A new approach to assessing Malaysian contractor satisfaction levels

The extent of poor project outcomes is a recurring issue for construction industries worldwide. One of the main causes of these and project failure seems to be the inability of contractors to provide a high level of service quality to the project team. In Malaysia, design failures have also been identified as a further contributory factor. To overcome this, different types of subjective performance measurement have been progressively developed. These approaches are typically concerned with client satisfaction, customer satisfaction, home buyer satisfaction and occupant satisfaction, but very seldom consider contractor satisfaction. This paper examines the implications of this, and what is involved in developing satisfaction measures based on contractor perception instead of the typical sole concern with client performance. As a result, other attributes such as participants’ performance, business performance, project performance, external factors and contractor characteristics are also examined. Several potential attributes are derived from interviews among Malaysian contractors, namely: performance (direct attributes) and contractor characteristics (indirect attributes) that possibly influence contractor satisfaction levels. These attributes are then developed to improve the existing conceptual framework. The developed framework is expected to help the project team in performing projects more efficiently, maintaining service quality and improving relationships between participants. In addition, the findings of the paper should assist contractors enhance competitiveness, improve their image and create more job opportunities in the future.

Sustainable relationship : an Australian case study

Successful construction project managers often stress the importance of team working, relationship management, project environment and senior management commitment as being key determinants of project success. However, it is generally accepted that the construction industry has stronger preference for displaying distrust rather than emancipating the full benefits of cooperation. In the research domain, the impact of culture and organisation on project performance is becoming an increasingly important topic for the establishment of a sound relational approach to projects. Relational procurement strategies emphasise the importance of sustainable relationships. However, the efficacy of relational contracting is, so far, unproven. This study examines the organisational factors that facilitates sustainable relationship between project organisations and hence, lead to long-term business success. Initial findings captured from a survey undertaken with construction contracting organisations in Australia, where the perceptions of professional personnel and supply chain relationships are reported in this paper. A four-level project performance effectiveness model developed in this research is also presented.

The impact of contractor’s characteristics in gauging level satisfaction

The outcomes of the construction projects can be evaluated in numerous ways. One method is to measure the satisfaction of participants as represented by the differences between their expectations and perceptions. This measurement is used widely in construction as it promises benefits, such as the improvement of product delivery, and enhances services quality by identifying some necessary changes. Commonly satisfaction measurement is gauged by evaluating the level of client satisfaction of construction performance. The measurement of customer satisfaction on the other hand, is based on the quality of the end product. This evaluation is used to encourage contractors to improve their performance to a required level and to ensure that the projects are delivered as expected- in terms of time, budget and quality. Several studies of performance measurement have indicated that contractor performance is still not satisfactory, as the outcome delivered is not as required (because of cost overruns, time overruns or because it is generally unsatisfactory). This drawback may be due to the contractors’ lack of expertise, motivation and/or satisfaction. The measurement of performance based on contractor satisfaction levels is still new and very few studies have yet taken place in the construction industry. This paper examines how the characteristics of a contracting organisation – namely its experience in the industry, background, past performance, size of organisation and financial stability- may influence its satisfaction levels with regards to project performance. Previous literature reviews and interviews are used as research tools in the preliminary investigation. The outcome is expected to present a basic understanding of contractor satisfaction measurement and its potential for improving the performance of project outcomes.

Towards a relational contracting framework in the Australian construction industry : an initial framework

The Australian construction industry is characterized as being a competitive and risky business environment due to lack of cooperation, insufficient trust, ineffective communication and adversarial relationships which are likely lead to poor project performance. Relational contracting (RC) is advocated by literature as an innovative approach to improve the procurement process in the construction industry. Various studies have collectively added to the current knowledge of known RC norms, but there seem to be little effort on investigating the determinants of RC and its impact on project outcomes. In such circumstances, there is lack of evidence and explanation on the manner on how these issues lead to different performance. Simultaneously, the New Engineering Contract (NEC) that embraced the concept of RC is seen as a modern way of contracting and also considered as one of the best approaches to the perennial problem of improving adversarial relationships within the industry. The reality of practice of RC in Australia is investigated through the lens of the NEC. A synthesis of literature views on the concept, processes and tools of RC is first conducted to develop the framework of RC. A case study approach is proposed for an in-depth analysis to explore the critical issues addressed by RC in relation to project performance. Understanding the realities of RC will assist stakeholders in the construction industry with their investment in RC.

The identification of Malaysian contractor satisfaction dimensions : a strategy for continuous improvement

The unique characteristics of the construction industry - such as the fragmentation of its processes, varied scope of works and diversity of its participants - are contributory factors to poor project performance. Several issues are unresolved due to the lack of a comprehensive technique to measure project outcomes including: inefficient decision making, insufficient communication, uncertain site conditions, a continuously changing environment, inharmonious working relationships, mismatched objectives within the project team and a blame culture. One approach to overcoming these problems appears to be to measure performance by gauging contractor satisfaction (Co-S) levels, but this has not been widely investigated as yet. Additionally, the key Co-S dimensions at the project level are still not fully identified. ----- ----- This paper concerns a study of satisfaction dimensions, primarily by a postal questionnaire survey of construction contractors registered by the Malaysian Construction Industry Development Board (CIDB). Eight satisfaction dimensions are identified that are significantly and substantially relate to these contractors - comprising: project cost performance, schedule performance, product performance, design satisfaction, site safety, project profitability, business performance and relationships between participants. -Each of these dimensions is accorded different priority levels of satisfaction by different contractors. ----- ----- The output of this study will be useful in raising the awareness and understanding of project teams regarding contractors’ needs, mutual objectives and open communication to help to deliver a successful project.

Constructability improvement in sea water intake structure

Purpose The purpose of this paper is to explore the process, and analyse the implementation of constructability improvement and innovation result during the planning and design for sea water intake structure of fertilizer plant project. Design/methodology/approach The research methodology approach is case study method at project level. This constructability improvement process was investigated by using constructability implementation check lists, direct observation, documented lesson learned analysis and key personnel interviews. Findings The case study shows that the implementation of constructability during planning and design stage for this sea water intake structure has increased the project performance as well as improved the schedule by 5 months (14.21%) and reduced the project cost by 15.35%. Research limitations/implications This case study was limited to three (3) previous sea water intake projects as references and one (1) of new method sea water intake structure at fertilizer plant project. Practical implications A constructability improvement check list using theory and lesson learned for the specific construction project was documented. Originality/value The findings support the relevant study of constructability and provide specific lesson learned for three (3) previous project and one (1) of the new innovation method of the construction project and documented by the company.

An integrated framework to assess financial reward systems in construction projects

Motivation is a major driver of project performance. Despite team member ability to deliver successful project outcomes if they are not positively motivated to pursue joint project goals, then performance will be constrained. One approach to improving the motivation of project organizations is by offering a financial reward for the achievement of set performance standards above a minimum required level. However, little investigation has been undertaken into the features of successful incentive systems as a part of an overall delivery strategy. With input from organizational management literature, and drawing on the literature covering psychological and economic theories of motivation, this paper presents an integrated framework that can be used by project organizations to assess the impact of financial reward systems on motivation in construction projects. The integrated framework offers four motivation indicators which reflect key theoretical concepts across both psychological and economic disciplines. The indicators are: (1) Goal Commitment, (2) Distributive Justice, (3) Procedural Justice, and (4) Reciprocity. The paper also interprets the integrated framework against the results of a successful Australian social infrastructure project case study and identifies key learning’s for project organizations to consider when designing financial reward systems. Case study results suggest that motivation directed towards the achievement of incentive goals is influenced not only by the value placed on the financial reward for commercial benefit, but also driven by the strength of the project initiatives that encourage just and fair dealings, supporting the establishment of trust and positive reciprocal behavior across a project team. The strength of the project relationships was found to be influenced by how attractive the achievement of the goal is to the incentive recipient and how likely they were to push for the achievement of the goal. Interestingly, findings also suggested that contractor motivation is also influenced by the fairness of the performance measurement process and their perception of the trustworthiness and transparency of their client. These findings provide the basis for future research on the impact of financial reward systems on motivation in construction projects. It is anticipated that such research will shed new light on this complex topic and further define how reward systems should be designed to promote project team motivation. Due to the unique nature of construction projects with high levels of task complexity and interdependence, results are expected to vary in comparison to previous studies based on individuals or single-entity organizations.

Comparison of key competences of DB clients and contractors in the construction market of the People’s Republic of China

Clients and Design-build (DB) contractors are two key stakeholders in DB projects, and contribute significantly to the successful project performance. This study aims to identify and compare such key competences in the construction market of the PRC. After the survey of available literature and face-to-face interviews, a two-round Delphi questionnaire survey was conducted to identify the key competences of clients and DB contractors in DB projects. Relative importance of these identified competences were ranked and compared. The questionnaire results indicated distinct differences between the key competences of clients and that of contractors. The contractor’s key competences emphasize on DB experience, corporate management capability, building and design expertise, financial capability, enterprise qualification and reputation. While the client’s competences focus on the ability to clearly define the project scope & requirements, financial capacity, contract management ability, adequate staff, effective coordination with DB contractor and similar DB experience. Both clients and DB contractors should clearly understand the competence requirements in DB projects and possess all the necessary competences for the successful outcome of DB projects. The identification of these key competences provides clients and DB contractors with indicators to assess their capabilities before going for the DB option. Furthermore, the comparison of competences for clients and DB contractors will result in better understanding of DB system and improve the communication between these stakeholders.

Incentive mechanisms in infrastructure projects : A case-based comparison between Australia and the Netherlands

Despite a general belief that incentive mechanisms can improve value for money during procurement and performance during project execution, empirical research on the actual effects is nascent. This research focuses on the design and implementation of incentive mechanisms in four different infrastructure projects: two road reconstructions in the Netherlands and two building constructions in Australia. Based on an analytical framework of key motivation drivers, a cross cases analysis is conducted in view of performance on the contract assumptions, selection phase, execution phase and project contract performance. It was identified that despite significant differences in the project characteristics, results indicate that they experience similar contextual drivers on the incentive effectiveness. High value was placed on risk allocation and relationship building in the selection and construction phase. The differences can be explained from both contextual and project related characteristics. Although there are limitations with this research in drawing generalizations across two sets of case projects, the results provide a strong base to explore the nature of incentive systems across different geographical and contextual boundaries in future research.

From the Editor

The five articles appearing in this issue reflect the depth of project management research in terms of delineating and clarifying the different philosophical positions, advancing the concepts, and applying innovative research methods. These articles focus on the ontology of project management research (“Foundations of Project Management Research: An Explicit and Six-Facet Ontological Framework” by Gauthier and Ika), project management practices relevant to different types of projects from a practitioner’s perspective (“An Empirical Identification of Project Management Toolsets and a Comparison Among Project Types” by Besner and Hobbs), the effect of project management processes on project performance (“Project Management Knowledge and Effects on Construction Project Outcomes: An Empirical Study” by Chou and Yang), determining the success metrics at different stages of a project (“A Perspective Based Understanding of Project Success” by McLeod, Doolin, and MacDonell), and identifying project success parameters and critical success factors from the point of view of different project actors in largescale projects (“Forecasting Success on Large Projects: Developing Reliable Scales to Predict Multiple Perspectives by Multiple Stakeholders Over Multiple Time Frames” by Turner and Zolin), and understanding project success from the points of view of different project stakeholders...

From the Editor

The five articles appearing in this issue of the journal reflect the breadth of project management research and the cross-fertilization of ideas from other management disciplines with project management. These articles focus on the evolution of project management theory (“A Bibliometric View on the Use of Contingency Theory in Project Management Research” by Hanisch and Wald), interfirm knowledge management and learning in project networks (“Exploring Negotiation Through Boundary Objects in Global Design Project Networks” by Di Marco, Alin, and Taylor), learning within one project organization (“Organizational Learning in Project-Based Companies: A Process Thinking Approach” by Koskinen), identifying the factors affecting project performance (“Factors Causing Design Schedule Delays in Turnkey Projects in Taiwan: An Empirical Study of Power Distribution Substation Projects” by Yau and Yang), and considering the antecedents of negative employee behavior and its consequences for project team performance (“Counteracting Free-Riding With Team Morale—An Experimental Study” by He).

Developing a predictive contractor satisfaction model (CoSMo) for construction projects

Over the last few decades, construction project performance has been evaluated due to the increase of delays, cost overruns and quality failures. Growing numbers of disputes, inharmonious working environments, conflict, blame cultures, and mismatches of objectives among project teams have been found to be contributory factors to poor project performance. Performance measurement (PM) approaches have been developed to overcome these issues, however, the comprehensiveness of PM as an overall approach is still criticised in terms of the iron triangle; namely time, cost, and quality. PM has primarily focused on objective measures, however, continuous improvement requires the inclusion of subjective measures, particularly contractor satisfaction (Co-S). It is challenging to deal with the two different groups of large and small-medium contractor satisfaction as to date, Co-S has not been extensively defined, primarily in developing countries such as Malaysia. Therefore, a Co-S model is developed in this research which aims to fulfil the current needs in the construction industry by integrating performance measures to address large and small-medium contractor perceptions. The positivist paradigm used in the research was adhered to by reviewing relevant literature and evaluating expert discussions on the research topic. It yielded a basis for the contractor satisfaction model (CoSMo) development which consists of three elements: contractor satisfaction (Co-S) dimensions; contributory factors and characteristics (project and participant). Using valid questionnaire results from 136 contractors in Malaysia lead to the prediction of several key factors of contractor satisfaction and to an examination of the relationships between elements. The relationships were examined through a series of sequential statistical analyses, namely correlation, one-way analysis of variance (ANOVA), t-tests and multiple regression analysis (MRA). Forward and backward MRAs were used to develop Co-S mathematical models. Sixteen Co-S models were developed for both large and small-medium contractors. These determined that the large contractor Malaysian Co-S was most affected by the conciseness of project scope and quality of the project brief. Contrastingly, Co-S for small-medium contractors was strongly affected by the efficiency of risk control in a project. The results of the research provide empirical evidence in support of the notion that appropriate communication systems in projects negatively contributes to large Co-S with respect to cost and profitability. The uniqueness of several Co-S predictors was also identified through a series of analyses on small-medium contractors. These contractors appear to be less satisfied than large contractors when participants lack effectiveness in timely authoritative decision-making and communication between project team members. Interestingly, the empirical results show that effective project health and safety measures are influencing factors in satisfying both large and small-medium contractors. The perspectives of large and small-medium contractors in respect to the performance of the entire project development were derived from the Co-S models. These were statistically validated and refined before a new Co-S model was developed. Developing such a unique model has the potential to increase project value and benefit all project participants. It is important to improve participant collaboration as it leads to better project performance. This study may encourage key project participants; such as client, consultant, subcontractor and supplier; to increase their attention to contractor needs in the development of a project. Recommendations for future research include investigating other participants‟ perspectives on CoSMo and the impact of the implementation of CoSMo in a project, since this study is focused purely on the contractor perspective.

Downtime model development for construction equipment management

Downtime (DT) caused by non-availability of equipment and equipment breakdown has non-trivial impact on the performance of construction projects. Earlier research has often addressed this fact, but it has rarely explained the causes and consequences of DT – especially in the context of developing countries. This paper presents a DT model to address this issue. Using this model, the generic factors and processes related to DT are identified, and the impact of DT is quantified. By applying the model framework to nine road projects in Nepal, the impact of DT is explored in terms of its duration and cost. The research findings highlight how various factors and processes interact with each other to create DT, and mitigate or exacerbate its impact on project performance. It is suggested that construction companies need to adopt proactive equipment management and maintenance programs to minimize the impact of DT.

Innovation in the road and bridge industry

This paper reviews innovation activity in a key service industry – road and bridge construction. Based on a large-scale Australian survey and descriptive statistics, the paper finds that there is little difference in innovation levels between different types of industry participants and that innovation is difficult to implement. The survey gathered responses from suppliers, consultants, contracts and clients and compared results across these four industry sectors. The absorptive capacity and relationship capacities of respondents were also investigated. One in five respondents had poor absorptive capacity. Suppliers were found to the most effective learners and were the best adopters of ideas from outside their organisations and consultants were the least effective. Australian construction organisations have relatively good relationship skills because relationship-based contracts are common compared to other countries. Indeed, the survey found that nearly 60% of respondents had experience with such contracts, with clients having more experience than the other three sectors. The results have implications for the measurement of innovation in project-based industries, and the relative roles of clients and suppliers in driving innovation in the construction industry. Further research will examine the extent to which particular governance mechanisms within relationship contracts lead to improved innovation and project performance.

Learning routines used by firms during construction of infrastructure projects using the alliance procurement method

Collaborative contracting has emerged over the past 15 years as an innovative project delivery framework that is particularly suited to infrastructure projects. Australia leads the world in the development of project and program alliance approaches to collaborative delivery. These approaches are considered to promise superior project results. However, very little is known about the learning routines that are most widely used in support of collaborative projects in general and alliance projects in particular. The literature on absorptive capacity and dynamic capabilities indicates that such learning enhances project performance. The learning routines employed at corporate level during the operation of collaborative infrastructure projects in Australia were examined through a large survey conducted in 2013. This paper presents a descriptive summary of the preliminary findings. The survey captured the experiences of 320 practitioners of collaborative construction projects, including public and private sector clients, contractors, consultants and suppliers (three per cent of projects were located in New Zealand, but for brevity’s sake the sample is referred to as Australian). The majority of projects identified used alliances (78.6%); whilst 9% used Early Contractor Involvement (ECI) contracts and 2.7% used Early Tender Involvement contracts, which are ‘slimmer’ types of collaborative contract. The remaining 9.7% of respondents used traditional contracts that employed some collaborative elements. The majority of projects were delivered for public sector clients (86.3%), and/or clients experienced with asset procurement (89.6%). All of the projects delivered infrastructure assets; one third in the road sector, one third in the water sector, one fifth in the rail sector, and the rest spread across energy, building and mining. Learning routines were explored within three interconnected phases: knowledge exploration, transformation and exploitation. The results show that explorative and exploitative learning routines were applied to a similar extent. Transformative routines were applied to a relatively low extent. It was also found that the most highly applied routine is ‘regularly applying new knowledge to collaborative projects’; and the least popular routine was ‘staff incentives to encourage information sharing about collaborative projects’. Future research planned by the authors will examine the impact of these routines on project performance.