The efficacy of contractual governance on task and relationship conflict in inter-organisational transactions

Purpose This paper aims to explain how contractual complexity, including contractual control, coordination and adaptation, makes a difference to the task and relationship conflict, and then, to investigate the moderating roles played by both, total interdependence and interdependence asymmetry, in altering the association between the two types of conflicts. Design/methodology/approach This study obtained data through a questionnaire survey in the Chinese construction industry and the final sample consisted of 232 responses. The data were analysed using hierarchy analysis using SPSS. Findings The results are as follows: first, higher contractual control and coordination reduce the level of relationship conflicts, and higher contractual coordination also reduces the level of task conflicts; second, task conflict positively affects relationship conflict; third, task conflict mediates the relationship between contractual coordination and relationship conflict; and finally, when total interdependence is higher, task conflict induces more relationship conflict. On the contrary, high interdependence asymmetry weakens the positive relationship between task and relationship conflicts. Practical implications This study highlights the importance of contracts in conflict management. The findings can guide practitioners in drafting suitable contracts to deal with task and relationship conflicts more effectively. Originality/value This study differentiates the effects of distinct components of contracts on task and relationship conflicts, and then reveals the contingent effects of interdependence on the relationship between task and relationship conflicts in inter-organisational transactions.