Showing papers in "Construction Management and Economics in 2008"

Sustainable construction aspects of using prefabrication in dense urban environment: a Hong Kong case study

Abstract: The construction industry in Hong Kong heavily relies on conventional cast in‐situ construction involving extensive use of timber formworks and wet trades. In 2001, the Construction Industry Review Committee (CIRC) report described the construction activities in Hong Kong as ‘labour intensive, dangerous and polluting’, in which ‘built products are rarely defect‐free’. Globally, however, the recent trend is prefabrication, which is being increasingly used in the building industry, alleviating some of the environmental burdens associated with conventional construction. The sustainable construction aspects of adopting prefabrication in high‐rise buildings are examined, and the economic, environmental and social aspects of using prefabrication are assessed. A questionnaire survey was administered to experienced professionals and case studies of seven recent residential and non‐residential buildings in Hong Kong were conducted. The findings revealed that environmental, economic and social benefits of using pre...

Problems causing delays in major construction projects in Thailand

Abstract: Delays are frequent and recurring in construction projects in developing countries. Although the principal reasons for construction delays are comparable across developing countries, several factors pertaining to local industry, socio‐economic and cultural issues and project characteristics also contribute to construction delays. Questionnaire surveys and interviews were conducted on a major construction project in Thailand to explore the most significant problems causing construction delays. Factors related to designers, contractors and consultants were rated among the top problems. Issues such as lack of resources, poor contractor management, shortage of labour, design delays, planning and scheduling deficiencies, changed orders and contractors' financial difficulties were also highlighted during the interviews. Notably, problems such as ‘multicultural and multilingual environment causing ineffective communication’, ‘large number of participants of project’ and ‘involvement of several foreign designers ...

Implementing innovation in construction: contexts, relative boundedness and actor‐network theory

Abstract: Theoretical understanding of the implementation and use of innovations within construction contexts is discussed and developed. It is argued that both the rhetoric of the ‘improvement agenda’ within construction and theories of innovation fail to account for the complex contexts and disparate perspectives which characterize construction work. To address this, the concept of relative boundedness is offered. Relatively unbounded innovation is characterized by a lack of a coherent central driving force or mediator with the ability to reconcile potential conflicts and overcome resistance to implementation. This is a situation not exclusive to, but certainly indicative of, much construction project work. Drawing on empirical material from the implementation of new design and coordination technologies on a large construction project, the concept is developed, concentrating on the negotiations and translations implementation mobilized. An actor‐network theory (ANT) approach is adopted, which emphasizes the roles...

Conceptualizing stakeholder engagement in the context of sustainability and its assessment

Abstract: Stakeholder engagement in construction projects can be conceptualized in different ways. It can be seen from a strategic management perspective aimed at capturing knowledge, increasing ownership of the project by users, reducing conflict, encouraging innovation and facilitating spin‐off partnerships. From an ethical perspective, meaningful stakeholder engagement can be seen to enhance inclusive decision making, promote equity, enhance local decision making and build social capital. The benefits from both of these perspectives are vital for sustainability; however, stakeholder engagement can also be seen from the perspective of an opportunity for social learning—a social process where diverse stakeholders share a common forum, learn about each other's values, reflect upon their own values and create a shared vision and shared objectives. Dialogue is also useful in increasing awareness, changing attitudes and affecting behaviours. Existing practices view stakeholder engagement: mostly from a management pers...

Interpreting risk allocation mechanism in public-private partnership projects: An empirical study in a transaction cost economics perspective

Abstract: Risk allocation in public–private partnership (PPP) projects is currently claimed as capability driven. While lacking theoretical support, the claim is often ‘violated’ by current industrial practice. There is thus a need for formal mechanisms to interpret why a particular risk is retained by government in one project while transferred to private partners in another. From the viewpoint of transaction cost economics (TCE), integrated with the resource‐based view (RBV) of organizational capabilities, this paper proposed a theoretical framework for understanding risk allocation practice in PPP projects. The theories underlying the major constructs and their links were articulated. Data gathered from an industry‐wide survey were used to test the framework. The results of multiple linear regression (MLR) generally support the proposed framework. It has been found that partners' risk management routine, mechanism, commitment, cooperation history, and uncertainties associated with project risk management could s...

A comparative study of factors affecting the external stakeholder management process

Abstract: There is a natural tendency for stakeholder groups to try to influence the implementation of construction projects in line with their individual concerns and needs. This presents a challenge for construction project managers in analysing and managing these various concerns and needs in a stakeholder management process falling within the limits of the project. The aim of the research presented here was to show the factors affecting the stakeholder management process positively or negatively from the perspective of project implementation. A comparative study of two railway projects in Sweden was undertaken to analyse these factors. The study showed that the outcome of the stakeholder management process depended mainly upon how well the project managers presented the benefits and negative consequences brought on by the construction project. Techniques and tools exist for this purpose, but must be appropriate, and these are discussed in the context of the two projects. The challenge for project managers is to...

Stakeholders and uncertainty management in projects

Abstract: Stakeholders are a major source of uncertainty in projects. This uncertainty encompasses who relevant stakeholders are, how they could influence a project, and what their motives are in so far as their actions affect project activity. A generic project uncertainty management process framework is employed to provide a structure for a review of approaches to analysing stakeholders and related uncertainty management issues. This framework, the SHAMPU (Shape, Harness, and Manage Project Uncertainty) process, consists of nine phases: project definition, focusing the uncertainty management process, identifying sources of uncertainty, structuring issues, clarifying ownership, estimating variability, evaluating implications of uncertainty, harnessing plans, and managing implementation. A variety of approaches to stakeholder analysis are considered in relation to these phases. In particular, characterizing projects on a ‘hard–soft’ spectrum suggests generic strategies for managing stakeholder expectations and fost...

The option value of government guarantees in infrastructure projects

Abstract: The participation of private capital in public infrastructure investment projects has been sought by many governments who perceive this as a way to overcome budgetary constraints and foster economic growth. For some types of projects, this investment may require government participation in the form of project guarantees in order to reduce the risk to the private investor, and as a consequence, the government assumes a contingent liability which may have significant future budgetary impacts. We present a minimum traffic guarantee (MTG) real options model that differs from most of the literature in the field by using market data to determine stochastic project parameters. This model can be used to assess the value of these guarantees, allows the government to analyse the cost–benefit of each level of support, and proposes an alternative to limit the exposure of the government while still maintaining the benefits to the private investor. We apply this model to the projected 1000 mile long BR‐163 toll road th...

Influence, stakeholder mapping and visualization

Abstract: Stakeholder identification, management and engagement are recognized as key project management skills; however, this is a ‘soft’ skill that requires both intuition and a strong capacity for analysis. There are few tools and methodologies to which people undertaking stakeholder management activities can turn. Highly complex problem solving activities, such as stakeholder management, can benefit from high level conceptual approaches that allow those involved to see clearly or to visualize the situation being examined. Metaphors, particularly highly visual representations of complex situations, can be very helpful in triggering simplification of complex situations to a level where understanding of the situation can yield fruitful results in moving forward to developing plans and actions. Visualization tools for stakeholder management can be of great value. Describing stakeholder visualization tools that can be used to develop a stakeholder engagement strategy can therefore raise awareness of these tools. The...

Practical approaches for engaging stakeholders: findings from the UK

Abstract: Principles for managing stakeholders are discussed in the context of UK construction practice. The number of stakeholders in a modern construction project can be large, presenting numerous interfaces that have to be managed. Meanwhile, each organization has its own characteristic disposition. Therefore, the interactions between diverse organizations in a project pose a high potential for conflicting stakes. Against this background, stakeholder management assumes high priority. Qualitative research was used to investigate the practice of stakeholder management with 12 UK companies in the construction sector. Interviews were held with these companies and content analysis was used to identify themes that demonstrate effective stakeholder management practice. Construct validity and a workshop underpinned the verification of underlying and frontline approaches for managing stakeholders. The underlying approaches include maintaining existing relationships, providing top‐level support and being proactive while t...

Public–private partnership projects in Greece: risk ranking and preferred risk allocation

Abstract: Project participants, through experience, have an initial perception and predisposition towards risk and the types of risks they are willing and able to undertake. This is equally true for parties interested in public–private partnership (PPP) projects. These initial positions have been registered for the major Greek PPP market stakeholders potentially involved in a PPP arrangement through a survey covering all candidate construction companies, interested financing institutes and a number of public sector entities to be involved in PPPs. Findings revealed that stakeholders were, for the majority of risks identified, in agreement as to preferred risk allocation. Risk allocation preferences for construction companies were compared with similar findings for the UK, a mature PPP market, indicating a possible learning/maturing process based on the particular country background. Conclusions add to other surveys carried out on the subject and should enable public sector clients to establish a more efficient fram...

Applicability of lean principles and practices in industrialized housing production

Abstract: The applicability of lean principles and practices to industrialized housing in Sweden are examined, taking the production culture into consideration. The factory production of industrialized housing shows apparent similarities to manufacturing, but areas related to fully integrated lean production practices, such as error proofing and standardized work floor and equipment maintenance, are scarce. Hence, applicability of lean principles and practices to industrialized housing production is clearly influenced by a production culture that has similarities to a traditional construction culture. Setting up industrialized housing production thus requires careful implementation of lean principles if workers from traditional building are moved into factories, and managers still adhere to the prevailing site‐based production mentality. However, the influence of the traditional construction project culture is not solely a constraint; flexible teams that take their own responsibility are also important in a lean cu...

Performance measurement of construction firms in developing countries

Abstract: Many large contractors in Vietnam are lacking an effective method to measure their performance and identify weaknesses and threats. The integration of the balanced scorecard (BSC) and strengths‐weaknesses‐opportunities‐threats (SWOT) matrix is described to evaluate the strategic performance of large contractors in Vietnam. The AnGiang Construction Company (ACC) was used as an example to validate the approach. The BSC‐oriented SWOT matrix is developed to formulate the short‐ and long‐term strategies of ACC. The benchmarking approach was adapted to evaluate the ACC's performance and expose its competitors' best practices for improvement. The results indicated that only the financial perspective is at a poor level on the performance scale whereas the customer, learning and growth, and internal process perspectives are at a moderate level on the performance scale. The effective evaluation matrix uncovered 11 effective solutions that could be grouped under four categories: (1) innovating organizational structu...

Reliability of building embodied energy modelling: an analysis of 30 Melbourne case studies

Abstract: Building design decisions are commonly based on issues pertaining to construction cost, and consideration of energy performance is made only within the context of the initial project budget. Even where energy is elevated to more importance, operating energy is seen as the focus and embodied energy is nearly always ignored. For the first time, a large sample of buildings has been assembled and analysed in a single study to improve the understanding of the relationship between energy and cost performance over their full life cycle. Thirty recently completed buildings in Melbourne, Australia have been studied to explore the accuracy of initial embodied energy prediction based on capital cost at various levels of model detail. The embodied energy of projects, elemental groups, elements and selected items of work are correlated against capital cost and the strength of the relationship is computed. The relationship between initial embodied energy and capital cost generally declines as the predictive model assum...

Competitive strategy revisited: contested concepts and dynamic capabilities

Abstract: Strategy is a contested concept. The generic literature is characterized by a diverse range of competing theories and alternative perspectives. Traditional models of the competitive strategy of construction firms have tended to focus on exogenous factors. In contrast, the resource‐based view of strategic management emphasizes the importance of endogenous factors. The more recently espoused concept of dynamic capabilities extends consideration beyond static resources to focus on the ability of firms to reconfigure their operating routines to enable responses to changing environments. The relevance of the dynamics capabilities framework to the construction sector is investigated through an exploratory case study of a regional contractor. The focus on how firms continuously adapt to changing environments provides new insights into competitive strategy in the construction sector. Strong support is found for the importance of path dependency in shaping strategic choice. The case study further suggests that str...

Editorial: stakeholder management in construction

Abstract: Interest in stakeholders has grown considerably since Freeman’s (1984) seminal work Strategic Management: A Stakeholder Approach was published. Over 100 papers concerning what has become termed 'stakeholder theory' were published by 1995 alone (Donaldson and Preston 1995, p.65), with many more published since. Increasingly, stakeholders have been referred to in mainstream media and government communications, not just in academic texts (Friedman and Miles 2002).

Integrating system dynamics and fuzzy logic modelling for construction risk management

Abstract: The complex structure of construction project risks arises from their internal and external interactions with their dynamic nature throughout the life cycle of the project. A system dynamics (SD) approach to construction project risk management is presented, including risk analysis and response process. Owing to the imprecise and uncertain nature of risks, fuzzy logic is integrated into system dynamics modelling structure. Risk magnitudes are defined by a fuzzy logic based risk magnitude prediction system. Zadeh's extension principle and interval arithmetic is employed in the SD simulation model to present the system outcomes considering uncertainties in the magnitude of risks resulting from the risk magnitude prediction system. The performance of the proposed method is assessed by employing the method in the risk management plan of a sample project. The impact of a sample risk is quantified and efficiency of different alternative response scenarios is assessed. The proposed approach supports different st...

Conceptual framework for the assessment of subcontractors' eligibility and performance in the construction industry

Abstract: Subcontractors handle a major portion—about 85%—of all construction projects in the building industry. The ability of the main contractor and consultants to deliver the project within time, quality and cost targets depends largely on the performance of the subcontractors. Selection of subcontractors on the basis of overall ability to perform is therefore crucial to successful project delivery. The key criteria for assessing subcontractors' eligibility for tender invitation and award, and subsequent performance at the construction stage, were investigated. Using the descriptive survey method, 243 contractors and 307 subcontractors registered with the Gauteng Master Builders Association of South Africa were surveyed. The multi‐attribute technique was used to analyse the data. Results showed that quality record is the most influential criterion for selecting high performing subcontractors at the pre‐qualification stage, and for assessing their performance at the construction stage. Tender price exerts the mo...

The development of corporate social responsibility in the Australian construction industry

Abstract: In the Australian construction industry, large companies develop corporate social responsibility (CSR) in order to maintain an image of being a good corporate citizen. CSR relevant to the construction industry is defined including the following activities: moral obligation to be a good citizen; sustainability; reputation; relationship with employees and unions; relationship with suppliers and community representatives; and commitment to reporting on CSR. CSR is then examined through 85 interviews conducted with members of boards of directors, suppliers, employees, customers and community representatives of 17 large corporations. In order to be recognized as a socially responsible business, the corporations should: apply a corporate governance structure that takes into consideration working environment concerns; improve their sustainability, occupational health and safety measures, relationships with suppliers and commitment to local community protection and engagement.

Health and safety management in developing countries: a study of construction SMEs in Ghana

Abstract: The construction industry plays a significant role in the economy of developing countries. The sector is, however, also one of the most hazardous with frequent accidents and health‐related problems. The health and safety practices of construction small and medium‐sized enterprises (SMEs) in Ghana are examined with a view to improving the health and safety performance of the sector. A survey questionnaire was administered to owner/managers of SMEs, with a response rate of 32% of the sampling frame. Few of the SMEs adopted proactive health and safety practices. However, health and safety practices identified as being particularly associated with firm characteristics were: accident investigation procedures; accident reporting procedures; use of health and safety posters; documentation of method statements; and health and safety inductions. The diversity of health and safety practices associated with different size categories of SMEs and constraints to improving health and safety are highlighted. A positive c...

Application of AHP in improving construction productivity from a management perspective

Abstract: Poor productivity of construction workers is one of the major causes of cost overruns and schedule slippages in construction projects. Anecdotal evidence suggests that workers' attitudes towards higher productivity may not be limited to purely financial rewards, but inherently linked to many other latent factors. Some building construction projects in Melbourne are compared to each other to ascertain the factors that influence productivity. The factors and their relative importance impacting on workers' productivity are investigated by using a structured questionnaire survey approach. The survey was formulated with 72 questions covering three broad categories, namely (1) project planning; (2) incentives/disincentives; and (3) job satisfaction. Perceived best practices that impact on improvement of productivity on site were identified from 19 targeted experts. Analytical hierarchy process shows that the biggest influences on productivity are planning and programming. The outcome of this study should assist...

Sustainable construction management: introduction of the operational context space (OCS)

Abstract: Sustainable construction is an emerging field of science that aims at incorporating the general sustainable development concepts into conventional construction practices. While the foundation of knowledge in this field is continuously expanding, sustainable construction is not yet standard industry practice. One major technical barrier that hinders enacting sustainable construction is the absence of an application framework that integrates both sustainability and construction practices at an operational level. This shortcoming is being addressed through a three‐dimensional operational context space (OCS) that achieves the sought integration aspect. The three dimensions of OCS are: (1) project life cycle phases; (2) project executing entities; and (3) sustainability performance parameters. Such OCS facilitates the association of responsibility, by assigning each sustainability requirement to a specific project entity (or entities) during specific project phase(s), and further provides a numerical assessmen...

Stakeholder matrix for ethical relationships in the construction industry

Abstract: The construction industry in general has a poor ethical reputation, being widely regarded by the public as a sector with corrupt practices, health and safety failures, and causing damage to the environment. A modern 21st century industry needs to consider how it orientates itself to the dilemma of conflicting stakeholder and ethical demands. The implications for stakeholders of the all pervasive drive for globalization in the construction industry is reviewed, leading to a consideration of the ethical relationship interfaces that construction organizations have with their stakeholders from the viewpoint of ethics, social contracts and corporate responsibility. Building upon earlier work a prototype stakeholder ethical responsibility matrix (SERM) is proposed as a management tool. Stakeholder management using an ethical perspective can meet the needs of both agency and stakeholder requirements. The increasingly complex global construction industry presents many challenges as key business decisions in const...

How contractors price risk in bids: theory and practice

Abstract: Formal and analytical models that contractors can use to assess and price project risk at the tender stage have proliferated in recent years. However, they are rarely used in practice. Introducing more models would, therefore, not necessarily help. A better understanding is needed of how contractors arrive at a bid price in practice, and how, and in what circumstances, risk apportionment actually influences pricing levels. More than 60 proposed risk models for contractors that are published in journals were examined and classified. Then exploratory interviews with five UK contractors and documentary analyses on how contractors price work generally and risk specifically were carried out to help in comparing the propositions from the literature to what contractors actually do. No comprehensive literature on the real bidding processes used in practice was found, and there is no evidence that pricing is systematic. Hence, systematic risk and pricing models for contractors may have no justifiable basis. Contra...

Lean construction as a strategic option : testing its suitability and acceptibility in Sri Lanka

Abstract: Lean Construction is a concept still new to many construction industries in the world. According to Ballard and Howell (2003) countries such as UK, Australia, USA and Brazil have gained significant benefits by adoption of Lean Construction concepts. However, this concept is still new to the Sri Lankan construction industry. Lean Construction can be argued as a strategic option when implementing in a new setting, where certain tests such as its suitability and acceptability needs to be done prior to its implementation. Hence, this study aimed to explore the suitability and acceptability of Lean Construction in Sri Lanka. The study adopted an opinion survey using Delphi Method to collect empirical data. The findings reveal frequent flow activities that generate waste and their causes in the Sri Lankan construction industry. The research further finds that the domestic construction industry workforce is ignorant of these flow activities that create waste and their causes. When tested majority accept the core principles of Lean Construction and are having a Kaizen mentality, which is central to lean thinking. Thus, the study concludes that Lean Construction is suitable and acceptable in the Sri Lankan context. Overall, the study offers an approach to test Lean Construction in a new construction industry using an opinion survey.

The accuracy of pre‐tender building cost estimates in Australia

Abstract: A pre‐tender building cost estimate is an important piece of information when making decisions at the project planning and design stage. The important project characteristics influencing the accuracy of pre‐tender building cost estimates are examined and practical improvement for increasing the accuracy of estimates are considered. A quantitative approach is used to address the research problem. Analysis of data from 56 projects and from a postal questionnaire survey of 102 quantity surveying firms suggests that the accuracy of pre‐tender building cost estimates varies according to project size and principal structural material. When eight identified project characteristics are controlled in a multiple regression analysis, the accuracy of estimates is influenced by project size. The estimates of smaller projects are more biased than the estimates of larger projects. It was discovered that pre‐tender building costs are more often overestimated than are underestimated. Overestimated forecasts are incorrect ...

Organizational culture and TQM implementation in construction firms in Singapore

Abstract: The adoption and implementation of total quality management (TQM) are related to a company's culture. The relationship between cultural orientation and the implementation of TQM practices among certified Singapore contractors is investigated from an organizational culture perspective. The competing values framework was used to assess organizational culture and eight TQM elements were identified to gauge the implementation of TQM practices among contractors. A survey questionnaire was administered. Four organizational culture types have been identified from the survey findings. These are strong comprehensive, clan‐driven, hierarchy‐driven and weak comprehensive culture. Firms with strong comprehensive culture implement highly the TQM elements of top management leadership, people, process, customer and supplier management. Firms with clan‐driven culture implement highly the element of process management while firms with hierarchy‐driven and weak comprehensive culture implement lowly to moderately all elemen...

Managing construction project change: a knowledge management perspective

Abstract: In the information age, organization theories have addressed problem‐solving as an information‐processing activity. However, in this era, with the realization of knowledge‐based views of the organization, shared problem‐solving is increasingly recognized as a knowledge creation trigger. During shared problem‐solving, stakeholders bring different types of knowledge into the problem situation and it is captured, created and shared by the team members. In construction projects, shared problem‐solving often takes place through pragmatic problem‐solving on site, in particular, through managing project changes. However, this significant role of knowledge in managing project change is not well appreciated in the extant literature. Accordingly, to explore how knowledge is created during project changes in construction a case study approach was adopted using two change events in two collaborative settings within the UK construction industry. The case study findings revealed that different forms of knowledge are cr...

Stakeholder management through empowerment: modelling project success

Abstract: Stakeholder management is part of the project management process and this ongoing research builds on previous studies in the field of relationship management in Hong Kong and Australia and presents a testable stakeholder management process model in which the concepts of empowerment, organizational culture, trust and commitment are used as a basis for exploring the process. This may appear somewhat paradoxical to the reader as project managers, traditionally, have been seen to attempt to mollify stakeholders while focusing their attention on the details of project management rather than to empower stakeholders to have a significant input to the project—empowerment being seen to encourage ‘interference’ from non‐specialists into the managers' domain. This change in attitude to stakeholders marks a culture change in the real estate and construction industry, brought about by an increased emphasis on relationship management. The research reported in this paper looks at the issues of stakeholder management via...

Entry mode selection for international construction markets: the influence of host country related factors

Abstract: The increasing necessity to establish a permanent presence in overseas markets challenges the tradition of tide‐like market entry mode of international contractors and confronts them with an important dichotomous selection between permanent entry mode and mobile entry mode. By borrowing theories and previous findings from the general international business area, the hypotheses regarding the influences of specific host country related factors upon the selection between the two generic entry modes, including cultural difference, trade link, host market potential, investment risk, institutional entry barrier and competition intensity are developed. Measures are proposed for these factors as well as some control variables and the dependent variable (entry mode). Data were collected from multiple sources for these variables. A binary logistic regression analysis was performed to test the hypotheses and develop a statistical model for entry mode selection. The model is statistically significant and not all the ...