Win-win approach to subcontracting in building construction: Sri Lankan perspective

Subcontracting has long been studied due to subcontractors’ critical role in construction. However, significant issues persist, especially in developing countries like Sri Lanka, impacting project performance. These issues between main contractors and subcontractors stem from a lack of mitigation methods incorporating relationship management into traditional practices. Furthermore, most prior mitigation strategies are not favorable to both parties. This research aims to develop a “win–win” approach to subcontracting, focusing on relationship and performance management, specifically applicable to building construction. A mixed-method research approach was employed, involving literature review, questionnaire survey, and semi-structured interviews. Quantitative data were analyzed using descriptive statistics, while qualitative data were analyzed thematically. Findings reveal that effectively managing critical factors that influence both subcontracting relationships and subcontractor performance can lead to mutually beneficial outcomes. The study identified critical factors affecting the subcontracting relationship as mutual trust, good communication, and a clear understanding of the work scope by the subcontractor, while for subcontractor performance, the critical factors include time and cost management capabilities of the subcontractor, the availability of finance and working capital for both parties, and issues such as material price increase and inflation rate when subcontractors supply materials. The findings emphasize that prioritizing mutual satisfaction throughout the subcontracting process is essential for implementation. Recommendations provided in this study aim to improve these critical factors, offering practical solutions to enhance project efficiency and individual performance. This research provides valuable insights for developing organizational policies or industry guidelines, particularly for the unique challenges being faced in developing countries.