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Relational Contracting, Culture & Relational Contracting, Culture & GlobalisationGlobalisation

Value in Project Delivery Systems: Value in Project Delivery Systems: Facilitating a Change in CultureFacilitating a Change in Culture

(2002(2002--022022--A)A)

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If we knew what it was we were doing, it would not be called research would it ?

-- Albert Einstein

ProblemProblem

Implementation of Implementation of relational contracting:relational contracting:

Throughout a range of Throughout a range of projects projects With a focus on client body With a focus on client body staffstaff

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Empowerment, regional development and sustainable Empowerment, regional development and sustainable industryindustryQueensland government have experienceQueensland government have experienceSuccessful on large projectsSuccessful on large projectsNeed to examine skill sets needed for successful Need to examine skill sets needed for successful partnering/partnering/alliancingalliancing

ContextContext

RationaleRationale

RM, Partnering and RM, Partnering and alliancingalliancing require a require a change of mind set change of mind set –– a culture changea culture changeClient side must change along with Client side must change along with contracting sidecontracting sideA fit is required between organisation A fit is required between organisation structure and organisation culturestructure and organisation culture

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ObjectivesObjectives

To move relational To move relational contracting down the contracting down the value chainvalue chain

Audit required of Audit required of current positioncurrent positionSkill sets need to be Skill sets need to be identifiedidentifiedChange needs to be Change needs to be implementedimplemented

Methodology Methodology ––Facilitating a Change in CultureFacilitating a Change in Culture

• National culture• Organisational culture• Organisational assessment• Commitment• Competing values framework • Pattern of interactions among

collaborating individuals / organisations• Structure of the coalition formed by collaborating partners• Pattern and extent of information sharing among the partners

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Wait for it…..This is good…….

Diagonal SliceDiagonal SliceIn Australia it has been In Australia it has been

identified that there are identified that there are four levels at which RM four levels at which RM needs to operate and that needs to operate and that each level has its own each level has its own issues:issues:

Principal/DirectorPrincipal/DirectorSuperintendent/project Superintendent/project managermanagerSuperintendent reps/engineersSuperintendent reps/engineersInspectors/foremenInspectors/foremen

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Benefits of RMBenefits of RM

Less paperwork;Less paperwork;More enjoyable to go to work;More enjoyable to go to work;People are more helpful, less destructive and People are more helpful, less destructive and more proactive;more proactive;Clients can potentially make savings in their Clients can potentially make savings in their operations;operations;Contractors can potentially make savings in their Contractors can potentially make savings in their operations;operations;Training and education.Training and education.

WorkshopsWorkshops

There must be a There must be a commitment from both commitment from both sides to send ALL sides to send ALL personnel along to the personnel along to the RM workshops;RM workshops;

andand

To maintain a stable project To maintain a stable project team throughout the team throughout the project.project.

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Issues Raised in the StudyIssues Raised in the Study

Organisational ChangeOrganisational Change

Organisational CultureOrganisational Culture

Acceptance of the existence of a cultural Acceptance of the existence of a cultural mismatch;mismatch;Rationalising the existence of different cultures Rationalising the existence of different cultures throughout the organisation;throughout the organisation;Legitimising individuals expectations of the type Legitimising individuals expectations of the type of culture which is appropriate to the company;of culture which is appropriate to the company;Empowering employees to address these Empowering employees to address these mismatches.mismatches.

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Hypothesised Patterns of Systematized, Discretionary and DevelopHypothesised Patterns of Systematized, Discretionary and Developmental mental Modes in Complex OrganisationsModes in Complex Organisations

HighHighMediumMediumLowLow5.5. Frequency of conflict among Frequency of conflict among ComponentsComponents

HighHighMediumMediumLowLow4.4. Perceived Interdependence among Perceived Interdependence among ComponentsComponents

LowLowMediumMediumHighHighc.c. Standardization & Standardization & CodificationCodification

LowLowMediumMediumHighHighb.b. AmountAmount

HorizontalHorizontalVerticalVerticalDiffuseDiffusea.a. DirectionDirection

3.3. Resource & Information Flows Resource & Information Flows among Organizational Levels, among Organizational Levels, Units & Positions:Units & Positions:

Mutual group Mutual group adjustmentsadjustments

Exceptions to Exceptions to hierarchyhierarchy

Rules, plans, Rules, plans, schedulesschedules2.2. Coordination and Control by:Coordination and Control by:

Coordination Coordination committeescommitteesHierarchy & staffHierarchy & staffCentral information Central information

systemsystem1.1. Organizational ReferentOrganizational Referent

Salient Dimensions of Managerial Salient Dimensions of Managerial SubsystemSubsystem

HighHighMediumMediumLowLowDifficulty & Variability of Task, Difficulty & Variability of Task, Problems, Issues Encountered by Problems, Issues Encountered by subsystem:subsystem:

Developmental Developmental Group ModeGroup Mode

Discretionary Discretionary Personal ModePersonal Mode

Systematized Systematized Impersonal ModeImpersonal Mode

Organisational StructureOrganisational Structure

Clearly define the mode within which the Clearly define the mode within which the organisation wishes to operate;organisation wishes to operate;If a mismatch is accepted, prepare a plan of If a mismatch is accepted, prepare a plan of actions for organisational change;actions for organisational change;If a mismatch is not accepted, then a If a mismatch is not accepted, then a programme should be developed to explain the programme should be developed to explain the situation to employees.situation to employees.

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(cont.)(cont.)

The consensus/conflict results suggest an issue The consensus/conflict results suggest an issue that needs further investigation that needs further investigation –– if if roles/relationships cannot be clearly stated or roles/relationships cannot be clearly stated or specifically laid down how should this be specifically laid down how should this be addressed by client departments.addressed by client departments.

A social infrastructure already exists within many A social infrastructure already exists within many organisations which is in harmony with relational organisations which is in harmony with relational contracting approaches and this should be contracting approaches and this should be further nurtured and documented as a learning further nurtured and documented as a learning and skills issue.and skills issue.

(cont.)(cont.)

Organisations’ management of its own clients, Organisations’ management of its own clients, the temporary multi intrathe temporary multi intra--organisation that is organisation that is imposed on it during projects, is a key issue in imposed on it during projects, is a key issue in the whole project delivery process.the whole project delivery process.

The role of informal relationships in problem The role of informal relationships in problem solving needs to be recognised and legitimised, solving needs to be recognised and legitimised, within the context of ethical behaviour.within the context of ethical behaviour.

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Traditional Adversarial Approach Long Term Benefits

CultureCulture

Reinforce all of the issues already identified and Reinforce all of the issues already identified and instil people with a vision.instil people with a vision.

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How can this be achieved?How can this be achieved?

??

Long Term IssuesLong Term Issues

A policy issue arises here A policy issue arises here –– including relationship including relationship management skills as one of the recruitment management skills as one of the recruitment criteria, not just possession of, say, an criteria, not just possession of, say, an Engineering degree. This raises the following Engineering degree. This raises the following questions:questions:

Is there a need to include this into formal graduate Is there a need to include this into formal graduate curricula and other training courses? curricula and other training courses? One cannot include relationship training if it is not One cannot include relationship training if it is not taught. Who will provide the training material? taught. Who will provide the training material? Should contractors be expected to and how can Should contractors be expected to and how can contractors train their own staff?contractors train their own staff?

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Client ManagementClient Management

Stakeholder CircleStakeholder CircleBourne, L. and Walker, D.H.T. (2005) Visualising and Mapping StaBourne, L. and Walker, D.H.T. (2005) Visualising and Mapping Stakeholder Influence, keholder Influence,

Management Decision, 43 (5), 649Management Decision, 43 (5), 649--660.660.