American Journal of Industrial and Business Management, 2013, 3, 539-548 Published Online October 2013 (
The Effects of Trust and Contractual Mechanism on
Working Relationships—An Empirical Study in
Engineering Construction Projects
Shuping Guo1, Ping Lu1, Yinqiu Song 2
1School of Management, University of Science and Technology of China, Hefei, China; 2School of Management, Graduate
University of Chinese Academy of Sciences, Beijing, China.
Received August 2nd, 2013; revised September 2nd, 2013; accepted September 10th, 2013
Copyright © 2013 Shuping Guo et al. This is an open access article distributed under the Creative Commons Attribution License,
which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Inefficiency is usually one of the perceived ills within the construction projects and relationships among participants
needing improvement. With the rising trend of partnerships in engineering construction projects, trust as an essential
element in partnerships has become of increasing concern too. A growing stream of study has discussed the importance
of trust in promoting interpersonal relationships among project participants. And formal contract has been closely
watched which can mitigate exchange hazards. However, the relation between trust and contract is controversial. Based
on cross-sectional survey data, regression analysis was used to test the impact of trust on satisfaction with working rela-
tionships and project performance in engineering construction projects in China. Likewise, the moderating effect of
contractual mechanism on the relationship between trust and working relationships is explored. The results show that
working relationships are positively associated with trust and satisfying working relationships have significant impact
on project performance. The empirical findings also support the moderating effect of contractual mechanism. The
conclusions enrich the research of working relationship, and provide some practical implications for enterprises.
Keywords: Trust; Contractual Mechanism; Working Relationships; Project Performance
1. Introduction
Fragmented is a typical nature of engineering construc-
tion projects [1]. The enforcement process of a project
involves a plurality of different organizations with dif-
ferent goals, cultures, and professional skills; therefore,
in order to improve project performance, the question of
how to promote cooperation among participants is a
common problem for researchers and practitioners of
project management.
Further study shows that, trust as a unique, valuable
and key resource [2] is an extremely important tool to
obtain competitive advantages, and build sound coopera-
tive relationships which, in turn improve project success.
Based on relational exchange theory (RET), trust among
participants can develop an effective coordination
mechanism and plays an important role in preventing
opportunism, reducing transaction costs, simplifying de-
cision making and promoting the structure of the coop-
eration stable [3]. As we known, Guanxi is a pervasive
phenomenon in China, which is a direct outcome of the
traditional culture value [4-6] and is viewed as a trust-
building system [7].
Winch [8] notes that the project is regarded as a tem-
porary coalition, which is simply based on the contract.
In the construction field, most projects invite bidding;
project participants often lack prior cooperation experi-
ence [9]. Furthermore, Nguyen et al. [3] point out that
large construction projects are inherently complex and
dynamic. The problems which are urgently solved de-
pend on whether the trust built up in such an environ-
ment can significantly improve collaborators’ satisfaction
with working relationships and how contractual mecha-
nism affects trust.
There are few empirical studies concerning relation-
ships based on trust, working relationships, project per-
formance and contractual mechanism in the context of
engineering construction projects, much less in China.
Therefore, using empirical research, this body of article
addresses the following research questions: 1) whether
the satisfaction with working relationships is associated
Copyright © 2013 SciRes. AJIBM
The Effects of Trust and Contractual Mechanism on Working Relationships
An Empirical Study in Engineering Construction Projects
with trust, which, in turn boosts project performance; and
2) Is the effect of trust on satisfaction with working rela-
tionships moderated by contractual mechanism. Here,
Figure 1 was used to illustrate the conceptual frame-
2. Literature Review and Hypotheses
2.1. Trust
Economists tend to think that reputation or trust is the
most important moral basis for running a good market.
Maurer [9] suggests that trust is a complex and multifac-
eted concept which has captivated scholars from different
fields. Research on trust involves the fields of psychol-
ogy, sociology, economics and management science, etc
(e.g., [10-14]) and generally, trust plays a positive role.
The document of each area has approached the issue with
its own filters [15]. At the macro-level, sociologists and
economists emphasize on the structural characteristics of
the trust, and explore the important role of trust in pro-
moting economic development and social progress
[10,13]. At the micro-level, psychologists focus on the
personality characteristics of trust, and management sci-
entists pay more attention to competitiveness and opera-
tional efficiency [11,12].
The concept of trust has a great variety of forms be-
cause of the multidisciplinary research on the nature of
trust. Rousseau et al. [16] define “trust is a psychological
state comprising the intention to accept vulnerability
based upon positive expectations of the intentions or be-
havior of another”. Gambetta [17] proposes when you
trust a person, you believe that he/she is not likely to do
something that is damaging to you, even though he/she
has the chance. Bromily and Cummings [18] deem trust
is an expectation that individuals or group will be truthful
in negotiations, making great efforts to complete assign-
ment even there is an opportunity to take advantage of.
To date, trust has not a precise definition, so some schol-
ars avoid talking about it [19]. However, this does not
prevent us from understanding the nature of trust, be-
cause different concepts explain the same organizational
issues [20].
For the assessment of trust, scholars often choose a
multi-dimensional measure. McAllister [21] considers
that trust encompasses cognition-based trust and affect-
based trust. The former is rooted in individual confidence
about peer reliability and dependability; the latter is
rooted in reciprocated interpersonal care. Nooteboom [22]
notes that trust is divided into goodwill trust and compe-
tence trust. Goodwill trust focuses on the other party’s
intention to perform in a trust-worthy manner, while
competence trust focuses on the other party’s ability to
complete assigned tasks. Wicks et al. [23] argue that trust
contains three levels: high, moderate and low. Rousseau
et al. [16] raise three kinds of trust: calculus-based trust,
relational trust and institution-based trust. Later scholars,
for example, Kadefors [2], Malhotra [24] have adopted
Rousseau’s division. Hartman [25] suggests that trust
includes integrity trust, competence trust, and intuitive
trust in project setting. Integrity trust is based on the un-
derstanding of ethical trust of the other party that will
care another party’s benefits; competence trust is based
on the belief that the other party can perform the work
required; and intuitive trust is upon the party’s emotion
or prejudice that one can trust the other. Concrete details
are summarized in Table 1.
Considering the complexity, and the changing circum-
stances [26], the dimensions of trust in construction may
be different from the others. Thus, which dimensions
shall we choose for project environment? Goodwill-
based trust which is proposed by Nooteboom [22] is less
suitable for projects in China, as many options are de-
pendent on project bidding, especially low price bids.
Pinto et al. [19] indicates that Hartman’s dimensions are
more suitable for the project environment, because this
dimensions were purposely operated to apply trust within
a project setting. Our study also chose Hartman’s dimen-
2.2. Contractual Control Mechanism
Because of uncertainty, information asymmetry and op-
portunism, the organization is always exposed to various
risks [27]. In order to reduce risk, transaction cost theory
indicates that we need to adopt the necessary control
mechanisms [28]. Scholars often use control activities to
address the problems caused by information asymmetry,
Figure 1. Conceptual framework.
Copyright © 2013 SciRes. AJIBM
The Effects of Trust and Contractual Mechanism on Working Relationships
An Empirical Study in Engineering Construction Projects 541
Table 1. Dimension of trust.
Scholars Dimension and definition
McAllister (1995) 1) Cognition-based trust—rooted in individual confidence about peer reliability and dependability
2) Affect-based trust—rooted in reciprocated interpersonal care
Nooteboom (1996) 1) Goodwill trust—focus on the other party’s intention to perform in a trust-worthy manner
2) Competence trust—focus on the other party’s ability to finish assigned tasks
Rousseau et al. (1998
1) Calculus-based trust—motivated by self-interest or the existence of economic incentives for cooperation
or contractual sanctions for breach of trust
2) Relational trust—derives from repeated interactions over time
3) Institution-based trust—refers to the role of legal institutions, teamwork cultural etc. in promoting trust
Wicks, Berman and Jones
1) High trust—rely extensively on affect-based belief
2) Moderate trust—firms depend primarily on rational, prediction-based inducements to limit opportunism
3) Low trust—a relatively balanced reliance on affect-based belief in moral character and incentives to
preclude opportunism
Hartman (2002)
1) Integrity trust—the understanding of “ethical trust” of the other party that will care another party’s benefits
2) Competence trust—the belief that the other party can perform the work required
3) Intuitive trust—the party’s emotion or prejudice that one can trust the other
and agent opportunism. Formal control methods contain
regime, rules, formal contract, the formal standard and
ex-post control, etc. Explicit contractual control is an
important formal control mechanism for fragmented pro-
ject [29]. Contractual control emphasizes on the applica-
tion of formal and legally-binding agreements to regulate
the relationships among participants in the transaction
[30,31]. Construction project contracts make the rights,
responsibilities and interests clear among stakeholders,
which control and guarantee the enforcement of the
whole project.
A full equipped construction contract not only deter-
mines the outcome of the project, but also details provi-
sions of partners’ obligations and duty, which should
include the procedures, rules and penalties for violations,
and also contain the procedures and method to resolve
claims and termination of agreement. In projects, the
contract control contains schedule control, quality control,
cost control, etc. Therefore, firms generally prefer arms-
length contractual agreements to protect themselves
from risks [32].
Yunnan Lubuge Hydroelectric project is a sign that the
modern project management was first introduced into
China. Lubuge Hydroelectric project was a great success
and as a “the Lubuge Shock” promoted the establishment
of CPMS (the Construction Project Management System)
[33]. The modern project management adopts competi-
tive bidding and normative project contract management.
In China, the most significant is the enforcement of con-
struction project contract in the evolution process of pro-
ject management system.
2.3. Trust, Working Relationships, Project
Performance and Contractual Mechanism
2.3.1. Trust, Working Relationsh ips and Pro je ct
The stakeholder theory has had a rapid development in
recent years, thus the project goal is no longer simply to
consider time, cost and quality. Wang and Huang [33]
explain that project success criteria has been expanded,
encompassing organizational objectives, stakeholders’
satisfaction, future potential to organization, etc. Satis-
faction with relationships refers to itself qualitative, over-
all satisfaction in cooperation, and the degree of pleasure
to work together, which can reduce the friction and con-
flicts among participants and improve project perform-
ance. Project participants’ satisfaction with working rela-
tionships includes customer loyalty, leadership and ef-
fectiveness [34]. During the life of the project, there are
many key factors affecting working relationships, and
trust is one of the key factors [15].
Summarizing previous studies, we find that trust can
significantly reduce the transaction costs of the partners
[35], which reduce the search for trading, negotiation,
contracting and compliance costs. Schurr and Ozanne [36]
find trust is central to the process of achieving coopera-
tive problem solving and constructive dialogue. Trust can
facilitate communication, information sharing, reduce
asymmetric information among organizations and im-
prove individual working satisfaction, thereby improve
the performance of individuals and organizations [37].
Therefore, trust as informal control mechanism can im-
prove the satisfaction with working relationships and
positively influence the final project deliverables. Pinto
et al. [19] argues that when trust levels are low, the
working relationship is likely at risk and conflicts may
appear. When working relationships are under an un-
healthy state, it is obviously that the likelihood of project
success decreases. According to above analysis, we pro-
H1: Higher levels of trust will lead to higher levels of
satisfaction with working relationships among project
H2: Higher levels of satisfaction with working rela-
tionships will lead to higher levels of project perform-
Copyright © 2013 SciRes. AJIBM
The Effects of Trust and Contractual Mechanism on Working Relationships
An Empirical Study in Engineering Construction Projects
2.3.2. Trust and Contractual Mechanism
Trust and control are two basic problems of inter-organ-
izational cooperation, which also are key issues for tem-
porary project teams. There are two typical views about
the relationship between trust and control. One is substi-
tute [2,38-40], the other is supplement [23,41,42]. Adler
[40] argues that trust can reduce trade cost through shak-
ing hands instead of the contract. It is uncovered by Ka-
defors [2] that both official principles and ways of moni-
toring are in well accordance to definition of traditional
contractual arrangements, as long as they offset the spon-
taneous development of inter-participants trust. Some
scholars argue that trust and contract are complementary,
both of which are indispensable, and their interdepend-
ence is the basis of the ability that improve trading per-
formance [41,42]. Some researchers also believe that the
relationship between trust and contract is affected by
cooperation time. For instance, Ngowi [43] presents that
early in the alliance, detailed and clear terms of the con-
tract should be written down, which is essential for the
successful cooperation. However, after trust is estab-
lished, it is no need for the strict contract terms and ma-
nagement procedures. Partners’ trustworthiness is able to
reduce the need for detailed contract terms. Some school-
ars also argue that the relationship between contractual
safeguards and cooperative outcomes depends on both
the level and type of trust [44]. Malhotra [24] indicates
that control items lead to more competence-based trust,
while less goodwill-based trust and coordination items
increase competence-based trust.
Currently, the relationship between trust and contract
does not have a consistent conclusion. But it is undeni-
able that trust facilitates the exchange of information
which makes all participants understand each other’s
rules of conduct more clearly. The participants tend to
proceed from the overall interests, which ultimately pro-
motes satisfaction with working relationships and im-
proves project performance. Furthermore, Kadefors [2]
claims trust is not only associated with persons but also
with surroundings. Complete contract provides a good
institutional framework for cooperation, which increases
transparency of relationship among partners [45], and
reduces ambiguity of transaction [44], thus enhances
trust of the participants. In other words, contractual con-
trol mechanism with higher levels make a stronger rela-
tionship between trust and satisfaction with working rela-
tionships; whereas contractual control mechanisms with
lower levels generate a weak relationship between trust
and satisfaction with working relationships. Thus, we
H3: The greater the contractual mechanism, the
stronger the relationship between trust and satisfaction
with working relationships.
3. Research Methodology
3.1. The Sample
Our respondents are project participants of independent
contract, including client, contractor, project supervisor
and designer, etc. In preliminary research stage, we in-
vited several project managers who have rich project
management experience to fill out the questionnaire.
According to their opinions, we revised the questionnaire
to ensure that the items conform to China’s actual situa-
The survey was conducted in some cities of Anhui
Province, including Hefei, Tongling and Maanshan. Re-
spondents who filled out the questionnaire are senior
managers of projects, who are familiar with the process
of projects and have at least 4-year-project experience.
We handed out 260 questionnaires and received back 210
questionnaires, of which 20 incomplete and invalid ques-
tionnaires were discarded. Thus, 190 complete and valid
questionnaires for a 73.1% response rate were obtained.
Table 2 shows the demographic information of the sam-
3.2. Measures
In this study, all constructs’ items were adapted from
Table 2. Demographic information of respondents (n = 190).
characteristic Frequency percentage
man 158 83.2%
SEX woman 32 16.8%
20 - 30 31 16.3%
31 - 40 88 46.3%
41 - 50 57 30.0%
above51 14 7.4%
4 - 8 56 29.5%
9 - 14 58 30.5%
15 - 20 44 23.2%
Work time (year)
above 20 32 16.8%
client 51 26.8%
designer 45 23.7%
supervisor 25 13.2%
contractor 64 33.7%
others 5 2.76%
below 5 10 5.3%
5 - 10 18 9.5%
10 - 50 34 17.9%
50 - 100 27 14.2%
Total investment
above100 101 53.2%
below 6 16 8.4%
6 - 12 33 17.4%
Project duration
(month) 12 - 18 46 24.2%
Copyright © 2013 SciRes. AJIBM
The Effects of Trust and Contractual Mechanism on Working Relationships
An Empirical Study in Engineering Construction Projects 543
previously validated scales. We make the appropriate
adjustments based on the actual situation of the study.
All measures were assessed with five-point Likert-type
scale, with responses ranging from “1” to “5”, represent-
ing “strongly disagree” to “strongly agree” respectively.
3.2.1. Trust
Drawing on the insight of Hartman, trust is divided into
three dimensions, which are integrity, competence and
intuitive trust. The six items measuring trust were
strongly influenced by Hartman [25], Pinto et al. [19],
and Cheung et al. [34]. The Cronbach’s alpha for this
scale was 0.886.
3.2.2. Satisfaction with Working Relationships
Satisfaction with working relationships measures the
overall satisfaction with cooperative relationship. The six
items measuring satisfaction with working relationships
were drawn principally from Pinto et al. [19], including
“I liked to contact with other parties during the execution
of the project”, “I think that we all have invested consid-
erable emotion in our relationship”, and so on. After re-
liability and validity analysis, there are 4 questions re-
maining. The Cronbach’s alpha for this scale was 0.846.
3.2.3. Project Performance
Traditional way to assess project success is the golden
triangle standard, including time, budget and required
quality [33,46]. With economic development, some
scholars realize that it is not enough to consider the
golden triangle; we should also take into account stake-
holders’ expectations [47,48]. The six items assessing
project performance were taken from Pinto et al. [19]
and Wang and Huang [33], and some were adjusted to
combine with China’s actual situation. The Cronbach’s
alpha of project performance was 0.749.
3.2.4. Contrac tual Mechanism
The control mechanism of contract is commonly mea-
sured multi-dimensionally. According to Goo, et al. [49],
Cannon et al. [50], Luo [51], Parkhe [52] and “The En-
gineering and Construction Contract”, the contractual
mechanism is divided into foundation elements (4 items),
change elements (3 items) and governance elements (3
items). Cronbach’s alpha of project performance was
To explain the impact of extraneous variables, the arti-
cle considered work time, participants, the total invest-
ment and the project duration as controls [53].
4. Data Analysis and Results
4.1. Measurement Validity
The convergent validity was tested by composite reliabi-
lity and average variance extracted (AVE), and discrimi-
nate validity was measured by AVE and constructs’ cor-
relations. As shown in Table 3, the values of composite
reliability ranged from 0.833 to 0.913, which are above
the 0.7 recommended levels. The AVE scores for every
construct ranged from 0.626 to 0.683, which are greater
than the 0.50 recommended level. Those results showed
that convergent validity was passed. Furthermore, as Ta-
ble 4 shows, the square roots of AVEs were higher than
the correlations between constructs and thus discriminate
validity was passed. All the results manifest that validity
was passed.
4.2. Hypotheses Testing
The hypotheses were tested by regression analysis in our
study. The results in Ta ble 5 (Models 2 and 3) show that
trust (β = 0.588, P < 0.01) had a significant positive im-
pacts on satisfaction with working relationships, and the
coefficients from satisfaction with working relationships
to project performance was also significant (β = 0.473, P
< 0.01). These results provide support for H1 and H2. In
the model 4, if trust and satisfaction are independent
variables at the same time, both of them had significant
coefficients with project performance, so we conclude
that the satisfaction with working relationships plays a
mediating role between trust and project performance.
During the implementation process of project, once the
mutual trust was established among participants in the
project, the participants whose expectations have been
met will strive to maintain the existing trust relationship,
and this trust will continue to spiral upward [54]. This
reciprocally-reinforcing trust promotes communication
and exchange of each partner, thus their working rela-
tionship is more harmonious, which, in turn, improves
project performance.
Table 3. The validity analysis (n = 190).
Construct Composite Reliability AVE
trust 0.913 0.637
satisfaction 0.896 0.683
project performance 0.840 0.636
contractual mechanism 0.833 0.626
Table 4. Mean, SD, and correlation (n = 190).
Construct MeanSD 1 2 3 4
1 trust 3.6570.546 0.798
2 satisfaction 3.7010.531 0.637 0.826
3 project performance3.7360.499 0.477 0.495 0.797
4 contractual
mechanism 3.7920.437 0.441 0.413 0.4920.791
Note: The diagonal elements are the square roots of AVEs.
Copyright © 2013 SciRes. AJIBM
The Effects of Trust and Contractual Mechanism on Working Relationships
An Empirical Study in Engineering Construction Projects
Copyright © 2013 SciRes. AJIBM
Table 5. Regressions analysis (n = 190).
Variable Model 1Model 2 Model 3 Model 4 Model 5 Model 6
Control variables work time 0.013 0.053 0.131 0.105 0.048 0.052
participants 0.027 0.020 0.003 0.004 0.006 0.008
total investment 0.151 0.086 0.034 0.041 0.145 0.159*
project duration 0.274 0.162* 0.153 0.162 0.215 0.222**
Independent variables trust 0.588** 0.347** 0.469** 0.424**
satisfaction 0.473** 0.265**
contractual mechanism (cm) 0.248** 0.269**
*cm 0.124*
F 2.033 22.503** 10.995** 13.453** 22.607** 20.386**
2 0.042 0.379 0.230 0.306 0.426 0.439
Adjusted R2 0.021 0.363 0.209 0.283 0.407 0.418
ΔR2 0.384** 0.014*
Note: **P < 0.01 (2-tailed), *P < 0.05 (2-tailed)In Model 1, Model 2, Model 5 and Model 6, dependent variable was satisfaction with working relationships; in
Model 3 and Model 4, dependent variable was project performance.
The regression analysis also shows that project dura-
tion has a significant positive impact on the satisfaction
with working relationships (Model 2). Generally, project
participants are simply linked by the contract, so long
project duration means the participants have enough time
to understand each other, and the working relationships
among participants will be more harmonious with deeper
The moderating effect of contractual mechanism on
the relationship between trust and satisfaction with
working relationships was tested by hierarchical regres-
sion analysis. In order to minimize the possible presence
of multicollinearity, the independent and moderator
variables were mean-centered in the study [55]. In Model
6, the product term of trust and contractual mechanism
had a significant positive impact on satisfaction with
working relationships (β = 0.124, P < 0.05, F = 20.386**).
To research the moderating effect fully, the study com-
pared the impact of trust on satisfaction with working
relationships at low and high levels of the contractual
mechanism [55]. In Figure 2, the horizontal axis repre-
sents the levels of trust; the vertical axis represents the
levels of satisfaction with working relationships; blue
line represents a high level of contractual mechanism,
and red line represents a low level of contractual mecha-
nism. We use a standard that uses mean to plus or minus
one standard deviation to describe the high and low lev-
els of contractual mechanism. The figure reveals that
when the level of contractual mechanism is high, trust
has a stronger positive effect on satisfaction with work-
ing relationships than when the level is low. The regres-
sion analysis and the figure both provide support for H3.
5. Discussion
This study examines how trust affects working relation-
ships, and how such relationship is moderated by con-
tractual mechanism in China’s engineering construction
projects. Our findings are as followings:
First, trust can promote satisfaction with working rela-
tionships, which in turn improves project performance.
Trust in construction projects has its features, that is not
based on familiarity, similarity, future necessity and or-
ganizational security [56], so the role of trust is some-
times perceived controversial. The current study provides
evidence that trust in engineering construction industry
can positively affect working relationships and, then,
boost project performance, which corroborate the general
positive conclusions (e.g., social exchange theory and
relational capital theory). Trust encourages well interac-
tion among the participants [32], which enables them to
share information, exchange knowledge, solve conflicts
and reduce the fear of opportunism. Thus, trust plays an
important role in building a benign business relationship
[57] and this sound working relationship is critical to the
project success.
Although the participants involved in construction
projects have come to understand the importance of trust,
during the actual enforcement of the project, the partici-
pants don’t devote sufficient time, energy, and resources
to cultivate trust. The conclusions of this study will con-
tribute to the project participants’ attention to trust-buil-
ding. The project is a one-off, but cooperative relation-
ship can be repeated. Inter-organizational activities are
typically embedded in social network and if one party
who has a reputation for untrustworthy will be punished
The Effects of Trust and Contractual Mechanism on Working Relationships
An Empirical Study in Engineering Construction Projects 545
Figure 2. The moderating effect.
in the broader network [41]. Therefore, in engineering
construction industry, building corporate reputation
mechanism can avoid partners’ opportunistic behavior
and promote the long-term cooperative relation.
Second, the greater the contractual mechanism, the
stronger the relationship between trust and satisfaction
with working relationships. The result indicates that con-
tractual mechanism can positively moderate the relation-
ship between trust and working relationships. Under the
same level of trust, if contractual control mechanism is
more perfect, the impact of trust on working relationships
will be more effective. As Li et al. [29] suggested a
well-designed contract can offer a legal framework, and
this framework strengthen the role of trust. The tradi-
tional view is that detailed contract may signify distrust
so managers generally emphasize one of them, but the
study shows that the two are mutually affected. This re-
sult is partly consistent with the Poppo and Zenger [41]
finding that relational governance and contracts function
are complements. In the actual enforcement of the project,
trust should be combined with contractual mechanism to
improve participants’ satisfaction, which furthermore
promotes higher project performance.
In China, the low trust phenomenon is widespread, and
trust has two obvious flaws: one is non-obligatory and
the other tends to guidance rather than supervision. For-
mal contracts for the alliance provide a cooperation
framework, which addresses the most critical issues of
cooperation in basic rights and obligations, the distribu-
tion of benefits as well as conflict resolution. As such if
the provisions are more detailed, the alliance will operate
more smoothly, and the cooperation expectations of other
participants can be higher. Mayer and Argyres [58] con-
ducted a detailed case study and argue that formal con-
tract can promote cooperation expectations, resulting in a
commitment to the relationship, such that detailed con-
tracts help enhance mutual trust. Under contract safe-
guard, trust can operate more effectively. But everything
has an optimum degree, and in fact, paying excessive
attention to formal and detailed contract may bring a se-
ries of defects, thereby breaking the rules of relations and
development of the trust relationship [41]. According to
the actual situation of the local and the project, we need
to develop a reasonable control level of contract to en-
able trust to be of maximum effectiveness; after all, too
complex contracts are too costly to craft and enforce [41].
Meanwhile, overreliance may be harmful, such as the
overburdening of corporate obligations, collective biases,
etc [6]. Jeffries and Reed [59] also find that it is not a
good way to develop too much or too little trust. We
should promote a check-and-balance system to ensure
project’s success.
6. Limitations and Future Research
As with any research, there are several limitations in the
current study. First, this study only explores the rele-
vance of trust for working relationships and contractual
mechanism, which has not examined the antecedents of
trust in project settings. The engineering construction
project has its unique environment; therefore seeking
antecedents of trust will have certain practical signifi-
cance. Second, the research was conducted only in Anhui.
This may limit the generalization of the results, because
broader districts and their legal systems may alter the
effectiveness of trust and contractual mechanism. Third,
this cross-sectional data design obviously limits our abil-
ity to fully test the nature of relationships. So subsequent
research should undertake a longitudinal design, which is
more convincing.
7. Conclusion
With survey data collected from engineering construction
projects in China, this paper has explored the positive
effects of trust and contractual mechanism on project
performance. Trust is pivotal in projects as a means to
promote good working relationships and project success.
Trust can be considered as the glue among project
participants through boosting cooperation. Further, the
moderating effect of contractual mechanism reminds
managers that trust will be more effective when com-
bined with contractual mechanism. Overall, the results of
this article extend existing research on working relation-
ship and provide some guidance for practitioners.
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