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Enhancing Trust-Based Interface
Management in International
Engineering-Procurement-Construction Projects
Wenxin Shen 1; Wenzhe Tang, A.M.ASCE 2; Shuli Wang, Ph.D. 3;
Colin F. Duffield 4; Felix Kin Peng Hui 5; and Richun You 6
Abstract: The engineering-procurement-construction (EPC) method is gaining more acceptance worldwide as a project delivery strategy
due to the construction efficiencies gained through making one organization responsible for integration of the processes of design, procurement, and construction. Such EPC projects are not without their difficulties—for example, the time pressures frequently brought by overlapping design, procurement, and construction increase uncertainty and complexity in managing the multiple interfaces between different
interacting stakeholders. This paper aims to quantitatively and systematically examine how trust, openness, and communication interrelate to
improve interface management performance in international EPC projects. A conceptual model is developed and tested with data collected
from a questionnaire survey and interviews. The path analysis demonstrates that trust not only can be directly conducive to interface
management but also has a positive impact on interface management through enhanced interorganizational openness and communication.
Social network analysis visualizes contractors’ industrial relations and reveals different impacts of stakeholders in trust and interface networks of international EPC contractors. This study advances previous research by developing a systematic framework on the basis of trust
for understanding and promoting interface management. Understanding the in-depth underlying interrelations of trust, openness, and communication can contribute to improving alignment between stakeholders and to appropriately applying interface management in practice.
DOI: 10.1061/(ASCE)CO.1943-7862.0001351. © 2017 American Society of Civil Engineers.
Author keywords: Engineer-procure-construct; Interface management; Trust; Information sharing; Communication; Social network;
Organizational boundary; Contracting.
Introduction
The engineering-procurement-construction (EPC) method is gaining acceptance worldwide (Hale et al. 2009). With a fast-track
lifecycle, the EPC method can achieve lower costs and a reduced
project duration by integrating the design, procurement, and construction processes (Back and Moreau 2000). However, the adoption of concurrent design, procurement, and construction increases
the uncertainties and complexities of EPC projects, which makes it
1
Doctoral Candidate, Institute of Project Management and Construction Technology, State Key Laboratory of Hydroscience and Engineering,
Tsinghua Univ., Beijing 100084, China.
2
Associate Professor, Institute of Project Management and Construction Technology, State Key Laboratory of Hydroscience and Engineering,
Tsinghua Univ., Beijing 100084, China (corresponding author). E-mail:
twz@mail.tsinghua.edu.cn
3
Research Engineer, Electric Power Planning and Engineering Institute
of China, Beijing 100120, China; Institute of Project Management and
Construction Technology, Tsinghua Univ., Beijing 100084, China.
4
Professor, Dept. of Infrastructure Engineering, Univ. of Melbourne,
Melbourne, VIC 3010, Australia.
5
Senior Research Fellow, Dept. of Infrastructure Engineering, Univ. of
Melbourne, Melbourne, VIC 3010, Australia.
6
Doctoral Candidate, Institute of Project Management and Construction Technology, State Key Laboratory of Hydroscience and Engineering,
Tsinghua Univ., Beijing 100084, China.
Note. This manuscript was submitted on October 6, 2016; approved on
March 14, 2017; published online on June 21, 2017. Discussion period
open until November 21, 2017; separate discussions must be submitted
for individual papers. This paper is part of the Journal of Construction
Engineering and Management, © ASCE, ISSN 0733-9364.
© ASCE
more difficult to control and manage interfaces when in project
execution (Lee et al. 2006).
Interface management is associated with managing common boundaries between or among interacting organizations/
stakeholders, systems, and project phases (Lin 2013). The
Construction Industry Institute (CII) created a research team to
study interface management in 2012 and defined it as the “management of communications, relationships, and deliverables among
two or more interface stakeholders” (CII 2014). It has been considered an effective way to improve stakeholder alignment, enhance
communication and coordination, and reduce potential conflicts
and transaction costs in advance (Nooteboom 2004). Projects with
systematic interface management are likely to have better cost
performance (Shokri et al. 2015a, b). Implementing interface
management can improve partnering between project stakeholders
throughout overlapping phases and prevent the problems that stem
from incomplete information and miscommunication (Chen et al.
2008). Moreover, interface management can achieve its fullest potential in an EPC project because it can be applied and coordinated
extensively given its high degree of integration of design, procurement, and construction (Shokri et al. 2014; Chen et al. 2010).
Managing the inherent interdependencies between organizations in projects requires a high degree of trust-based coordination, sharing and exchanging information, and solving emerging
conflicts (Galbraith 1973). Existing studies agree that interface
management, which is an information- and relational-processing
activity, is closely related to trust, openness, and communication
(Chen et al. 2008). However, comprehension of the relationships among trust, openness, and communication is descriptive
and qualitative, and limited research illustrates their multilateral
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relationships using quantitative approaches. To address this gap,
a conceptual model is established and empirically tested to reveal
the cause-effect relationships among trust, openness, communication, and their effect on interface management performance in
EPC projects in a systematic manner. By drawing a holistic picture,
understanding of the in-depth underlying interrelations of trust,
openness, and communication can contribute to fully maximizing
the potential benefits of interface management and to appropriately
apply interface management in practice.
Fig. 1. Conceptual model for interface management in EPC projects
Conceptual Model of Interface Management
Literature Review
An interface is formed in the course of interrelation and interaction
among different organizations and stakeholders. An organizational
interface is a reciprocal relation between interdependent entities
(Brown 1983). Interfaces have been classified into different categories such as internal, external, physical, contractual, organizational, static, and dynamic (Chen et al. 2007; Pavitt and Gibb
2003; Morris 1983). The focus in this research will be on interorganizational interfaces in EPC projects. Previous studies have
identified inaccurate and inefficient information exchange as the
main reason for interface issues (Huang et al. 2008; Miles and
Ballard 2002; Al-Hammad 2000). Insufficient and inefficient communication hinders interface information from effectively flowing
and being exchanged across organizational boundaries, which
can result in poor interface management performance (Chen
et al. 2008).
Network theory is another way to consider interface management in EPC projects. Diverse project stakeholders, such as owners, contractors, designers, engineers, suppliers, local government,
financial organizations, and local residents (Wang et al. 2013;
Tang et al. 2008), with their complicated interfaces are fundamentally a social network. In this network, members’ close interactions can enhance free flow and exchange of resources (such
as information, knowledge, technologies, money, and materials).
This entails the establishment of links that are not constrained
by organizational boundaries to ensure the efficient transmission
of the required resources among organizations (Nadler and
Tushman 1997).
The networks of construction projects, however, tend to be less
cohesive and unstable because they are mainly one-off and temporary, being disbanded at the end of a project (Kadefors 2004). It is
therefore a challenge to increase the cohesion of an EPC project’s
social network. To deal with the complex interface issue, it is
essential to improve interorganizational activities and govern the
relationships and interactions between parties, which can be promoted by partnering (Tang et al. 2006). With the core concept
of win-win, partnering allows the active and effective exchange
of resources through diverse channels (Hong et al. 2012). By establishing a long-term commitment among project participants,
partnering creates the potential for development of a shared culture
and a cooperative atmosphere that disregards organizational boundaries. Developing partnering relationships should be based on
trust, openness, communication, common interests, and a mutual
understanding of the individual expectations of project participants
(CII 1991).
Nevertheless, the specific aspects of partnering that directly improve interface management have not been comprehensively studied. There is a need to better understand how trust, openness, and
communication are interrelated to improve interface management
performance in EPC projects. Thus, a conceptual model has been
© ASCE
developed to investigate the cause-effect relationships among
these ideals on the theoretical basis of previous studies (Ceric
2016, 2015; Manu et al. 2015; Brewer and Strahorn 2012;
Jäger 2008; Tang et al. 2006; Kadefors 2004; Crowley and
Karim 1995; Williamson 1979), as shown in Fig. 1. The objective
of this model is to improve interface management by achieving a
greater level of trust, openness, and communication among
stakeholders.
Trust
In the construction industry, the ideal of trust between stakeholders
is receiving more and more attention (Ceric 2015; Manu et al. 2015;
Kadefors 2004; Bonet et al. 2000; Sarker et al. 1998). Trust, communication, and commitment are of great importance in developing
a collaborative culture in construction (Gorse and Emmitt 2003).
Trust can even be thought of as a route to successful project management (Brewer and Strahorn 2012). One important objective of
interface management is to reduce risks and transaction costs
caused by information asymmetry between parties in business interactions (Jäger 2008). Specifically, EPC project contracts are normally signed on the basis of conceptual design, leaving high
uncertainties, and EPC activities in project implementation are
reciprocally interdependent. In this circumstance, in which uncertainty and interdependency coexist, a critical driver for project participants to effectively interact is trust (Schoorman et al. 2007).
Thus, trust is one of the most important strategies for addressing
information asymmetry existing between parties (Ceric 2016),
and can be considered an essential component in managing interorganizational relationships and developing satisfactory working
boundaries among interdependent project parties (Rousseau et al.
1998).
From the perspective of the principal-agent theory, dealing with
information asymmetry is closely related to aligning the interests of
both agents and principals (Akerlof 1970; Stiglitz and Weiss 1981;
Eisenhardt 1989). Trust among owners, contractors, designers, and
suppliers in construction projects can be explained by this theory
(Turner and Müller 2004; Jäger 2008). The establishment of trust
can help develop confidence among parties and encourage them to
exchange ideas and resources. A climate of trust enables project
actors to make their organizational boundaries more flexible and
permeable, which allows active interorganizational exchange and
communication (Crowley and Karim 1995). Within an environment
of trust, project participants can spontaneously engage in sharing
useful information and working cooperatively to realize their
common goals, which can considerably reduce transaction costs
and avoid opportunistic behavior during the process of interaction
(Williamson 1979). The benefits of trust can be achieved through
promoting communication among stakeholders and thus improving
project performance—for example, saving construction costs and
reducing project risks (Cheung et al. 2013; Tang et al. 2007). Trust
is also the base for project participants to form long-term partnering
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relationships for achieving strategic benefits, such as reducing owners’ transaction costs when selecting competent contractors, and
expanding the market share for contractors to win more jobs
(Morgan and Hunt 1994; Wang et al. 2016).
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Openness
Openness is the extent to which project participants share their
ideas with other stakeholders without suspecting hidden motives
that other stakeholders might have and without hiding key information (Suprapto et al. 2014; Tang et al. 2006). It is widely
acknowledged that openness between project participants is based
on trust, mutual commitment, and shared vision (Anvuur and
Kumaraswamy 2007; Bresnen and Marshall 2000). Different from
trust, which is attitudinal in nature (Cheung et al. 2003), openness
focuses on unrestricted and transparent access to information and
knowledge (Peter and Deimann 2013). Tightly organized interfaces
with closed external boundaries not only limit project participants
from interacting with each other freely and openly; they also prevent information from being transmitted accurately and in a timely
way, which is detrimental to smooth implementation of projects
(Crowley and Karim 1995).
An open climate makes organizational boundaries more permeable and flexible. Openness is an ideal condition for efficient
communication and for sharing information and resources,
thereby encouraging project participants to cooperatively deal with
interface-related issues (Amabile et al. 2004). Openness gives people from different organizations access to the necessary resources
and information to execute the project, thus preventing interface
issues from arising.
As one of the benefits of openness, exchange of integration information across organizational boundaries can contribute to saving time and money (Back and Moreau 2000). The open sharing of
information also discourages people from behaving opportunistically (Hargadon and Sutton 1997), resulting in reduced project risk
and uncertainty projects (Wong and Cheung 2005). Project definition in EPC contracts is normally unclear because such contracts
are prepared on the basis of conceptual design and incomplete information, leaving many internal uncertainties (Love et al. 2011).
Open sharing of information between contractors and designers is
essential to keeping design documents accurate and uniform. This
mutual information feedback between contractors and designers
can help optimize design, minimize rework, and improve constructability (Wang et al. 2016). Information sharing among project participants leads to substantial transaction cost reduction because less
money is spent to obtain necessary information for decision
making.
Communication
Communication refers to the flow of data, information, knowledge,
experience, and ideas between project participants, which requires
management of various interfaces and interconnections (Tang et al.
2006). Communication is considered to be vital for delivering projects successfully and has a great impact on the performance of construction projects (Bakens et al. 2005). Because valued information
and resources exist in different organizations involving project delivery, establishing links across organizational boundaries to ensure
that they flow efficiently between organizations is essential (Nadler
and Tushman 1997).
Efficient communication promotes cooperation and collaboration among project participants on the basis of trust (Sarker
et al. 1998), which is critical to interface management (Shokri
et al. 2012). Sound communication assists in preventing interface
© ASCE
issues and, should problems arise, is also a key element of conflict
resolution (Crowley and Karim 1995). Consistent, cross-functional
communication assists in interface conflicts being identified and
tracked early (Wright 1997). When interface problems occur, effective and direct communication can help project participants analyze
the causes and jointly seek solutions (Dettman and Bayer 2012).
Effective information flow, relying on high communication quality
between project stakeholders, can play a mediating role in the relationship between trust and project performance (Cheung et al.
2013).
Interface Management Performance
Compared with the traditional method of design-bid-build (DBB),
more uncertainties and complexities remain in the EPC approach,
which may make it riskier, especially for contractors (Öztaş and
Ökmen 2004). Interface management is a proven approach employed to respond to dynamic changes, reduce risks (Chen et al.
2007), and mitigate the adverse influence of project complexity in
EPC projects (Ahn et al. 2016). Good interface management
performance not only aids uncertainty reduction by standardizing
handling processes and workflows for diverse interfaces but also
enhances complex relationships in the social network by improving coordination and cooperation of project stakeholders. Poor
interface management performance and interface mismatches
are often responsible for delays and excessive rework (Chen
et al. 2007).
It is expected that trust, openness, and communication will assist
in achieving good interface management performance in terms of
quality, time, and cost. Trust between parties is the cornerstone of
interface management. Based on trust and mutual commitment,
project participants are more likely to be open to sharing their valued resources, enabling more permeable and flexible organizational
boundaries. But having the willingness to be open is not sufficient
to realize good interface management performance. Actions such as
establishing effective communication channels that adapt to organizational structure and characteristics are required to convey accurate and comprehensive interface information and to facilitate
efficient information exchange. Designing moderate interface
mechanisms for multidisciplinary and multiorganizational communication among parities is essential to achieving timely communication, coordination, and cooperation.
Empirical Research Questions
Exploring factors that have an impact on interorganization interface
management, and how they interact to promote high interface management performance, is the central aspect of the model concept.
Specifically, this study aims to examine the following research
questions:
• What is the level of trust between contractors and the interfacerelated stakeholders in EPC projects?
• What is the degree of openness between contractors and the
interface-related stakeholders in EPC projects?
• What is the level of communication efficiency between
contractors and the interface-related stakeholders in EPC
projects?
• What is the level of interface management performance in EPC
projects?
• What are the interrelations among these themes?
Answering these questions can broaden existing, currently limited, understanding of how these factors interrelate with the interorganizational interfaces in EPC projects.
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Research Methodology
interaction and flow of information among project participants,
using the data collected from the second part of the questionnaire
regarding the degree of interface management and trust between
contractors and different stakeholders.
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Triangulated Approach for Data Collection
A questionnaire survey was selected as the principal method for
collecting quantitative data. It was complemented by interviews
for further learning the views of the selected respondents (Love
et al. 2002). The questionnaire (see Appendix S1) was developed
from the conceptual model and included two parts. The first part
was to extract general information about respondents such as positions, involved projects, and working experience. In the second
part, respondents were required to evaluate the following status
on a five-point Likert scale based on their experience in delivering
EPC projects: (1) level of trust with stakeholders, (2) degree of
openness with stakeholders, (3) level of communication with stakeholders, and (4) performance of interface management with
stakeholders.
Because Chinese contractors are becoming more and more active in the international market [65 were listed as among the top 250
international contractors in 2015 (ENR 2015)], they were chosen as
questionnaire respondents. A total of 165 questionnaires were sent
out to international EPC contractors in China either by mail or delivered in hand. After excluding two invalid questionnaires, 107
effective questionnaires were returned with an acceptable response
rate of 64.8%. On average, the respondents had 13 years of work
experience in the construction industry, with rich knowledge and
skills in executing international EPC projects.
After completion of the questionnaires, semistructured interviews were conducted to obtain more detailed information about
interface management in practice. Forty-two respondents with more
than 10 years of experience in construction and holding senior
company positions such as project manager were selected to interview. Questions from the questionnaire were used as the interview
framework, and the respondents further explained their views on
specific questions based on their experience. The outcomes of the
face-to-face interviews were used to interpret the survey results for a
deeper understanding of interface management in EPC projects.
Data Analysis Techniques
The collected data were analyzed employing Statistical Package for
Social Science (SPSS 19.0) and UCINET. The data analysis techniques adopted in this study included (1) ranking cases, (2) reliability test, (3) Pearson correlation, (4) path analysis, and (5) social
network analysis.
Means of samples and ranking cases were applied to reveal the
level of trust, openness, communication, and interface management
in delivering EPC projects. Cronbach’s alpha coefficient was used
to assess the reliability and validity of the data, with the hurdles
0.7 ≤ α < 0.8 (acceptable), 0.8 ≤ α < 0.9 (good), and α ≥ 0.9 (excellent) (Sharma 1996). Pearson correlation analysis was employed
for measuring the strength of association between interface management performance of different stakeholders. Path analysis
was applied to validate the relationships in the conceptual model.
Social network analysis (SNA) is regarded as a powerful way to
exhibit interrelationships between individuals or organizations by
capturing and visualizing the social network structure and interactions among multiple stakeholders (Bourne and Walker 2006; Cova
and Salle 2006; Rowley 1997). It can be used to compresence and
analyze interface management in construction projects viathe
sociogram, which is a mathematical technique to formulate interactions between actors (Shokri et al. 2015a, b). Because interface
issues are fundamentally related to social networks, SNA was applied in this research as a quantitative method to reflect the dynamic
© ASCE
Survey Results
Trust
To understand the level of trust between project stakeholders in
EPC projects, the respondents were required to rate the level of trust
by responding on a five-point Likert scale (1 ¼ very low and 5 ¼
very high). The results are given in Table 1.
Referring to the table, Cronbach’s alpha value for the level of
trust is 0.868, which indicates that the internal consistency reliability of the data is good (Sharma 1996). The top three scores are
given to trust between contractors and owners, trust between
contractors and suppliers, and trust between contractors and designers, which demonstrates that international EPC contractors have
confidence in suppliers, owners, and designers. The score of trust
between contractors and local residents is the lowest, indicating that
contractors’ relations with stakeholders indirectly involved in projects is relatively weak.
Openness
Table 2 summarizes the degree of openness between stakeholders
evaluated by respondents on a Likert scale of 1 (very low) to 5 (very
high). Cronbach’s alpha value for the degree of openness is 0.887
(Table 2), which indicates that the internal consistency reliability of
the data is good (Sharma 1996). The degree of openness between
contractors and designers receives the highest, followed by openness between contractors and suppliers, which demonstrates that
contractors, designers, and suppliers in international EPC projects
have a high degree of openness with each other. This is because
designers, suppliers, and contractors are the key members of the
project team and are reciprocally interdependent in the business
chain. Dealing with multiple interface issues requires project participants to be open to sharing information and resources, which
can merge their organizational boundaries and, consequently,
Table 1. Level of Trust between Contractors and Project Stakeholders
Trust
Contractors–owners
Contractors–suppliers
Contractors–designers
Contractors–local government
Contractors–consultants
Contractors–financial organizations
Contractors–subcontractors
Contractors–local residents
Rating
Rank
Cronbach’s α
4.02
4.02
4.00
3.74
3.71
3.71
3.60
3.52
1
1
3
4
5
6
7
8
0.868
Table 2. Degree of Openness between Contractors and Stakeholders
Openness
Contractors–designers
Contractors–suppliers
Contractors–owners
Contractors–consultants
Contractors–financial organizations
Contractors–local residents
Contractors–local government
Contractors–subcontractors
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Rating
Rank
Cronbach’s α
3.94
3.83
3.77
3.69
3.67
3.61
3.58
3.52
1
2
3
4
5
6
7
8
0.887
J. Constr. Eng. Manage.
Table 3. Efficiency of Communication between Contractors and
Stakeholders
Communication
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Contractors–designers
Contractors–suppliers
Contractors–owners
Contractors–consultants
Contractors–financial organizations
Contractors–local residents
Contractors–subcontractors
Contractors–local government
Rating
Rank
Cronbach’s α
3.99
3.83
3.74
3.74
3.70
3.61
3.54
3.52
1
2
3
4
5
6
7
8
0.884
as the best (4.00), and the performance of interface management
between contractors and suppliers (3.95) and between contractors
and subcontractors (3.85) rank second and third, respectively,
demonstrating that interface management performance among contractors, designers, suppliers, and subcontractors is high. Interface
management performance between contractors and local residents
scores the lowest (3.25), indicating much room for improvement.
Pearson correlation was performed to understand the relationships between contractors and interface-related stakeholders,
with the results presented in Table 4. The interface management
performance correlation between contractors and stakeholders is
statistically significant (p < 0.05). However, the correlations for
“contractors–financial organizations” and “contractors–designers,”
and “contractors–financial organizations” and “contractors–
subcontractors” are not significant. These positive correlations
show that the interface between contractors and individual stakeholders can affect interactions between contractors and other stakeholders. For example, the project managers interviewed indicated
that good coordination with the Export-Import Bank of China allow
them to efficiently assist owners in obtaining export credits, which
not only give impetus to a project but also enhance relationships
between contractors and owners. The results of the correlations
also reveal that project stakeholders interweave with each other
and that networking exists in all project delivery processes.
significantly enhance work efficiency. The score of openness between contractors and subcontractors is the lowest (3.52), indicating
that there is still much room for contractors to improve openness with
subcontractors.
Communication
Table 3 summarizes the efficiency of communication between
stakeholders, rated by respondents on a Likert five-point scale ranging from 1 (low) to 5 (high).
According to the table, Cronbach’s alpha value of the efficiency
of communication is 0.884, indicating that there is a good level of
internal data consistency (Sharma 1996). Communication between
contractors and designers (3.99) receives the highest score, followed by contractors and suppliers (3.83); communication between
contractors and local government scores the lowest (3.52). These
results indicate contractors’ emphasis on communicating efficiently
with their main partners—namely, designers and suppliers. It is not
surprising that contractors have the lowest communication efficiency with local government. In some circumstances, in dealing
with issues such as permitting and land use, the contractor needs
the help of local government. However, because of the long approval process and bureaucracy, the efficiency of local government is
usually low, which is a potential political risk for international projects (Du et al. 2016).
Testing the Model
Path Analysis
To test the relationships among trust, openness, communication,
and interface management performance as developed in the model
(Fig. 1), path analysis was applied with the results shown in Table 5.
First, openness is highly correlated with trust [β ¼ 0.900
(p < 0.01)]. Second, trust and openness are positively related to
communication [β ¼ 0.303 (p < 0.01) and β ¼ 0.663 (p < 0.01),
respectively], with trust, openness, and communication collectively predicting interface management performance [β ¼ 0.314
(p < 0.05), β ¼ −0.058 (p > 0.05), and β ¼ 0.542 (p < 0.01),
respectively]. Third, the effect that openness exerts on interface
management performance has decreased from the original β ¼
0.732 to β ¼ 0.058, demonstrating that openness between stakeholders influences interface management performance by enhancing communication. Fourth, the effect that trust exerts on interface
management performance has decreased from the original β ¼
0.749 to β ¼ 0.314, demonstrating the partial mediation effect
of communication between trust and interface management
performance.
Interface Management Performance
The performance of interface management in EPC projects is rated
on a five-point Likert scale, ranging from 1 (poor) to 5 (good) and is
tabulated in the second column of Table 4.
Cronbach’s alpha value for the performance of interface management between stakeholders is 0.881 (Table 4), indicating good
internal consistency reliability (Sharma 1996). The performance of
interface management between contractors and designers is ranked
Table 4. Performance and Correlations of Interface Management between Contractors and Stakeholders
Interface
C-D
C-S
C-SU
C-C
C-O
C-FO
C-LG
C-LR
Rating
Rank
C–D
C–S
C–SU
C–C
C–O
C–FO
C–LG
C–LR
4.00
3.95
3.85
3.78
3.68
3.41
3.36
3.25
1
2
3
4
5
6
7
8
1
0.597a
0.585a
0.318a
0.476a
0.158
0.422a
0.446a
—
1
0.511a
0.475a
0.353a
0.345a
0.346a
0.347a
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1
1
0.214b
0.530a
0.144
0.529a
0.333a
1
0.473a
0.647a
0.459a
0.253a
1
0.319a
0.610a
0.287a
1
0.396a
0.468a
1
0.540a
Note: C–C = contractors–consultants; C–D = contractors–designers; C–FO = contractors–financial organizations; C–LG = contractors–local government;
C–LR = contractors–local residents; C–O = contractors–owners; C–SU = contractors–subcontractors; C–S = contractors–suppliers.
a
Correlation is significant at the 0.01 level (two-tailed).
b
Correlation is significant at the 0.05 level (two-tailed).
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Table 5. Test of Relationships among Trust, Openness, Communication,
and Interface Management (IM)
Independent
variable
Dependent
variable
Trust
Trust
Openness
Trust
Openness
Trust
Openness
Communication
Trust
Openness
Communication
Openness
Communication
Communication
Communication
—
IM performance
IM performance
IM performance
IM performance
—
—
Step
1
2
3
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4
5
R2a
β
0.808 0.900a
0.808 0.899a
0.873 0.935a
0.890 0.303a
—
0.663a
0.557 0.749a
0.531 0.732a
0.589 0.770a
0.369 0.314b
— −0.058
—
0.542a
Centrality
Degree
t
21.169
21.044
27.032
4.085
8.950
11.590
10.994
12.373
2.064
−0.309
2.901
Closeness
Betweenness
Network type
Trust Interface Trust Interface Trust Interface
Owners
Suppliers
Designers
Consultants
Local government
Financial organizations
Subcontractors
Local residents
0.746
0.746
0.728
0.588
0.561
0.553
0.491
0.482
0.553
0.746
0.737
0.614
0.412
0.439
0.658
0.325
0.644
0.644
0.630
0.535
0.521
0.516
0.485
0.481
0.498
0.616
0.610
0.530
0.437
0.447
0.556
0.406
0.154
0.183
0.161
0.072
0.084
0.087
0.053
0.056
0.099
0.186
0.169
0.122
0.033
0.041
0.120
0.021
way to reveal the complex interactions among project participants
and pinpoint the key network players.
Compared with a one-mode network that studies same sets of
entities, such as person by person and organization by organization,
the two-mode network aims to explore the relations between different sets of entities, such as persons and organizations (Borgatti
2009). This study adopted the two-mode network to analyze relations between questionnaire respondents and project stakeholders
using measures of centrality and network visualization.
Note: R2a = adjust R2 ; β = standardized regression coefficient.
a
p < 0.01.
b
p < 0.05.
Fig. 2. Final model for interface management in international EPC
projects; *Correlation is significant at the 0.01 level (two-tailed);
** Correlation is significant at the 0.05 level (two-tailed)
As shown in Fig. 2, trust influences interface management performance by driving openness and effective communication. The
path analysis results validate the paths shown in Fig. 1. Path 1:
trust → interface management performance; Path 2: trust →
communication → interface management performance; and Path 3:
trust → openness → communication → interface management performance. The first and second paths indicate that trust not only is
directly conducive to good interface management performance but
also has a positive impact on interface management performance
through enhanced communication. The third path shows that trust
has a significant impact on openness and that openness exerts its
influence on interface management performance through improved
communication. These paths demonstrate that communication plays
a partial mediation role in the relationship between trust and interface management performance, but plays a full mediation role between openness and interface management performance. The
results indicate that establishing effective communication channels
that adapt to a project’s characteristics and delivery processes is
essential for trust and openness to facilitate interface management
performance.
Social Network Analysis
Construction projects are multidisciplinary and multiorganizational. As the results in Table 4 reveal, the interwoven relationships
among stakeholders fundamentally represent a social network. Because of the dynamic and one-off nature of construction projects,
the networks in the construction industry are normally less cohesive
and unstable than those in the manufacturing industry (Chinowsky
et al. 2008), and the interactions among project stakeholders in
these networks are complicated. Social network analysis is an ideal
© ASCE
Table 6. Centralities of the Interface and Trust Networks
Measures of Centrality
Centrality is a concept used to measure the prominence of an actor
in a network (Freeman 1978). If an actor’s centrality is high, he or
she has strong influence or power in the network. The three most
common measures of centrality are (1) degree, indicating the number of direct connections to an actor; (2) closeness, capturing
how independent an actor is from the communications flow and
measured by the number of an actor’s indirect connections; and
(3) betweeness, assessing the power or capability of an actor by
calculating how often he or she travels a path between two nonconnected nodes” (Freeman 1978). A person with high betweeness
centrality occupies a brokerage position and can be considered a
gatekeeper or broker who has the power of to control the resources
and information flowing through the network (Krackhardt 1992).
Table 6 scores the three centralities s of the trust and interface
networks of EPC contractors and project stakeholders. It shows
that, in a trust network, owners, suppliers, and designers are the
top three in all three types of centrality, demonstrating that they
are highly reliable from the perspective of international EPC contractors. This also suggests that EPC contractors have high confidence that owners will meet their commitments and that designers
and suppliers can competently carry out their assigned project
tasks. Comparatively, in an interface network, suppliers, designers,
and subcontractors are the top three in the three types of centrality,
although subcontractors rank fourth in betweenness centrality. This
is quite reasonable because international EPC contractors, designers, suppliers, and subcontractors are team members and have high
connectivity with each other in project-implementing processes.
Notably, suppliers play significant roles in EPC contractors’
trust and interface networks. Good relationships with key suppliers
can help contractors obtain cost-effective materials and equipment
in global markets. This is is particularly important when considering that a large proportion of EPC projects’ costs are related to
material and equipment, especially in large-scale and technically
complex projects such as hydropower (Azambuja et al. 2014;
Du et al. 2016). As shown in Table 6, suppliers are first in both
trust and interface networks regarding degree, closeness, and
betweeness centralities, indicating that EPC contractors have established high levels of trust-based cooperation with suppliers to improve international EPC project performance.
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Table 7. Spearman Correlations among Stakeholder Rankings in Centralities
Trust network
Degree
Closeness
Betweeness
Degree
Closeness
Betweeness
Degree
Closeness
Betweeness
1.000
1.000a
0.838a
—
1.000
0.838a
—
—
1.000
1.000
1.000a
0.976a
—
1.000
0.976a
—
—
1.000
a
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Interface network
Centrality
Correlation is significant at the 0.01 level (two-tailed).
To explore whether there is consensus among the stakeholders’
rankings in different centralities, Spearman rank correlation coefficients were calculated and are summarized in Table 7. The results
show that in both networks, the correlation coefficients among
degree, closeness, and betweenness centralities are higher than 0.8
(at p < 0.01), indicating that they are significantly correlated with
each other.
Sociograms of International EPC Contractor Trust and
Interface Networks
Based on degree centralities, this study used two-mode network
analysis for visualizing the relations between international EPC
contractors and project stakeholders to further understand trust
and interface networks. The results are shown in Figs. 3 and 4,
which represent the multidimensional scaling of the trust and
interface networks of EPC contractors, respectively. The 107 questionnaire respondents are represented by round nodes, and 8 stakeholders in EPC projects are represented by square nodes. The
relations between actors (the respondents and the stakeholders)
are represented by links (Wasserman and Faust 1994; Pryke
2004). Each node is sized according to the actor’s betweenness centrality, which is a measure of the extent to which the actor controls
the interaction of others. In the trust network (Fig. 3), (1) the nodes
representing the stakeholders are close to each other if they have
trust relationships with almost the same respondents; (2) the nodes
representing the respondents are located close to each other if they
have trust relationships with almost the same stakeholders; and
(3) the stakeholder nodes are close to the respondent nodes if those
respondents have trust relationships with those stakeholders
(Borgatti and Everett 1997). The rules of interpreting the interface
network (Fig. 4) are similar to those for the trust network. The positions of actors indicate the number of their linkages to others: the
actors with more ties to others are located in the center, whereas
those with fewer ties are scattered around the periphery.
As shown in Fig. 3, in the trust network the owners, designers,
and suppliers are located in the center of the sociogram, suggesting
that EPC contractors’ trust relationships with these three stakeholders are most influential. This is in tune with the survey results in
Table 1, where trust between EPC contractors and these three stakeholders is ranked at the top. The interviewed project managers confirmed the significant impacts of building trust relationship with
these stakeholders, saying, for example, “In the bidding stage,
many of our jobs were largely attributed to owners’ trust based
on our good industry reputation or our past successful cooperation
experiences, and in the implementing stage, we highly relied on
trust-worthy designers and suppliers to help us fulfill the EPC
project tasks.” Other stakeholders such as local residents are located
relatively far from the center of the interface network, indicating
that EPC contractors’ trust relationships with these stakeholders
need to be gradually developed.
In Fig. 4, it is observed that the eight stakeholders can be
grouped into four clusters. The first cluster, consisting of designers,
suppliers, and subcontractors, is located in the core of the sociogram, illustrating that EPC contractors interact most frequently
with these stakeholders. This makes intuitive sense because EPC
contractors take total responsibility for carrying out engineering,
Fig. 3. Sociogram of trust network of international EPC contractors and stakeholders
© ASCE
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Fig. 4. Sociogram of interface network of international EPC contractors and stakeholders
procurement, and construction, and designers, suppliers, and subcontractors are the essential upstream and downstream partners in
the business chain. This is in line with the survey results in Table 4,
where the performance of interface management between EPC contractors and these three stakeholders is ranked at the top.
The second cluster includes two nodes representing owners and
consultants. As the owner’s agents, consultants represent the owners by sending orders to contractors and approving design, equipment manufacture, and construction options (Tang et al. 2009).
Therefore, in many circumstances consultants’ behaviors are considered the owners’ organizational behavior from the perspective of
EPC contractors. This explains why the two nodes are near each
other in the interface network (Fig. 4).
The third cluster in Fig. 4 includes local governments and financial organizations. Local government exercises permitting power
over a project by evaluating its influence on the economy, society,
and the environment. Financial organizations, such as the ExportImport Bank of China, normally require local governments’ security for loans to develop a project. From the perspective of
international EPC contractors, interactions with these two stakeholders are less frequent than they are for the first and the second
clusters. However, local governments and financial organizations
can largely decide whether or not a project will proceed.
Local residents are located peripherally with the lowest centrality in the network of EPC contractors (Fig. 4), indicating that
contractors’ ties with local residents are relatively weak. Local residents’ low participation can be attributed to the lack of a mechanism to incorporate community needs into the project development
process. Besides, local governments and owners are more critical in
dealing with the issues such as land acquisition and resident resettlement, whereas EPC contractors mainly focus on building local
infrastructure and protecting the environment.
Discussion
The results of this research have confirmed and advanced the
conclusions of previous studies and have broad theoretical and
practical implications. Testing the model of interface management
in EPC projects supports the belief in trust’s prominent role in
© ASCE
dealing with transaction costs arising from uncertainty and opportunism (Williamson 1979; Zaheer et al. 1998; Cheung and Pang
2013). Fig. 2 shows that trust can both directly enhance openness
and influence communication to improve interface management
performance, showing that it can reduce information asymmetry
and lower monitoring costs by promoting openness and effective
communication among stakeholders.
It is notable that trust, openness, communication, and interface management performance of “contractors–designers” and
“contractors–suppliers” are all ranked in the top three in Tables 1–4,
demonstrating that EPC contractors perform well with designers
and suppliers in terms of interface management. The results of social
network analysis can explain the critical roles of designers and
suppliers in the networks of international EPC contractors.
As shown in Table 6 and Figs. 3 and 4, suppliers have the highest centralities and are located in the center of the trust and interface
networks, showing that their ties spread out among various
international EPC contractors. The results support the proposition that procurement risk management is critical in delivering
international large-scale, technically complex EPC projects because procurement costs account for a large share of total project
investment (Azambuja et al. 2014; Du et al. 2016). By establishing
long-term trust-based cooperative relationships with suppliers
worldwide, contractors can use their global channels to reduce
logistical uncertainties caused by long-distance transportation
and thereby reduce equipment and materials delivery time and cost.
The interviewed project managers indicated that they prefer major
equipment suppliers from the home country based on their successful cooperative experiences with them. Choosing these suppliers
lowers the costs stable and cost-effective equipment and materials
and reduces problems associated with the equipment design–
manufacturing–installation interface.
Designers also have high centralities and are located in the
center of the networks (Table 6 and Fig. 4), demonstrating their
strong role in delivering EPC projects. EPC contracts signed
between contractors and owners are normally based on conceptual
design, leaving high uncertainties in the early stages of project
implementation. Interviewed project managers confirmed that it
is critical for contractors to create interface conversations between
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designers and involved participants such as owners, consultants,
suppliers, and local residents in order to clearly interpret the
owners’ requirements, consider social and environmental issues,
specify technical standards, and choose feasible design options
through multiple communication channels. This study shows that
the more project participants communicate, the more they understand each other’s needs and potential problems, which can prevent
issues arising from incomplete information (Gainey and Klass
2003). For example, a contractor in Indonesia discovered that a preliminary design might lead to much higher construction costs than
represented by the bidding price. Open communication between the
designer and the contractor enabled them to integrate each other’s
design and construction expertise to jointly achieve an optimum
and cost-effective design option that saved approximately US
$50 million. This case is in line with the finding that effective communication has a strong influence on the optimization of design
options and design change management (Wang et al. 2016).
It is also notable that owners’ positions in the trust network differ from their positions in the interface network. Whereas designers
and suppliers occupy central positions in both networks, owners are
in the core of the trust network (Fig. 3) but are relatively far from
the center of the interface network (Fig. 4). This discrepancy can be
explained by the final model (Fig. 2), in which interface management performance is influenced not only by trust but also by openness and communication. Because EPC contractors take sole
responsibility for carrying out EPC tasks, owners are not actively
involved in routine jobs. This is different from DBB projects, in
which contractors need to interact with owners frequently in dealing with design errors and omissions, unforeseen site conditions,
equipment and materials quality problems, and other relevant issues
(Pishdad-Bozorgi and Garza 2012; Tang et al. 2013).
The findings from this study have broad practical implications
for improving the management of complicated interorganizational
interfaces in international EPC projects. They can be translated into
the practical strategies discussed next.
First, the interface management model (Fig. 2) shows that building trust is fundamental to openness, communication, and interface
management performance. This means that contractors should establish trust-based partnering relationships with stakeholders by
creating a cooperative climate, allocating risks/rewards equitably,
and enhancing team building in project implementation.
Second, the study reveals communication’s direct mediational
effects on interface management performance. This suggests that
building formal and informal communication channels that adapt to
EPC project characteristics and delivery processes should be emphasized to create trust and good interface management performance.
Third, because openness is a significant element in improving
interface management, measures should be taken to increase information sharing and traceabilityto reduce information asymmetry
and conflicts arising from opportunistic behavior.
Forth, the results of social network analysis highlight that contractors’ ties with local residents are relatively weak. Measures
should be adopted to enhance local participation in dealing with
social and environmental issues related to EPC projects, thereby
incorporating community needs into project development.
Conclusions
Findings
The engineering-procurement-construction (EPC) method is gaining acceptance worldwide because of its high efficiency and integrative solutions (Hale et al. 2009). A key challenge in delivering
© ASCE
international EPC projects is that various stakeholders and concurrent design, procurement, and construction processes increase
complexities and difficulties in management interface. However,
current studies lack a systematic way to identify the underlying factors in interface management performance or to analyze how these
factors are interrelated. In this study, a conceptual model was established on the basis of a literature review and empirically tested
with data collected from questionnaires and interviews. This research reveals that trust, openness, and communication play a critical role in improving interface management in EPC projects, and it
depicts their multilateral relationships. The main findings of this
research are discussed next.
The survey outcomes outline the status of EPC contractors’ interface management regarding trust, openness and communication.
The results demonstrate that, on the basis of trust and openness,
EPC contractors have developed good relationships with the main
project stakeholders such as owners, and are able to communicate
efficiently with key EPC team members such as designers and
suppliers.
Path analysis of the conceptual model reveals three critical paths
from trust to interface management performance: (1) trust → interface
management performance; (2) trust → communication → interface
management performance; and (3) trust → openness → communication → interface management performance (Fig. 2). These paths
demonstrate that communication plays a partial mediation role in
the relationship between trust and interface management performance but a full mediation role between openness and interface
management performance.
Social network analysis allows visualization of relations between international EPC contractors and project stakeholders to
further understand trust and interface networks. In the trust network
(Fig. 3), owners, designers, and suppliers are located in the center
of the sociogram, suggesting that EPC contractors’ trust relationships with these three stakeholders are the most influential. In the
interface network (Fig. 4), from the perspective of international
EPC contractors, project stakeholders are grouped into four clusters. The first cluster, consisting of designers, suppliers, and subcontractors, is located in the core of the sociogram, illustrating that
EPC contractors interact most frequently with these stakeholders,
who are essential upstream and downstream partners in the business chain. The second cluster includes owners and consultants;
in many circumstances, consultants represent owners in orders
to contractors and design, equipment manufacture, and construction option approval. The third cluster includes local governments
and financial organizations, which, in controlling project permission and financial support, largely decide whether or not a project
will proceed. Local residents are at the periphery of the sociogram
with the lowest centrality in the EPC contractor network (Fig. 4),
indicating that international EPC contractors’ ties with local residents are relatively weak.
It is noteworthy that owners’ positions differ between the trust
network and the interface network. Owners locate in the core of the
trust network, whereas they are relatively far from the center of the
interface network. This can be explained by the difference between
EPC projects and DBB projects: in EPC projects contractors take
sole responsibility for tasks, in which owners are not actively
involved.
The findings suggest broad practical strategies to improve
management of complicated interorganizational interfaces in
international EPC projects. These include (1) building close interorganizational links and social networks with various project stakeholders to resolve problems of resource restriction; (2) promoting
partnering among participants on the basis of trust and equitable
risk/reward allocation to facilitate information sharing, mitigate
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the impacts of uncertainty, and reduce conflicts caused by opportunistic behaviors; (3) establishing effective communication channels congruent with the project characteristics and EPC processes
to bridge trust and good interface management performance; and
(4) enhancing local residents’ participation in dealing with social
and environmental issues related to EPC projects, thereby incorporating local community needs into project development.
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Contributions to the Body of Knowledge
This study provides evidence of interdisciplinary connections
among knowledge areas of trust, openness, communication, and
interface management, thus contributing to the body of knowledge
in both theory and practice. First, this study advances previous
research on interface management (Shokri et al. 2015a, b, 2012;
Chen et al. 2007; Pavitt and Gibb 2003) by developing a systematic
framework based on trust for understanding and promoting interface management. Second, by drawing a holistic picture, this research reveals that trust not only directly promotes interface
management but also exerts an influence on communication
through enhanced openness, thereby improving interface management performance. By achieving a greater level of trust, a project
team will be able to enhance openness and communication within
the network, which in turn will lead to higher interface management
performance. Third, this research provides valuable insights into
relationships between stakeholders by combining interface management with social network theory. The results reveal the different
impacts of stakeholders in the trust and interface networks of
international EPC contractors, which can help contractors optimally
allocate resources in interactions with high-impact stakeholders,
such as designers, suppliers, and owners. Fourth, comprehensively
understanding in-depth underlying interrelations can contribute to
improving alignment between stakeholders and to appropriately applying interface management in practice. Specifically, the insights
from this study can help contractors strategically develop their
industrial relationships and handle complex interface issues to improve international EPC project outcomes.
Limitations and Future Research Directions
The main research limitation of this study is its use of data collected
only from Chinese EPC contractors. Nevertheless, because the conceptual model is developed based on theories derived from worldwide experience, it appears that the insights it offers are transferable
to interface management in different project delivery systems, such
as design-bid-build (DBB) and build-operation-transfer (BOT)/
private-public-partnership (PPP). Future studies could be conducted to (1) validate the model by collecting data worldwide from
different project delivery approaches and different perspectives of
project participants such as clients, designers, and consultants;
(2) identify more factors impacting the performance of interface
management from a boarder view, considering the dynamic features
of project execution; and (3) studying how to enhance efficient information circulation and reduce conflicts among interface-related
stakeholders by developing appropriate industrial networks.
Data Availability Statement
Data analyzed during this study are available from the corresponding author by request. Information about the Journal’s data-sharing
policy can be found here: http://ascelibrary.org/doi/10.1061/%28
ASCE%29CO.1943-7862.0001263.
© ASCE
Acknowledgments
Many thanks are offered to the National Natural Science Foundation of China (Grant Nos. 51379104, 51579135, 51079070,
50539130, and 70671058), the State Key Laboratory of Hydroscience and Engineering (Grant Nos. 2013-KY-5, 2015-KY-5,
and 2009-ZY-7), and the Major Science and Technology Research
Project of Power China (Grant Nos. DJ-ZDZX-2015-01-02,
DJ-ZDZX-2015-01-07). Special thanks are also given to the
respondents for their generous contributions during the survey.
Supplemental Data
Appendix S1, the survey questionnaire, is available online in the
ASCE Library (www.ascelibrary.org).
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