Introduction
The success of any project is affected significantly by the existing relationships between customers and contractors. This case means that the success of these projects tends to revolve around the quality of relationships between clients and involved contractors. Generally, a good relationship between consumers and contractors should be based on understanding and, most importantly, trust between involved parties. The creation of good relationship management plays a critical role in achieving specific and desired goals of any project and tend to be fruitfully beneficial to both clients and contractor for the long term. The primary focus of this paper will be on the management of relationships between contractors and customs, ethical issues in contracting, benefits of contraction, effective communication strategies and processes, and specific risks and responsibilities related to the relationships between customers and contractors.
Ethical Issue
A contract is mainly a valid agreement that binds involved parties legally. Having an ethical foundation for an organization plays a critical role in promoting a sense of pride and, most importantly, self-respect regardless of the nature of the organization. Ethical agreements focus on setting specific moral guiltiness of conduct within the organization and the contraction process. While business contracts between organizations and customers are legally binding documents, they are only effective and important in ethical-related frameworks that assume different involved parties fulfill and observe specific and designed contractual obligations. To maintain trust in the relationships between customers and the organizations, ethical consideration is important, with the primary aim of avoiding possible ethical issues in any contract. Besides, the organization needs to consider specific responses towards customers with unethical behaviors that affect proposed agreements between their relationships. Competing for satisfying and, most importantly, obtaining a contract legally is the basis of a good functioning relationship between customers and contractors. This case means that if the organization engages in unethical behaviors or decisions, there is a chance to lose contacts, waste its valuable resources through legal entanglements with contractual parties as they try to seek damage. Some of the most important factors to consider in this case include conflict of interest, fair competition, price ethics, and specific laws and regulations.
Price Ethics
It is important to have a good basis for determining the prices of the contracts. Some of these bases may include market levels and profit levels. Setting the prices of any contract ensures the organization behaves ethically, and ethical issues, in this case, may arise from basing contracts’ prices on hidden or manipulation factors. Once the prices of contracts have been created, it is important to ensure it has been transparently presented to customers, without any hidden costs (DiMatteo & Cordero-Moss, 2021, April). Generally, an ethically negotiated contract plays a critical role in balancing benefits contractors and customers. As a result, poor execution of any contract should be avoided as an ethical issue capable of resulting in specific disadvantages to involved parties. Avoiding such ethical issues help in the ability of customers and contractors to prevent and avoid possible issues, thus creating good, reliable, and effective relationships.
Conflict of Interest
Logically, some conflicts of interest tend to be ethically unacceptable. Some of these conflicts of interest include bidding on contacts for which the organization decides who is awarded but can prevent other types of these conflicts with transparency. When a conflict of interest arises, particularly as a result of factors beyond the organization, it is important to ensure they have been addressed them publicly. Besides declaring the conflict and, most importantly, refraining from participating in the relevant decisions are important outcomes and ethical considerations related to the contracts.
Fair Competition
A competitive market provides the organization with feedback on the values offered to customers compared to its competitors. Obtaining contracts through fair competition means the organization is successful in presenting exceptional value to customers. When competitors receive more contracts, then it will be important for the organization to consider factors limiting its ability to successfully get more contracts. Some of the factors to consider in this case include reducing the prices of contracts offered or increasing the quality. Unfair competition is unethical as it contributes to collusion or price-fixing, particularly when the organization secretly decides to raise bid prices with its competitors. Such behaviors are not only unethical, but negative factors contribute to limiting the effectiveness of a market. Organizations that fail to present good value receive orders particularly at the expose of contracts with the best prices and, most importantly, highest quality. Besides, these issues may contribute to the distortion of the market signal, and other participants within the market are most likely to lose out in the long term. Such unethical decisions should be avoided to ensure the effectiveness and positive performance of the organization in general.
Observation of Laws and Regulations
These laws and regulations play a critical role in protecting consumers, employees within the organization (contractors), and most importantly, other involved market participants. When developing an offer and signing any contract, it is important to keep legal and regulatory constraints in mind. Even if the organization’s adherence to laws is not likely to be varied, an ethical decision helps prepare and execute specific and vital contracts. Erring on good ethical practices is also essential, particularly in cases where an organization or a contractor is in doubt as to the legality of an involved contract. Such decisions help prevent possible legal issues that come with trying to define the specific and exact legal limits and focus on coming too close to borderline practices.
When coming to an agreement, considering such ethical issues is important. The main reason is that such considerations help in understanding possible issues and factors that may limit effectiveness and positive outcomes in contractor-customer relationships and their management. Effective management of these relationships must be focused on ensuring the achievement of desired goals and objectives that will ensure the satisfaction of contractors, their competitors, and, most importantly, involved customers (DiMatteo & Cordero-Moss, 2021, April). These ethical issues have the potential to cause negative impacts on the general performance and outcomes of an organization and how it offers its services to its customers.
Benefits of Contracting
Working as a contractor gives you a variety of experience-enhancing and developing your skills in a given field of work. Contracting gives you a better view of different companies’ operations, enabling you to have a real distinction in your working life, unlike permanent job experience.
Flexibility and independence are also among the benefits of contracting, mainly because when you contract, you get an opportunity to choose an errand that suits you to take or forego the one that inconveniences you. It also gives you enough freedom to schedule yourself when to finish the contract within the given timeline, saving you time and starting another project.
Not only do contracts give you a job opportunity, but they also expose you to trying out different companies’ cultures and jobs. Aside from having the same or permanent daily experience. It’s exemplary for contractors who enjoy -time jobs as they will always have the urge to seek fresh projects in the market, reducing boredom in one project. As a result of more experience in different projects, contractor is more likely to get a chance of being known by other well-known related companies growing one’s job network.
Due to worthwhile specialized skills and knowledge, contractors get increased income and some other financial benefits. Developed knowledge and experienced set of skills generally reward contractor’s fruitful pay. Many skilled contractors are likely to earn more than double the salaries of full-time employees since they have specialized skills in a specific field that not all employees can take. This case allows them to demand high rates of pay. Working in various project contracts with the new working environment, different systems, and new types of jobs fasten one up-skill different from them in person skill due to interacting with new ideas from new people and different managerial sectors (DiMatteo & Cordero-Moss, 2021, April). This faster up skilling also secures you a wider range of opportunities in different fields of work.
Unlike a full-time job, as a contractor, one has employments rights which makes sure in every project you take, the company cannot take advantage of you in any project you agree to take under terms of labor guide. Also, as a contractor, one of the advantages is that you can decide to renew the contract depending on how you were treated and served by the company. Unlike a permanent job, a contractor can decide to leave the job after the contract anytime you want without anyone questioning. For an independent contractor, one gets to be his or her boss. You take charge of making and amending any rules that increase the productivity of your knowledge and skills. It means you can manage and choose jobs you do at any time and manage and weigh your workload. Besides being a boss, most importantly, you can decrease or deduct your business expenses from your taxes, saving more income.
Importance of Communication Process
Communication is a key element in ensuring good, productive, and effective relationships between customers and contractors. This case means that communication is a key element in an effective contractual relationship.
Communication plays a critical role in clarifying specific questions or possible confusions between contractors and customers. As a result, communication helps ensure parties involved effectively keep up with a cordial relationship with each other. A two-way and transparent communication process ensures both parties come to a good and productive understanding of different factors, including any contract’s proposed terms and conditions. Besides, the communication process helps improve the relationships of involved parties and, most importantly, promotes workplace efficiency (Al Safarini et al., 2021). This case means that if the communication is better, there would be a good understanding of involved parties, ensuring their satisfaction. Some of the contractual relationships are most likely to end due to a lack of or poor communication processes between involved parties. As a result, contractors and organizations, in general, need to ensure effectiveness in their communication processes with customers, which helps to build a strong and reliable relationship that helps to promote positive outcomes in any contract (Malik et al., 2021).
Risks and Responsibilities in the Contractor–Customer Relationship
There are two major and important risks involved in the relationship between a contractor and customers. These risks are emotional and financial risks. For example, if a contractor comes to an end in between, there is more likelihood of one party to ensure financial loss as a result of the impending work. Besides, it may also result in great anxiety and stress for the affected party, thus resulting in emotional risks. When parties come into a contractual relationship, they tend to be bound emotionally. Therefore, possible effects that may lead to failure of the contract as expected contribute to damages of the negotiation, thus affecting and jeopardizing the contract.
Generally, businesses are driven by acquiring processes, resources and, most importantly, delivering products and services and managing possible risks (Rutgers & Sauter, 2021). Potential risks tend to have a major impact in affecting relationships between contractors and the organization’s customers. Generally, these risks can be differed to be contractual obligations and ignorance of the reality of assuming risks. In some cases, some customers are more likely to be lost, particularly when making it important to recognize possible risks and, most importantly, manage these risks with the primary aim of ensuring good and continued relationships between contractor and customers.
Besides such risks, specific responsibilities play a critical role in ensuring effectiveness in the general relationship between a contractor and customers. Logically, customers are responsible for defining their terms and conditions and, most importantly, their expectations at the end of the contract. On the other hand, the contractor is responsible for fulfilling a customer’s terms and conditions. As a result, effective management and considerations of these responsibilities are important in ensuring effectiveness and positive outcomes in the general management of their relationships and the primary goal of the contract.
Contractor-customer relations help to ensure effectiveness and positive outcomes in monitoring and detecting possible risks. This objective is achieved through the creation of effective, reliable, and most importantly, appropriate techniques for managing contracts. As a result, effective risk management is an important factor of consideration in the contractor-customer relationship (van der Krift et al., 2021). Through risk explorations, the responsibility of contractor-customer relations is focused on the development of value important in avoiding risks. Logically, relationships have become multi-dimensional. This case means that success is no longer dependent on outfacing segments in the general process of an organization by an important differentiator integrated across the organization. As a result, leadership within an organization must focus on specific and desired goals and objectives that have been created. Besides, they must be in line with what is expected from both customers and, most importantly, contractors. It is also important to venture into more integral solutions which play a critical role in embracing the growing needs and desires of customers.
Conclusion
Effective management of the contractor-customer relationships is important in achieving specific desired goals and objectives. However, it is important to consider specific ethical issues, communication processes, and most importantly, specific roles and responsibilities elations to the contractor-customer relationships. These factors help improve the general management process of this relationship with a focus on specific factors that will help achieve positive outcomes from such relationships. The primary goal, in this case, is to improve processes that influence positive relationships in the management of any contract while considering and avoiding possible ethical issues that might have negative consequences on these relationships.
References
Al Safarini, N., Hasan, A., Sakhrieh, A., Alnahhal, M., & Al Hazza, M. (2021). Crucial role of efficient communication on construction projects progress, deliverables and conflicts reduction in the United Arab Emirates. Polish Journal of Management Studies, 23(1), 9.
DiMatteo, L. A., & Cordero-Moss, G. (2021, April). Long-Term Contracts: Installment and Supply Contracts. In International Sales Law (pp. 968-995). Nomos Verlagsgesellschaft mbH & Co. KG.
Malik, S., Taqi, M., Martins, J. M., Mata, M. N., Pereira, J. M., & Abreu, A. (2021). Exploring the Relationship between Communication and Success of Construction Projects: The Mediating Role of Conflict. Sustainability, 13(8), 4513.
Rutgers, J. W., & Sauter, W. (2021). Fair private governance for the platform economy: EU competition and contract law applied to standard terms. Available at SSRN 3859941.
van der Krift, H. C., Gevers, J. M., & van Weele, A. J. (2021). Interorganisational project dynamics: A longitudinal study of perceptual distance and client-contractor collaborative relationships. Journal of Purchasing and Supply Management, 100698.
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