International comparisons of construction industry performance: further investigations

While there have been many attempts at comparisons of construction performance over the past 50 years, the results have generally been inconclusive and/or contradictory.

Such comparisons are of great interest to industry, governments and theorists alike but there is little agreement as to how they are best done. A variety of methodologies have been used, however, the lack of satisfactory outcomes has been due largely to one factor, the lack of a truly reliable method for comparing construction costs in different currencies

Exchange rates are recognised as being unsuitable, and while purchasing power parity (PPP) has a long history, the method still has many critics. In addition, the nature of the building industry and its products makes the establishment of reliable construction PPPs very difficult. Both the UN’s International Comparison Program (ICP) and the European Union gather data for the production of construction-specific PPP indices, but neither body publishes them, as there is too much doubt about their reliability.

New approaches are being developed and some are soon to be trialled. This paper looks at the problems, describes and discusses some new approaches, and assesses their potential.

An industrial organisation economic supply chain approach for the construction industry : a review

Understanding industries in terms of the concepts of chains, clusters and networks is becoming increasingly important in economies around the world. Supply chain management for an individual organization is an
emerging field of research in the construction management discipline, but less attention has been devoted to investigating the nature of the construction supply chains and their industrial organizational economic environment. This selected review of construction and mainstream management supply chain literature is organized around four themes; distribution, production, strategic procurement management and industrial
organization economics, and highlights the need to develop an industrial organization economic supply chain framework for construction. The merging of the supply chain concept with the industrial organization model
as a methodology for understanding firm conduct and industry structure and performance is an important contribution to both construction supply chain and construction economic theory. Much of the industrial organization supply chain literature has tended to focus upon manufacturing industries, where typically firms are permanent organizations. This raises issues as to the differences between industries founded upon temporary compared with permanent organizations. There is potential for the development of an industrial organization methodology applicable to the project based industry. Ultimately industrial organization research seeks to have direct implications for industry performance and government policies.

Skills and qualities and the effective project manager in the UK construction industry

The professional project manager is a sought after commodity (McManus, 1995:12). Many companies face increasing demands to complete projects faster, at lower costs and to higher specifications and as Lock (1996;50) comments; “This work, far from requiring specialisation, demands a sufficient general understanding of the work carried out by those participants for the project manager to be able to discuss the work sensibly”. Though for some the term project manager can be clearly identified, others believe the terms project manager and project management, as used in the construction industry, mean all things to all men and lead to confusion (The Chartered Institute of Building, 1982;12). The lack of clarity surrounding the role of project manager made this area worthy of investigation.

This research sought a deeper understanding of the project management role and an identification of the skills and professionals associated with it. The desk top study revealed definitions of the role and perceptions of the skills involved. The literature showed that authors believed in the need for a balance between knowledge, experience and training and the types of professions involved. The research methodology comprised a qualitative approach, with a questionnaire sent out to a non-random sample of practices specialising in project management. The data analysis adopted uni and bi-variant methods, using SPSS. The research found that the role of the project manager is very broad. Furthermore it is adopted by many construction professions as the background of the project manager is largely perceived as irrelevant to the role. A definition is proposed and relevant skills are identified, finally the importance of experience and training is highlighted.

Model for fostering trust and building relationships in China's construction industry

Trust is an underlying psychological condition that can cause cooperation or risk-taking. Trust is considered as a predominant feature and a central mechanism in business transactions, especially among Chinese. Trust-based relationships create advantages in conducting business such as lowering cost, shortening duration, and improving performance. Indispensable conditions for trust to arise are relationships and risks. Different risks surface as a result of different levels of relationships. Sustained trust is therefore fostered by various means to counterbalance those risks. In order to assess the links between distinct trust-related features, a model is constructed and tested through a questionnaire survey in China. The findings generally support the model in terms of explaining the dominant relationships, inherent risks, and trust-fostering tools. It is recommended that firms adopt the refined model and utilize successful practices verified in this paper to foster trust and relationships and in turn secure project success.

Productivity measurement of the construction industry in Australia

This research adopts the Malmquist total factor productivity model with Lovell's decomposition and renovated partial factor model to evaluate changes of productivity levels in Australia's construction industry. Research results find that the average annual productivity levels for Australian states are slowly growing, except for Queensland's total factor and capital productivities.

Using a knowledge management evaluation framework for improving an ERP system - a Hong Kong construction industry case study

Organisations need to rely on leadership, information support and human capital in order to ensure a knowledge advantage over their competitors. Knowledge management (KM) provides organisations with sustainable competitive advantage, because it becomes extremely difficult for an organisation to cut expenditure and increase revenue by simply reengineering its business model. Project delivery and success has been traditionally viewed and measured as management of a three-legged stool, with the legs defined as cost, schedule and quality. However, KM can be linked to success by organisations becoming more effective as well as being more efficient.

This paper uses a KM framework, the Knowledge Advantage (K-Adv), developed initially for use by construction organisations. It assesses the impact of leadership and its supporting information communication technology infrastructure on the ability of people (by effectively creating, sharing, disseminating and using knowledge) to facilitate sustainable competitive advantage.

A case study that is presented is based upon the experience of a leading construction company using an Enterprise Resources Planning (ERP) system to demonstrate the effectiveness of KM from a cost management business unit perspective. Results are evaluated using a capability maturity model (CMM) - that forms the core of the K-Adv tool - to help improve processes that meet the needs of the organisation operating in a highly dynamic business environment. The case study is part of a broader doctoral research project that uses action learning to facilitate and measure ERP improvement.

The application of electronic commerce and information integration in the construction industry

Many parties involved in the construction industry have convinced the importance of electronic commerce (EC) for improving business processes, cutting cost, and providing comprehensive information. However, currently the application of EC is relatively limited and ineffective. These systems are always non-interoperable which creates problems for the stakeholders in construction projects. This paper aims to analyze the E-commerce application system and develop a system for the parties to collaborate and share information effectively. In this paper, four information flats are summarized based on the literature survey and field investigation, and the information integration model for EC is built up using IFC and XML. It should provide a useful reference for China to promote the development of EC in the construction industry.

An overview of previous studies in stakeholder management and its implications for construction industry

Purpose – The purpose of this paper is to provide an overview of previous studies in the field of stakeholder management, and propose implications for the construction industry.

Design/methodology/approach – Three major databases are searched: ABI, EI CompendexWeb, and ISI web of knowledge. Papers are searched on topic by using the keywords of “stakeholder management”, “management of stakeholders” and “management of stakeholder”. A brief review of the abstracts and conclusions of these papers is conducted to filter out the irrelevant and/or duplicate papers. After filtering, 159 articles with content relevant to stakeholder management are selected for analysis.

Findings – An overview of previous studies reveals that research interest in stakeholder management has turned to the descriptive approach. Through a critical review of stakeholder management process, three main problems of previous studies are identified: very few methods and tools are available to identify all stakeholders and their interests; limited studies involve the change management about the stakeholders' influence and relationship; and few studies are capable of reflecting the influence of the entire relationship network in practice.

Research limitations/implications – Two implications for the construction industry are suggested: establish a practical framework for managing stakeholders; and apply social network theory (SNT) in developing a stakeholder relationship model.

Originality/value – The overview and implications lead to new knowledge and an improved understanding of the management of multiple stakeholders in construction projects. The perspective of SNT avoids the deficiency of Freeman's dyadic ties model, and the project managers can make decisions in response to the stakeholder behaviours according to the entire relationship.

A critical analysis of techniques for risk mitigation in the construction industry

Risks exist in every form of construction project. The risks associated with construction projects are often diverse and varied and the management of these risks is nowadays considered compulsory in order to achieve project success. This paper analyses the diverse strategies of risk mitigation that have been employed in construction projects. These strategies are classified into analysed categories of procurement strategies. contingency and co-operative approach along with the utilisation of a designated risk manager. The analysis showed that in order to improve risk mitigation within the construction industry, there is a requirement tor an industry based standard. This standard will improve the efficiency and effectiveness of the risk mitigation response technique to risk management.

Malmquist indices of total factor productivity changes in the Australian construction industry

Construction is an important industry and forms a vital part of national economics in the world. Factors affecting the productivity of the construction industry should be measured appropriately to reflect its development situation and economic performance. The Malmquist index method with a novel decomposition technique is employed to estimate the total factor productivity of the Australian construction industry during the period 1990-2007 and to analyse the factors affecting the technological change in the industry. Research results exemplified by two input variables and one output variable elaborate how construction technology, pure technical efficiency and scale economy take effect in the change of construction productivity. In addition, based on temporal and spatial comparisons, the analysis for construction productivities reveals their changes over time and across the country. Proposals and recommendations are expected to be beneficial for policy making and strategic decisions to improve the performance of the Australian construction industry.

Chinese construction industry performance after entry into the world trade organization

The Chinese construction industry has had significant activity in the international market in the last decade following the entry into the World Trade Organization (WTO). However the degree of activity and the sector performance is still relatively uncertain. A review of the literature in this field indicates that there is very little rigor in relation to adoption of quantitative measurement and performance indicators for internationalization, in particular for the measurement of the degree of internationalization specifically related to the international construction sector at both firm and country level. In addition the estimation of the influence and status of a country's construction activity in the international market has not been considered. There are useful indicators that we can borrow and consider from mainstream economics literature, such as, Dunning's Eclectic Paradigm (based on the ownership (0), location (L) and internalization (1) advantages of a firm) and Low et al.'s OLI+S Model (based on the Ownership, Location, Internalization and Specialty). Through an analysis of the attributes of the Chinese construction industry and a discussion on trends for the last decade, this paper proposes to develop a new model by adapting the Dunning model and acknowledging the significance of "Specialty" to measure the degree of internationalization both at the firm and country level. The International Level and Status Index was generated to measure the level and status of a country's construction industry in the international market by adopting the Depth Index (revenue composition), Height Index (top enterprises) and Width Index (fields involved). The key finding is that the degree of internationalization of Chinese construction industry and the status and influence of Chinese construction industry in the international market has not increased quickly. Surprisingly even though China had expectations of high growth after entry to WTO it has in fact declined. Contrarily, both of them declined in the early years after the accession to WTO.