Line of Privity’s Effect on Project Performance: A Case Study

The construction industry relies on temporary alliances for project completion, emphasizing effective coordination and communication. Line of privity (LoP) is a key concept in construction projects, representing the contractual relationship between parties and playing a vital role in inter-team coordination. This study investigates the impact of LoP on team communication and productivity within a transaction cost framework, using mixed methods with social network analysis. The main hypothesis posits that contractual and organizational ties, measured by LoP and distance, enhance project team productivity through improved communication. Data were collected from a healthcare project using mixed methods throughout project delivery. Analysis reveals the importance of direct communication, although excessive focus may hinder performance due to fewer parties involved or information overload. Increased organizational distance negatively affects completion rates, while frequent long-distance communication promotes understanding and coordination among distributed teams. A direct correlation between the ratio of LoP communications and project performance was observed. This paper provides insights for construction project management, emphasizing the significance of direct communication, effective management of organizational distance, fostering long-distance communication for distributed teams, and understanding the impact of LoP communications on project performance. These findings contribute to efficient coordination, reduced idle time, and minimized rework.