Whether reactive devaluation is a barrier against the settlement of construction disputes

Abstract

Disagreement and conflicts in construction projects are common. Disputes resulting from failure in contract administration hamper the motivation of contract parties and hinder the project schedule. Therefore, having efficient Construction Dispute Resolution (CDR) is beneficial to all contracting parties. In this regard, construction practitioners usually fail to reach settlement of disputes because they have not acted rationally. They may be affected by psychological barrier that influences their behaviour towards CDR in dispute negotiation. Reactive Devaluation (RD), one of the well-known psychological barriers was first proposed by Ross (1995). RD was further examined by Ross and Stillinger, (1991) and Ross and Ward, (1995). RD describes the behaviour to devaluate the concession made of the counterpart. There are a number of possible explanations like change in interpretation, that in underlying preference, afraid to lose own interest and cognitive bias. This study aims to discover whether Reactive Devaluation serves as a barrier that obstructs settlement of construction disputes. Literature Review about the observations, explanations and mechanisms of RD was done to construct theoretical framework. Questionnaire with manifestations describing the behaviour in dealing CDR was designed and responses were collected. 5 factors were identified using Explorative Factor Analysis (EFA). Their contributing effect to RD was confirmed by Confirmatory Factor Analysis (CFA) and Reliability Analysis. Furthermore, Analysis of Variance (ANOVA) was carried out to examine the pattern between working experiences and the agreement level of manifestations. From the result of the analysis, Reactive Devaluation was found to be a barrier against settlement of CDR. It is believed such barrier could be overcome by active listening and trust building process in CDR.