Diagnosis of Negotiation Failure in Resolving Construction Disputes using Fuzzy Fault Tree Analysis

Project: Research

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The construction industry has on average accounted for 4.3% of the gross development product (GDP) of Hong Kong over the past decade. It has collectively contributed to the social and economic transformation of Hong Kong’s society. However, construction projects are dispute prone. Dispute resolution processes such as mediation, arbitration, and litigation are relatively time consuming and expensive, and are likely to disrupt construction programme, which in turn affect the programs of subcontractors, suppliers, and employers. Consensual dispute resolution by direct negotiation is therefore encouraged in the industry. Negotiation, a nontechnical survival skill, is seldom learned by construction practitioners as part of their formal education process but rather through hard experience. Mistakes are often repeated. These ‘failure’ stories, which are as instructive as success stories, provide a primary source of knowledge for construction negotiators. This project seeks to investigate the root causes (i.e., basic reasons) that lead to negotiation ‘failure’ (the failure of reaching an integrative agreement, not a complete breakdown).To achieve this, a model to conceptualize the root causes of negotiation failure will be developed using the fault tree approach. This approach organizes the root causes in hierarchical order through logic links. Using a hybrid approach, fuzzy fault tree analysis, which combines fuzzy fault analysis and fuzzy set theory, a probabilistic assessment of each root cause can be performed and negotiation failure can be quantified. Birnbaum’s importance measure will then be calculated to provide sensitivity indices that associate each of the root causes of the model to its effect on the likelihood of the occurrence of negotiation failure. This can help construction negotiators to identify the root cause, the management of which is most likely to yield the greatest improvement.This project is of academic and practical value. The systematic presentation of the fault tree model will foster a clear conceptual understanding of negotiation failure in the industry, which will give new theoretical insights to stimulate further research into construction negotiation. In addition, gaining a better understanding of the root causes of negotiation failure will assist practitioners to diagnose and monitor common mistakes in their daily negotiation tasks. This can be achieved by noting the sensitivity indices that evaluate the likelihood of negotiation failure in response to the occurrence of a given root cause.


Project number9041507
Grant typeGRF
Effective start/end date1/01/102/07/10