Client recommendations for financial incentives on construction projects

Purpose: To provide recommendations for construction clients who design and implement financial incentive mechanisms (FIMs) on projects. ---------- Methodology: Four large Australian building projects commissioned by government clients under managing contractor contracts and completed between 2001 and 2005 were examined to explore the ‘drivers’ that promoted motivation toward financial incentive goals. The results were triangulated across data sources, projects and stakeholder types. ---------- Findings: FIM design should incorporate: 1. flexibility to modify goals and measurement procedures over time, 2. multiple goals covering different project areas, 3. distribution of rewards across all the key organizations contributing to team performance (e.g. potentially not just the contractor, but the subcontractors and consultants) and a reward amount sufficient to be valued by potential recipients. FIM benefits are maximized through the following complementary procurement initiatives: 4. equitable contract risk allocation, 5. early contractor involvement in design, 6. value-driven tender selection, 7. relationship workshops, and 8. future work opportunities.---------- Research Limitations: This paper provides practical recommendations to industry and hence does not emphasize theoretical aspects.---------- Practical Implications: The uptake of these recommendations is likely to increase the impact of FIMs on motivation and improve project and industry outcomes. Although the study focuses on government clients of building projects, all the recommendations would seem to apply equally to private-sector clients and to non-building projects.---------- Originality: In order to improve motivation and reward high performance, clients are increasingly using FIM in their construction contracts. Despite the rising use of financial incentives, there is a lack of comprehensive construction-specific knowledge available to help clients maximize outcomes. The study addresses this gap in the literature.

Re-engineering project planning processes : a best practice model for managing project phase integration issues

Competitive markets are increasingly driving new initiatives for shorter cycle times resulting in increased overlapping of project phases. This, in turn, necessitates improving the interfaces between the different phases to be overlapped (integrated), thus allowing transfer of processes, information and knowledge from one individual or team to another. This transfer between phases, within and between projects, is one of the basic challenges to the philosophy of project management. To make the process transfer more transparent with minimal loss of momentum and project knowledge, this paper draws upon Total Quality Management (TQM) and Business Process Re-engineering (BPR) philosophies to develop a Best Practice Model for managing project phase integration. The paper presents the rationale behind the model development and outlines its two key parts; (1) Strategic Framework and (2) Implementation Plan. Key components of both the Strategic Framework and the Implementation Plan are presented and discussed.

Managing knowledge for enterprise systems in indian organizations: Case study insights

Many Enterprise Systems (ES) projects have reported nil or detrimental impacts despite the substantial investment in the system. Having expected positive outcomes for the organization and its functions through the weighty spend, the effective management of ES-related knowledge has been suggested as a critical success factor for these ES projects in ES implementations. This paper suggests theoretical views purporting the importance of understanding on knowledge management for ES success. To explain the complex, dynamic and multifaceted of knowledge management, we adopt the concepts in Learning Network Theory. We then conceptualized the impact of knowledge management on ES by analyzing five case studies in several industries in India, based on the Knowledge-based Theory of the Firm that captures the performance of the system.

Managing the project learning paradox : a set-theoretic approach toward project knowledge transfer

Managing project-based learning is becoming an increasingly important part of project management. This article presents a comparative case study of 12 cases of knowledge transfer between temporary inter-organizational projects and permanent parent organizations. Our set-theoretic analysis of these data yields two major findings. First, a high level of absorptive capacity of the project owner is a necessary condition for successful project knowledge transfer, which implies that the responsibility for knowledge transfer seems to in the first place lie with the project parent organization, not with the project manager. Second, none of the factors are sufficient by themselves. This implies that successful project knowledge transfer is a complex process always involving configurations of multiple factors. We link these implications with the view of projects as complex temporary organizational forms in which successful project managers need to cope with complexity by simultaneously paying attention to both relational and organizational processes.

Planning for SMEs’ Proactive Waste Management in Office Building Retrofit Projects

Office building retrofit projects face many challenges for on-site waste management. While the projects themselves have the potential for a significant level of reuse and recycling from decon-struction and demolition, their unique characteristics often prohibit direct application of existing waste management systems, which are typically based on managing waste generated through new material application in new build projects. Moreover, current waste management plans include no stimuli to involve Small and Medium Enterprises (SMEs) for on-site waste management. As SMEs carry out the majority of on-site work as subcontractors, their active involvements will result in more proactive approaches to waste management and enhance project delivery. This paper discusses the interim results of a continuing research aimed at engaging SMEs in the planning processes of waste management through the collaboration between subcontractors and main contractors of retrofitting projects. It introduces a conceptual model for SMEs to proactively plan and manage on-site waste generation for both deconstruction and construction stages, before traditional waste management plans by the main contractor come into place. The model also suggests a collaboration process between SMEs as subcontractors and large companies as the main contractor to improve the involvement and performance of SMEs in waste management of office building retrofit projects.

An integrated knowledge management framework for managing sustainability knowledge in the Australian infrastructure sector

In Australia, it has been increasingly accepted that sustainability needs to be at the top of the agenda when contemplating infrastructure development. In practice however, many companies struggle to find effective ways to embrace sustainable ideas and implement them in real projects beyond minimum compliance. One of the reasons is the lack of underpinning knowledge and evidence to demonstrate and measure the linkage between sustainability implementations and the relevant outcomes. This is compounded by the fact that very often there are no common understandings between the stakeholders on sustainability and there is a big divide between research advancement and real-life applications. Therefore it is both feasible and timely to develop and expand the body of sustainability knowledge on infrastructure development and investigate better ways of communicating with and managing it within the infrastructure sector. Although knowledge management (KM) is a relatively new and emerging discipline, it has shown its value and promise in existing applications in the construction industry. Considering the existing KM mechanisms and tools employed in practice, this research is aimed at establishing a specific KM approach to facilitate sustainability knowledge identification, acquisition, sharing, maintenance and application within the infrastructure sector, and promote integrated decision-making for sustainable infrastructure development. A triangulation of questionnaire survey, semi-structured interviews and case studies was employed in this research to collect required qualitative and quantitative data. The research studied the unique characteristics of the infrastructure sector, the nature of sustainability knowledge, and evaluated and validated the critical elements, key processes, and priority issues of KM for the Australian infrastructure sector. A holistic KM framework was developed to set the overall context for managing sustainability knowledge in the infrastructure sector by outlining (1) the main aims and outcomes of managing sustainability knowledge, (2) the key knowledge activities, (3) effective KM strategies and instruments, and (4) KM enablers. Because of the highly project-oriented nature of the infrastructure sector, knowledge can only add value when it is being used in real projects. Implementation guidelines were developed to help the industry practitioners and project teams to apply sustainability knowledge and implement KM in infrastructure project scenarios. This research provides the Australian infrastructure sector with tools to better understand KM, helps the industry practitioners to prioritize attention on relevant sustainability issues, and recommends effective practices to manage sustainability knowledge, especially in real life implementation of infrastructure projects.

Managing financial implications for sustainable highway infrastructure delivery

Highway construction works have significant bearings on all aspects of sustainability. As they typically involve huge capital funds, stakeholders tend to place all interests on the financial justifications of the project, especially when embedding sustainability principles and practices may demand significant initial investment. Increasing public awareness and government policies demand that infrastructure projects respond to environmental challenges and people start to realise the negative consequences of not to pursue sustainability. Stakeholders are now keen to identify sustainable alternatives and financial implications of including them on a whole lifecycle basis. Therefore tools that aid the evaluation of investment options, such as provision of environmentally sustainable features in roads and highways, are highly desirable. Life-cycle cost analysis (LCCA) is generally recognised as a valuable approach for investment decision making for construction works. However to date it has limited application because the current LCCA models tend to focus on economic issues alone and are not able to deal with sustainability factors. This paper reports a research on identifying sustainability related factors in highway construction projects, in quantitative and qualitative forms of a multi-criteria analysis. These factors are then incorporated into existing LCCA models to produce a new sustainability based LCCA model with cost elements specific to sustainability measures. This presents highway project stakeholders a practical tool to evaluate investment decisions and reach an optimum balance between financial viability and sustainability deliverables.

Quality management in construction projects

[Quality Management in Construction Projects by Abdul Razzak Rumane, CRC Press, Boca Raton, FL, 2011, 434 pp, ISBN 9781439838716] Issues of quality management, quality control and performance against specification have long been the focus of various business sectors. Recently there has been an additional drive to achieve the continuous improvement and customer satisfaction promised by the 20th-century ‘gurus’ some six or seven decades ago. The engineering and construction industries have generally taken somewhat longer than their counterparts in the manufacturing, service and production sectors to achieve these espoused levels of quality. The construction and engineering sectors stand to realize major rewards from better managing quality in projects. More effort is being put into instructing future participants in the industry as well as assisting existing professionals. This book comes at an opportune time.

Perspectives on Projects

Modern project management had its genesis in the field of operations research in the late 1940s, but today it is a much more diverse subject. It has evolved and developed a much wider range of methods, techniques, and skills that the project manager can draw upon. Not all these skills are relevant to every project, but an assortment of them will be relevant to most. This book aims to describe for students, researchers and managers the full range of skills that project managers can use to develop their methodologies.The authors group the skills into nine perspectives, representing nine schools of project management research and theory. By attaching a metaphor to each of these perspectives, students, researchers and managers are better able to understand each approach and decide whether it is best suited to the development of a strategy for managing their project. Perspectives on Projects builds upon the various theoretical orientations that the field of project management has developed. Featuring several case studies, drawn from a variety of settings, to illustrate how the different schools can provide different perspectives on projects, this book is an ideal text for anyone involved in project management.

The impact of construction organisations’ learning capabilities on collaborative projects

Dynamic capability theory asserts that the learning capabilities of construction organisations influence the degree to which value-for-money (VfM) is achieved on collaborative projects. However, there has been little study conducted to verify this relationship. The evidence is particularly limited within the empirical context of infrastructure delivery in Australia. Primarily drawing on the theoretical perspectives of the resource-based view of the firm (e.g. Barney 1991), dynamic capabilities (e.g. Helfat et al. 2007), absorptive capacity (e.g. Lane et al. 2006) and knowledge management (e.g. Nonaka 1994), this paper conceptualises learning capability as a knowledge-based dynamic capability. Learning capability builds on the micro-foundations of high-order learning routines, which are deliberately developed by construction organisations for managing collaborative projects. Based on this conceptualisation of learning capability, an exploratory case study was conducted. The study investigated the operational and higher-order learning routines adopted by a project alliance team to successfully achieve VfM. The case study demonstrated that the learning routines of the alliance project were developed and modified by the continual joint learning activities of participant organisations. Project-level learning routines were found to significantly influence the development of organisational-level learning routines. In turn, the learning outcomes generated from the alliance project appeared to significantly influence the development of project management routines and contractual arrangements applied by the participant organisations in subsequent collaborative projects. The case study findings imply that the higher-order learning routines that underpin the learning capability of construction organisations have the potential to influence the VfM achieved on both current and future collaborative projects.

Learning opportunities : a partnership, connecting learning with projects

Major construction projects undertaken on university campuses are an ideal opportunity to connect learners in related disciplines to the real thing. How often do universities take that opportunity, make the connection and value add to projects being carried out? Discussion with students and academic staff will consistently generate enthusiasm for creating learning activities and resources related to projects. Some typical disciplines are project management, all fields of engineering, architecture, interior design and information technology. Some other areas that may not at first seem obvious are business, marketing, communication and public relations. The authors will provide a case study based on the new Queensland University of Technology (QUT) Science and Engineering Centre project of how the partnership between QUT and Leighton Contractors, the managing contractor, has delivered excellent learning opportunities through the design and construction phases of the Science and Engineering Centre project.

Culture in global business transformation projects : the discovery of a grounded theory

Presently organisations engage in what is termed as Global Business Transformation Projects [GBTPs], for consolidating, innovating, transforming and restructuring their processes and business strategies while undergoing fundamental change. Culture plays an important role in global business transformation projects as these involve people of different cultural backgrounds and span across countries, industries and disciplinary boundaries. Nevertheless, there is scant empirical research on how culture is conceptualised beyond national and organisational cultures but also on how culture is to be taken into account and dealt with within global business transformation projects. This research is situated in a business context and discovers a theory that aids in describing and dealing with culture. It draws on the lived experiences of thirty-two senior management practitioners, reporting on more than sixty-one global business transformation projects in which they were actively involved. The research method used is a qualitative and interpretive one and applies a grounded theory approach, with rich data generated through interviews. In addition, vignettes were developed to illustrate the derived theoretical models. The findings from this study contribute to knowledge in multiple ways. First, it provides a holistic account of global business transformation projects that describe the construct of culture by the elements of culture types, cultural differences and cultural diversity. A typology of culture types has been developed which enlarges the view of culture beyond national and organisational culture including an industry culture, professional service firm culture and 'theme' culture. The amalgamation of the culture types instantiated in a global business transformation project compromises its project culture. Second, the empirically grounded process for managing culture in global business transformation projects integrates the stages of recognition, understanding and management as well as the enablement providing a roadmap for dealing with culture in global business transformation projects. Third, this study identified contextual variables to global business transformation projects, which provide the means of describing the environment global business transformation projects are situated, influence the construct of culture and inform the process for managing culture. Fourth, the contribution to the research method is the positioning of interview research as a strategy for data generation and the detailed documentation applying grounded theory to discover theory.

Managing cost implications for highway infrastructure sustainability

Highway construction works have significant bearings on all aspects of sustainability. With the increasing level of public awareness and government regulatory measures, the construction industry is experiencing a cultural shift to recognise, embrace and pursue sustainability. Stakeholders are now keen to identify sustainable alternatives and the financial implications of including them on a lifecycle basis. They need tools that can aid the evaluation of investment options. To date, however, there have not been many financial assessments on the sustainability aspects of highway projects. This is because the existing life-cycle costing analysis (LCCA) models tend to focus on economic issues alone and are not able to deal with sustainability factors. This paper provides insights into the current practice of life-cycle cost analysis, and the identification and quantification of sustainability-related cost components in highway projects through literature review, questionnaire surveys and semi-structured interviews. The results can serve as a platform for highway project stakeholders to develop practical tools to evaluate highway investment decisions and reach an optimum balance between financial viability and sustainability deliverables.

Working on the edge : Exploring the creative tensions experienced by practitioners facilitating participatory media projects with refugees and asylum seekers in Australia

This paper aims to provide a contextualised and embedded exploration of how the notions of "practice" and "participation", key concepts in the study of culture and media, are manifest in an example of a complex creative project. This project aimed to engage with refugees and asylum seekers through the co-creation of cultural material and is an outcome of an? ethnographic action research (Tacchi et al. 2003) partnership involving a community development worker in a settlement support agency and a storytelling/community media researcher (the author), along with other project collaborators. The discussion of this project focuses on the role of the facilitator and illustrates the processes of orchestrating a complex project involving a series of linked stages with cumulative effect. As practitioners at this site we are working in the space where personal narratives, participatory arts and media, and the staging of intercultural, civic dialogue events, intersect. Co-creative media facilitation in these contexts involves both managing hybrid communicative spaces and (re)combining the "integrative practices" (Schatzki 1996) of a range of professional approaches and creative roles. This is liminal work, located on the boundaries of several disciplines and practices. Drawing on reflections gathered from collaborative ethnographic descriptions (Bhattacharya 2008), this paper traces moments of practitioner uncertainty that can be linked to the way "practice" and “participation” is problematised within the community cultural development field in a way that is at times an uneasy fit with conventional ways of operating in social service roles. These moments of tension also indicate where this project pushed practitioners into spaces of improvisation and new learning. Keywords: Youth, refugees, community cultural development, co-creative media facilitation, ethnographic action research, intercultural dialogue.

Comparing the effect of inadequate documentation to the cost management and tendering processes in managing contractor and fixed lump sum contracts in Australia

Purpose of this paper This research aims to examine the effects of inadequate documentation to the cost management & tendering processes in Managing Contractor Contracts using Fixed Lump Sum as a benchmark. Design/methodology/approach A questionnaire survey was conducted with industry practitioners to solicit their views on documentation quality issues associated with the construction industry. This is followed by a series of semi-structured interviews with a purpose of validating survey findings. Findings and value The results showed that documentation quality remains a significant issue, contributing to the industries inefficiency and poor reputation. The level of satisfaction for individual attributes of documentation quality varies. Attributes that do appear to be affected by the choice of procurement method include coordination, build ability, efficiency, completeness and delivery time. Similarly the use and effectiveness of risk mitigation techniques appears to vary between the methods, based on a number of factors such as documentation completeness, early involvement, fast tracking etc. Originality/value of paper This research fills the gap of existing body of knowledge in terms of limited studies on the choice of a project procurement system has an influence on the documentation quality and the level of impact. Conclusions Ultimately research concludes that the entire project team including the client and designers should carefully consider the individual projects requirements and compare those to the trade-offs associated with documentation quality and the procurement method. While documentation quality is definitely an issue to be improved upon, by identifying the projects performance requirements a procurement method can be chosen to maximise the likelihood that those requirements will be met. This allows the aspects of documentation quality considered most important to the individual project to be managed appropriately.