Partnering in Construction: The Views and Experiences of Foreign and Local Participants in Vietnamese Market

Abstract

Traditional procurement methods have revealed many disadvantages especially the adversarial relationship between parties. After several decades of application, partnering has shown that it is an innovative arrangement that help to reduce many problems having existed in traditional arrangement. It can provide a win-win working attitude in a construction project. This mechanism can help both local and foreign construction participants to mutually offset their differences when implementing projects. Partnering in construction has been applied in several ways in recent years in Vietnam. Complying with the global integration, the Vietnamese construction industry has faced many new challenges such as increased competition from foreign sector, more exacting quality standards, rapid development of new technologies and increased risks of globalization. The adversarial relationships between project parties from the traditional contract arrangement have caused many difficulties. The construction firms are trying to improve the competency and competitive advantages. They are searching for a new arrangement sufficient with their current context. There are three major distinct objectives which are the three aspects of partnering implementation in this study. The first objective is to identify and investigate the incentives of partnering application. The second is to identify and examine the problems in implementing partnering approach. Exploring the critical success factors for construction partnering in Vietnam is the last objective in this study. Foreign and local sectors are the two concerned subjects in the study. The study has investigated and introduced the incentives of partnering from Vietnam perspective. It has been shown that to learn mutually among participants and to increase bidding advantages are the most important incentives according to foreign and local practitioners respectively. In addition, the four perspectives of incentives are examined. Brand and competition perspective is considered as most important while performance improvement perspective is considered as least essential with respect to two sectors. Learning and growth perspective and financial perspective are the two perspectives having divergent opinions between foreign and local participants. Foreign participants pay more attention to learning and growth than to financial side. The study has identified some prominent problematic issues of partnering in Vietnam construction projects. Partners' attitudes governed by commercial pressure and dealing with large bureaucratic organization(s) are the most concerned problems with foreign organizations and local practitioners respectively. Factor analysis has pointed out seven underlying dimensions of problems existing in partnering process. These are: unsuitability of partnering application; lack of commitment to partnering; unfamiliarity with partnering concept; poor communication between partners; lack of key stakeholders’ involvement; external constraint issues; and disagree to compromise. Twenty eight success factors are identified in Vietnamese context. The top five success factors in Vietnamese context are: financial security, commitment from top management, mutual trust between parties, adequate resources, and effective communication. Furthermore, factor analysis shows that there are eight underlying dimensions that must be adequately considered to improve the partnering performance in Vietnam. The eight dimensions are: dedication, readiness, coordination, teamwork, sufficiency, leading, balance, and clearness. The dimensions cover all aspects of the partnering working environment. The subjective answers of respondents on the ten-point scale about partnering success level show a positive trend of performance. The present positive outcomes encourage the practitioners to widely take advantage of this innovative arrangement. Four components, dedication, teamwork, sufficiency, and balance, are observed to have significant influence on the success level of construction partnering using multinomial logistic regression analysis. It is shown that the extent of contribution varies with success level. A cross-validation technique, namely discriminant analysis, also shows the four similar components significantly influence on the partnering success level. Moreover a logistic regression model is developed to convert qualitative performance of related success factors into quantitative value of chance of partnering success in a specific context. The model can also be used to measure the performance of partnering and to enhance the performance through identifying the impact of significant factors.