The Social Capital View of the Transactional Governance Structure Between the Construction Firms and their Subcontractors
Date Issued
2015
Date
2015
Author(s)
Lao, Kin-Chi
Abstract
As construction engineering develops, construction industry is now facing unprecedented challenges. How to build up a strong team to meet the needs of the owners has become a major issue to General Contractor. We believe that the coordination capacity of General Contractor and technical skill sets of the Sub-Contractors is not the only key to the success of a construction work, but more so the relationship between General Contractor and Sub-Contractors. The General Contractor and Sub-Contractors have to build up the sense of identity, reciprocity, trust, norms, obligations, and through opportunities, motivations, abilities, meet different demands in different aspects of construction. And this brings out the value of social relationship. This value is called social capital. First, we study the literature of social capital theory and construction outsourcing, together with some practical experience from experts in related aspects. After that we interpret the contingencies of construction industry by the use of Alder’s & Kwon’s Social Capital Conceptual Model, and explore how the value of co-operation is produced between General Contractor and Sub-Contractors. Finally, to qualitatively validate the Social Capital Conceptual Model, we choose four sizeable Taiwanese General Contractor companies which are majored in different aspects. We would find out the situation that is best for using social capital to create value of co-operation. Our empirical studies have shown that both General Contractor and Sub-Contractors are willing to maintain long-term relations so as to overcome the risks arise from practical construction. We also make several conclusions in the study: 1. The social capital is mostly reflected in the aspect of practical construction. At this stage General Contractor needs to build up trust and reciprocity with Sub-Contractors. 2. In the aspect of pricing, long-term relationship may not have significant impact in cost-effectiveness. But in the aspect of coordinating practical construction, trust and reciprocity between the General Contractor and the Sub-Contractors are very useful in avoiding or overcoming risks. 3. In the aspect of acquiring material and equipment, the General Contractor may obtain lots of more-updated information from different Sub-contractors by the use of market mechanism. And in the aspect of coordinating practical construction long-term relationship is useful in integrating resources of Sub-Contractors. 4. In the context of today''s public constructions in Taiwan, the value of social capital is very limited. Meanwhile, social capital is much more influential in the context of private constructions in Taiwan.
Subjects
Social Capital
General Contractor
Sub-Contractors
Social Relationship
Network
SDGs
Type
thesis
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