Interaction of Business Construction Network in the Market of the Three Provinces in Central Southern Region

Research in interaction theory’s frame of network had showed relationship between contractors and employers in construction of residential buildings which needed to agree to support relationship relating to activities and benefits of mutual relationship. The results found that construction business Network’s relationship was based on risk in business cooperation and behavioral opportunism of constructors because lack of competition in markets. Moreover, this still was lack of thorough information for consumers to property cooperation with a kind of construction. One cooperation was not representative to relationship bond in markets of construction business network. Consumers therefore made a formal contract and hired foremen to be able to manage risk and construction of residential buildings according to standards. This situation was undeveloped to business network in the same target. Hence, consumers should developmental methods of contractor and outsource selection in construction business.


Introduction
Construction of residential buildings in three provinces in central southern region still is lack of development and competition by developing markets which depended on capital construction, constructor network and informal relationship between contractors, outsources and employers.This still was lack of good corporate governance, skilled labors in workplaces that made an effect of restrictions on integration of business network to reduce other costs in value chain including resulted risk of consumers in marketplace such as consumers are lack of unchanged specific prices of construction and problems about data accessibility in connection with potential contractors and outsources in construction business are unclear and clear lecture of methods of contractors and outsources selection in the current situation.
Because markets thoroughly do not know manufacturers and consumers are restriction for consumers and only one transaction relationship as well as consumer's perception ability levels is about private residential construction is a strategic specification of decision on implementation of mutual economic activities of construction network.Incomplete information greatly affects cause of unstable costs from planning's figure and quality of work does not comply with the standard in work piece.Moreover, business partners also are lack of awareness of responsibility for the agreement; incomplete information has led to reduction in the well-being status of people (Akerlof, 1994, p. 293) which occurs in the contracting process.Thus, it is important problem in the current situation for consumers under lack of good corporate governance in markets, cooperation with business network between contractors and outsources of integrative business processes, mutual relationship development of employers and outsources such as relationship priority is to select contractors and outsources, contractual relationships, framework specification of interaction between economic hosts (Kotljarov, 2010).Terms of important evaluation of agreement, relationship control between the parties and terms modification of agreement are to be good indicators in duties and reduction of entire costs in supply chain, which former researches of this aspect have not been shown before.

Literature Review
The important mentally discussion of social exchange theory in Blau's work stated that such theory stands in contrast to reasons of economic exchange which economic exchange is identified with abstract on Neo-classical theory.The research agrees with Blau that this occurs confrontation, human shows relationship for exchange in order to realize about related benefits with obtaining personal interests.Latest basic format for social interaction controls only the exchange process so that the first step is common norms and role expectation that are missing.After that, social interaction of participants in exchange is to stimulate formation of the simple structure and then there are social norms are designed to manage exchange and it is initially used to a case of absence of obligation and punishment in the group (Blau, 2009, pp. 88-114).The focus of the research is contractual relationship between companies that economic exchange is not universal.Agreement may be categorized as continuous and related conditions and discontinuous agreement will not be offered relationship between the parties that are participating in exchange apart from simple exchange of goods.In practice, the exchange can be found less because this is mostly in the world of abstract theory.True agreement is bond relationship to live in complex relationship between specific persons, in addition to traditional and modern social characteristics have different contractual relationship.
Therefore, today exchange in markets is study of the complex formation including elements of continuous transaction and relationship agreement in Blok's work.Political economy has analyzed roles of relationship in power with participants in markets (Blok, 2004).Abolafija, Burd'e showed cultural sociology stated that markets have a relationship with understanding to economic culture, cultural capital, cultural economic asset and political culture.Market analysis acts space setting (Abolafija, 2003;Burd'e, 2002).This exhibited that a variety of idea contains in aspect of economic sociology is lacks of unity of definition of exchange in different markets.Economic sociology's literatures by new institutionalism, moral economy and network's guidelines are analyzed by new institutionalism that time acts source of uncertainty, which uncertainty may be reduced through trust building.New Institutionalism analyzed that contracting arises as institutional diagram.Concept's representatives are, for example, Biggart (2001), Dimadzhio (2004, pp. 46-65), Nort (1997), Williamson (1985) and Fligstein (2001) had to weight about rules what is duties in markets and there is connection with transaction costs, opportunism, formal and informal relationships (Kjerroll, 2004).The person offers network's guidelines to measurement method with target to show that bond exchange in markets is wider than relationship that does not make an agreement of network.This agreed that markets is social network, markets have relationship between participants in markets as well as there is relationship with person's reliability whom participants, which this showed that connection is determined relationship by time into exchange of business partners is regarded as powerful indicator to make institutional stability.The study which associates with mutual relationship of construction network in markets has seen less, especially, the person has participated in market "connected social network", this means series of strong connection between participants in market (Radaev, 2008, p. 31).Moreover, this referred that participants in initial markets will describe the situation in network so that participants will base on personal interests together with trust and working experience with the parties which becomes important base to cooperate and is denied to cooperate (Radaev, 2008, pp. 31-33).Business relationship between trading partners to determine selection criteria for contractors to consumers in markets relating to residential construction to achievement, it is necessary to examine the following parties.1) General distribution of selection criteria from the parties in consumer markets.
2) Difference in importance of each criteria for selection of business partners, contractors and consumers.
3) Most strategies are found for contractor selection by consumers.4) Difference in selecting strategies of business partners depends on natures of the company.
Presentation of rational concepts in contractor selection and is to describe the mechanisms to choose contractors and business partners in consumer markets, this needs to determine diagram of development of business relationship between the parties to be obtained in markets.Entire processes develop business relationship can be divided into several steps according to classification; it consists of five steps (Dwyer et al., 1987, pp. 15-20).
1) Perception (one party knows that other party is suitable partner for exchange).
2) Study (assignment, duty and trial steps on exchange).
3) Expansion (continuous increase in benefits for the parties that will exchange and addition of interdependence).4) Obligation (Implicit or explicit agreement to implement with relationship between business partners).5) Space (out of business relationship and "release" from of original parties).
Most questions of choice of business partners are regarded as quite simple (participants in markets is aware of something which other persons are the parties to exchange) while other participants are finding suitable partners-a key step in development to relationship (Wilson, 1995, p. 340).In the process of development on business relationship can divide following variables for usage in modeling of the different market situation (Wilson, 1995, pp. 337-340).
1) Alternative comparative levels (benefits are obtained from the best working with the parties).
2) Standards (scope of transaction is sighted with expectation from business partners).
3) Consistency (levels of agreement are in line with expectation from partner's business).4) Reliability (belief of players in markets with benefits of each other).
Development's diagram of business relationships causes a key step that has an effect on other subsequent steps (orientation of relationship, measurement of relationship keeping, support of relationship).This occurs as a model (Wilson, 1995, p. 335).
1) Increasing the probability of transaction is in a case of the lowest price or this associate with qualitative goods as well as competitors or higher price such as a case of customer's satisfaction will continue among cooperation; thus, benefits can be expected in the future.
2) Decreasing the probability of contracting transaction will be found that the lowest price is associated with poor quality and seller's potential ignores with continuous cooperation (Wathne et al., 2001, p. 56).
Relationship building of business in companies brings benefit to the company as long relationship between by the parties in which each party causes specific benefits (Hingley, 2005, p. 871).Relationship results to benefits to players in the form of equation with total value of interaction to be equal to the sum of utility from buying and benefits in exchange.This means that the first person will receive goods and the second person will be donated from social relationship (Frenzen & Davis, 1990, pp. 2-3).As a result, markets can be considered to bond even if consumers get advantages of buying from both types (Frenzen & Davis, 1990, p. 9) therefore, the main reason of failure in relationship building of business is lack of trust and overall essence relating to trading partner's potential (Wilson, 1995, p. 341).
We have mentioned reliability of the parties that there is to play an important role in selection of business partners.Well-known company will be a variable; especially, ability in negotiation contains in accordance with nature of exchange in markets which it may have an important influence on choice of the parties.(Gulati & Gargiulo, 1999, p. 1482).However, importance evaluation of business partners may be different for each group.It is believed that general consumers strictly follow to existing agreement while disciplines are performed by contractors at low level.(Radaev, 2009) Information's source is about the reliability of the parties in the past working with business partners.(Granovetter, 2004, pp. 139-140).
Because it is more important for contractors than consumers.Reputation is a condition that will continue to be important for both groups, which have a direct impact on achievement from cooperation to promote construction services.Conditions of selection have to study strategies for implementation of classification processes by employers and type of construction transaction is accident or relationship which business operation of private residential construction business is single operation depending on experience and strategy determination of selection of contractors and outsources is transaction on basis in accordance with relationship and the most close benefits which are used in study of this research project.

1)
To analyze the relationships of exchanges in the market for construction of residential houses in the examples of collaborative interaction of the employers, and contractors, outsource.
2) To show the terms of the contract and the formation of reducing expenses in the supply chain in the construction business marketing.

Methodology
This study used the quantitative and qualitative study by selecting the construction business of residential houses in the Southern Central Provinces operating the construction activities of residential houses during November 2012-April 2013.It includes the 76 cases in the area of Songkhla Province (36 contractors and outsources, and 40 employers), 54 cases in Phatthalung Province (24 contractors and outsources, and 30 employers) and 54 cases in Satun Province (18 contractors, outsources and 20 employers).This quantitative study used an interview about the nature of the terms of the contract agreed between the contractors, outsources, and the employers for the type of hiring out the contractors, outsources, and employers for information cooperation, the method of solving the problem of employers, the strategy of choosing a construction business network for stability to the employer.
The data collection methods used the interviews and the survey for following up collaborative activities.The study of contract documents among contractors, outsources, and employers was made.The data were analyzed using descriptive statistics, percentage and model analysis that makes the conflict resolution of business network, and a kind of contract for working together of business partners to reduce expenses in the supply chain of the construction business.1 shows the study on the level of knowledge of the employer with the selection of channels on contacting the contractor for building residential houses.It was found that in the three provinces of the central area of Southern Thailand would use the channels in contacting through acquaintances who has a weight equal to 90%, which is independent of the level of knowledge of those contractors for building residential houses due to lack of builder database in the market, and there are no ratings on the business market of construction in the area to report the information to the customer in order to access to information through acquaintances.The classification for residential house builders can be divided into two types: 1. Hiring the contractor to work according to the workpiece (outsource), and 2. Hiring the contractor and do it all by himself, and the types of contract using in the construction can be classified into three categories: 1.The contractual relationships which is a construction contract that has been agreed by oral, 2. The semi-formal contract which is the written construction contract but the contract cannot be applied to prosecution by law because the information in the contract may be incomplete, 3. The formal contract is a construction contract consisted of the complete information of the construction, and it can be used for legal prosecution.

Results
The study found that employers in Songkhla Province hired the contractor to work according to the workpiece (outsource) using the contractual relationships (20.0%), the semi-formal contract (37.5%), and the formal contract (7.5%).While the contractors were hired to perform it all by themselves, they used the semi-formal contract (22.5%), and the formal contract (12.5%).In Phatthalung Province, the contractors were hired to work according to the workpiece, they used the contractual relationships (16.7%), the semi-formal contract (36.7%) and the formal contract (13.3%).While the contractors were hired to perform it all by himself, they used the semi-formal contract (10.0%), and the formal contract (23.3%).In Satun Province, the contractors were hired to work according to the workpiece, they used the informal contract (35.0%).While the contractors were hired to perform it all by themselves, they used the contractual relationships (15.0%), the semi-formal contract (10.0%), and the formal contract (25.0%).It can be seen that if employers chose to hire the contractor according to the workpiece, they would choose to use the semi-formal contract.If the contractors were hired to perform it all by themselves, the formal contract will be used.
The interesting thing is that the subcontractor can have a number of workpieces that are offered to customers as much in need of the customer that is not a barrier to collaboration.The subcontractor will respond to the customer, and it can also define the terms of the work and the model of contract that is necessary in the cooperation.On the basis of the survey, we can see that the purchase price of the product is a determining factor in making their own interaction with local customary practice that does not use a contract.If it was known before through their own networks, which provided advice to employers by checking on the initial step of cooperation frequently used formal mechanisms.But over time, they were gradually replaced by informal mechanism s at the network level and social engagement, so we saw informal contract and contractual relationships.Table 3 reveals that after the construction, the results can be classified into 3 major points: 1.There is no problem with the house of the employer, 2. The problem on delayed home building that does not follow the plan, 3. The problem with the material does not meet the specification.The research found that in the area of Songkhla Province, hiring contractors based on the workpiece, and there was no problem with the employer (22.5%), and the problem on delayed home building (42.5%), hiring the contractor to perform it all and there is no problem (22.5%), and the problem on the material does not meet the specification (12.5%).In Phatthalung Province, hiring the contractor according to the workpiece, and there is no problem with the employer (26.7%) and the problem of delayed home building (40.0%), hiring the contractor to perform it all and there is no problem (23.3%) and the problem with the material does not meet the specification (10.0%).In Satun Province, hiring the contractor based on the work piece (outsource) and there is no problem with the employer (5.0%), and the problem on delayed home building (30.0%), hiring the contractor to perform it all, and there is no problem (40.0%), and the problem on the material does not meet the specification (25.0%).The research indicates that after construction problems, the method used by the employer in solving problems consists of 3 ways: 1.The employer needs the contractor to fixed by the notice, 2. stopped working temporarily, and 3. stopped working permanently.The results showed that when the employer in Songkhla Province had problems arising from the contractor according to the workpiece affecting the construction delay (59.0%), and made the contractor to fix by the notice of his own.While 41.0% would provide to stop working temporarily.In Phatthalung Province, 100.0%would provide the contractors to fix by the notice of his own, and Satun Province, 66.7% would provide the contractor to fix by the notice of his own, 33.3% would provide to stop working temporarily.If it was the problem about the material did not meet the specification, it gave the same result.It was in 3 areas, the contractors would stop working permanently.
The relationship between "the consumer-contractor for the whole house (workpiece)" is the relationship that brings conflicts.The problem followed by conflicts among customers for violations of the conflict "in the duration of recording in the contract".However, it has resulted in low enforcement under this definition.
From the perspectives of the employer, it is a violation of the terms of work on time, which causes a conflict, usually as the needs of contractors, which they said they knew about the violation of the contract.But they deliberately violate because they think that they can negotiate traditionally.Furthermore, they are also known in the area.Therefore, the occurring conflict is a revelation, and the reason is known, and understood by all parties.
Most of them will lead to conflicts with employers and contractors, regardless of the size of the company to resolve conflicts through the negotiation of conflict often do not destroy the business relationship.If there is a delay on the time, it can negotiate to do.But in the case that opportunistic behavior is used in reducing product quality standards led to the cancellation of a contract for work because it was considered to occur a cheat, and do not trust each other anymore.From the matrix to see whether in the case of hiring a contractor according to the agreed workpiece on a formal contract and the homeowners hire a foreman in directing the work.They could reduce the risk of delays in the construction efficiently.But in the case of homeowners use a contractual relationships or informal contract and control the construction themselves, it will result in construction delay.In the case of hiring a contractor to do all the construction if the contractor controls over the work himself, the employer must use the formal contract to reduce the risks caused by building the house that does not meet the specification, or if the semi-formal contract has been used, the homeowners will need to hire the foreman for directing the work.
For opportunistic behavior, it is defined as the deviation from the practice of the contractor or contractor according to the workpiece with the terms of the contract or verbal agreement.In this case, the contractor or the contractor according to the workpiece do not follow the contract of opportunistic behavior as well as the delivery of defective products.The basic form of opportunistic behavior.The first is called "Moral hazard".The moral hazard occurs when one of the parties treats one another, and gets real information about the behavior of the other party.As the employer tells that a lack of knowledge of the mechanics and the method of materials substitution which can avoid forging more or less to the owner of a project in achieving their obligations of the transaction make it no longer complies with the agreed standards and increase expenditure.From the table 6 it is seen that the relationship between employers and contractors will be based on strategies to select the network, which consists of the relationship of exchange of construction business networking contributing to the business occurred from 3 main elements: Employer, strategies for selecting the network and contractors in marketing solutions for residential home construction.Signing a contract should be based on a formal contract, but it should also employ the foreman in the supervision and take care of work standards because the employers lack the knowledge and experience in a particular type of property.The consumer market focuses on the selection criteria of the parties as a good condition of hiring a contractor who has the potential to be the lowest cost option gaining employment.The experience demonstrates the cooperation that will benefit from the interaction under the guarantee of employment contracts as if the contractor has been selected.In practice, it does not occur the risk in construction that would have been inappropriate products in accordance with the quality because the employer provides the contractor to be responsible for the construction contract to help to punish offenders immediately.An indicator of party discipline is experienced in working with contractors as we noticed that it would help the consumers to analyze data as much as possible about the company from past interactions.

Discussions
The problems of the interaction of the network in the market construction occur from the employers (consumers), lack the contractor's information, and outsource which bring to the risks.Furthermore, the consumer focuses on the price as a major criterion in the determination of working together.Therefore, the position of the contractor is the person who defines the terms of collaboration and the characteristics of relationship.If the work is not based on the formal contract, the interaction of the network cannot occur on the commitment to cooperate because it is a single trading contract in accordance with researches of Biggart (2001), Dimadzhio (2004), Nort (1997), Williamson (1985), Fligstein (2001) said that the time is a source of uncertainty that may reduce the creation of trust.Therefore, it should agree to a contract, which acts as the rules on the market, and is related to the reduction of transaction costs, and opportunistic relationships, formal and informal relationship.Therefore, using a full contract affecting the cause the formal powers that can verify the effects caused by opportunistic behavior, which is an appropriate choice to consumers in the of residential construction market.
According to neoclassical economic theory, the entrepreneurs do not have a relationship to each other.If the method is presented to the government sector, the business law depends on the information of individual entrepreneurs.In fact, the entrepreneurs in the market are related to a variety of formats, and interdependence in the value chain that they have benefits in the market.The opportunistism is made by contractors to customers tends to make short term through exchange rather than supporting long-term relationships and building loyalty.Confronting with the process of distrust within the network within a network with each other, it will use contract compliance.In the present, construction market still lacks the competition that defines the norms of the business network.Therefore, the progress of legal norms depends on the customer's claims and social control by employers as important.The study found that the binding relationship has a very little effect in determining the quality of the product by the time, because it is an asset that has a high cost and require competent legal mechanism that can be directed to comply with the study of MacNeil (1980).The contract has no relationship whatsoever between the two sides, in addition to the exchange of products.In practice, this Exchange is common in the environment without competition under the lack of information which conflicts with a world that cannot be true (MacNeil, 1980, p. 13).Choosing a contractor in the market will come from the price, contract and work experience.It makes monitoring role of assessing the reliability of business partners through the contract which conflicts on the job.The reputation in the society may have a significant influence on its selection of parties, and people who are well known desire to provide business partners to work together (Gulati & Gargiulo, 1999, p. 1482).
The findings in this research is the conflict that arises from a breach in the contract that does not come from a serious competition, but it comes from a specific cause of the construction contractor's personal story.It all depends on the intentions and their own requirements in the market, the contractor is not paying attention in violation of the terms of the contract.But it is the intentions and opportunistic considerations and the pursuit of profit.For example, in the case that the contractors had a contract which is not perfect, and do not pay the money for the teamwork on time due to lack of funds, and seek ways to take this opportunity even more.It can be seen that the conflict problem has actually disclosed and is perceived and understood by all affected parties disputed, and working style of subcontractors (local technician) and how to handle problems with the teamwork to create a working environment.It causes problems of delivering the work on time, lack of exchange of information, does not evaluate residential construction market.Therefore, employers should change the way to select the contractors and outsource according to the components in the details of the method and the implementation of the formal contract which is more appropriate to solve problems with expectation of intervention by the authorities, or causes to compete in the market.

Table 1 .
Levels of knowledge of the employers and channels on contacting the contractor for building residential homes in Songkhla Phatthalung and Satun Provinces

Table 2 .
Types of contract of the employer in the area of Phatthalung, Songkhla and Satun Provinces

Table 3 .
The problems arising from hiring the construction builder of the employer

Table 4 .
Methods for solving problems of the employer

Table 5 .
The metrix shows the results arising from the construction of houses for residential houses

Table 6 .
Results of the model to perform construction activity for residential houses