The Efficacy of Action at a Distance as a Control Mechanism in the Construction Industry When a Trust Relationship Breaks Down: an Illustrative Case Study
| Author | Thérèse Woodward,David Woodward |
| Published date | 01 December 2001 |
| DOI | http://doi.org/10.1111/1467-8551.00215 |
| Date | 01 December 2001 |
Introduction
A paper published by one of the authors
(Woodward and Squires, 1996), described a
situation of the perceived failure of the accounting
information system (AIS) used by a project man-
ager (PM) geographically remote from his head-
quarters, in respect of a project of considerable
British Journal of Management, Vol. 12, 355–384 (2001)
© 2001 British Academy of Management
The Efficacy of Action at a Distance as a
Control Mechanism in the Construction
Industry When a Trust Relationship
Breaks Down: an Illustrative Case Study*
David Woodward and Thérèse Woodward†
School of Management, University of Southampton, Highfield, Southampton SO17 1B and
†School of Finance and Law, Bournemouth University, Fern Barrow, Poole, Dorset BH12 5BB, UK
email: d.g.woodward@southampton.ac.uk; twoodward@bournemouth.ac.uk
A paper published by one of the authors (Woodward and Squires, 1996), described a
situation where the accounting information system used by a geographically-remote
project manager to report progress on a project to his headquarters proved inadequate
for that task. The inadequacy was particularly relevant in the reported case, in that
the object project was one of considerable significance to the company, being the largest
and most complex it had ever undertaken. While the earlier paper concentrated initially
upon identifying the perceived shortcomings in the organization’s accounting information
system, and subsequently upon delineating the proposal for a ‘workable’ solution thereto,
the purpose of the present paper is rather to analyse the situation earlier reported, in the
context of a perceived breakdown in the trust relationship existing between the project
manager and his superior, the company’s managing director. The managing director trusted
his subordinate, although it seems apparent retrospectively that the trusting relationship
existing was abused. While the underpinning precept of trust is thus fundamental to the
present analysis, it is additionally necessary to utilize as relevant concepts: the veracity of
the company’s control mechanism (via the concept of action at a distance) to adequately
report what was happening remote from headquarters; the assumption that the project
manager, as agent, had the potential to abuse his position; and, finally, that the project
manager’s professional affiliation was probably insufficiently strong to sustain self-control
based upon ‘clan’ considerations. It also emerges from the analysis that multiple, rather
than single, trust relationships were at work.
*This paper has benefited tremendously from comments
received from colleagues and academic contacts, both
via discussion (with Christopher Napier, Richard
Laughlin and Mick Broadbent), and via postal/emailed
communication (with Sten Jönsson, Peter Armstrong
and Willie Seal). No significance at all should be
assumed to the order in which these names appear.
Whilst not all the received advice has necessarily been
absorbed into the final ‘product’ that which has is of
unquestionable value. Participants at a staff seminar
organized at the University of the West of England
(particularly David Dugdale and Colwyn Jones), are
also deserving of our thanks, as are conference audiences
in London, Antwerp, Reading and Ljubljana. Three
reviewers (one of them particularly insightful) have
also commented upon the paper. After such exposure,
any errors of fact or omission that remain can hardly be
laid at the feet of anyone other than the authors.
significance to his company, being the largest and
most complicated it had ever undertaken. As
described, the situation was one where, largely
because of the geographic distance involved, it
was impossible for the PM’s superior, the com-
pany’s managing director (MD), to determine by
direct observation the quality of the actions being
undertaken by his subordinate, such that the
‘behavioural’ control espoused by Ouchi (1977)
was not possible. Additionally, it seems likely that
the PM was concerned to further his own self-
interest, by representing a deteriorating project
situation in a far better light than was in fact the
case, since performance on the project would
affect his bonus (this being based upon the overall
performance of the division for which he was
responsible, and of which the project was a part).
The earlier paper had as its foci firstly, the
describing of the historical situation which had
developed in the object company; and subse-
quently the specifying of the perceived ‘recipe for
success’ to resolve it.
However, rather than re-examining the ground
covered earlier, the present purpose is oriented to-
wards analysing the situation previously reported,
in the context of a breakdown in the trust
relationship extant between the PM and his MD.
Such an analysis as that now proposed is founded
upon the assumption that a principal-agent rela-
tionship is in existence, whereby the agent’s (PM’s)
actions would at least to some degree be calcu-
lative, being designed to elicit continued payment
from the principal (MD). There is then the
potential implication that the PM would attempt
to disguise any performance shortcomings on his
part, since as Argyris (1982) has observed, people
both cover up poor performance1and cover up
that they have covered up. Meyer and Zucker
(1989), equally, have suggested that embarrassing
facts will be covered up and failure not admitted.
As Jönsson (1996a, p. 14) comments, this is a par-
ticularly unfortunate state of affairs, since the
denial of the cover-up makes things that are
crucial for problem solution ‘undiscussable’.
At the heart of the investigation of the object
company is a situation of un-programmed decision-
making, as much as anything because of the
unique features of the specific project involved –
nothing of that scale or complexity had ever
previously been undertaken by the company. The
level of uncertainty involved was thus likely to
have increased the PM’s scope for indulging in
undetected opportunism (what Williamson, 1985,
has described as ‘self-interest seeking with guile’).
The present paper hopes to contribute to that
significant body of research identified by Ezzamel
and Willmott (1992) that the notion of trust
underlies, and thereby assist in the resurrection
of a concept ‘long neglected’ according to
Martin (2001, p. 2), and ‘whose time has come’
(Möllering, 1999a, p. 11). Indeed, the present
study may well fill in a gap in the relevant body of
literature (as identified by Munns, 1995), of many
previously-published studies having all focused
on permanent organizations, where trust will have
developed over a period. The very nature of
projects is that they provide an environment that
is substantially different. Rosenfeld, Warszawski
and Laufer (1991) attributed this to three factors:
the people who work on projects are often temp-
orary and might lack motivation to participate in
long-term success; the job will often be unique,
thereby reducing the potential for savings from
improved personal relations; and, finally, the
organization is temporary, thereby perhaps lead-
ing to a lack of commitment on the part of those
involved in developing people-building skills.
A ‘bundle of concepts’ requires unpacking for
the purposes of the present analysis. As has been
suggested elsewhere, ‘before a problem can be
solved, it must be set. Real life does not present
us with well-defined problems such as those at the
end of the chapters of a textbook. Rather, human
beings confronted with complex, ambiguous, and
puzzling circumstances must pose the problems
they will endeavor to solve’ (Argyris, Putnam and
McLaine Smith, 1990, p. 47).
The discussion will proceed as follows. Initially,
the situation described in the earlier paper
(Woodward and Squires, 1996) will be revisited,
indicating how the PM, through manipulation of
the company’s AIS (here introducing the concept
of ‘action at a distance’), was enabled to return
fallacious data to the centre that was believed both
by the MD (probably willingly) but also by the
company’s external auditors (who might thereby
well have been ‘hoodwinked’). The background
concept of trust is then discussed as being a
356 D. Woodward and T. Woodward
1Barber, Tomkins and Graves (1999) provide a con-
temporary example of such action, reporting that on
the A13 construction project, ‘everyone wanted their
part of the operation to look good so they covered up
the problems and only reported the good aspects of
performance’ (p. 115).
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