The impact of construction organisations’ learning capabilities on collaborative projects

Dynamic capability theory asserts that the learning capabilities of construction organisations influence the degree to which value-for-money (VfM) is achieved on collaborative projects. However, there has been little study conducted to verify this relationship. The evidence is particularly limited within the empirical context of infrastructure delivery in Australia. Primarily drawing on the theoretical perspectives of the resource-based view of the firm (e.g. Barney 1991), dynamic capabilities (e.g. Helfat et al. 2007), absorptive capacity (e.g. Lane et al. 2006) and knowledge management (e.g. Nonaka 1994), this paper conceptualises learning capability as a knowledge-based dynamic capability. Learning capability builds on the micro-foundations of high-order learning routines, which are deliberately developed by construction organisations for managing collaborative projects. Based on this conceptualisation of learning capability, an exploratory case study was conducted. The study investigated the operational and higher-order learning routines adopted by a project alliance team to successfully achieve VfM. The case study demonstrated that the learning routines of the alliance project were developed and modified by the continual joint learning activities of participant organisations. Project-level learning routines were found to significantly influence the development of organisational-level learning routines. In turn, the learning outcomes generated from the alliance project appeared to significantly influence the development of project management routines and contractual arrangements applied by the participant organisations in subsequent collaborative projects. The case study findings imply that the higher-order learning routines that underpin the learning capability of construction organisations have the potential to influence the VfM achieved on both current and future collaborative projects.

Innovation in the road and bridge industry

This paper reviews innovation activity in a key service industry – road and bridge construction. Based on a large-scale Australian survey and descriptive statistics, the paper finds that there is little difference in innovation levels between different types of industry participants and that innovation is difficult to implement. The survey gathered responses from suppliers, consultants, contracts and clients and compared results across these four industry sectors. The absorptive capacity and relationship capacities of respondents were also investigated. One in five respondents had poor absorptive capacity. Suppliers were found to the most effective learners and were the best adopters of ideas from outside their organisations and consultants were the least effective. Australian construction organisations have relatively good relationship skills because relationship-based contracts are common compared to other countries. Indeed, the survey found that nearly 60% of respondents had experience with such contracts, with clients having more experience than the other three sectors. The results have implications for the measurement of innovation in project-based industries, and the relative roles of clients and suppliers in driving innovation in the construction industry. Further research will examine the extent to which particular governance mechanisms within relationship contracts lead to improved innovation and project performance.

Learning routines used by firms during construction of infrastructure projects using the alliance procurement method

Collaborative contracting has emerged over the past 15 years as an innovative project delivery framework that is particularly suited to infrastructure projects. Australia leads the world in the development of project and program alliance approaches to collaborative delivery. These approaches are considered to promise superior project results. However, very little is known about the learning routines that are most widely used in support of collaborative projects in general and alliance projects in particular. The literature on absorptive capacity and dynamic capabilities indicates that such learning enhances project performance. The learning routines employed at corporate level during the operation of collaborative infrastructure projects in Australia were examined through a large survey conducted in 2013. This paper presents a descriptive summary of the preliminary findings. The survey captured the experiences of 320 practitioners of collaborative construction projects, including public and private sector clients, contractors, consultants and suppliers (three per cent of projects were located in New Zealand, but for brevity’s sake the sample is referred to as Australian). The majority of projects identified used alliances (78.6%); whilst 9% used Early Contractor Involvement (ECI) contracts and 2.7% used Early Tender Involvement contracts, which are ‘slimmer’ types of collaborative contract. The remaining 9.7% of respondents used traditional contracts that employed some collaborative elements. The majority of projects were delivered for public sector clients (86.3%), and/or clients experienced with asset procurement (89.6%). All of the projects delivered infrastructure assets; one third in the road sector, one third in the water sector, one fifth in the rail sector, and the rest spread across energy, building and mining. Learning routines were explored within three interconnected phases: knowledge exploration, transformation and exploitation. The results show that explorative and exploitative learning routines were applied to a similar extent. Transformative routines were applied to a relatively low extent. It was also found that the most highly applied routine is ‘regularly applying new knowledge to collaborative projects’; and the least popular routine was ‘staff incentives to encourage information sharing about collaborative projects’. Future research planned by the authors will examine the impact of these routines on project performance.

Externally oriented capabilities and corporate entrepreneurship : institutional and managerial contingencies

This research adopts three different theoretical lenses- the attention-based view, institutional perspective and network theory- to investigate the effect of externally oriented capabilities (absorptive capacity and networking capabilities) on corporate entrepreneurship. Based on an Australian and Iranian sample of mining equipment, technology and service providers, this thesis provides new understanding of why some firms are able to generate higher levels of corporate entrepreneurship than others and opens new directions for more capabilities-oriented research in corporate entrepreneurship. In particular, this research provides new insight into how entrepreneurial management, institutional context and external knowledge search breadth shape the relationship between externally oriented capabilities and corporate entrepreneurship.

The learning capability of construction organisations engaged in collaborative contracting - Literature Review [industry report]

Background Value for money (VfM) on collaborative construction projects is dependent on the learning capabilities of the organisations and people involved. Within the context of infrastructure delivery, there is little research about the impact of organisational learning capability on project value. The literature contains a multiplicity of often un-testable definitions about organisational learning abilities. This paper defines learning capability as a dynamic capability that participant organisations purposely develop to add value to collaborative projects. The paper reports on a literature review that proposes a framework that conceptualises learning capability to explore the topic. This work is the first phase of a large-scale national survey funded by the Alliancing Association of Australasia and the Australian Research Council. Methodology Desk-top review of leading journals in the areas of strategic management, strategic alliances and construction management, as well as recent government documents and industry guidelines, was undertaken to synthesise, conceptualise and operationalise the concept of learning capability. The study primarily draws on the theoretical perspectives of the resource-based view of the firm (e.g. Barney 1991; Wernerfelt 1984), absorptive capacity (e.g. Cohen and Levinthal 1990; Zahra and George 2002); and dynamic capabilities (e.g. Helfat et al. 2007; Teece et al. 1997; Winter 2003). Content analysis of the literature was undertaken to identify key learning routines. Content analysis is a commonly used methodology in the social sciences area. It provides rich data through the systematic and objective review of literature (Krippendorff 2004). NVivo 9, a qualitative data analysis software package, was used to assist in this process. Findings and Future Research The review process resulted in a framework for the conceptualisation of learning capability that shows three phases of learning: (1) exploratory learning, (2) transformative learning and (3) exploitative learning. These phases combine both internal and external learning routines to influence project performance outcomes and thus VfM delivered under collaborative contracts. Sitting within these phases are eight categories of learning capability comprising knowledge articulation, identification, acquisition, dissemination, codification, internationalisation, transformation and application. The learning routines sitting within each category will be disaggregated in future research as the basis for measureable items in a large-scale survey study. The survey will examine the extent to which various learning routines influence project outcomes, as well as the relationships between them. This will involve identifying the routines that exist within organisations in the construction industry, their resourcing and rate of renewal, together with the extent of use and perceived value within the organisation. The target population is currently estimated to be around 1,000 professionals with experience in relational contracting in Australia. This future research will build on the learning capability framework to provide data that will assist construction organisations seeking to maximise VfM on construction projects.

Collaborative learning model of infrastructure construction: A capability perspective

Purpose Performance heterogeneity between collaborative infrastructure projects is typically examined by considering procurement systems and their governance mechanisms at static points in time. The literature neglects to consider the impact of dynamic learning capability, which is thought to reconfigure governance mechanisms over time in response to evolving market conditions. This conceptual paper proposes a new model to show how continuous joint learning of participant organisations improves project performance. Design/methodology/approach There are two stages of conceptual development. In the first stage, the management literature is analysed to explain the Standard Model of dynamic learning capability that emphasises three learning phases for organisations. This Standard Model is extended to derive a novel Circular Model of dynamic learning capability that shows a new feedback loop between performance and learning. In the second stage, the construction management literature is consulted, adding project lifecycle, stakeholder diversity and three organisational levels to the analysis, to arrive at the Collaborative Model of dynamic learning capability. Findings The Collaborative Model should enable construction organisations to successfully adapt and perform under changing market conditions. The complexity of learning cycles results in capabilities that are imperfectly imitable between organisations, explaining performance heterogeneity on projects. Originality/value The Collaborative Model provides a theoretically substantiated description of project performance, driven by the evolution of procurement systems and governance mechanisms. The Model’s empirical value will be tested in future research.

The role of innovation intermediaries in collaborative networks of small and medium-sized enterprises

The major challenge of European Union’s agricultural industry is to ensure sustainable supply of quality food that meets the demands of a rapidly growing population, changing dietary patterns, increased competition for land use, and environmental concerns. Investments in research and innovation, which facilitate integration of external knowledge in food chain operations, are crucial to undertaking such challenges. This paper addresses how SMEs successfully innovate within collaborative networks with the assistance of innovation intermediaries. In particular, we explore the roles of innovation intermediaries in knowledge acquisition, knowledge assimilation, knowledge, transformation, and knowledge exploitation in open innovation initiatives from the wine industry through the theoretical lens of absorptive capacity. Based on two case studies from the wine industry, we identified seven key activities performed by innovation intermediaries that complement SMEs’ ability to successfully leverage external sources of knowledge for innovation purposes. These activities are articulation of knowledge needs and innovation capabilities, facilitation of social interactions, establishment of complementary links, implementation of governance structures, conflict management, enhancement of transparency, and mediation of communication. Our in-depth qualitative study of two innovation intermediaries in the wine industry has several important implications that contribute to research and practice.

Client learning and the performance of collaborative infrastructure projects

Australia is a leading user of collaborative procurement methods, which are used to deliver large and complex infrastructure projects. Project alliances, Early Contractor Involvement (ECI), and partnering are typical examples of collaborative procurement models. In order to increase procurement effectiveness and value for money (VfM), clients have adopted various learning strategies for new contract development. However client learning strategies and behaviours have not been systematically analysed before. Therefore, the current paper undertakes a literature review addressing the research question “How can client learning capabilities be effectively understood?”. From the resource-based and dynamic capability perspectives, this paper proposes that the collaborative learning capability (CLC) of clients drives procurement model evolution. Learning routines underpinning CLC carry out exploratory, transformative and exploitative learning phases associated with collaborative project delivery. This learning improves operating routines, and ultimately performance. The conceptualization of CLC and the three sequential learning phases is used to analyse the evidence in the construction management literature. The main contribution of this study is the presentation of a theoretical foundation for future empirical studies to unveil effective learning strategies, which help clients to improve the performance of collaborative projects in the dynamic infrastructure market.

Firm transformation: Advancing a Darwinian perspective

Purpose of the paper: The paper advocates a Darwinian explanation of the process of firm transformation. Existing, but generally opposing views related to the selection-adaptation debates are united to consider the dialogic nature of both approaches. It is argued that a Darwinian approach, as opposed to a neo-Darwinian or Lamarckian approach provides the means to scale the sides of a debate that has for too long divided scholars interested in firm and industry transformation. Approach: The paper addresses three specific issues to develop its Darwinian argument. Firstly, the various work of Geoff Hodgson that have for many years advanced Darwin's evolutionary ideas are used to argue the nature and application of Darwinism in the socio-economic domain. Secondly, the nature of what constitutes the elements of firm-environment interaction is considered to establish basic areas of focus through which the process of firm transformation is more understandable. Lastly, the construct absorptive capacity is likened to a mechanism of transmission through which the learning processes associated with the acquisition of favoured variations can be reconciled with the generic evolutionary processes of variation, selection, and retention. Findings: To understand the process of firm learning, the role of habits and routines must be outlined in specific detail. They cannot be assumed to perform interacting and replicating roles simultaneously. To do so, undermines the fundamental qualities of an evolutionary theory. What is the original/value of paper: The preliminary framework advanced takes us beyond the Darwinian - Lamarckian debate and provides elements of focus from which a greater understanding of the process of firm/industry transformation is possible.

An alternative view of small firm adaptation

Increasingly, small firms with a history tied to a specific geographic location are having their survival threatened by new and innovative web-based entrants. This paper considers the plight of such firms and proposes an alternative means to reflect on how they may or may not learn about such threats. Adopting an evolutionary perspective, the construct absorptive capacity is used to highlight the deficiencies of current market orientation theory to explain the process of firm learning. The conceptual model of evolutionary potential provides a framework through which both the firm and its owner/s' abilities to learn can be taken into account.

e-Extinction: an illusion of knowledge, the presence of ignorance, or evolutionary fate?

At present, the rate of small firm adoption of the Internet's ubiquitous World Wide Web (the web) far exceeds the actual exploitation its commercial potential. An inability to strategically acquire, comprehend and use external knowledge is proposed as a major barrier to optimal exploitation of the Internet. This paper discusses the limitations of applying market orientation theory to explain and guide small firm exploitation of the web. Absorptive capacity is introduced as an alternative theory that when viewed from an evolutionary perspective provides potentially more insightful discussion. An inability to detect emerging business model dominant designs is suggested to be a mixture of the nature of the technology that supports the Internet and underdeveloped small firm knowledge processing capabilities. We conclude with consideration of the practical and theoretical implications that arise from the paper.

Invisible opportunities and irreversible trends

Small firms are always vulnerable to complex technological change that may render their existing business model obsolete. This paper emphasises the need to understand how the Internet's ubiquitous World Wide Web is impacting on their operating environments. Consideration of evolutionary theory and the absorptive capacity construct provides the foundation for discussion of how learning and discovery take place within individuals, firms and the environments that interact with. Small firms, we argue, face difficulties identifying what routines and competencies are best aligned with the seemingly invisible dominant designs that support pursuit of new enterprise in web-impacted environments. We argue that such difficulties largely relate to an inability to acquire external knowledge and the subsequent reliance on existing internal selection processes that may reinforce the known, at the expense of the unknown. The paper concludes with consideration as to how managers can overcome the expected difficulties through the development of internal routines that support the continual search, evaluation and acquisition of specific external knowledge.