Developing a perceptual distance monitor for client-contractor collaborations

Purpose This study aims to propose a tool for conceptualizing and operationalizing perceptual distance in client-contractor collaborations: the perceptual distance monitor (PDM). This paper explains how this monitor was developed and used to examine the impact of perceptual distance on project outcomes. Design/methodology/approach This paper developed the PDM by gathering quantitative survey data from client and contractor representatives. Structural equation modeling tested the predictive validity of perceptual distance on project outcomes. Findings The PDM enables a valid and reliable assessment of the perceptual distance between client and contractor in projects. Moreover, the PDM shows that project outcomes suffer if parties have different perceptions of project objectives, project managers’ competences and the level of trust in the collaboration. These findings confirm the predictive validity of the PDM. Research limitations/implications The study builds on survey data representing dyadic perceptions from 38 measurements in collaborative projects. This paper may not have identified all the effects of perceptual distance on project outcomes, as the analyses were conducted at the project level. This research underlines the importance of gathering dyadic data for studies in interorganizational settings. Practical implications Perceptual distance can be expected between clients and contractors, and higher perceptual distance is generally associated with lower project outcomes. Using the PDM, project managers can concretize, discuss and monitor this perceptual distance over time. The PDM provides project managers with a useful tool to prevent the escalation of conflicts and project failure. Originality/value Based on agency theory and social identity theory, this study provides a unique and validated conceptualization and operationalization of perceptual distance between client and contractor in interorganizational collaborations and supply chains.