Understanding the effect of contractual complexity on regulatory focus in construction projects: the moderating role of organizational culture

Wenqian Guo, Wenxue Lu, Wenrui Cao and Lihan Zhang

Construction Management and Economics, 2024, vol. 42, issue 11-12, 992-1011

Abstract: How the behavioral motivation of each organization is shaped or emerges during the interorganizational transaction deserves more investigation. Drawing on regulatory focus theory, this study delves into the impact of contractual complexity and organizational culture on regulatory focus as behavioral motivation in construction projects. This study dissects contractual complexity into control, coordination, and adaptation grounded in a functional perspective, decomposes regulatory focus into prevention focus and promotion focus, and splits organizational culture into group culture, developmental culture, hierarchical culture, and rational culture. Through validating the empirical data from 411 questionnaires within Chinese construction sector, this study uncovers that contractual control and contractual coordination positively affect prevention focus, while contractual adaptation positively affects promotion focus. Four different types of organizational culture play different moderating roles in the process of stimulating regulatory focus. Organizations with high group culture have a strong driving force for the formation of both regulatory focuses. In contrast, the average level of hierarchical culture, developmental culture, or rational culture is not conducive to the formation of prevention focus or promotion focus. These findings explain how behavioral motivation is impacted by transaction characteristics such as contracts from the perspective of social psychology, confirm the spillover effect of organizational culture of one party at the interorganizational level, and provide suggestions for practitioners on how to develop interorganizational relationships and allocate resources appropriately.

Date: 2024
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DOI: 10.1080/01446193.2024.2366321

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