The interdependency factor: Managing risks in client-contractor relationships

Abstract

This thesis investigates how the management of interdependencies between the client and the contractor can enhance risk mitigation strategies in complex construction projects. In practice, many risks do not originate from isolated technical failures, but from misaligned responsibilities, conflicting goals, and a lack of coordination between project stakeholders. These interdependencies influence how decisions are made, how risks propagate, and how effective mitigation strategies ultimately are. While traditional risk management approaches focus on identification and responsing on risks, they often overlook the systemic nature of interdependencies that shape project outcomes.

To address this gap, the research combines two theoretical models to develop a structured framework. The TOE framework is used to categorise the cause and manifestation of complexity into technical, organisational, and external sources, while Perrow’s Normal Accident Theory is applied to assess the level of coupling and interaction between these components. This dual approach allows for a detailed analysis of how different types of interdependencies affect risk exposure and governance needs.

The framework is applied in two completed infrastructure projects through a mixed-methods approach, combining cash flow analysis, project documentation review, and semi-structured interviews. Six key events were identified and analysed to assess how interdependencies were managed in practice and which governance structures were applied.

The findings show that clients typically rely on centralised governance structures focused on control and compliance, whereas contractors operate in more dynamic conditions that require flexible, decentralised responses. This structural misalignment often leads to delays, decision-making bottlenecks, and reactive risk management. Although hybrid governance was not explicitly implemented in the studied cases, the analysis suggests that such an approach could offer a promising solution. By combining strategic oversight with operational flexibility, hybrid governance would allow both parties to respond more effectively to complexity, better align their roles and responsibilities, and improve the overall quality of risk mitigation.

The thesis concludes that aligning governance models with the specific interdependency profile of a project leads to better risk management. It recommends early joint classification of interdependencies, broader stakeholder involvement in decision-making, and the use of trust-based mechanisms to complement contractual controls. These strategies can help project teams respond more effectively to complexity, interdependency and improve overall project performance.