Risk pricing practices in finance, insurance and construction

A review of current risk pricing practices in the financial, insurance and construction sectors is conducted through a comprehensive literature review. The purpose was to inform a study on risk and price in the tendering processes of contractors: specifically, how contractors take account of risk when they are calculating their bids for construction work. The reference to mainstream literature was in view of construction management research as a field of application rather than a fundamental academic discipline. Analytical models are used for risk pricing in the financial sector. Certain mathematical laws and principles of insurance are used to price risk in the insurance sector. construction contractors and practitioners are described to traditionally price allowances for project risk using mechanisms such as intuition and experience. Project risk analysis models have proliferated in recent years. However, they are rarely used because of problems practitioners face when confronted with them. A discussion of practices across the three sectors shows that the construction industry does not approach risk according to the sophisticated mechanisms of the two other sectors. This is not a poor situation in itself. However, knowledge transfer from finance and insurance can help construction practitioners. But also, formal risk models for contractors should be informed by the commercial exigencies and unique characteristics of the construction sector.

Influencing energy efficient occupant behavior through improved building and control design

There is growing pressure on the construction industry to deliver energy efficient, sustainable buildings but there is evidence to suggest that, in practice, designs regularly fail to achieve the anticipated levels of in-use energy consumption. One of the key factors behind this discrepancy is the behavior of the building occupants. This paper explores how insights from experimental psychology could potentially be used to reduce the gap between the predicted and actual energy performance of buildings. It demonstrates why traditional methods to engage with the occupants are not always successful and proposes a model for a more holistic approach to this issue. The paper concludes that achieving energy efficiency in buildings is not solely a technological issue and that the construction industry needs to adopt a more user-centred approach.

The effect of BREEAM on clients and construction professionals

The effects and influence of the Building Research Establishment’s Environmental Assessment Methods (BREEAM) on construction professionals are examined. Most discussions of building assessment methods focus on either the formal tool or the finished product. In contrast, BREEAM is analysed here as a social technology using Michel Foucault’s theory of governmentality. Interview data are used to explore the effect of BREEAM on visibilities, knowledge, techniques and professional identities. The analysis highlights a number of features of the BREEAM assessment process which generally go unremarked: professional and public understandings of the method, the deployment of different types of knowledge and their implication for the authority and legitimacy of the tool, and the effect of BREEAM on standard practice. The analysis finds that BREEAM’s primary effect is through its impact on standard practices. Other effects include the use of assessment methods to defend design decisions, its role in both operationalizing and obscuring the concept of green buildings, and the effect of tensions between project and method requirements for the authority of the tool. A reflection on assessment methods as neo-liberal tools and their adequacy for the promotion of sustainable construction suggests several limitations of lock-in that hinder variation and wider systemic change.

Building WF16: construction of a PPNA pisé structure in Southern Jordan

The Pre-Pottery Neolithic A (PPNA) period in Southwest Asia is essential for our understanding of the transition to sedentary, agricultural communities. Developments in architecture are key to understanding this transition, but many aspects of PPNA architecture remain elusive, such as construction techniques, the selection of building materials, and the functional use of space. The primary aim of the research described within this contribution was to build a PPNA-like structure in order to answer questions about PPNA architecture in general, while specifically addressing issues raised by the excavation of structures at the site of WF16, Southern Jordan. The second aim was to display a ‘PPNA’ building to visitors in Wadi Faynan to enhance their understanding of the period. The experimental construction based on one of the WF16 structures showed that 1) required materials can be acquired locally; 2) a construction technique using mud layers as described in this paper was likely used; 3) flat, or very slightly dome-shaped, roofs are functional and can also be used as a solid working platform; 4) the WF16 small semi-subterranean buildings appear inappropriate for housing a nuclear family unit.

Governmentality, subject-building, and the discourses and practices of devolution in the UK

This paper uses a Foucauldian governmentality framework to analyse and interrogate the discourses and strategies adopted by the state and sections of the business community in their attempts to shape and influence emerging agendas of governance in post-devolution Scotland. Much of the work on governmentality has examined the ways in which governments have developed particular techniques, rationales and mechanisms to enable the functioning of governance programmes. This paper expands upon such analyses by also looking at the ways in which particular interests may use similar procedures, discourses and practices to promote their own agendas and develop new forms of resistance, contestation and challenge to emerging policy frameworks. Using the example of business interest mobilization in post-devolution Scotland, it is argued that governments may seek to mobilize defined forms of expertise and knowledge, linking them to wider political debates. This, however, creates new opportunities for interests to shape and contest the discourses and practices of government. The governmentalization of politics can, therefore, be seen as more of a dialectical process of definition and contestation than is often apparent in existing Foucault-inspired writing.

The need of sustainable buildings construction in the Kingdom of Bahrain

This thesis is aimed to initiate implementing sustainable building construction in the kingdom of Bahrain, i.e. Building-Integration PhotoVoltaic (BIPV) or Wind Energy (BIWE). It highlights the main constrains that discourage such modern concept in building and construction. Three groups have been questioned using a questionnaire. These are the policy and decision makers, the leading consultants and the contractors. The main constrains of the dissemination of BIVP and BIWE, according to the policy and decision makers, are: lack of knowledge and awareness of the public in sustainable technology, low cost of electricity, low cost of gas and oil and difficulty in applying local environmental taxes. The consultants had attributed the constrains to ignorance of life cycle cost of PV and Wind turbines systems, lack of education and knowledge in sustainable design, political system, shortage of markets importing sustainable technologies and client worries in profitability and pay-back period. The contractors are found to be very enthusiastic and ready to take over any sustainable building project and prefer to have a construction manger to coordinate between the design and contracting team. Design and Build is found the favorable procurement method in Bahrain for conducting BIPV or BIWE projects.

Model for calculating the sustainable building index (SBI) in the kingdom of Bahrain

We have developed a model that allows players in the building and construction sector and the energy policy makers on energy strategies to be able to perceive the interest of investors in the kingdom of Bahrain in conducting Building Integrated Photovoltaic (BIPV) or Building integrated wind turbines (BIWT) projects, i.e. a partial sustainable or green buildings. The model allows the calculation of the Sustainable building index (SBI), which ranges from 0.1 (lowest) to 1.0 (highest); the higher figure the more chance for launching BIPV or BIWT. This model was tested in Bahrain and the calculated SBI was found 0.47. This means that an extensive effort must be made through policies on renewable energy, renewable energy education, and incentives to BIPV and BIWT projects, environmental awareness and promotion to clean and sustainable energy for building and construction projects. Our model can be used internationally to create a "Global SBI" database. The Sustainable building and construction initiative (SBCI), United Nation, can take the task for establishing such task using this model.

Making sense of supply chain management: acomparative study of aerospace and construction

Current recipes for learning across business sectors too often fail to recognize the embedded and contextual nature of management practice. The existing literature gives little emphasis to the symbiotic relationship between supply chain management and the broader dynamics of context. The aerospace and construction sectors are selected for comparison on the basis that they are so different. The UK aerospace sector has undergone extensive consolidation as a result of the imperatives of global competitive pressures. In contrast, the construction industry has experienced decades of fragmentation and remains highly localized. An increasing proportion of output in the aerospace sector occurs within a small number of large, globally orientated firms. In contrast, construction output is dominated by a plethora of small firms with high levels of subcontracting and a widespread reliance on self-employment. These differences have fundamental implications for the way that supply chain management is understood and implemented in the two sectors. Semi-structured interviews with practitioners from both sectors support the contention that supply chain management is more established in aerospace than construction. The introduction of prime contracting and the increasing use of framework agreements within the construction sector potentially provide a much more supportive climate for supply chain management than has traditionally prevailed. However, progress depends upon an improved continuity of workload under such arrangements.

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.