Stakeholders’ Perception of the Severity of the Causes of Disputes in the Nigerian Construction Industry

Chapter One of Stakeholders’ Perception of the Severity of the Causes of Disputes in the Nigerian Construction Industry

Chapter One of Stakeholders’ Perception of the Severity of the Causes of Disputes in the Nigerian Construction Industry

INTRODUCTION

BACKGROUND OF THE STUDY

Just like any other industry, the construction industry around the world contribute to the economic development (generation of employment and wealth) of countries with Nigeria not being an exception. This sector of the economy is unique in nature that calls into play proper handling of activities in the industry via the instrumentation of reliable dispute resolution techniques.

The existence of an atmosphere of risk is present in every form of construction project and no matter how small this is, it has the ability of becoming a fully blown out dispute if not checked. With a proper perception of dispute even the littlest of matter would not be taken lightly as it can pose a great threat to the construction works with time. Disputes should be seen as difference of opinion of each party. Dispute arises from a continuous injustice by one party or misinterpretation of meaning by the other. Many such disputes need never arise if the original decision causing disagreement had been made with adequate clarity of purpose and definition or recognition of a changing situation had been built into the decision. Any problem no matter how small should always be looked at and controlled so that it does not get out of hand. Only poor management would assume that a problem would disappear if left over a period of time.

The construction industry is a very competitive high risk business. Problems such as little cooperation, lack of trust and ineffective communication result in adversarial relationship. To overcome most threats that come due to the aforementioned reason for disputes project partnering was developed and proposed as a tool that would help. Partnering here refers to a technique used that generates an organizational environment of trust, open communication and parties’ involvement. Partnering in conventional business setting has been seen as a form of business organization accepted and recognized throughout the world. The Koreans in order to overcome hitches that had rocked their construction industry decided to try out partnership. It involves a long term commitment between two parties for the purpose of achieving specific business objectives by maximizing the effectiveness of each participant. This involves changing the traditional relationship to a shared culture without regard to organizational boundaries. The relationship is based on trust, dedication to common goal and an understanding of each individual’s expectation

Disputes have been established as one of the major factor plaguing the construction industry in Nigeria (Adebayo and Babajide, 2009). One of the major disputes that have occurred in the construction industry in Nigeria is the retrenchment of over five thousand workers by Julius Berger Nigeria plc in the late 90’s. Besides this, several disputes continually arises which have negative impact in the project success in terms of cost, time, quality and the atmosphere for continuing business.

With proper understanding, every form of challenges that comes in the form of disputes could be properly addressed.

 

STATEMENT OF THE PROBLEM

Disputes have been a common phenomenon in the construction industry and with the surge in numbers of construction projects, the numbers of disputes are expected to increase, It was conceived that a critical weakness lies in the holistic understanding of disputes and the contributing factors. The fundamental starting point should be to firstly understand the nature of the disputes itself within the context of the industry (Hayarti, 2009).

 

AIM

The aim of this research is to identify the severity of the factors that causes disputes.

OBJECTIVES

• Identify the causes and effects of disputes in construction projects
• Identify ways by which the effects of disputes could be controlled
• With the use of the severity index, seek the stakeholders’  perception on the causes of disputes
• Prioritize the various causes of disputes on how much it affect construction

 

JUSTIFICATION OF THE STUDY

Disputes have been a common phenomenon in the construction industry and with the surge in the numbers of construction projects, the numbers of disputes are expected to increase. To overcome this, the construction industry has introduced various initiatives to encourage the application of more effective ways of preventing and resolving construction disputes but results have been variable. While much has been done, critics are frequent in arguing that the initiatives have not been effective.

 

It was conceived that a critical weakness lies in the holistic understanding of disputes and the contributing factors. The fundamental starting point should be to firstly understand the nature of the disputes itself within the context of the industry. This is necessary before appropriate means of dispute resolution can be effectively identified (Haryati et al, 2009).

 

SCOPE AND LIMITATION

This project focuses on consultants, contractors and clients responses as this formed the basis for my data analysis. Contractors, consultants and clients responses around the Federal Capital Territory were considered.

A major limitation to this work is that stakeholders’ such as relevant government agencies, communities around which projects are situated, financiers of projects etc., were not taken into cognizance.