Dispute Avoidance and Resolution (literature review) - Construction ...

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4.2 Root causes of disputesIt was concluded that further study was needed to establish significant claims so thatmanagement attention may be focussed on attempts to control the corresponding causesand reduce such claims. Clearly Table 4.1 highlights that there are past studies then thattend towards identifying the proximate causes of disputes and then studies that attempt toidentify root causes of disputes. There are studies which are tending towards a diagnosticapproach to dispute causes – ie deeper underlying structural, behavioural and culturalcharacteristics which pervade the industry, relationships between firms and projectenvironments rather than the immediate proximate or apparent symptom at the core of adispute which has resulted in litigation or undergone some form of a dispute resolutionprocess. Root causes can also been viewed as factors influencing dispute resolution andavoidance.The Construction Dispute Resolution Research Unit (CDRRU), City University, Hong Kong isone of the few research unit worldwide with a research focus on ‘construction disputemanagement’. The output of publications over the last five years from the Unit is extensiveand forms a comprehensive picture of the extent of the Unit’s research interests. Whilst theresearch directions of the Unit will to some extent be driven by the research interests andresearch backgrounds of the individual Unit members, a brief résumé of some of the keypapers provides an insight into research sophistication in the field.There would appear to be a relatively consistent research methodology which the Unitdeploys on most research questions in avoidance, disputation and resolution. Thismethodology is typically described by Wong and Cheung (2005) in their paper ‘ StructuralEquation Model of Trust and Partnering Success’ viz.“To achieve the research objective, the following methodologies were developed. Firstmetrics were developed to measure trust among project partners, then metrics for projectpartnering success were also developed, and subsequently a questionnaire survey wasdeveloped and administered to measure trust among project partners and partneringsuccess”.This approach of conducting an analysis of the published data to identify key issues whichthen become the basis of a questionnaire which is then administered to industry playerswould appear to be a tried and tested approach which yields robust data sets (Yiu andCheung, 2004, Wong and Cheung, 2005, Wong and Cheung, 2004, Cheung and Yui, 2006).The data resulting from this approach is then analysed using a variety of statisticaltechniques ranging from simple descriptive statistical analysis and Relative ImportanceIndices (RIIs) (Yiu and Cheung, 2004) to structural equation modelling (SEM) (Wong andCheung, 2005); Principal Component Factor Analysis (PCFA) (Wong and Cheung, 2004);Analytical Heirachy Process (AHP) (Cheung and Suen, 2002) and recently the use of a fuzzyfault tree model to predict the probability of the occurrence of a construction dispute. Theimportant contribution of this work to field of dispute resolution and avoidance literature is adeeper questioning of the root causes of disputes. The analysis used is typically a diagnosticapproach and seeks to identify complex interactions taking place between variables.Project 2007-006-EP Page 19 of 62
5. Industry reform to improve adversarial environmentThere have been two major approaches which have sought to address the problem ofdisputation in the construction industry. Although they tend to overlap and do not have to becategorised as distinct areas one grouping of approaches to dispute resolution can includealternative dispute resolution processes such as mediation, arbitration, negotiation or disputereview boards. The second grouping of dispute avoidance or prevention can include otherstrategies such as partnering, relational contracting, stakeholder management, alignment,alliancing, lean construction and supply chain management. We have seen a rise in the lastdecade of various approaches to manage conflict and to create project environments whichwould support success and this is a much far reaching field of literature that literally has noboundaries. This has developed in parallel to the other literature on dispute resolutionprocesses. Considerable progress has been made in the area of dispute resolution and inparticular in are of dispute control. Dispute control mechanisms have been extensivelyexplored in the literature however their use if far from extensive in the industry.5.1 OverviewIn Australia there have been numerous industry initiatives since the late 1980s which havesought to investigate the problems of the industry and then develop strategies and actions totake the recommendations arising from the investigations forward. The introduction of someof the more significant strategies listed above [lean construction, partnering, supply chainmanagement, alliancing] can be mapped to key investigations and/or initiatives aimed atindustry reform.This is an international phenomenon – for example, the United Kingdom has periodicallyanalysed it’s building and construction industry as far back as 1944 with the Simon Report,The Emmerson Report in 1962, the Banwell Report in 1964, Wood (1975) and the NEDOReport in 1988 – and more recently in 1994 The Latham Report and then in 1998 The EganReport. For a more complete analysis of the UK studies Rogan (1999) and more recently anextensive critique of the UK government reports from 1944-98 has been published by Murrayand Langford (2003). Lean construction and supply chain management became much moresignificant in the UK property and construction industry in comparison to the Australianconstruction industry where it has had less enthusiastic uptake. Egan was a champion oflean construction and supply chain management and was wholeheartedly supported by BAAand hence implementation of a theoretical management concept became a reality with thesupport of two such significant clients [UK federal and municipal governments and BAAlargest airline and second largest client at the time].5.2 Australian initiatives to address adversarial cultureContemporary reform in the Australian building and construction industry can be traced backto the late 1980s (Cole, 2002). A brief history of building and construction industry reform inAustralia was developed and reported in the 2002 Royal Commission into the Building andConstruction Industry Cole and reported in Discussion Paper 15. This overview provided acase study of three countries, Australia, United Kingdom and Singapore and compared thereform processes underway in each of these countries from the period 1988 till 2002. Figure5.1 builds upon the work undertaken for the Commission and updates till 2007. Reforminitiatives are often an event which can trigger significant change in policy, process and/orpractice. For example, it is important to note that similar to the UK reform processes andsubsequent uptake of lean construction and supply chain management in Australia theintroduction of partnering to the Australian construction industry is largely attributed to Cole.The overview of the history of the various initiatives provides a useful context to understandboth the performance of the industry and the attempts to assess and then improveperformance at an industry level. Within the context of this literature review it is useful tounderstand attempts to improve the performance of the industry from both a positive andProject 2007-006-EP Page 20 of 62
Page 2 and 3: Dispute Avoidance and ResolutionA L
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