PhD Defense F. Fang
When performance shortfall arises, contract or trust?
This dissertation investigates how two different governances (contractual and relational) and performance affect each other in a public – private partnership (PPP). It contributes to the governance literature by providing an integrated view of the dynamic process, not only of how these two governances affect project performance, but also how project performance affects the use of the two mechanisms in a PPP.
The research studies four PPPs formed between Dutch Water Authorities (DWAs) and their contractors. In all cases two parties (DWAs and contractors) encountered a performance shortfall (i.e. actual project performance being lower than contractually required performance). When a performance shortfall occurs, business relationship is slightly changed, it deteriorates and its outcome is uncertain. Contractual and relational strategies have been used to deal with this situation.
The contractual strategy focuses on solving the performance shortfall through a formal and written contract which explicitly stipulates the responsibilities and obligations of each party, while the relational strategy focuses on solving the performance shortfall through informal relations and shared norms.
The results shows that once a performance shortfall occurs, a relational strategy is likely to help enhance the project performance and this results in a good relational outcome. In turn, enhanced project performance and a better relationship promotes the continuous use of a relational strategy. In contrast, a contractual strategy is likely to have negative impact on project performance, thus leading to a bad relational outcome. As a result, it is likely to trigger the repeated use of the contractual strategy.
Feng Fang (China, 1985) received his B.Eng. in Pharmaceutical Engineering from Central South University in 2006, M.Eng. in the same field from East China University of Science and Technology in 2009, and M.Sc. in Innovation Management from Eindhoven University of Technology in 2013. He started as a Ph.D. candidate at the Department of Management at Tilburg University in 2013. Currently he works as a part-time lecturer at the Department of Management at Tilburg University and at Avans Hogeschool. For the rest of his time, he (co-founder) works for the consultancy company Asset Health Dynamics in Rotterdam.
- Location: Cobbenhagen building, Aula (access via Koopmans building)
- Supervisors: Prof. G.C.J.M. Vos, Prof. H.A. Akkermans
- Co-supervisor: Dr. W. van der Valk