The construction firm and the construction project: A transaction cost approach

Three of the influential perspectives for analysing construction management are reviewed – socio-technical systems; organization and environment; and project management – and it is suggested that in spite of their considerable usefulness, they contain no framework for analysing the inevitable differences in interest between the different firms who are members of the project coalition. An alternative approach is then presented – the transaction cost approach – which, it is suggested, does allow these differences to be analysed. In conclusion, the dynamics of the contracting system are assessed in terms of the contradiction between construction firms' responses to the uncertainties inherent in the project, and those deriving from the contracting system itself.