Organizational Culture and Knowledge Management Success at Project and Organizational Levels in Contracting Firms

This research focuses on contracting firms within the construction sector. It characterizes and evaluates the composition of organizational culture using four culture types (clan, adhocracy, market, and hierarchy), the strategic approach for knowledge flow, and the success of knowledge management (KM) systems at different hierarchical levels of contracting organizations (project and parent organization level). Responses from managers of local or overseas contracting firms operating in Hong Kong were collected using a carefully constructed questionnaire survey that was distributed through electronic mail. The organizational value is analyzed in terms of the four cultural models. Clan culture is found to be the most popular at both project and organization levels, which means that the culture of contracting firms very much depends on honest communication, respect for people, trust, and cohesive relationships. On the other hand, hierarchy culture, which focuses on stability and continuity, and analysis and control, seems to be the least favored at both levels. Another significant finding was that the two main KM strategies for knowledge flow, codification and personalization, were employed at both project and organization levels in equal proportion. This indicates that successful KM efforts at both enterprise levels utilize a hybrid and balanced approach for their knowledge flow, and that they complement each other. The findings also revealed that knowledge management system success factors emphasize the support of the management level. The results show that KM is critical and beneficial as indicated by 64% at the project and 74% at the organization level. The expectation is higher for organizations as they are the organizational memories in which experiences of past projects are archived and connected. Understanding these factors and the relationships among them has been demonstrated to be critical in order to increase the chances of success or to help with making decisions when applying KM.     

Strategic Management Practices in Turkish Construction Firms

This paper presents a study that aims to define the present position of Turkish construction companies in terms of strategic management. It is based on a survey measuring strengths and weaknesses in the “strategic management” practices of Turkish construction companies, and thus reveals potential opportunities and threats in a generalized manner. The results highlight the current strategic management practice of construction firms for designing their own future. Toward this aim, a detailed questionnaire was administered to 52 construction companies. The culture of companies and their perceptions of strategic management were shown to have serious shortcomings. However, specialization on different project types through joint venture companies established by their partners was found to be a major strength of many companies. These companies also pointed out the developing and unstable nature of both the political and economic structure of Turkey as their most significant threat. This disadvantage has inclined many firms to choose investment in the private sector as a response.     

Fuzzy Intellectual Capital Index for Construction Firms

Construction firms are now operating in a new era. Gaining and sustaining competitive advantage in this era primarily depends on effective and efficient management of knowledge assets. This paper proposes a performance evaluation model called fuzzy intellectual capital index (FICI) that can guide construction business executives to effectively and efficiently manage their knowledge assets. FICI incorporates an intellectual capital performance measurement model with fuzzy set theory to adequately handle imprecision, vagueness, and uncertainty that prevail in this process. FICI uses the fuzzy-weighted average algorithm to compute the intellectual capital performance of architectural/engineering/construction (A/E/C) firms. It is an internal reporting model that can guide executives of A/E/C firms to evaluate their firm’s ability to achieve their strategic objectives and to pinpoint their firm’s strengths and weaknesses in order to neutralize threats and to exploit opportunities presented by today’s construction business environment. A real-world case study is presented to illustrate the implementation and utility of the proposed model. Implications for practitioners and directions for future research are discussed.     

Enhancing Financial Success Among Electrical Contractors

This paper provides electrical contractors with significant information related to enhancing company financial performance. The methodology involves understanding the determinants of contractor financial success through: (1) an extensive literature review; (2) collection of financial- and management-related data from electrical contractors; and (3) analysis of data to identify management trends that are more prevalent in profitable firms. Ninety-six usable responses were collected from small, medium, and larger electrical contracting companies. General trends reveal that more profitable firms place greater emphasis in the areas of certain management initiatives (higher lines of credit and supporting continuing education), marketing initiatives (involvement in formal alliances and partnering), and technology initiatives related to spending more capital resources on computers and software. Significant differences are revealed with financial ratios as well. A Financial Success Scorecard is created for firms to compare their management inputs to those of successful firms. Findings from this study could provide helpful guidelines for nonelectrical contracting firms. Recommendations for achieving future financial success are also provided.     

Strategic Assets Driving Organizational Capabilities of Thai Construction Firms

This research study aims to identify strategic assets which currently drive and enhance the organizational capabilities of construction firms. There were 258 sets of questionnaires assessing the level of importance given to 106 substantial resources underlying six organizational capabilities of Thai construction firms that were analyzed. Using factor analysis, these 106 items were reduced to 14, which were termed strategic assets. These 14 strategic assets were then classified based on their influence on the six organizational capabilities. The results indicate that Thai construction firms concentrate mostly on developing excellent reputation, creating strong bargaining power with suppliers and subcontractors, and strengthening the firm’s financial stability. However, they do not give much importance to effective risk and investment management, continuous development and innovation, and explicit strategic management. These findings provide in-depth insight to comprehensively understanding a Thai construction firm’s capabilities. These 14 strategic assets should thereafter be used to develop a practical tool for managers of construction firms to evaluate their firm’s strengths and weaknesses as well as to identify strategic assets required to enhance competitiveness in the market.     

Capturing Knowledge in Construction Projects: Knowledge Platform for Contractors

Managing knowledge effectively is critical to the survival and advance of a company, especially in project-based industries such as construction. However, capturing knowledge in construction projects is a tedious task, as knowledge is usually experience based, tacit, and hard to pass on to others. In this study, a survey was carried out among eight leading Turkish construction contractors that are operating within the international construction market. The specific objectives of this survey are to find out how the tacit and explicit knowledge are captured, stored, shared, and used in forthcoming projects, as well as major drivers and barriers for knowledge management. Based on the survey, it was determined that most of these firms do not have a knowledge management strategy and a systematic way of capturing and storing tacit knowledge. A conceptual framework is proposed to formalize the knowledge-capturing process within construction companies. To demonstrate how the conceptual framework can be implemented in practice, a Web-based system, namely, Knowledge Platform for Contractors (KPfC) is presented. It is hypothesized that KPfC can be used to manage both tacit and explicit knowledge effectively in construction projects.     

Benchmarking Initiatives in the Construction Industry: Lessons Learned and Improvement Opportunities

Benchmarking is a systematic process of measuring and comparing an organization’s performance against that of other similar organizations in key business activities. The lessons learned from other companies can be used to establish improvement targets and to promote changes in the organization. The benchmarking process can create a fertile ground for ideas, but only in a receptive environment; companies that share good practices and compare their performance against others benefit most. Recently, industry groups in several different countries have initiated benchmarking programs focused mainly on construction performance measures. This paper describes the scope of these initiatives and discusses the lessons learned and improvement opportunities that were identified in their design and implementation. This investigation is focused on four initiatives, carried out in Brazil, Chile, the United Kingdom, and the United States. This paper concludes by recommending some further directions on this research topic.     

Prototype System for Knowledge Problem Definition

Attitudes to knowledge management (KM) have changed considerably as organizations are now realizing its benefits. Implementation, however, has been facing serious difficulties attributed either to not being able to anticipate the barriers when planning KM strategies or to using inappropriate methods and tools for implementation. These difficulties are more critical in construction due to the fragmented nature of the industry. This paper suggests that proper definition of a KM problem at the early stages of developing the KM initiatives will result in better control over the KM barriers. A methodology for identifying KM problems within a business context is then introduced. The methodology is encapsulated into a prototype software system, which facilitates its deployment in organizations and provides online help facilities. The methodology, development, operation, and evaluation of the prototype are described. The paper concludes that the prototype offers considerable potential for delivering a clarified KM problem and a distilled set of issues for an organization to address. This represents a significant first step in any KM initiative.     

Social Network Analysis of Collaborative Ventures for Overseas Construction Projects

As the world construction market becomes more globalized, an increasing number of construction companies, including both large companies (LCs) and small and medium-sized companies (SMCs), have extended their business to the global market. During this process, the number of collaborative ventures to mitigate the burden of entry risks has greatly increased. This study aims to investigate the formation of construction firms’ collaborative networks for performing international projects from both the LC and SMC network perspectives. To this end, 389 real cases of overseas projects executed by Korean firms over the last two decades that involved collaboration were analyzed using social network analysis (SNA) approach. The result showed that LCs and SMCs have different perspectives when pursuing collaborative ventures for overseas construction projects; LCs have a tendency to form large and dense networks, whereas SMCs prefer to maintain long-term and targeted relationships. Moreover, this study showed a series of apparent tendencies in the development of collaboration networks to realize better profit performance under risky project conditions. Through analysis based on real cases, this study validated the applicability of SNA in analyzing the collaboration in the construction domain. More importantly, this study is useful as an aid for developing collaboration strategies to achieve better outcomes while considering the relevant network patterns and their different levels of performance under the assorted network attributes.     

Relationship between Governance Structure and Financial Performance in Construction

Although corporate governance has emerged as an issue of considerable importance in shaping the organizational structure and the vision of the firm, this entity has yet to receive sufficient scrutiny in the construction industry. The purpose of this study is to determine the extent by which the configuration of corporate governance may impact on the financial performance of construction firms. The investigation utilizes 100 companies of differing sizes. The analysis reveals that a critical mass of outside independent directors and the dissociation of the roles of CEO and Chairmanship of the board do translate into superior financial market returns for the firms. Other corporate governance variables have no apparent impact on the financial performance of the firms. These findings are significant to construction firms that are already established or in the process of being formed.     

Ontology-Centered Knowledge Management Using Information Retrieval Techniques

The paper argues that an effective solution to information and knowledge management (KM) needs of practitioners in the construction industry can be found in the provision of an adapted knowledge environment that makes use of user profiling and document summarization techniques based on information retrieval sciences. The conceptualization of the domain through ontology takes a pivotal role in the proposed knowledge environment and provides a semantic referential to ensure relevance, accuracy, and completeness of information. A set of KM services articulated around the selected ontology have been developed, using the Web services model, tested, and validated in real organizational settings. This provided the basis for formulating recommendations and key success factors for any KM project development.     

Benchmarking System for Evaluating Management Practices in the Construction Industry

This paper presents the results obtained for the initial application of a management evaluation system whose objective is to provide a continuous improvement tool for construction companies through benchmarking management practices. The outlined system seeks to support a benchmarking system that has been recently established in the Chilean construction industry by incorporating qualitative management aspects in addition to performance indicators. Different analyses were made to determine trends in the sector and to establish correlations between qualitative aspects coming from surveys and quantitative aspects coming from performance indicators. Thirteen construction companies participated in the initial application of the benchmarking system. A correlation analysis found that safety performance was strongly related to companies having superior planning and control, quality management, cost control, and subcontractor management policies. A factor analysis found that central office priorities focus on strategic management policies having longer-term competitive impact, while site management emphasizes tactical management dimensions having short-term impact. There is scope to elevate the profile of continuous improvement initiatives to strategic significance at the central office level.     

Theft and Vandalism on Construction Sites

Theft and vandalism on construction sites in the commercial construction industry is a problem that can affect productivity and drain profits. To explore the impact of theft and vandalism in the commercial construction industry, a survey was sent to commercial construction firms to gather information by which the magnitude of the problem of theft and vandalism could be estimated; and to determine what techniques have been successfully used to deter thieves and vandals. The responses were analyzed and several conclusions were developed. Firms engaging in all types of projects are susceptible to theft and vandalism. Theft is more costly to large sized firms ($100 million and over in annual volume of construction work) than smaller firms, but vandalism is more costly for smaller firms. This occurs despite the fact that larger firms use a greater number of measures to combat theft and vandalism on their construction sites. The results should be of particular interest to construction firms that want to reduce the number of theft and vandalism incidents.     

Empiricist Framework for TQM Implementation in Construction Companies

As a management philosophy, total quality management (TQM) is implemented differently in firms. This study investigates the implementation level and the types of TQM practices adopted in construction companies. Eight elements had been identified from both organizational-/management- and construction-related studies to represent the TQM spirit. These elements are top management leadership, customer management, people management, supplier management, quality information management, process management, organizational learning, and continual improvement. A questionnaire survey was conducted to solicit the implementation level of the identified TQM elements. The survey findings indicate that customer, process management, and top management leadership were implemented at a higher level than the remaining elements with quality information management implemented at the lowest level. Important practices that constitute each element were also identified. Based on the findings, we propose a TQM implementation framework for construction companies.     

Exploratory Study of Knowledge Sharing in Contracting Companies: A Sociotechnical Perspective

According to Dede Bonner in 2000, employees hold a wealth of knowledge and experience about their companies, including the products, customers, internal processes, histories, technologies, and competitors. But this knowledge is usually dispersed across scattered individuals and locations. Although learning happens at an individual level, it is usually as a one-time event, without an organizational context or a sense of continuity. Knowledge is kept in people’s minds but not shared in an organization. Not until the 20th century did people start to realize that knowledge is critical to the success of a company and considered to be the pivotal point for aggressive organizational growth in today’s highly competitive marketplace. This is also true for the Hong Kong construction industry. In order to gain a deeper understanding of the current situation of knowledge sharing at the departmental level in contracting companies, this research was carried out with the aims of investigating the main barriers to and finding out the critical factors for and benefits resulting from effective knowledge sharing in the tendering departments of contracting companies in Hong Kong and the United Kingdom. The research reviews existing theories of knowledge and knowledge sharing. It seeks to contribute to the theory of organizational knowledge sharing by providing an explorative account supported by empirical evidence. It also allows management to continuously anticipate and support knowledge sharing activities related to the successful management of construction projects within their particular organizations.     

Competitive Positioning in United States Construction Industry

The concept of competitive positioning is explored in the context of the United States construction industry along two dimensions—scope and mode of competition. The effects of competitive positioning on construction company performance are also explored while controlling the size of construction companies. Construction firms’ choices regarding scope and mode of competition and their economic performance are self-reported. The statistical analyses used in this research include cluster analysis, Duncan multiple range tests, one-way analysis of variance, and one-way analysis of covariance. Research findings point out that construction companies address the challenges of the industry by adopting a number of competitive positioning alternatives. Research findings also reveal that construction companies’ choices regarding scope and mode of competition are significantly related to company performance, measured by means of three criteria—profitability, growth in contract awards, and overall performance. Construction firms that place a strong emphasis on all modes of competition and adopt a neutral approach to scope of competition outperform their rivals.     

Public versus Private Perceptions on Hiring an External Program Manager

As construction industry service providers have expanded their service offerings to meet the demands of construction owners, new management techniques have evolved. One of these management techniques, program management, has emerged as a service offering that covers all aspects of the construction life cycle. This paper reviews specific topics related to the hiring of an external program management service provider, including fees, types of firms, factors considered, and organizational models. Each of these topics was addressed in a recent survey of nonresidential construction industry owners. The survey results are first presented for all respondents and are then segregated by sector (public and private sector respondents). It is apparent that the use of program management firms is still lacking in comparison to the use of other firms and service providers and that construction owners typically use an organizational model that allows them to retain control of their construction program, which true external program management does not. Also, the survey results showed differences between the public and private sectors in the factors considered when hiring a program manager. Because program management is the ultimate form of outsourcing, it is both a particularly timely topic and a topic that is very relevant to construction professionals.     

Communicating in Dynamic Conditions: How Do On-Site Construction Project Managers Do It?

A great many of today’s construction projects are characterized by high levels of dynamics, namely, the combined effect of complexity, uncertainty, and speed. Managing projects under such conditions is difficult and challenging, and the question is asked: How do managers do it? Aspiring to answer this question, ten excellent on-site construction project managers were systematically observed during one workweek each, within an extensive study that examined their performance in their dynamic management environments. The structured observation and documentation and the analysis that followed them enabled us to characterize the managers’ work and exposed their unique modes of operation through which they consistently excel in their work. Among many aspects addressed by the said study, this paper focuses on communication and, using various measures, examines the intensiveness and extensiveness of communication performed by the PMs in the broad context of their work. The study found that the on-site construction PMs were strongly oriented toward verbal communication of information (during nearly 80% of their activities and time); they spent a major portion of their workdays in meetings (during 60% of their activities, and of which nearly 80% were unplanned); and they showed clear preference for interacting informally with no more than one or two other persons (during 93% of their activities and 88% of the time). The unique knowledge base resulting from this study constitutes a potential contribution for practitioners who are required to function in similar dynamic work environments, as well as for students, teachers, and researchers of construction management.     

Comparison of Contract General Conditions between United States and China

In light of the fact that construction projects are expensive, complex, and time-consuming undertakings, a well-written contract that specifies each participant’s duties and obligations is required. Furthermore, a well-written contract with regard to business practice differences between the United States and China is unquestionably needed by American owners, design firms, and construction companies conducting business in China. In response to this industry need, general conditions of construction contracts commonly used in the United States (AIA-A201) and China (GF-1999-0201) have been analyzed and compared. The findings of this research reveal that the content of subclauses in AIA-A201 and GF-1999-0201 is different in several ways. These differences may have been caused by cultural, historical, geographical, political, and language variations that exist between the American and Chinese construction markets. Understanding these differences could help U.S. companies stay competitive and profitable in China.     

Strengths, Weaknesses, Opportunities, and Threats for Architectural, Engineering, and Construction Firms: Case Study of Vietnam

After Vietnam became a member of the World Trade Organization, Vietnamese architectural, engineering, and construction (A/E/C) firms face competition from not only their domestic competitors but also from foreign A/E/C firms. As most Vietnamese firms are used to operating under a protected setting, they may face difficulties competing in the globalized environment. This study undertakes a strengths, weaknesses, opportunities, and threats (SWOT) analysis of Vietnamese A/E/C firms, investigates how they respond to opportunities and threats, and recommends how foreign A/E/C firms operating in Vietnam could respond. Using semistructured interview questions, face-to-face interviews were conducted with Vietnamese and foreign A/E/C firms. The SWOT analysis reveals that Vietnamese A/E/C firms are lagging behind foreign firms in financial capacity, experience in complex projects, knowledge in advanced design and construction technology, and management ability. Industry practitioners from outside Vietnam who are contemplating entering the Vietnamese market can leverage on Vietnamese firms’ strengths by forming joint ventures with strong and reputable private Vietnamese firms. To improve their competitive advantage, it is recommended that foreign A/E/C firms offer superior products and services and familiarize themselves with local culture and regulations. They should be mindful of corruption and set up surveillance systems to curb wasteful spending.