The compatibility of dispute resolution mechanisms with national culture in the construction industry - a case study of the Malaysian statutory adjudication regime

In 2012, Malaysia became one of the many countries worldwide to introduce statutory adjudication into its construction industry. As with other countries, the purpose of the legislation – contained in the Construction Industry Payment and Adjudication Act 2012 (CIPAA), was to ensure that construction payment disputes were resolved in an efficient and timely manner, thereby easing the problem of cash flow within the industry. Until that time - with the single exception of Singapore, with its unique history and commercial status within the region, no other Asian country had taken this step. Essentially statutory adjudication was being entirely confined to the construction industries of the Western, English-speaking world. The introduction of statutory adjudication - an adversarial form of dispute resolution, in Malaysia that is associated with very different traditions of cultural interaction, therefore raises a potential question of cultural incompatibility between the method of dispute resolution and the national culture of the society in which it is implemented. National culture refers to a set of beliefs, values, norms, and behaviour shared collectively by the population of a nation. Historically, it has played a significant role in shaping approaches to dispute resolution in national settings. The purpose of this research is therefore to assess the compatibility of an adversarial method of dispute resolution with national culture in the construction industry of the Malaysian society. It takes the recent introduction of adjudication in Malaysia as a single qualitative case study of this wider phenomenon. The research establishes a set of propositions based on the pattern of Malaysia’s national culture in four distinctive dimensions derived from Hofstede’s national culture model - namely individualism/collectivism, masculinity/femininity, power distance and uncertainty avoidance. The research utilises the four propositions by conceptually relating each of the dimensions to the key principles of dispute resolution process. The research draws data by 15 semi-structured interviews from various key stakeholders within the Malaysian construction industry. Through thematic analysis, data were coded and categorized to support the inquiry. Patterns emerging from the data were then compared against each of the propositions. Findings of the study suggest that adjudication is appropriate and fitting to the national culture of the Malaysian construction industry, thus invalidating initial assumptions about its incompatibility with Malaysian national culture. The research contributes to knowledge by presenting an in-depth case study of a single adversarial dispute resolution mechanism in a single Malaysia to understand how cultural values can influence the process of resolving construction industry disputes through the lens of national culture. Its findings also foster a better understanding of national culture amongst policy makers when preparing to implement internationally-inspired legislative changes in local settings.