Showing papers in "Construction Management and Economics in 2005"

Critical success factors for PPP/PFI projects in the UK construction industry

Abstract: Public–private partnerships (PPPs) are increasingly used in the United Kingdom's public facilities and services provision through the Private Finance Initiative (PFI) Despite some casualties, PPP/PFI projects have been undertaken successfully, but the reasons for success are not entirely clear Questionnaire survey research examined the relative importance of 18 potential critical success factors (CSF) for PPP/PFI construction projects in the UK The results show that the three most important factors are: ‘a strong and good private consortium’, ‘appropriate risk allocation’ and ‘available financial market’ Factor analysis revealed that appropriate factor groupings for the 18 CSFs are: effective procurement, project implementability, government guarantee, favourable economic conditions and available financial market These findings should influence policy development towards PPPs and the manner in which partners go about the development of PFI projects

Delays and cost increases in the construction of private residential projects in Kuwait

Abstract: Time‐delays and cost‐increases associated with the construction of private residential projects in the State of Kuwait are determined. A person‐interview survey of 450 randomly selected private residential project owners and developers in 27 representative districts in metropolitan Kuwait formed the database for the study. The socio‐economic traits of the owners/developers, and the pre‐construction family planning, the design, and the construction phases of the sample projects are presented. Estimates of time‐delays and cost‐increases are made, and their causes identified. The three main causes of time‐delays included changing orders, owners' financial constraints and owners' lack of experience in the construction business. Regarding cost overruns, the three main causes were identified as contractor‐related problems, material‐related problems and, again, owners' financial constraints. A number of recommendations end the paper. The minimization of time delays and cost overruns in private residential projec...

Last among equals: a comparison of innovation in construction, services and manufacturing in the UK

Abstract: This paper contrasts the attitudes of firms towards innovation from the construction sector with those in services and manufacturing, using data from the UK innovation survey. We examine the liabilities that construction firms face in their innovative activities in comparison to other sectors, drawing from literature on the distinctiveness of construction as an economic activity. We find that the liabilities of immobility and unanticipated demand are among key distinguishing features that separate innovative behaviour in construction from other industries. The paper concludes with a discussion of the merits of cross-sectoral comparative research of this kind, together with issues for further research.

Building a conceptual framework for measuring business performance in construction: an empirical evaluation

Abstract: The importance of business performance measurement across industries has elevated in the last decade in what has been described as a revolution. Meanwhile, the construction industry has been criticised for its underperformance and the Latham and Egan reports emphasized the need for performance improvement and measurement. Companies have had to face the dilemma of choosing among different performance measurement frameworks. Hence, a need has been identified for a comprehensive framework. The aim of this research is to fulfil this need by building a conceptual framework for measuring the business performance of construction organizations. The framework had been formulated in previous research upon the principles of the Balanced Scorecard and Business Excellence Models. The research attempts to empirically evaluate and revise the framework through a series of expert interviews and case studies. In addition, empirical feedback has been used to: express the revised framework in a more communicative form, illus...

Towards a social network theory of project governance

Abstract: The findings of a study are presented using social network analysis in an innovative application involving the analysis of construction project governance. The rationale supporting the application of social network analysis (SNA) within the construction project coalition context was published by this author in a previous paper in this journal. The rationale is summarised in order to explore a very specific framework for the examination of the governance of construction coalitions. The significance of the analytical approach proposed relates to the weakness in existing analytical methods, particularly in relation to changes in approach to procurement following the publication of the Latham and Egan reports. The research framework relates to the key functions of the coalitions to SNA. Within the framework of these key functions, network density and actor point centrality data are gathered using a form of linear responsibility analysis chart adapted to assemble network data in node list form for input in UCI...

Main contractor experiences of partnering relationships on UK construction projects

Abstract: Partnering provides a major opportunity for improving project performance, whilst offering direct benefits to the whole of the supply chain. Many research studies reinforce this assertion although there is less critical analysis examining the nature of partnering in practice and whether the claims made for it are consistently justified. The experiences of commercial surveyors and managers within the UK construction industry have been gathered in a pilot study, drawing on the opinions of 48 commercial managers employed by a leading national contractor. The perceptions and experiences of partnering relationships are generally positive, although the early optimism at the beginning of such arrangements is seldom sustained throughout the project lifecycle. Attitudes to partnering are similar whether the relationship is upstream (client/main contractor) or downstream (main contractor/subcontractor). The growth in popularity of alternative procurement methods and statutory adjudication are both regarded as havin...

Use of information and communication technologies by small and medium‐sized enterprises (SMEs) in building construction

Abstract: Scholars usually agree that small and medium‐sized enterprises (SMEs) active in construction are not very innovative when compared with large‐size construction enterprises. This is particularly evident in the case of adoption and diffusion of innovation associated with information and communication technologies (ICTs). Although ICTs are powerful instruments for the rapid and broader diffusion of technical knowledge, few SMEs are fully able to exploit their benefits. There is little evidence of how SMEs perceive ICTs and of the extent to which these technologies are actually used in the construction industry. There is a relationship between organizational size and the use of ICTs within the SMEs in the building construction sector in Turkey. A set of ICT variables comprising the perception, investment, usage and the software preferences of SMEs were analysed by making use of the data collected in a survey of a randomly selected sample of 227 building construction firms in Turkey. In contrast to the common ...

Making sense of supply chain management: a comparative study of aerospace and construction

Abstract: Current recipes for learning across business sectors too often fail to recognize the embedded and contextual nature of management practice. The existing literature gives little emphasis to the symbiotic relationship between supply chain management and the broader dynamics of context. The aerospace and construction sectors are selected for comparison on the basis that they are so different. The UK aerospace sector has undergone extensive consolidation as a result of the imperatives of global competitive pressures. In contrast, the construction industry has experienced decades of fragmentation and remains highly localized. An increasing proportion of output in the aerospace sector occurs within a small number of large, globally orientated firms. In contrast, construction output is dominated by a plethora of small firms with high levels of subcontracting and a widespread reliance on self-employment. These differences have fundamental implications for the way that supply chain management is understood and implemented in the two sectors. Semi-structured interviews with practitioners from both sectors support the contention that supply chain management is more established in aerospace than construction. The introduction of prime contracting and the increasing use of framework agreements within the construction sector potentially provide a much more supportive climate for supply chain management than has traditionally prevailed. However, progress depends upon an improved continuity of workload under such arrangements.

A review of construction companies' attitudes to sustainability

Abstract: In the last decade several initiatives have been taken to encourage the construction industry to support the agenda of sustainable development. On the basis of public disclosures made by companies listed on the UK Stock Exchange this paper reviews current attitudes to sustainability and corporate social responsibility. The findings suggest that very few of the major companies positively embrace these ideas. It is subsequently argued that the fragmented and diverse nature of the industry further complicates the transition towards sustainable construction. The conclusion is that even though the construction industry has its own sustainability agenda, relatively few companies have changed their business paradigm.

The financial risks in build‐operate‐transfer projects

Abstract: The build–operate–transfer (BOT) approach for developing infrastructure projects is a technique that allows fast realization of public works in cases of a shortage of public funds. This process is full of risks, due mainly to the complexity and extend of the disciplines, public agencies and stakeholders involved. The identification, classification and presentation of a comprehensive list of this type of risks will provide BOT project practitioners with a useful tool in the effort of setting up successfully a BOT concession agreement. The approach presented provides a practical insight into 27 financial risks, which are associated with the BOT projects in their lifecycle. This is achieved through proper justification and description of the content of each risk. Furthermore, a categorization of the risks is presented, according to the stage at which they occur and the sources of their origin. The findings of this research would facilitate the risk analysis process that is being conducted by risk managers pr...

Architects and contractors: a comparative study of organizational cultures

Abstract: Conflicts between project participants have been identified in various construction industry reports as being one of the principal causes of poor performance on construction projects. These conflicts occur at the interface level in one respect because participants have different objectives and different organizational cultures which define their approach to work and relationship with the other project participants. This research was therefore undertaken to investigate and identify the organizational cultures of two significant players in the project coalition – architects and contractors – on the premise that by revealing specific cultural characteristics and orientations, establishing significant areas of difference and initiating discussion on some of the implications for conflicts and project performance, the context would have been set for assessing and understanding the behaviour of these project participants. A questionnaire survey based on some specific indices of organizational culture conducted o...

A hierarchical structural model of assessing innovation and project performance

Abstract: Research in construction innovation highlights construction industry as having many barriers and resistance to innovations and suggests that it needs champions. A hierarchical structural model is presented, to assess the impact of the role of the project manager (PM) on the levels of innovation and project performance. The model adopts the structural equation modelling technique and uses the survey data collected from PMs and project team members working for general contractors in Singapore. The model fits well to the observed data, accounting for 24%, 37% and 49% of the variance in championing behaviour, the level of innovation and project performance, respectively. The results of this study show the importance of the championing role of PMs in construction innovation. However, in order to increase their effectiveness, such a role should be complemented by their competency and professionalism, tactical use of influence tactics, and decision authority. Moreover, senior management should provide adequate r...

Does work–family conflict mediate the relationship between job schedule demands and burnout in male construction professionals and managers?

Abstract: It is unclear where work–family conflict should be theoretically positioned in the relationship between job stress and strain. Data collected from 231 male construction professionals, managers and administrators were analysed to determine whether work–family conflict mediates the relationship between job stressors and burnout. Two different aspects of work–schedule demands, i.e. job schedule irregularity and hours worked per week, were found to be related to the emotional exhaustion dimension of burnout. In all cases, the relationship between job schedule demands and emotional exhaustion was mediated by work–family conflict. The authors conclude that job schedule demands impact upon emotional exhaustion via work–family conflict. Further, work–family conflict is demonstrated to be a key mediating mechanism between schedule demands and emotional exhaustion for male employees. It is recommended that construction organizations examine ways to reduce work–family conflict as a means to reduce burnout and improv...

The definition of partnering as a Wittgenstein family-resemblanceconcept

Abstract: This article on partnering and family-resemblance makes two contributions to the debate about the definition of partnering in construction. The first is a distinction between general prerequisite ...

Value management practices of leading UK cost consultants

Abstract: Value management (VM) is widely accepted as an important tool in the management of projects. Through a series of semi‐structured interviews, this paper attempts to add to the qualitative exploration of VM, by investigating the attitudes and experiences of VM facilitators within major UK cost consultancies. Clients cut across all sectors, but relatively few subscribe to a formal VM process. Despite the acknowledged importance of early interventions, the focus for many VM studies tends to be at spaces and element levels, rather than at the earlier concept level. VM continues to be used as a cost‐cutting exercise, particularly so on projects which are experiencing problems. Formal VM rarely extends beyond tender stage. Workshops remain the common format, but these are often compressed, due to commercial pressures, into a half‐day. Techniques are adapted to suit the needs of the project, team and client rather than being rigidly applied according to the theoretical approaches outlined in the literature. The p...

Project cost estimation using principal component regression

Abstract: Factors affecting construction project cost include project‐specific factors and those reflecting the characteristics of the project team. Multiple regression is often used to estimate a project's cost, but independent variables with a high degree of correlation are likely be left out of such a model. As a result, only a limited number of factors are included in the estimate of project cost and predictions from such models will not be accurate. To overcome this technical inefficiency, the aims of this study are: to identify factors that contribute to project cost, to construct a predictive project cost model using the principal component technique and to assess the relative importance of determining factors. The data are obtained from a random sample survey comprised of Singapore building projects completed after 1992 costing more than US$5 million in value. Three main groups of variables are identified, pertaining to characteristics of the project, contractors and owner/consultants. Special project requi...

Entry and business strategies used by international architectural, engineering and construction firms in China

Abstract: International architectural, engineering and construction (AEC) firms need to decide on the appropriate market entry mode and business strategies when undertaking projects overseas The objectives of this research are to investigate the effective market entry modes for penetrating China and the effective business strategies for managing projects in China The research method is based on a structured questionnaire and data were collected via postal survey Interviews have been conducted to complement the survey The results show that establishing a wholly owned subsidiary in China is the most effective entry mode Foreign AEC firms need to adopt a differentiation strategy by providing niche and superior service They must also pay great attention to customer satisfaction to gain competitive advantage and clinch and manage projects To succeed in China, foreign AEC firms need to set up a physical office there, to develop a good understanding of local by‐laws, understand client requirements better and theref

Critical stressors influencing construction estimators in Hong Kong

Abstract: The main task of contractors' estimators is to predict the likely costs involved in executing a future project. This is an onerous job as any errors made can undermine project success and ultimately reduce the contractors' profit margins. The inherent uncertainty of most construction work, however, together with the often very short time periods involved, make errors unavoidable. Unsurprisingly, therefore, estimation is considered to be a very stressful business. To identify the nature of the stress involved, a survey of construction estimators in Hong Kong was conducted. Using correlation analysis, regression analysis and structural equation modelling, the relationships amongst the causes (stressors or stress factors) and effects (stress) were examined and a causal structural model developed. The results indicate work overload, role conflict, job ambiguity, and working environment to be the most critical stressors, with work underload and distrust being the main indirectly influencing factors. These resu...

Strategic planning practice of construction firms in Ghana

Abstract: In Ghana, the operating environment for construction firms is constantly changing in the face of a volatile economic environment, shifting political climate and a highly competitive market. Confronted with such instability, companies need strategic planning to combat the threat to their survival. A survey was conducted to determine how widespread strategic planning is used as a management tool by contractors in Ghana. Construction firms with classification A1B1, A2B2, D1 and D2 were used in the survey. Only 8.5% of D2 firms use strategic planning. The other firms have a combined average of 86.7%. Civil engineering contractors are far ahead of the building contractors in the practice of strategic planning. Strategic plans are drawn to cover an average of three years. There is an urgent need for contractors in the D2 class to be encouraged to seek insight into strategic planning and employ the technique to enhance their chances of surviving risks in the business environment.

The cult of customer responsiveness: Is design innovation the price of a client-focused construction industry?

Abstract: Much has been written about the positive contribution made by the customer to innovation in bespoke and low‐volume products like those of construction. Far less attention has been given to the potentially corrosive effects the client might have on innovation. Drawing on three construction case studies, this paper argues that strong client leadership may have negative consequences for innovation, including the suppression of innovation and an overly narrow focus on particular types of innovation. Given that innovation has a key role in the future competitiveness of any industry, it is argued that the role of the client in construction innovation requires more careful examination than it has thus far been afforded.

Gender and ethnic minority exclusion from skilled occupations in construction: a Western European comparison

Abstract: Women and ethnic minorities remain seriously underrepresented in skilled construction occupations despite European Union policy to overcome labour market segregation and despite their increasing participation in the economy-wide labour market. The paper seeks to account for differences in female and ethnic minority/migrant participation in both the deregulated, craft-based construction industries of Italy and Spain and to an extent Britain and in the regulated industrial and training-based industries of Denmark and the Netherlands. We found that the only entry route for women is to obtain formal qualifications, with the Dutch and Danish education and training systems being especially pivotal to inclusion. Those from ethnic minorities and recent migrants, whilst proportionately overrepresented in Italy and Spain, face more vertical segregation in being largely confined to the bottom of the job ladder. Key obstacles confronted by both groups are the opportunity to undertake work-based training, output-based wage systems, informal methods of recruitment and lack of proactive implementation of equal opportunities policies. The conclusion drawn is that European and national authorities and social partners need to address equality of access and of employment conditions to ensure that regulation overcomes exclusion.

The construction labour market skills crisis: the perspective of small–medium‐sized firms

Abstract: Reports abound of the detrimental effect of the construction skills crisis on the performance and future development of the UK construction industry. The industry's continued growth in output, coupled with its unpopularity as a career choice, has led to extreme pressure on its labour market capacity. There remains, however, a paucity of empirical research into the nature of its highly complex labour market. In particular, very little attention has been paid to the impacts being felt by the smaller firms who account for the vast majority of the industry's economic output and employment. This paper reports on research that has explored the perspectives of smaller employers with respect to the skills crisis. Using an inductive methodology, this research canvassed the opinions of representatives of small‐ and medium‐sized (SME) firms in order to establish the impact of skills shortages on the operational efficiency of the industry. The paper reveals the complex interplay of factors which have combined to shap...

The JIT materials management system in developing countries

Abstract: The just‐in‐time (JIT) approach to materials management appears to be superior to a just‐in‐case (JIC) approach in terms of reducing cost and improving productivity under most circumstances encountered in industrialized countries. However, is it truly more advantageous than the more commonly used approaches in developing countries? Contractors in developing countries may be compelled to keep excessive inventory under some circumstances to help manage uncertainty in the supply chain and production process, high inflation rates, available discounts on prices of large amounts of materials, and price cuts in case of early purchasing. This study presents a comparison of the JIT and JIC materials management systems in terms of total cost of inventory by means of a simulation model that makes use of actual data obtained from an ongoing trade centre project in Istanbul, Turkey. The study suggests that had the JIT system been used in the project in Istanbul the total cost of inventory would have been 4.4% higher t...

Structural equation model of project planning effectiveness

Abstract: Previous research studies investigating the impact of situational variables on project planning effectiveness have not examined how the situational variables work together to influence planning effectiveness. A structural equation model (SEM) has been developed for describing and quantifying the influence of situational factors in project environments and organizational characteristics of performing organizations on project planning effectiveness. The individual effects of directly‐observable variables on the project planning process were evaluated using regression analysis. The SEM approach enables the modelling of multiple factors as latent not‐directly‐measurable variable sets, thus providing a theoretical insight into how individual influence factors work together to determine the effectiveness of project planning efforts. The project environment has a dominant significant influence on the potential effectiveness of project planning efforts. In contrast, the influence of organizational characteristics...

Organizational learning: conceptual challenges from a project perspective

Abstract: Organizational learning has been widely acknowledged as holding the key for companies to survive and prosper and has, in recent years, gained currency in construction management research. Much research centred upon the study of organizational learning as a process, as well as the view and understanding of companies as learning organizations. However, non-construction management researchers have recently begun to recognize the incoherence of the concepts presented in the literature and identified a lack of a solid theoretical and empirical foundation. To further exacerbate the challenge of embracing organizational learning in construction, the industry is largely project-based, thus increasing the difficulties for organizational learning to occur. Past research into organizational learning has also mainly concentrated on an intra-organizational perspective and where construction is specifically concerned, on project partnering. However, we regard such a focus to be myopic as a means of exploring organizational learning at the construction project level. As such, a number of research challenges are recommended including the need to examine organizational learning beyond project partnering; an emphasis on the inter-organizational dynamics involved in both the process and outcomes of organizational learning and the investigation of construction projects as learning networks.

Fairness in interorganizational project relations: norms and strategies

Abstract: There is a strong preference for fairness in human interaction, so that people who experience unfairness tend to react with anger, resentment and loss of motivation. Concerns to appear fair influence the behaviour of both individuals and firms. Perceptions of fairness are susceptible to framing and may be influenced by various norms for outcome distribution as well as by decision processes and interpersonal relations. This paper deals with causes and effects of fairness perceptions in construction project relations, mainly fixed price contracts procured by competitive tendering. In such projects, uncertainty results in continuous post contract award problem‐solving and negotiations, and fairness concerns may have incremental but significant influence on the terms of exchange. Case studies of client–contractor interaction in two projects are used to discuss of how fairness norms relate to strategies and industry culture. It is concluded that that an intuitive cost‐based norm of fair pricing shapes interact...

Assembling integrated project teams for joint risk management

Abstract: Exhaustive risk allocation cannot be achieved through contract conditions, because all risk items cannot be foreseen at the planning stage. Effective management of unforeseen risks/events at post‐contract stage needs the collective efforts of all major contracting parties. The attitude and motivation of project participants are critical to such collaborative arrangements. Project ‘partners’ need to be conditioned, starting with their selection processes, by incorporating appropriate ‘soft’ or relational qualities as important selection criteria. They would then need to work under suitable teambuilding protocols, with flexible contract conditions and appropriate adjustment mechanisms that would all be tailored to suit each specific project. The theoretical construct so developed is examined through a series of recent Hong Kong based studies on ‘joint risk management’. Results lead to the development of a framework for building a coalesced team that includes owners, consultants, contractors, subcontractors ...

Time series forecasts of the construction labour market in Hong Kong: the Box‐Jenkins approach

Abstract: Labour resources are invaluable assets in the construction industry. Nurturing a quality workforce and promoting stable employment for construction personnel have often been advocated as part and parcel of an industrial policy. Yet, the future labour market of the industry is always uncertain, and there is a need for estimating future labour market conditions as an aid to policy formulation and implementation. The Box‐Jenkins approach has been applied to develop Autoregressive Integrated Moving Average (ARIMA) models to analyse and forecast five key indicators in the construction labour market of Hong Kong: employment level, productivity, unemployment rate, underemployment rate and real wage. This approach can be adopted in more complex and diverse labour markets subject to the properties of the utilized data series. Quarterly time‐series statistics over the period 1983–2002 are used in this study. The predictive adequacy of the models derived is evaluated with out‐of‐sample forecasts in comparison with a...

The decline of the ‘traditional’ family: work‐life benefits as a means of promoting a diverse workforce in the construction industry of Australia

Abstract: The ‘traditional’ managerial career model was based upon a clear division of labour. Typically, women stayed at home to raise children and manage household work while men acted as primary breadwinners. In this arrangement, relocation, long and inflexible hours of work and frequent travel were not only possible but were a prerequisite for advancement. However, since the 1950s, dramatic changes to family structures and workforce composition have occurred. In the twenty‐first century the majority of women, including those who may be considered in the child‐bearing and early child‐rearing age group, are in paid employment. There has also been an increase in the number of lone parents in the workforce. There is evidence of a corresponding change in employees' expectations, with both men and women placing greater value on both work and family involvement. Given these changes, it can no longer be assumed that employees are ‘free’ to devote all their energy to their work. Nor can it be assumed that there is a cle...

Using linear model for learning curve effect on highrise floor construction

Abstract: The evolution of repetitive scheduling methods led to the introduction of the learning concept in construction planning. It is common knowledge that performing the same activity repeatedly, and in the same conditions, takes less and less time as the activity is repeated (Gates and Scarpa, 1972). This phenomenon is clear in many construction activities and is known as learning experience or learning effect. The increase in productivity is mainly due to the increasing knowledge acquired by work repetition. Graphic representation is through a learning curve that admits duration decreases as the activity is repeated, according to a predictable and constant learning rate. The Linear Model of logarithmic coordinates (log10Y = log10A – nlog10X) was applied to two repetitive construction processes, frequently used in Portuguese construction. The intent was to examine its applicability and efficiency in predicting future performances, and the interest in incorporating the model in new planning methodologies for ...