Assessing the relationship chain among causes of variation orders, project performance, and stakeholder performance in construction projects

Variation orders have a substantial impact on project performance and stakeholder performance. The objective of this study is to discover the relationship chain among causes of variation orders (VOs), the project performance (PP), and the stakeholder performance (SP). A questionnaire survey is designed to collect data from practitioners. Using factor analysis, five constructs of the VOs are identified, namely poor management, construction method change, design/scope problems, uncontrollable objective problems, and impediment problems. SEM model is then established to uncover the relationship chain among the VOs, the PP, and the SP. The result of the SEM model shows that the VOs have a fairly strong impact on the PP, while PP has a strong impact on the SP. The VOs do not appear to have a direct impact on the SP. However, it has an indirect significant impact on the SP. This study extends the body of knowledge relating variation orders in construction project. The results of this study imply that the parties need to build a cooperative relationship with each other to minimize the impacts of variation orders, thereby improving the PP and the SP.