The effect of the client–contractor relationship on project performance

Purpose: The purpose of this paper is first to examine the effect of client-led and contractor-led supply chain initiatives on project performance in the Indian construction industry and second to assess how the client-led supply chain initiatives complement the contractor-led supply chain initiatives. Design/methodology/approach: In this study, the effects of the client-led supply chain initiatives (reward power and competence trust of the construction clients) and the contractor-led supply chain initiatives (contractor integration and calculative commitment of the contractor) on project performance in construction projects are examined. The data were collected from 346 construction professionals working in Indian construction projects using purposive sampling. The proposed hypotheses were tested using structural equation modeling. Findings: The contractor-led supply chain initiatives, in the form of contractor integration and the calculative relationship commitment of a contractor, were found to be strong mediators, indirectly affecting the project performance. On the other hand, the client-led supply chain initiatives, in the form of the reward power of the client and the competence trust of the client, directly influence the project performance. Research limitations/implications: This study reports the inevitable bias on the part of participants, who responded to the survey either in the capacity of client or contractor, although they might have executed projects in both capacities. Future studies could benefit from the use of objective data instead of behavioral data. Practical implications: This study helps construction firms understand how to demarcate the client and contractor roles in the construction supply chain to improve the project performance. Originality/value: The originality of this study lies in its investigation of the influence of client-led supply chain initiatives and contractor-led supply chain initiatives on project performance.