The impact of project managers’ experience on the selection of strategies for minimizing information asymmetries in construction projects

Abstract

This research has evolved in four stages, the last of which is presented here. The principal-agent theory has formed the core of the research through all the stages. The relationship between the project owner and contractor was extended to include their respective project managers. The first stage was based on an exploratory survey of project managers with considerable experience in the field. It was found that the two project managers play the key role in the construction phase of a project, whereas the project owner and contractor play subsidiary roles during this phase. The second stage investigated this finding by using the Delphi method. A panel of experienced project managers selected from the exploratory survey confirmed its findings. The third stage of the research involved another exploratory survey of the same participants to establish the relative importance of a number of risk-minimization strategies in construction projects established on the basis of the principal-agent theory. It was established that trust is the most important risk-minimization strategy. The fourth and last stage involves three dimensions of project managers’ experience and their impact on the project managers’ ranking of risk-minimization strategies. The parameters of experience employed are years of experience in the field, the size of the largest project worked on and the number of countries worked in.Multi-attribute utility theory has been used in the last three stages of the research. It is used in the last stage to re-rank the strategies investigated previously with respect to the three dimensions of project managers’ experience. The new ranking confirms the previous findings, but it also brings forth important differences between the three dimensions of experience. In particular, trust matters everywhere, whereas contractual arrangements drop in importance in large projects and across a variety of countries.