Alliance contracting: adding value through relationship development

Purpose - Alliancing and partnering have been extensively used to stimulate collaborative relations between supply chain members as well as to address the need to improve the performance of projects. Recognising the need to build and sustain relationships in alliances, the paper aims to present a model that is developed and tested by industry practitioners who are regularly involved with alliance contracting. The developed model can be used to encourage a culture of reflective learning and mutual trust, beyond merely project-specific performance outcomes. Design/methodology/approach - To examine the applicability of the conceptual model to alliance contracting in construction an exploratory approach was adopted. A total of 49 in-depth interviews were conducted over a six-month period with a variety of industry practitioners (clients, contractors, design consultants, construction lawyers, and alliance facilitators) who had extensive experience with working in alliance contracts. Interviews were used as the mechanism to examine the themes and constructs identified from the literature. Findings - The relationship development process represents a major contributor to successful alliance contracting and can add considerable value throughout the supply chain. There is a recognisable structure to relationship development that is underpinned by specific themes that should be considered when managing the alliance relationship. Trust and commitment are explicit elements that should be continually maintained in an alliance contract, and can significantly contribute to joint learning from joint problem-solving activities. From the respondents' perspectives it appears that the entire process of relationship development hinged around individual relationships, trust and organizational development. Practical implications - A three-phase model for building alliances is developed and can be used by practitioners to improve the performance of projects. Social implications - It is suggested that the developed model can be used to promote a culture of reflective learning and mutual trust, beyond merely project-specific performance outcomes. Originality/value - The research develops a model for relationship development and maintenance in construction projects so that sustainable relationships can be established. The proposed model includes three phases: assessment, commitment and endurance. Being able to manage each of these phases effectively is critical for successful project delivery and stimulating innovation.