Exploration of an agenda for transparency in the construction industry

Nijhof, A. and Graafland, J.J. and Kuijer de, O. (2009): Exploration of an agenda for transparency in the construction industry. Published in: Construction Innovation , Vol. 3, No. 9 (2009): pp. 250-267.

Abstract

Purpose In enhancing the market operation of the building sector, transparency is of great importance. The objective of this article is to propose an inventory of aspects of the relationships between public clients and executing parties that have the most urgent need for greater transparency.

Methodology / approach The main methods used include a conceptual analysis and twenty interviews with managers of various organisations in the construction industry.

Findings Based on this study, four essential points for transparency have been determined: openness about risks and costs, measuring of quality-price ratios, reasons for award or rejection and enhancement of the reputation mechanism.

Research limitations / implications This study takes the Dutch context as a reference point for the analysis. When the findings are used also in other settings, it is necessary to address the differences in characteristics of the building sector.

Practical implications The essential points for transparency addressed in this paper have consequences for especially the interaction between public clients and executing parties. Furthermore, conditions for transparency - like possibilities to judge quality in a more robust and transparent manner and methods for enhancing the reputation mechanism - point at necessary future research for improving transparency in the construction industry.

Originality / value of the paper The Dutch construction industry is working through a transition process focused on improving its market operation, integral processes and societal added value. In this transition, transparency between clients and executing parties is of great importance.

• Item Type: MPRA Paper
• Language: English
• Keywords: Transparency; construction sector; trust; reputation; integrity
• Subjects: D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D86 - Economics of Contract: Theory; D - Microeconomics > D2 - Production and Organizations > D23 - Organizational Behavior ; Transaction Costs ; Property Rights; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L14 - Transactional Relationships ; Contracts and Reputation ; Networks; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M1 - Business Administration > M14 - Corporate Culture ; Diversity ; Social Responsibility; L - Industrial Organization > L7 - Industry Studies: Primary Products and Construction > L74 - Construction

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