Do national cultural differences affect the nature and characteristics of HRM practices? Evidence from Australian and Hong Kong construction firms on remuneration and job autonomy

Human resource management (HRM) plays a pivotal role in attracting and retaining talents. However, there is growing recognition in international HRM literature that the adoption of the widely accepted US/Harvard-inspired HRM model ignores the influences of cultural contexts on HRM practices in different countries. This notion has not been empirically investigated in the construction industry. Based on survey responses from 604 construction professionals from Australia and Hong Kong, this study examines whether: (i) national cultural differences influence individuals’ preference for types of remuneration and job autonomy, (ii) actual organizational HRM practices reflect such preferences and (iii) gaps between individuals’ preferences and actual organizational HRM practices affect job satisfaction. Results showed significant difference in HRM preferences between Australian and Hong Kong respondents and these are reflected in the distinct types of HRM practices adopted by construction firms in the two countries. Findings further indicated that the gap between individuals’ preferences and actual organizational HRM practices is associated with job satisfaction. The results support existing mainstream research and highlight the deficiency of the acultural treatment of HRM that is still apparent in construction management literature. An uncritical literature in the area not only hinders theory development but also potentially undermines the ability of construction firms to attract, recruit, and retain scarce talents.

Understanding the long term success of UK construction firms: the extent and role of 'hidden' corporate social responsibility

The construction sector is often described as lagging behind other major industries. At first this appears fair when considering the concept of corporate social responsibility (CSR). It is argued that CSR is ill-defined, with firms struggling to make sense of and engage with it. Literature suggests that the short-termism view of construction firms renders the long-term, triple-bottom-line principle of CSR untenable. This seems to be borne out by literature indicating that construction firms typically adopt a compliance-based approach to CSR instead of discretionary CSR which is regarded as adding most value to firms and benefiting the broadest group of stakeholders. However, this research conducted in the UK using a regional construction firm offers a counter argument whereby discretionary CSR approaches are well embedded and enacted within the firms’ business operations even though they are not formally articulated as CSR strategies and thus remain 'hidden'. This raises questions in the current CSR debate. First, is ‘hidden’ CSR relevant to the long term success of construction firms? and to what extent do these firms need to reinvent themselves to formally take advantage of the CSR agenda?

Creative participation in construction firms: bridging creativity and innovation

An intricate evolution of mainstream theories follows the growing need to explain employees’ commitment and engagement. Our understanding of these work-related phenomena and behaviour has improved but creativity and innovation as desired indicators are still often treated as coexisting constructs with very little attention given to a state of willingness of an individual to even consider contributing ideas. In this research we investigate the influence of knowledge and understanding, perceived radicality, personality dimensions, and favouring of ideas on employee willingness to creatively participate in order to trace its existence in propagation of ideas. A total of 76 construction and non-construction professionals participated in between-subject quasi-experiments. We also proposed IPO-based radicality of ideas construct from the viewpoint of employees involved in the processes of transformation. The research findings show that experts with deep understanding of the work are more likely to contribute highly radical ideas to decision-makers than less knowledgeable employees. Furthermore, personal factors that impact employee willingness to creatively participate have been valued higher than organisational factors. Personality dimensions by The BigFive Inventory have shown no effect on willingness to contribute ideas, while favouring of ideas showed a significant effect. In general, the findings show similarities with some studies of consumer willingness to participate in co-creation processes and thus indicate that firms may be studied as dynamic internal markets of ideas.

Sustainable construction: exploring the capabilities of Nigerian construction firms

As the built environment accounts for much of the world's emissions, resource consumption and waste, concerns remain as to how sustainable the sector is. Understanding how such concerns can be better managed is complex, with a range of competing agendas and institutional forces at play. This is especially the case in Nigeria where there are often differing priorities, weak regulations and institutions to deal with this challenge. Construction firms are in competition with each other in a market that is growing in size and sophistication yearly. The business case for sustainability has been argued severally in literature. However, the capability of construction firms with respect to sustainability in Nigeria has not been studied. This paper presents the preliminary findings of an exploratory multi-case study carried out to understand the firm's views on sustainability as a source of competitive advantage. A international firm and a lower medium-sized indigenous firm were selected for this purpose. Qualitative interviews were conducted with top-level management of both firms, with key themes from the sustainable construction and dynamic capabilities literature informing the case study protocol. The interviews were transcribed and analysed with the use of NVivo software. The findings suggest that the multinational firm is better grounded in sustainability knowledge. Although the level of awareness and demand for sustainable construction is generally very poor, few international clients are beginning to stimulate interest in sustainable buildings. This has triggered both firms to build their capabilities in that regard, albeit in an unhurried manner. Both firms agree on the potentials of market-driven sustainability in the long term. Nonetheless, more drastic actions are required to accelerate the sustainable construction agenda in Nigeria.

Learning across business sectors: Knowledge sharing between aerospace and construction

This report addresses the extent that managerial practices can be shared between the aerospace and construction sectors. Current recipes for learning from other industries tend to be oversimplistic and often fail to recognise the embedded and contextual nature of managerial knowledge. Knowledge sharing between business sectors is best understood as an essential source of innovation. The process of comparison challenges assumptions and better equips managers to cope with future change. Comparisons between the aerospace and construction sectors are especially useful because they are so different. The two sectors differ hugely in terms of their institutional context, structure and technological intensity. The aerospace sector has experienced extensive consolidation and is dominated by a small number of global companies. Aerospace companies operate within complex networks of global interdependency such that collaborative working is a commercial imperative. In contrast, the construction sector remains highly fragmented and is characterised by a continued reliance on small firms. The vast majority of construction firms compete within localised markets that are too often characterised by opportunistic behaviour. Comparing construction to aerospace highlights the unique characteristics of both sectors and helps explain how managerial practices are mediated by context. Detailed comparisons between the two sectors are made in a range of areas and guidance is provided for the implementation of knowledge sharing strategies within and across organisations. The commonly accepted notion of ‘best practice’ is exposed as a myth. Indeed, universal models of best practice can be detrimental to performance by deflecting from the need to adapt continuously to changing circumstances. Competitiveness in the construction sector too often rests on efficiency in managing contracts, with a particular emphasis on the allocation of risk. Innovation in construction tends to be problem-driven and is rarely shared from project to project. In aerospace, the dominant model of competitiveness means that firms have little choice other than to invest in continuous innovation, despite difficult trading conditions. Research and development (R&D) expenditure in aerospace continues to rise as a percentage of turnovers. A sustained capacity for innovation within the aerospace sector depends crucially upon stability and continuity of work. In the construction sector, the emergence of the ‘hollowed-out’ firm has undermined the industry’s capacity for innovation. Integrated procurement contexts such as prime contracting in construction potentially provide a more supportive climate for an innovation-based model of competitiveness. However, investment in new ways of working depends upon a shift in thinking not only amongst construction contractors, but also amongst the industry’s major clients.

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.

Emergent discourses of construction competitiveness: localized learning and embeddedness

Research is described that sought to understand how senior managers within regional contracting firms conceptualize and enact competitiveness. Existing formal discourses of construction competitiveness include the discourse of 'best practice' and the various theories of competitiveness as routinely mobilized within the academic literature. Such discourses consistently underplay the influence of contextual factors in shaping how competitiveness is enacted. An alternative discourse of competitiveness is outlined based on the concepts of localized learning and embeddedness. Two case studies of regional construction firms provide new insights into the emergent discourses of construction competitiveness. The empirical findings resonate strongly with the concepts of localized learning and embeddedness. The case studies illustrate the importance of de-centralized structures which enable multiple business units to become embedded within localized markets. A significant degree of autonomy is essential to facilitate localized entrepreneurial behaviour. In essence, sustained competitiveness was found to depend upon the extent to which de-centralized business units enact ongoing processes of localized learning. Once local business units have become embedded within localized markets the essential challenge is how to encourage continued entrepreneurial behaviour while maintaining a degree of centralized control and coordination. Of key importance is the recognition that the capabilities that make companies competitive transcend organizational boundaries such that they become situated within complex networks of relational ties.

Understanding construction competitiveness: the contribution of system dynamics

Purpose – Construction sector competitiveness has been a subject of interest for many years. Research too often focuses on the means of overcoming the “barriers to change” as if such barriers were static entities. There has been little attempt to understand the dynamic inter-relationship between the differing factors which impinge upon construction sector competitiveness. The purpose of this paper is to outline the benefits of taking a systems approach to construction competitiveness research. Design/methodology/approach – The system dynamics (SD) modelling methodology is described. This can provide practitioners with “microworlds” within which they can explore the dynamic effects of different policy decisions. The data underpinning the use of SD was provided by interviews and case study research which allowed an understanding of the context within which practitioners operate. Findings – The over-riding conclusion is that the SD methodology has been shown to be capable of providing a means to assess the forces which shape the sustained competitiveness of construction firms. As such, it takes the assessment of strategic policy analysis in the construction sector onto a higher plane. The need to collect data and make retrospective assessments of competitiveness and strategic performance at the statistical level is not now the only modus operandi available. Originality/value – The paper describes a novel research methodology which points towards an alternative research agenda for construction competitiveness research.

Achieving whole-life value: The challenges of service-led construction

Major construction clients are increasingly looking to procure built facilities on the basis of added value, rather than capital cost. Recent advances in the procurement of construction projects have emphasised a whole-life value approach to meeting the client’s objectives, with strategies put in place to encourage long-term commitment and through-life service provision. Construction firms are therefore increasingly required to take on responsibility for the operation and maintenance of the construction project on the client’s behalf - with the emphasis on value and service. This inevitably throws up a host of challenges, not the least of which is the need for construction firms to manage and accommodate the new emphasis on service. Indeed, these ‘service-led’ projects represent a new realm of construction projects where the rationale for the project is driven by client’s objectives with some aspect of service provision. This vision of downstream service delivery increases the number of stakeholders, adds to project complexity and challenges deeply-ingrained working practices. Ultimately it presents a major challenge for the construction sector. This paper sets out to unravel some of the many implications that this change brings with it. It draws upon ongoing research investigating how construction firms can adapt to a more service-orientated built environment and add value in project-based environments. The conclusions lay bare the challenges that firms face when trying to compete on the basis of added-value and service delivery. In particular, how it affects deeply-ingrained working practices and established relationships in the sector.

Innovation diffusion across firms

This chapter seeks to add to the study of innovation diffusion as enacted within the UK construction sector. Whereas using relevant theoretical frames as touch points, the chapter maps out challenges associated with understanding innovation diffusion within the UK construction sector. Central to the argument developed here is just how diverse the UK construction sector is, resulting in the need to focus upon a specific constituent perspective within the sector. It is argued that constituents of the UK construction sector experience the reality of innovation diffusion differently. The chosen focus here is medium-size and typically regionally based construction firms rather than the big guns, because statistics continually demonstrate that this group of smaller firms undertake more than 80% of the sector’s output. As is pointed out in other chapters in the present volume, and as argued theoretically in the industrial network perspective of chapter 7, firms do not innovate in a vacuum. Innovation and diffusion occur within networks of firms typically around a project. A framework drawing upon empirical data is provided to additional insight on the process and the interconnections. It is argued here that the unit of analysis or level of understanding termed the firm can actually be fairly unhelpful for understanding innovation and its manifestation and diffusion within the broader UK construction sector, because this occurs across networks of firms.

Interactive learning in UK construction practice: examining the role of BIM process standards

From a construction innovation systems perspective, firms acquire knowledge from suppliers, clients, universities and institutional environment. Building information modelling (BIM) involves these firms using new process standards. To understand the implications on interactive learning using BIM process standards, a case study is conducted with the UK operations of a multinational construction firm. Data is drawn from: a) two workshops involving the firm and a wider industry group, b) observations of practice in the BIM core team and in three ongoing projects, c) 12 semi-structured interviews; and d) secondary publications. The firm uses a set of BIM process standards (IFC, PAS 1192, Uniclass, COBie) in its construction activities. It is also involved in a pilot to implement the COBie standard, supported by technical and management standards for BIM, such as Uniclass and PAS1192. Analyses suggest that such BIM process standards unconsciously shapes the firm's internal and external interactive learning processes. Internally standards allow engineers to learn from each through visualising 3D information and talking around designs with operatives to address problems during construction. Externally, the firm participates in trial and pilot projects involving other construction firms, government agencies, universities and suppliers to learn about the standard and access knowledge to solve its specific design problems. Through its BIM manager, the firm provides feedback to standards developers and information technology suppliers. The research contributes by articulating how BIM process standards unconsciously change interactive learning processes in construction practice. Further research could investigate these findings in the wider UK construction innovation system.

Risk and price in the bidding process of contractors

Formal and analytical risk models prescribe how risk should be incorporated in construction bids. However, the actual process of how contractors and their clients negotiate and agree on price is complex, and not clearly articulated in the literature. Using participant observation, the entire tender process was shadowed in two leading UK construction firms. This was compared to propositions in analytical models and significant differences were found. 670 hours of work observed in both firms revealed three stages of the bidding process. Bidding activities were categorized and their extent estimated as deskwork (32%), calculations (19%), meetings (14%), documents (13%), off-days (11%), conversations (7%), correspondence (3%) and travel (1%). Risk allowances of 1-2% were priced in some bids and three tiers of risk apportionment in bids were identified. However, priced risks may sometimes be excluded from the final bidding price to enhance competitiveness. Thus, although risk apportionment affects a contractor’s pricing strategy, other complex, microeconomic factors also affect price. Instead of pricing in contingencies, risk was priced mostly through contractual rather than price mechanisms, to reflect commercial imperatives. The findings explain why some assumptions underpinning analytical models may not be sustainable in practice and why what actually happens in practice is important for those who seek to model the pricing of construction bids.

Competitive strategy revisited: contested concepts and dynamic capabilities

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 strategy is a collective endeavour enacted by a loosely defined group of individual actors. Dynamic capabilities are characterized by an empirical elusiveness and as such are best construed as situated practices embedded within a social and physical context.