase project citizenship:

  1. 1. be a model of helpful behaviour - helping they say is contagious;
  2. 2. make voluntary functions worth attending;
  3. 3. demonstrate courtesy - it is difficult not to reciprocate courtesy when it is extended to you;
  4. 4. do not complain - again this is contagious;
  5. 5. demonstrate conscientiousness - demonstrations of conscientiousness are difficult to ignore and create examples that others follow; and
  6. 6. treat others fairly - the perception of unfairness can be singularly destructive to project citizenship and it requires considerable effort to maintain the perception of fairness, but can generate considerable increases in the levels of project citizenship.
Thus it is important for the project to foster an environment that promotes project citizenship. Critically, this includes the adoption of conscientiousness and empathy learnt behavior by those who are not predisposed to such behaviour, in order to create a healthier environment in which project citizenship may blossom and effective conflict management practised.

Cooperation

The construction industry is a model of achievement of common goals through cooperation, but the degree of cooperation is inconsistent. Cooperation is enormously beneficial enabling that which cannot be achieved alone to be attained, but remarkably it is not always attained. Worse, within construction Fenn et al (1997) identifes that conflict is pandemic because interests are perceived to compete and so rather than cooperating and coordinating their efforts they work against each other with each party seeking to win upon its own interests and for the other party to lose, i.e. a win/ lose conclusion.

Indeed within multiparty relationships such as those found in the construction industry noncooperative behaviour by one party can easily pass unnoticed or be concealed compared to that of a relationship between just two parties. This renders the multiparty relationship particularly vulnerable to one party ceasing to cooperate whilst simultaneously reaping large individual gains at the cost of the other participants.

The objective is therefore to create an environment that balances competition with cooperation. Greenberg & Baron (2008) note however that whilst many would readily accept that we should "do unto others as we would have them do unto us" in practice parties treat others how they have been treated previously, i.e. what they term as the 'principle of reciprocity'. It follows that once started it ought to be self-sustaining, and so the key to creating cooperation is igniting cooperation in the first instance and thereafter maintaining conditions that perpetuate and do not extinguish cooperation. It is therefore essential to create an environment that ensures that cooperation is more beneficial than defection, encourages communication between its participants, and promotes the establishment and maintenance of long term relationships rather than short term gains.

Measuring Contractual Culture

Van den Berg and Wilderom (2004) point out that whilst previous studies have relied upon a number of cultural dimensions, it is nevertheless neccessary that they be comparable if scientific knowledge is to be developed. The purpose of the empirical stage of the study to follow will be to identify the extent to which or otherwise the practices that are conducive to effective conflict management identified within this paper are fostered by the 3 main standard forms of construction contracts.

Since contractual culture is essentially a perceptual yet contractual phenomenon witnessed by the participants, in addition to a comparison and study of those contracts, to achieve comparibles it will be necessary to solicit and capture comparible perceptions from the participants too.

The comparison of the standard form construction contracts against the identified conducive features and characteristics may help to better understand and identify possible adjustments that may be made to standard form construction contracts, and the bespoke amendments that parties often introduce to the same before entering into contract, in order to achieve a contract that is more conducive to effective conflict management. Qualitative descriptions have previously been used in the study of organisations as indicators of culture according to Van den Berg and Wilderom (2004). To be able to compare the practices of the contract cultures however, Van den Berg and Wilderom (2004) stress academic research be based upon quantifiable data such as that capable of being produced by questionnaires, archived materials and observational data. But that is not to say that there is no room for qualitative data, indeed as in this study which shall combine the two, Van den Berg and Wilderom (2004) accept that before and after the use of quantitative data collection, the qualitative provides a basis upon which to formulate and afterwards interpret the questionnaire data. In particular indepth interviews and the author's own professional practice within the area of study provide and may reveal invaluable specific unique practises and interpretations.

Conclusion

There is an inextricable link between culture and conflict. Culture is the personality of the collective, defining its uniqueness in the same way personality determines an individual's uniqueness, and forms the basis of social reality. It determines meaning, our understanding and identity; shapes perception, attitude, reasoning, behaviour and conclusions. It can even cause one party to perceive conflict and for another not to. Conflict arises from human relationships in which interests compete, whether through a clash of perspectives, personality, the allocation of precious resources (which within the context of construction is generally time and money), or a combination of all three. For that reason it is clear that culture is woven into the fabric of all conflict determining how we identify, isolate, attribute responsibility and resolve. But whilst conflict is always a factor, whether central to the issues or driving influence, it ought not be confused with dispute; conflict does not denote escalation, a loss of creativity and the onset of destruction unlike dispute.

An understanding of conflict can facilitate the constructive harnessing of the creative energies emitted by conflict through effective management, but a cultural environment conducive to conflict management is a prerequisite. Opinion within government, the judiciary and construction appears to suggest however that not all construction industry standard form contracts engender such an environment, or at least may do so with varying degrees of success. The prerequisite environment is therefore itself the product of the adoption of contractual practices that possess particular features and characteristics.

The effectiveness of conflict management rests upon human perception and behaviour, which in turn is dependent upon the subjective and common cultures of the participants. Perception, cognition, reasoning and communication style differences can cause miscommunication, misperception and an escalation of conflict. What is felt and perceived may not necessarily be what was intended. The process of effective conflict management is further exacerbated with increases in cultural variances between participants because the degree of shared meanings and understandings decrease, denying the participants the ability to rely upon understandings and meanings common to their cultural background. If the dysfunctional conflicts that arise from, or are exacerbated by, communication problems and cultural variance are to be avoided or mitigated it is necessary for the contractual practices to facilitate the appreciation, understanding, allowance and respect for cultural differences between participants.

Maintaining adversarial processes, occupying official positions and behaviour that either has or has had some merit is likely to prove counterproductive, particularly so in circumstances in which the culture of the other participants differs to that of the perceiver. The more productive solutions lie in practices that encourage participants to break free from their differences by greater participation; seek deeper understanding of the controlling issues; form psychological contracts; develop trust; adopt project citizenship, balance competition with cooperation; inspire confidence in each other; and develop relationships.

The establishment of equalitarian relationships and consensual agreements establishes good faith and trust, which is critical to maintaining the multilateral agreements that commonly exist within a project's contractual mosaic.

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Nigel J. Davies
18 December 2011

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