Abstract:

The purpose of the study is to suggest an integrated framework that investigates the impact of business-to-business trust and formal business relationship on the formal contract management under the moderation effect of length of business relationship. Data were collected from key stake holders associated with construction projects (client, owner, project manager, architect and supplier) in the Middle Eastern countries via self-administered questionnaire developed from previous studies. Correlation and regression analysis along with inter-item correlation matrix confirmed all hypotheses however with varying significance considering the outcomes of previous studies. The results revealed that 1) the relation between relational governance and management of formal contracts is positive though insignificant, 2) the relationship of B2B trust is positive with management of formal contracts and the association is relatively stronger as compared to relational governance, and 3) the influence of moderator, length of relationship, is stronger on the relationship between trust and contract management’s effectiveness as compare to the relationship between relational governance and contract management’s effectiveness.