APPLICATION OF SIGNALLING THEORY IN CONTRACTOR SELECTION FOR LONG-TERM COLLABORATIVE RELATIONSHIPS IN CONSTRUCTION

Abstract

Contractor selection for long-term collaborative relationships will involve carrying out a behavioural assessment of potential contractors to establish their competencies for collaboration and long-term relationships. People behavioural characteristics such as their trustworthiness, emotional states, genuineness, innate abilities and their possibility of acting in an expected way in the future are often challenging to evaluate in a physical encounter directly. In this study, the exact observable signals that indicate a contractor's suitability for long-term collaborative relationships were empirically investigated from the client’s organisations point of view, employing signalling theory. Data was collected using semi-structured interviews with eight purposively selected organizations involving sixteen key informants in South Africa. The significant signals which are perceivable indicators of contractor's suitability for collaboration and long-term relationships from the findings are: Past-performance signals; commitment signals which not only concerns attendance but also contractor's willingness, participative contributions and top management involvement in the various activities during the selection processes; and behaviour signal which comprises of being polite, honest, respectful and realistic. The study result represents a significant contribution to knowledge and understanding that are useful in identifying required signals to be sought in contractors for realistic evaluation, and ultimately make a better decision in selecting an appropriate contractor for long-term collaborative relationships. This study thus makes a strong case in providing theoretical explanations of contractor selection practices to accommodate for longterm collaborative relationships from a signalling theory perspective.