Convenient immorality: a substantive theory of competitive procurement in the New Zealand construction industry

Abstract

Fragmented and adversarial are words used routinely to describe firstly the structure of the construction industry, and secondly the inherent culture that continues to exist within it. Both are characteristics that ultimately serve to not only routinely constrain the efficiency, performance and resultant productivity of the New Zealand building sector, but moreover they persist to play a part in increasing related costs whilst diminishing the quality of the built environment surrounding us. The ubiquity of the outsource model goes some way towards mitigating much of the risk and financial encumbrances that large construction companies have historically faced. But consequentially it is directly responsible for an industry now propagated mostly by small, specialist trade subcontracting organisations that for the most part are reliant upon securing work through construction companies. Contiguous to a degree is the propensity of an industry focussed upon procuring construction by means of competitive tendering, an approach whereby successful bids are traditionally weighted towards those incorporating the lowest initial cost. To garner an understanding of the role that contextual significance plays in construction procurement this study was facilitated by utilising a constructivist grounded theoretical approach. Data was generated by the way of fifty interviews with construction industry stakeholders, inclusive of Sub-Contractors, Main Contractors, Consultants, Architects and Clients. Subsequent analysis reveals that in response to power asymmetry and other environmental conditions, organisations have developed numerous proactive, reactive and opportunistic strategies and behaviours that become evident as the procurement process progresses. This study highlights and explains the relationships and factors from which an industry actor’s rationale is drawn. Furthermore, however, it argues that the proponents of construction industry procurement will when necessary, relax their ordinarily pre-conditioned moral constraints and consciously venture into business practices considered by their peers to be somewhat immoral.