Integration in project business : mechanisms for integrating customers and the project network during the life-cycle of industrial projects

This thesis focuses on integration in project business, i.e. how projectbased companies organize their product and process structures when they deliver industrial solutions to their customers. The customers that invest in these solutions run their businesses in different geographical, political and economical environments, which should be acknowledged by the supplier when providing solutions comprising of larger and more complex scopes than previously supplied to these customers. This means that the suppliers are increasing their supply range by taking over some of the activities in the value chain that have traditionally been handled by the customer. In order to be able to provide the functioning solutions, including more engineering hours, technical equipment and a wider project network, a change is needed in the mindset in order to be able to carry out and take the required responsibility that these new approaches bring. For the supplier it is important to be able to integrate technical products, systems and services, but the supplier also needs to have the capabilities to integrate the cross-functional organizations and departments in the project network, the knowledge and information between and within these organizations and departments, along with inputs from the customer into the product and process structures during the lifecycle of the project under development. Hence, the main objective of this thesis is to explore the challenges of integration that industrial projects meet, and based on that, to suggest a concept of how to manage integration in project business by making use of integration mechanisms. Integration is considered the essential process for accomplishing an industrial project, whereas the accomplishment of the industrial project is considered to be the result of the integration. The thesis consists of an extended summary and four papers, that are based on three studies in which integration mechanisms for value creation in industrial project networks and the management of integration in project business have been explored. The research is based on an inductive approach where in particular the design, commissioning and operations functions of industrial projects have been studied, addressing entire project life-cycles. The studies have been conducted in the shipbuilding and power generation industries where the scopes of supply consist of stand-alone equipment, equipment and engineering, and turnkey solutions. These industrial solutions include demanding efforts in engineering and organization. Addressing the calls for more studies on the evolving value chains of integrated solutions, mechanisms for inter- and intra-organizational integration and subsequent value creation in project networks have been explored. The research results in thirteen integration mechanisms and a typology for integration is proposed. Managing integration consists of integrating the project network (the supplier and the sub-suppliers) and the customer (the customer’s business purpose, operations environment and the end-user) into the project by making use of integration mechanisms. The findings bring new insight into research on industrial project business by proposing integration of technology and engineering related elements with elements related to customer oriented business performance in contemporary project environments. Thirteen mechanisms for combining products and the processes needed to deliver projects are described and categorized according to the impact that they have on the management of knowledge and information. These mechanisms directly relate to the performance of the supplier, and consequently to the functioning of the solution that the project provides. This thesis offers ways to promote integration of knowledge and information during the lifecycle of industrial projects, enhancing the development towards innovative solutions in project business.

Inter-temporal Price Discrimination when Imports are Restricted by Quotas

A dominant firm holding import quota engages in inter-temporal price discrimination when facing a competitive fringe engaged in seasonal production. This causes a welfare loss that comes in addition the loss attributable to limitation of imports below the free trade level.

Operational Flexibility: A Model for Effective Project Management

The aim of this study is to investigate the role of operational flexibility for effective project management in the construction industry. The specific objectives are to: a) Identify the determinants of operational flexibility potential in construction project management b) Investigate the contribution of each of the determinants to operational flexibility potential in the construction industry c) Investigate on the moderating factors of operational flexibility potential in a construction project environment d) Investigate whether moderated operational flexibility potential mediates the path between predictors and effective construction project management e) Develop and test a conceptual model of achieving operational flexibility for effective project management The purpose of this study is to findout ways to utilize flexibility inorder to manage uncertain project environment and ultimately achieve effective project management. In what configuration these operational flexibility determinants are demanded by construction project environment in order to achieve project success. This research was conducted in three phases, namely: (i) exploratory phase (ii) questionnaire development phase; and (iii) data collection and analysis phase. The study needs firm level analysis and therefore real estate developers who are members of CREDAI, Kerala Chapter were considered. This study provides a framework on the functioning of operational flexibility, offering guidance to researchers and practitioners for discovering means to gain operational flexibility in construction firms. The findings provide an empirical understanding on kinds of resources and capabilities a construction firm must accumulate to respond flexibly to the changing project environment offering practitioners insights into practices that build firms operational flexibility potential. Firms are dealing with complex, continuous changing and uncertain environments due trends of globalization, technical changes and innovations and changes in the customers’ needs and expectations. To cope with the increasingly uncertain and quickly changing environment firms strive for flexibility. To achieve the level of flexibility that adds value to the customers, firms should look to flexibility from a day to day operational perspective. Each dimension of operational flexibility is derived from competences and capabilities. In this thesis only the influence on customer satisfaction and learning exploitation of flexibility dimensions which directly add value in the customers eyes are studied to answer the followingresearch questions: “What is the impact of operational flexibility on customer satisfaction?.” What are the predictors of operational flexibility in construction industry? .These questions can only be answered after answering the questions like “Why do firms need operational flexibility?” and “how can firms achieve operational flexibility?” in the context of the construction industry. The need for construction firms to be flexible, via the effective utilization of organizational resources and capabilities for improved responsiveness, is important because of the increasing rate of changes in the business environment within which they operate. Achieving operational flexibility is also important because it has a significant correlation with a project effectiveness and hence a firm’s turnover. It is essential for academics and practitioners to recognize that the attainment of operational flexibility involves different types namely: (i) Modification (ii) new product development and (iii) demand management requires different configurations of predictors (i.e., resources, capabilities and strategies). Construction firms should consider these relationships and implement appropriate management practices for developing and configuring the right kind of resources, capabilities and strategies towards achieving different operational flexibility types.

Cultura e innovación en empresas con relaciones de cooperación inter organizacional

Un gran número de empresas están inmersas actualmente en espacios de mercado conocidos y saturados de competidores. La innovación constituye una de las principales alternativas de las empresas para encontrar su posicionamiento estratégico y adaptarse a los cambios del entorno (Kim & Mauborgne, 2005). Igualmente, Demirci (2013) asegura que la cultura es un factor clave en la innovación, dado que está fuertemente asociada con los valores, actitudes, comportamientos y prácticas organizacionales. Esta investigación abarca el estudio de la cultura organizacional y la innovación en el marco de estrategias de cooperación inter-organizacional donde se plantea que el grado de cooperación que existe entre las empresas tiene un efecto sobre los valores culturales y la incorporación de innovaciones en cada organización. Para esto se llevó a cabo una investigación cuantitativa con un alcance de tipo descriptivo y de carácter no experimental y trans seccional, cuya unidad de análisis fueron 20 empresas de la red ParqueSoft Manizales. Para la medición de las variables de innovación se aplicó un instrumento basado en el Manual de Oslo de la OECD y Eurostat (2005) el cual contempla la innovación de producto, proceso, mercadotecnia y organización. A nivel de los valores culturales, la medición se realizó a través de un cuestionario inspirado en el modelo de Hofstede (1980). Los resultados obtenidos permiten demostrar que existe un grado de relación entre la cooperación y los valores culturales ‘distancia al poder’ y ‘tolerancia a la incertidumbre´, sin poder determinar la relación con la generación de innovación de producto, proceso, mercadotecnia y organización, así como con las otras dimensiones del modelo de valores de Hofstede.

Reputación y su relación con la efectividad de las empresas que conforman una Red Inter-Organizacional

En los últimos años, el entorno empresarial ha venido experimentando e indagando en nuevas estrategias organizacionales para un mejor desempeño de sus actividades, con el fin de alcanzar los objetivos que las compañías proyectan cada día. Una de estas estrategias es la conformación de redes inter-organizacionales, las cuales son una herramienta que les permite trabajar en cooperación para conseguir un objetivo común, que beneficie a cada uno de los miembros de la red. En este contexto, es relevante conocer su grado de efectividad así como conocer los factores clave que influyen en el buen funcionamiento de una red inter-organizacional. Por lo tanto, en este proyecto de investigación se hace énfasis en la reputación, el cual es un factor clave de la confianza y un elemento influyente en la efectividad de las redes inter-organizacionales, teniendo en cuenta no solo la reputación de los integrantes de la red, sino también la de la red en conjunto.

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.

Visualizing knowledge in project-based work

This article considers how visual practices are used to manage knowledge in project-based work. It compares project-based work in a capital goods manufacturer and an architectural firm. Visual representations are used extensively in both cases, but the nature of visual practice differs significantly between the two. The research explores the kinds of knowledge that are (and aren't) developed and made visible in strategizing and planning activities. For example, whereas the emphasis of project-based work in the former firm is on exploitation of knowledge and it visualizes its project context largely in commercial and processual terms, the emphasis in the latter is on exploration and it uses a wide range of visual materials to understand physical interdependencies across the project boundary. We contend particular kinds of visual tools can help project teams step between exploration and exploitation within a project, and articulate the types of representations, foci of attention and patterns of interaction involved. The findings suggest that business managers can make more deliberate choices about how knowledge is made visible, and can change visual practice to align the project with exploring and exploiting opportunities. It raises the question: What don't you see within your organization? The work contributes to academic debates about managing through projects, strategising and organizing, while the focus on visual representation disrupts the tacit-codified dichotomy in the broad debate on knowledge and learning, and highlights the craft skills central to strategizing and organizing.

Knowledge and information evaluation practice: an exploratory study in a construction firm

There are a number of challenges associated with managing knowledge and information in construction organizations delivering major capital assets. These include the ever-increasing volumes of information, losing people because of retirement or competitors, the continuously changing nature of information, lack of methods on eliciting useful knowledge, development of new information technologies and changes in management and innovation practices. Existing tools and methodologies for valuing intangible assets in fields such as engineering, project management and financial, accounting, do not address fully the issues associated with the valuation of information and knowledge. Information is rarely recorded in a way that a document can be valued, when either produced or subsequently retrieved and re-used. In addition there is a wealth of tacit personal knowledge which, if codified into documentary information, may prove to be very valuable to operators of the finished asset or future designers. This paper addresses the problem of information overload and identifies the differences between data, information and knowledge. An exploratory study was conducted with a leading construction consultant examining three perspectives (business, project management and document management) by structured interviews and specifically how to value information in practical terms. Major challenges in information management are identified. An through-life Information Evaluation methodology (IEM) is presented to reduce information overload and to make the information more valuable in the future.

Liability of country foreignness and liability of regional foreignness: their effects on geographic diversification and firm performance

The costs of inter- and intra-regional diversification have been widely discussed in the existing international business literature, but the findings are mixed. Explanations for the mixed findings have important managerial implications, because business managers have to estimate accurately the costs of doing business within and across regions before they make their internationalization decisions. To explain the existing mixed findings, this study differentiates between liabilities of foreignness at the country and regional levels, and explores the joint effects of liability of country foreignness (LCF) and liability of regional foreignness (LRF) on the performance of internationalizing firms. Using data from 167 Canadian firms, we find that LCF may not necessarily be negatively correlated with intra-regional diversification, but LRF is positively correlated with inter-regional diversification. LCF moderates the relationship between LRF and inter-regional diversification, and also mediates the relationship between intra-regional diversification and firm performance. LRF mediates the relationship between inter-regional diversification and firm performance. Missing one or more of these variables may result in different cost estimates. Identification of the relationships between these variables helps to improve the accuracy of estimating the costs of doing business aboard.

Modeling growth strategy in a biotechnology startup firm

The top managers of a biotechnology startup firm agreed to participate in a system dynamics modeling project to help them think about the firm's growth strategy. The article describes how the model was created and used to stimulate debate and discussion about growth management. The paper highlights several novel features about the process used for capturing management team knowledge. A heavy emphasis was placed on mapping the operating structure of the factory and distribution channels. Qualitative modeling methods (structural diagrams, descriptive variable names, and friendly algebra) were used to capture the management team's descriptions of the business. Simulation scenarios were crafted to stimulate debate about strategic issues such as capacity allocation, capacity expansion, customer recruitment, customer retention, and market growth, and to engage the management team in using the computer to design strategic scenarios. The article concludes with comments on the impact of the project.

Quantifying sources of inter-model diversity in the cloud albedo effect

There is large diversity in simulated aerosol forcing among models that participated in the fifth Coupled Model Intercomparison Project (CMIP5), particularly related to aerosol interactions with clouds. Here we use the reported model data and fitted aerosol-cloud relations to separate the main sources of inter-model diversity in the magnitude of the cloud albedo effect. There is large diversity in the global load and spatial distribution of sulfate aerosol, as well as in global-mean cloud-top effective radius. The use of different parameterizations of aerosol-cloud interactions makes the largest contribution to diversity in modeled radiative forcing (up to -39%, +48% about the mean estimate). Uncertainty in pre-industrial sulfate load also makes a substantial contribution (-15%, +61% about the mean estimate), with smaller contributions from inter-model differences in the historical change in sulfate load and in mean cloud fraction.

Diffusion of digital innovation in construction: a case study of a UK engineering firm

The UK government is mandating the use of building information modelling (BIM) in large public projects by 2016. As a result, engineering firms are faced with challenges related to embedding new technologies and associated working practices for the digital delivery of major infrastructure projects. Diffusion of innovations theory is used to investigate how digital innovations diffuse across complex firms. A contextualist approach is employed through an in-depth case study of a large, international engineering project-based firm. The analysis of the empirical data, which was collected over a four-year period of close interaction with the firm, reveals parallel paths of diffusion occurring across the firm, where both the innovation and the firm context were continually changing. The diffusion process is traced over three phases: centralization of technology management, standardization of digital working practices, and globalization of digital resources. The findings describe the diffusion of a digital innovation as multiple and partial within a complex social system during times of change and organizational uncertainty, thereby contributing to diffusion of innovations studies in construction by showing a range of activities and dynamics of a non-linear diffusion process.