The role of industry bodies in changing market practices through self-regulation: commercial property leasing in the UK

The UK government has sought to make changes to commercial property leasing practices. This has been the case since the recession of the 1990s. Industry self-regulation using an industry code of practice has been the vehicle for these changes. However, the code has had little direct success in changing practices. This is despite repeated threats of legislation as a constant backdrop to this initiative. The focus for this research is on the role of the industry bodies in the code initiative. They have been central to self-regulation in commercial leasing. Thus, the aim is to investigate the role of industry bodies in the process of institutional change. The context is industry self-regulation. The specific setting is commercial leasing. The main industry bodies in focus are the British Property Federation and Royal Institution of Chartered Surveyors. An existing model of institutional change forms the framework for the research. A chronological narrative is constructed from secondary data. This is analysed, identifying the actions of the industry bodies within the conceptual stages of the model. The analysis shows that the industry bodies had not acted as convincing agents of change for commercial leasing. In particular there was a lack of theorisation, a key stage in the process. The industry bodies did not develop a framework necessary to guide their members through the change process. These shortcomings of the industry bodies are likely to have contributed to the failure of the Code. However, the main conclusion is that, if industry self-regulation is led by government, then the state must work with industry bodies to harness their potential as champions and drivers of institutional change. This is particularly important in achieving change in institutionalised environments.

Policy making without legislating: the self-regulation of commercial property leasing

The terms of a commercial property lease covers aspects such as rent, alterations to premises and the ability to leave; consequently they have a significant impact on cash flow and the ability of a business to develop. In contrast to the heavily-legislated residential sector, commercial landlords and tenants in the UK are largely free to negotiate the terms of their contract. Yet, since the property crash of 1989/90, successive governments have taken an interest in commercial leasing; in particular there is a desire to see landlords being more flexible. UK Government policy in this area has been pursued through industry self-regulation rather than legislation; since 1995 there have been three industry codes of practice on leasing. These codes are sanctioned by government and monitored by them. Yet, 15 years after the first code was launched, many in the industry see the whole code concept as ineffective and unlikely to ever achieve changes to certain aspects of landlord behaviour. This paper is the first step in considering the lease codes in the wider context of industry self-regulation. The aim of the paper is twofold: First a framework is created using the literature on industry self-regulation from various countries and industries which suggests key criteria to explain the effectiveness (or ineffectiveness) of self-regulation. This is then applied to the UK lease codes based on research carried out by the authors for the UK Government to monitor the success of all three codes. The outcome is a clearer understanding of the possibilities and limitations of using a voluntary solution to achieve policy aims within the property industry.

The challenge of self-regulation in commercial property leasing: a study of lease codes in the UK.

Purpose – UK Government policy to address perceived market failure in commercial property leasing has largely been pursued through industry self-regulation. Yet, it is proving difficult to assess whether self-regulation on leasing has been a “success”, or even to determine how to evaluate this. The purpose of this paper is to provide a framework for this and a clearer understanding of self-regulation in commercial leasing. Design/methodology/approach – A literature review suggests key criteria to explain the (in)effectiveness of self-regulation. UK lease codes are analysed in the light of this literature, drawing on previous research carried out by the authors on the operation of these codes. Findings – Lease codes appear to be failing as an effective system of self-regulation. While there are influential market actors championing them, the fragmentation of the leasing process lessens this influence. The structures are not there to ensure implementation, monitor compliance and record views of affected stakeholders. Research limitations/implications – This work adds to the literature on self-regulation in general, and provides an insight into its operation in a previously unexplored industry. Research is needed into the experience of other countries in regulating the property industry by voluntary means. Social implications – There are institutional limitations to self-regulation within the property industry. This has implications for policy makers in considering the advantages and limitation of using a voluntary solution to achieve policy aims within the commercial leasing market. Originality/value – This paper provides a first step in considering the lease codes in the wider context of industry self-regulation and is relevant to policy makers and industry bodies.

Storm prediction research and its application to the oil/gas industry

The accurate prediction of storms is vital to the oil and gas sector for the management of their operations. An overview of research exploring the prediction of storms by ensemble prediction systems is presented and its application to the oil and gas sector is discussed. The analysis method used requires larger amounts of data storage and computer processing time than other more conventional analysis methods. To overcome these difficulties eScience techniques have been utilised. These techniques potentially have applications to the oil and gas sector to help incorporate environmental data into their information systems

Perceptions of the impacts of genetically modified cotton varieties: a case study of the cotton industry in Gujarat, India

The paper reports the findings of a study designed to consider the impact of the adoption of Bt cotton on markets, businesses, and institutional arrangements in India. Given that evidence to date suggests that widespread adoption of Bt cotton by farmers is likely to increase production, this study aims to assess possible implications for markets (access to inputs, prices of inputs and outputs, etc.) and local industries and to identify potential winners and losers. The results suggest that there are impacts on the cotton industry following from the release of Bt hybrids, and so far the impacts are most noticeable "upstream" (i.e., the input suppliers), where companies are rapidly moving away from the sale of bollworm insecticide and attempting to sell Bt seeds. Seed companies are looking for partnerships with Monsanto, the owner of the Bt gene. One reason that companies are keen to move away from insecticide is so they can avoid the need for credit supply to their customers. Seed purchase is not normally through credit, whereas insecticide purchase is. Issues for companies "downstream" (gins, textile manufacturers) relate more to the better quality of Bt cotton and the need for adequate segregation of Bt and non-Bt cotton.

Financial protection in the UK building industry: a guide for clients and the construction supply chain.

There is a clear need for financial protection in the construction industry, both to guarantee satisfactory completion of construction projects and to guard against non-payment. However, the cost of financial protection is often felt to be disproportionately high, with unnecessary overlap between different measures. The Reading Construction Forum has commissioned and steered research which is published in this report in an effort to bring the problem out into the open and to clarify the various options open to the various parties and stakeholders in the construction process. "Financial Protection in the UK Building Industry" is the first definitive report on the subject, offering an accurate and simple guide that all levels within the construction industry can understand. This accessible new guide considers the problem of financial protection and clearly lays out the alternative solutions.It looks by turn at the client, the main contractor, and the sub-contractor, discussing which financial protection options are available to each of them, and considers the pros and cons of each option. The cost of each type of financial protection is weighed against the amount of protection provided and the risks involved. The book concludes with guidance for consultants, emphasising relevant points to consider when advising clients and contractors about which type of financial protection to choose. "Financial Protection in the UK Building Industry" was researched by a literature search, collection of statistical data, and financial data, as well as discussions with clients, contractors, sub-contractors and consultants. This investigation has shown that the direct costs of implementing financial protection measures are marginal, and that wider adoption of payment protection would create a more equitable situation between contracting parties.This guide will enable anyone in the construction industry to consider all the options, and determine what is the best solution for them. "Reading Construction Forum Financial Protection for the UK Building Industry" was complied by the University of Reading, funded by the Reading Construction Forum. The Forum has recently commissioned and steered a number of high-profile reports covering important aspects of the construction industry. Members of the Forum include major companies which are concerned with achieving high quality in the design, construction and use of commercial, retail and industrial buildings. All are committed to change and innovation in the British and European construction industries.

Financial protection in the UK building industry: bonds, retentions and guarantees

Financial Protection in the UK Building Industry provides comprehensive treatment of a complex aspect of construction management which is increasingly important in modern construction contracts. The term 'Financial Protection' refers to refers to the various mechanisms by which funds are made available to ensure the due performance of a partys contractual obligations. This book is based on material written for a research project funded by the Reading Construction Forum. Financial Protection in the UK Building Industry looks at the legal and economic background to the problem of providing financial protection to clients to guard against poor performance and or the insolvency of contractors, consultants and sub-contractors. The inclusion of practical guidance notes and summaries makes this a valuable guide for the construction professional as well as for the researcher. * provides in-depth analysis of financial protection measures * explores the ways in which financial protection can increase efficiency in the industry * financial protection in construction is beset with problems - this book points toward practical solutions

The impact of market and supply configurations on the costs of tendering in the construction industry

The cost of tendering in the construction industry is widely suspected to be excessive, but there is little robust empirical evidence to demonstrate this. It also seems that innovative working practices may reduce the costs of undertaking construction projects and the consequent improvement in relationships should increase overall value for money. The aim of this proposed research project is to develop mechanisms for measuring the true costs of tendering based upon extensive in-house data collection undertaken in a range of different construction firms. The output from this research will enable all participants in the construction process to make better decisions about how to select members of the team and identify the price and scope of their obligations.

Developing a system for assessing the costs associated with different procurement routes in the construction industry

In developing techniques for monitoring the costs associated with different procurement routes, the central task is disentangling the various project costs incurred by organizations taking part in construction projects. While all firms are familiar with the need to analyse their own costs, it is unusual to apply the same kind of analysis to projects. The purpose of this research is to examine the claims that new ways of working such as strategic alliancing and partnering bring positive business benefits. This requires that costs associated with marketing, estimating, pricing, negotiation of terms, monitoring of performance and enforcement of contract are collected for a cross-section of projects under differing arrangements, and from those in the supply chain from clients to consultants, contractors, sub-contractors and suppliers. Collaboration with industrial partners forms the basis for developing a research instrument, based on time sheets, which will be relevant for all those taking part in the work. The signs are that costs associated with tendering are highly variable, 1-15%, depending upon what precisely is taken into account. The research to date reveals that there are mechanisms for measuring the costs of transactions and these will generate useful data for subsequent analysis.

Promoting innovation and exceptional performance in the Scottish construction industry

Demonstration Projects are an initiative developed in response to demands presented in the 1998 Egan Report. Scotland has witnessed an attempt to keep the momentum and the so called Demonstration Projects Team at the University of Dundee was introduced in late 2003. The team’s responsibility was to revitalise and restructure Scottish Demonstration Projects. These are now a major initiative within the newly established Scottish Construction Innovation and Excellence Centre, a part of Scottish Construction Forum that is an umbrella organisation funded by the Scottish Executive through Scottish Enterprise Glasgow.

Autopoietic organization of firm: an illustration for the construction industry

Generally poor productivity, delays, low profitability and exceeded budgets are Common problems in modern construction management, however it seems that a basic obstacle lies far deeper in the understanding of a firm's fundamental mission, its existence. The main objective of this paper therefore is to examine the operational living of a construction firm and by doing that to reveal the key problem or the solution for a construction firm - its organization. A firm as a social system in which interactions between its constitutive components (employees) are surordinated to its maintenance (keeping a system alive) is an autopoietic social system. Two domains of external perturbations are uncovered to which a construction firm has to adapt (market driven and project driven perturbations). Constructed conceptual model of an autopoietic organization is based upon two necessary and sufficient operational domains that a firm has to create in order to become an autopoietic, adaptive social system. The first one is a domain of interactions between employees and other operationally external systems, which is representing an idea-generating domain of interactions. The second is employee's autonomous operational domain, which embodies employee's autonomy and individuality and represents a necessary condition for the establishment of an idea-generating domain. Finally, it is recognized that interactions within these four domains keep a construction firm alive.

Input usage, output mix and industry deregulation: an analysis of the Australian dairy manufacturing industry

In this paper we estimate a Translog output distance function for a balanced panel of state level data for the Australian dairy processing sector. We estimate a fixed effects specification employing Bayesian methods, with and without the imposition of monotonicity and curvature restrictions. Our results indicate that Tasmania and Victoria are the most technically efficient states with New South Wales being the least efficient. The imposition of theoretical restrictions marginally affects the results especially with respect to estimates of technical change and industry deregulation. Importantly, our bias estimates show changes in both input use and output mix that result from deregulation. Specifically, we find that deregulation has positively biased the production of butter, cheese and powders.