Linking response strategies adopted by construction firms during the 2007 economic recession to Porter’s generic strategies

The time period bridging the years 2007 to 2012 will be remembered as one characterised by dramatic changes in the Irish and UK construction industries. Construction companies witnessed unprecedented changes in the environment, namely the coincidence of a sharp economic downturn, the significant decline of public works, a reduction in lending, increased competition, and structural changes in the marketplace. Nevertheless, little has been documented on what response strategies construction companies adopt as a result of an economic recession. Based on four exploratory case studies, a taxonomy framework of the response strategies adopted by Irish and UK construction companies during the 2007 economic recession was developed relative to Porter’s (1980) generic strategies of cost leadership, differentiation, and focus. Porter’s model (1980) is a well known theoretical framework among business strategists and industrial economists worldwide. The analysis provides strong support for the adoption of cost leadership strategies as a means to surviving the 2007 economic recession. The case studies further suggest that cost control initiatives are one of the most important attributes in companies’ responses to the 2007 recession. The findings provide valuable assistance for construction contractors in developing effective strategies and thus reducing business failures during recessionary periods.

Government Influence on the Construction Industry during the Economic Recession 2007 - 2013

Due to the high degree of international and economic integration across the globe, the 2007 global financial crisis quickly spread, causing recessions and widespread credit restrictions in advanced nations. During recessions, economic fluctuations cause dramatic changes to the market structure of industries, in particular, that of the construction sector. These structural changes can be further influenced by government strategies and policies; which if used incorrectly, can serve to fuel and exacerbate downturns. In contrasting form, during an economic recession, government strategies and policies can also be used to aid in exiting such economic turbulence. From an extensive review of literature it became apparent that very little research offered a comprehensive and systematic overview of Irish and UK construction related government policies and strategies adopted during recessions; hence the emergence of this topic. As part of an ongoing research PhD, the purpose of this paper is to collate and group Irish and UK Government strategies and policies adopted for the construction sector during the recession period 2007-2013; resulting in the establishment of a construction industry development framework and a taxonomic framework. The results reveal serious problems with the national strategic plan for the Irish construction industry, given that there is no overseeing body or target dates for implementation of the proposed actions. Furthermore, both countries failed to prioritize the proposed key actions within their strategic plans. The findings of this paper can be applied in the context of the construction sector to address shortcomings in the respective sub-sectors, while also aiding policy makers and company executives in mapping out future strategic milestones.

The Impact of the Recent Economic Recession on the NEC Contract in Northern Ireland: A Preliminary Study

In comparison to the rest of the United Kingdom (UK) the Northern Irish Construction Industry was disproportionately affected by the recent economic recession. During this period, use of the New Engineering Contract (NEC) has proliferated in the public sector, however no study has been undertaken to examine the impact of the recession on this contract in Northern Ireland. The aim of this paper is to explore NEC contract implementation in Northern Ireland and the impact of the recession on its operation. A qualitative methodology is adopted using a literature review and semi structured interviews with six construction professionals. A qualitative analysis identifies themes and issues arising exploring connections and links between them using thematic coding. The initial findings are that the introduction of the NEC contract in Northern Ireland makes demands of contractors and consultants in terms of additional resources and training. Some consultants show a clear lack of understanding of the contract and its provisions. Whilst there is general agreement that the contract does help to stimulate good project management, the interviewees find the contract time consuming and complicated to administer, describing it as “unforgiving for the architect and unforgiving to the contractor.” Due to the impact of the recession, both contractors and consultants are still reporting a drop in income from pre-recession levels. Project resourcing levels have dropped significantly since the onset of the recession. Adversarial and opportunistic behaviour has increased. Many consultants and contractors are struggling to adequately administer the NEC contract at current income levels. The introduction of the NEC contract and the economic recession have exerted opposing forces on the implementation of the contract, hindering its execution. As the pressures exerted by the economic recession abate and a greater understanding of the contract develops, these opposing forces will ease leading to a more consistent implementation of the contract.

The Impact of the Recent Economic Recession on the operation of the NEC Contract in Northern Ireland

In May 2006, the NEC contract was introduced as the preferred contract for Northern Ireland public sector works. This was subsequently followed by the 2007 economic crash and ensuing recession, which continues to affect the Northern Ireland Construction Industry, to a greater extent than the remainder of the United Kingdom (UK). However, use of the NEC contract has increased during this period, particularly in the public sector. There has been debate in the literature regarding the impact of the NEC contract on adversarial behaviour, but little consideration of the impact of external economic factors on the use of the NEC contract. Using a sequential mixed method approach, the study aims to fill this gap in knowledge, through examination of the impact the economic downturn has had on the operation of the NEC contract in Northern Ireland. Qualitative and quantitative findings show that the demands placed by the NEC contract, and the effects of the economic recession, have exerted opposing forces contract implementation, thus hindering its execution. The findings can lead to a deeper understanding, in the context of both industry and academia, of situations where a lack of resources may negatively impact the operation of the NEC contract.

‘Towards a Green New Deal on the Island of Ireland: from economic crisis to a new political economy of sustainability’

This article begins from the assumption (which may seem controversial to many) that anyone who thinks that our current economic crisis is a temporary blip until ‘normal service’ (i.e. a return to ‘business as usual’) is resumed, profoundly misunderstands the severity and significance of what’s happening to the global economy and its impacts on the future prosperity of the island of Ireland. The economic recession represents nothing short of a re-structuring of the global economy and the creation of a new dispensation between governments, markets and citizens. The full implications of the re-regulation of the market, with the state bailing out and part nationalising the financial sector in both jurisdictions on the island (as in other parts of the world) have yet to be seen, but what we are witnessing is the emergence of a new economic model. Those who think we can, or even ought to, return to the pre-2008 economic model, are gravely mistaken. The current economic downturn marks the end of the ‘neo-liberal’ model and the beginnings of the transition (an inevitable transition, this article will argue) towards a new low carbon, renewable, green and sustainable economy and society.

Construction Dispute Resolution in Ireland during Recession: Best Practice for Small-to-Medium Enterprises

The purpose of this paper is to identify best practice construction dispute resolution in small-to-medium enterprises (SMEs) within Ireland during the recent economic recession. A sequential mixed methodology encompassing a detailed literature review, case studies, and questionnaire survey is adopted, with results analyzed using both exploratory (data reduction) and confirmatory (structural equation modelling) factor analysis. The results show that four core aspects should be adopted by SMEs to achieve best practice construction dispute resolution in recession: third-party intervention, adoption of a streamlined process, proactive party characteristics, and the use of legal professionals. Numerous studies of this subject have been conducted; however, no research has been done to date documenting best practice in construction dispute resolution within SMEs, particularly in light of the economic recession in Ireland. It is clear that dispute resolution in Ireland is currently undergoing fundamental changes, and time is necessary to see if the new Construction Contracts Act 2013 will help this practice. Therefore, it is a fundamental requirement for project management and legal professionals to acknowledge the changing environment attributable to the economic downturn and the resultant SME best practices in dispute resolution. This paper fulfills a gap in knowledge with the emergence of the economic recession and the evolution of best practice in dispute resolution within SMEs in the Irish construction sector.

Construction Disputes in Small to Medium Enterprises in Ireland during Recession: Identification of Critical Factors

Purpose - To identify the critical factors causing construction disputes in Small to Medium Enterprises (SMEs) in Ireland during the recent recession period of 2007 to 2013.
Design/Methodology/Approach - A mixed method approach incorporating a literature review, case studies and questionnaire survey, with results analysed using exploratory (data reduction) factor analysis.
Findings - The results indicate seven core critical factors which result in construction disputes in SMEs in Ireland during a recession: Payment and extras; Physical work conditions; Poor financial/legal practise; Changes to the agreed scope of works; Time overrun; Defects; and Requests for increase in speed of project and long-term defects.
Research Limitations/Implications - With Ireland emerging from the current economic recession and the prevalence of SMEs to the construction sector, it is essential to document the core critical factors of construction disputes which emerge within this particular segment of the built environment.
Practical Implications - To address the adversarial nature of the construction sector and the prevalence of SMEs, it is essential to identify and document the critical factors of construction disputes within this remit. It is envisaged that the results of this research will be acknowledged, and the recommendations adopted, by construction SMEs, particularly within Ireland, as they emerge from the economic recession.
Originality/Value - This paper fulfils a gap in knowledge with the emergence of the economic recession and the identification of critical factors of construction dispute within SMEs in the Irish construction industry.

Culture and the Irish Border:Spaces for Conflict Transformation

The Irish border has been described as a ‘natural’ cultural divide between the island's two dominant indigenous ethno-national communities. However, an examination of key resources of ethno-national group culture - religion, sport and language - provides evidence to challenge this representation. Moreover, in the post-1994 period of conflict transformation, evidence is also presented to support the proposition that the Irish border region has developed into a cultural space in which Irish nationalist and Ulster unionist ethno-national communities can explore cultural differences and commonalities through cross-border, cross-community contact and communication in small group encounters. This space underpins the reconfiguration of the border from barrier to political bridge between North and South. European Union (EU) Peace programmes for Ireland, beginning in 1995, provided the support for a cross-border approach to escaping the cage of ethno-national conflict in Northern Ireland. However, post-2004 EU enlargement signalled the beginning of the end for EU Peace funding and severe economic recession has undermined the expectation of British-Irish intergovernmental intervention to support cross-border partnerships and their work. Therefore, the outlook for the sustainability of this cross-border cultural space is gloomy with potentially deleterious consequences for the continued reconfiguration of the border from barrier to bridge.

Ageing through Austerity: critical perspectives from Ireland

The book’s main contribution is the bringing together of varied discourses concerning the social policy impact of ageing within the context of fiscal austerity. As the editors rightly state, the economic recession has sharpened the focus of governments on the implication of demographic ageing. It is vital therefore, that the social policy implications of societal ageing are studied and understood within a wider political economy of austerity. Of course the fiscal crisis of the 1970s and the ensuing first wave of neo-liberalism in the Anglo-Saxon countries [in the 1980s] gave us a foretaste of the various ways in which the public burden thesis has been applied with great force to the older population. This recession is different, certainly in Ireland, but a combination of neo-liberal ideology and neo-classical economics is enforcing severe budgetary constraint on a range of countries (within and outside of the Eurozone) in the name of funding deficits. Policy makers appear to be disinterested in both the origins of the 2008 financial crisis and the distributional consequences of their austerity policies. In the absence of official concern social science research has a key role to play.

The Great Recession and the changing distribution of economic vulnerability by social class:The Irish case

Ireland provides an interesting case study of the distributional consequences of the Great Recession. To explore such effects we develop a measure of economic vulnerability based on a multidimensional risk profile for income poverty, material deprivation and economic stress. In the context of conflicting expectations of trends in social class differentials, we provide a comparison of pre and post-recession periods. Our analysis reveals a doubling of levels of economic vulnerability and a significant change in multidimensional profiles. Income poverty became less closely associated with material deprivation and economic stress and the degree of polarization between vulnerable and non-vulnerable classes was significantly reduced. Economic vulnerability is highly stratified by social class for both pre and post-recession periods. Focusing on absolute change, the main contrast is between the salariat and the non-agricultural self-employed and the remaining classes; providing some support for notions of polarization. In terms of relative change the higher salariat, the non-agricultural self-employed, the semi-unskilled manual and those who never worked gained relative to the remaining classes. This provides support the notion of ‘middle class squeeze’. The changing relationship between social class and household work intensity reflected a similar pattern. The impact of the latter on economic vulnerability declined sharply, while it came to play an increasing role in mediating the impact of membership of the non-agricultural middle classes. Responding to the political pressures likely to be associated with ‘middle class squeeze’ while sustaining the social welfare arrangements that have traditionally protected the economically vulnerable presents formidable challenges in terms of maintaining social cohesion and political legitimacy.

Trends in Economic Stress and the Great Recession in Ireland: An Analysis of the CSO Survey in Income and Living Conditions (SILC)

Since 2008, Ireland has experienced the most severe economic and labour market crisis since the foundation of the State. These economic and labour market changes have had a stark impact on the standard of living across the Irish population. The rapid deterioration in the labour market, the rising level of household indebtedness and stringent austerity measures to plug the public finance deficit have had a widespread impact yet there is debate about where the heaviest burden has fallen and where the economic stress has been felt most. The paper analyses data from the Survey of Income and Living Conditions for the period 2004 to 2011. The aim of the paper is to develop and test a measure of economic stress, which will capture some of the aspects of the rapid change in economic fortunes on Irish households that are not picked up by income alone. This includes tapping into features of the recession such as debt problems, unsustainable housing costs, and other difficulties associated with managing on reduced household income in a period of uncertainty. In testing such a measure we examine trends over time from boom to bust in the Irish economy and consider how economic stress is distributed across different socio-economic groups. The paper explores the distribution and level of economic stress across income class groups, social classes and the life-course and tests the thesis of ‘middle class squeeze’.

Economic Stress and the Great Recession in Ireland: Polarization, Individualization or ‘Middle Class Squeeze’?

Following an unprecedented boom, since 2008 Ireland has experienced a severe economic crisis. Considerable debate persists as to where the heaviest burden of the recession has fallen. Conventional measures of income poverty and inequality have a limited capacity to answer this question. Our analysis, which focuses on economic stress and the mediating role of material deprivation, provides no evidence for individualization or class polarization. Instead we find that while economic stress level are highly stratified in income class and social class terms in both boom and bust periods, the changing impact of class is contingent on life course stage. The affluent income class remained largely insulated from the experience of economic stress. However, it saw its relative advantage overthe income poor class decline at the earlier stage of the life-course. At the other end of the hierarchy, the income poor experienced a relative improvement in their situation in the early life course phases. The precarious income class experienced some improvement in its situation at the earlier life course stages while the outcomes for the middle classes remain unchanged. In the mid-life course stages the precarious and lower middle classes experienced disproportionate increase in their stress levels while at the later life-cycle stage it is the combined middle classes that lost out. Additional effects over time relating to social class are restricted to the deteriorating situation of the petit bourgeoisie at the middle stage of the life-course. The pattern is clearly a good deal more complex that suggested by conventional notions of ‘middle class squeeze’ and points to the distinctive challenges relating to welfare and taxation policy faced by governments in the Great Recession.

Family Economic Vulnerability & the Great Recession: An Analysis of the First two Waves of the Growing Up in Ireland Study

In this paper we make use of the first and second waves of the 2008 and 1998 cohorts of the Growing Up in Ireland study, to develop a multidimensional and dynamic approach to understanding the impact on families and children in Ireland of the Great Recession. Economic vulnerability is operationalised as involving a distinctive risk profile in relation to relative income, household joblessness and economic stress. We find that the recession was associated with a significant increase in levels of economic vulnerability and changing risk profiles involving a more prominent role for economic stress for both the 2008 and 1998 cohorts. The factors affecting vulnerability outcomes were broadly similar for both cohorts. Persistent economic vulnerability was significantly associated with lone parenthood, particularly for those with more than one child, lower levels of Primary Care Giver (PCG) education and to a lesser extent younger age of PCG at child’s birth, number of children and a parent leaving or dying. Similar factors were associated with transient vulnerability in the first wave but the magnitude of the effects was significantly weaker particularly in relation to lone parenthood and level of education of the PCG. For entry into vulnerability the impact of these factors was again substantially weaker than for persistent and transient vulnerability indicating a significantly greater degree of socio-economic heterogeneity among the group that became vulnerable during the recession. The findings raise policy and political problems that go beyond those associated with catering for groups that have tended to be characterized by high dependence on social welfare.