Project Organizations as Social Networks

High-performance teams achieve outcomes that exceed the expectations of the project and often demonstrate unique or innovative approaches within a final solution. The foundation of this high performance is the ability to focus on the success of the team over individual objectives. However, the recognition of this emphasis is based on the establishment of professional trust and strong communications between the team members. The social network model of construction introduced a dual-focused approach to enhancing these elements and creating high-performance project teams. The approach emphasizes balancing both a traditional project management emphasis on efficiency of communications with a focus on the social factors that move the project team from efficient to effective. In this paper, the model is extended to present the results of four studies of organizations that are full-service engineering companies that also provide construction oversight services. The paper presents the results of these studies in terms of the social network model and the achievement of high performance in the project teams. Analytical and graphical results are presented based on social network analysis techniques to provide a multiperspective analysis of the project teams.     

Offshore Outsourcing in Global Design Networks

Researchers have examined the benefits of outsourcing engineering design services from various perspectives. However, the process by which complex engineering design work is outsourced across international boundaries requires further investigation. In this paper we examine three offshore outsourcing design projects involving a design team in the United States outsourcing part of the project design to an offshore design vendor. We analyze empirical interview data and primary documentation to induce a set of eight key issues associated with outsourcing engineering services across national boundaries. We further analyze variances in the perspectives of the client and the vendor and identify important differences. The findings highlight the importance of addressing (1) vendor concerns over trust development and knowledge sharing; (2) client concerns over quality control, communication, and schedule control; and (3) shared concerns over cultural barriers, role redundancy, and design practice norms. Understanding and addressing offshore outsourcing issues in global design networks is critical to enhancing the efficiency and profitability of complex engineering services outsourcing.     

Global Dimension of Robust Project Network Design

Managing the increased complexity, emerging uncertainties, and diversity of cultures on global projects is creating significant challenges for architecture, engineering, and construction firms. In global projects, differences in “institutions”—including language, beliefs, values, group norms, work practices, professional roles, industry organizations, and legal frameworks—among team members from different national backgrounds can lead to misunderstanding and conflicts that cause delays, increase costs, and reduce quality. Previous research has examined risk factors associated with international project execution. However, little research to date has explored whether reconfiguring project networks might mitigate such risks. Project organizational simulation tools have been combined with “robust design” experimental techniques to design robust project networks that can perform reliably in uncertain conditions. This paper extends project network design research to examine whether robust designs for given project networks differ between “domestic” and “global” projects, given differing organizational uncertainties. The results demonstrate that robust project network designs may differ for global project networks. This finding has significant implications for the design of project networks in an industry where firm participation in global project networks is increasing, both domestically and abroad.     

Empirical Assessment of Internationalization Strategies for Small and Medium Construction Companies

In the wake of increased globalization, more small and medium construction companies (SMCCs) are expanding into the global market. However, the international construction industry is different from the domestic with respect to resource, regulations, culture, entry strategies, and risk levels among other factors. This paper explores various ways and modes of internationalization for SMCCs under 13 key hypotheses that are relevant to the issues of internationalization from the perspective of SMCCs. To verify these hypotheses, this study used actual data from 560 cases of SMCCs’ overseas projects performed between 1990 and 2007. It was found that SMCCs’ entry scheme as prime contractors was more rewarding than in the case of subcontractors. Moreover, SMCCs are likely to evolve from subcontractors engaged with home-country contractors to subcontractors engaged with foreign contractors. Also, cultural distance is positively related to performance, but the effects of cultural properties are not as strong compared to the international manufacturing industry. The results are expected to help SMCCs build internationalization strategies by determining promising entry modes, proposing possible evolutionary paths to enter overseas projects, and assessing cultural effects in reference to SMCCs’ successful performance.     

Global Legal Issues for Engineers and Constructors

When performing engineering and construction (E&C) throughout the world E&C personnel need to be aware of the differences in legal systems and how contracts are enforced in different countries. This paper provides information on some of the international legal conventions, regional legal issues, and comparative legal systems. Next the paper addresses international engineering and construction contracts by providing a discussion on the clauses that could differ in contracts throughout the world and which clauses are important to include in international contracts. Specific contract clauses are examined in relation to how their inclusion or exclusion might impact global engineering and construction projects. The next section presents issues related to claims and change orders along with a brief discussion of dispute resolution techniques including international arbitration and contract clauses related to dispute resolution techniques. Anticorruption legislation is mentioned along with kidnapping and ransom insurance because both of these issues are increasing in importance in the global E&C arena. Liability issues that firms might face in the global E&C marketplace are explained along with risks associated with currency valuations and local labor conditions. A table of clauses pertinent to global E&C contracts is provided to help firms prepare for projects in foreign nations.     

Legal Risks Faced by Foreign Architectural, Engineering, and Construction Firms in China

The extensive opportunities in China’s construction industry are expected to attract many foreign architectural, engineering, and construction (AEC) firms to her shores. However, these foreign firms may face many legal risks and obstacles, mainly because of the differences in culture and operating environment from their home countries. This study investigates the legal risks that foreign AEC firms encounter when operating in China, and how these risks are managed. Data were collected from 21 foreign (non-Chinese) AEC professionals who have extensive experience in China. Legal risks faced by foreign AEC firms in China include: difficulty in complying with the innumerable laws and regulations at the central, provincial, and local levels of the government; keeping up with new laws and regulations that are constantly being enacted; seeming reluctance of Chinese business associates to enter into binding contracts; and lack of sanctity of contracts and contractual obligations not being carried out fully, leading to disputes. Based on the research findings, a framework for managing legal risks is proposed for use by industry practitioners. The framework recommends to practitioners several measures to manage the legal risks. These include relationship-based strategies like establishing close relationships with the Chinese government officials and Chinese business associates and careful selection of Chinese business partners. It is recommended that foreign AEC professionals adopt the mindset that in China, the contact is to be continuously negotiated and reinterpreted. To achieve this, industry practitioners should provide a substantial contingency sum. It is also important to emplace permanent staff in China so that they can understand the local environment and monitor the changes taking place there.     

Simulating Learning Dynamics in Project Networks

In this paper we develop a multiagent simulation model to explore the impact of learning dynamics on the productive implementation of innovations in project networks comprised of designers and contractors. Though researchers generally agree that when firms form into networks they will gain access to new knowledge, the question of learning beyond the firm at the boundaries between firms or at the level of the project network itself remain less explored. We simulate the impact of task interdependence and relational instability on learning in project networks comprised of multiple specialist firms. We find that relational instability in project networks slows learning and task interdependence moderates the impact of increasing relational instability on network productivity rates. The findings have significant implications for interorganizational learning theory. The simulation results provide insights into appropriate firm-level and project network-level strategies for change.     

Inter- and Intraorganizational Trust in International Construction Joint Ventures

International joint ventures in construction often face a highly complex and dynamic environment because, in most instances, they are formed to build large-scale engineering projects. One can distinguish two organizational levels that together constitute the joint venture system: (1) the interorganizational level formed by the partners and (2) the intraorganizational level of the joint venture. The partners seek to reconcile their different interests on the interorganizational level, as each of them follows the goal of profit optimization. Here, formal control mechanisms are more important than trust. Actors on the intraorganizational level face the construction task. One of the primary requirements is to reduce the project complexity. Within the joint venture, many international construction joint ventures disentangle their responsibilities by functional separation and delegation of work. In a social group, delegation of work requires trust in the capability and willingness of others to perform their duties without supervision. Especially during the initial phase, international construction joint ventures are high-pressure environments without established teams. Trust is a mechanism that allows to reach goals efficiently within this setting. As a consequence, we can find a special form of trust in international construction joint ventures: necessitated general trust that is extended to everyone even without prior knowledge. These findings are new and have high practical relevance as trust proves to be a most important success factor.     

Cultural Considerations in International Construction Contracts

International construction projects involve multinational participants from different political, legal, economic, and cultural backgrounds. As one of the major issues affecting the management of international construction projects, culture deserves wide research. This paper aims to establish a valid groundwork for further research on the impact of cultural issues on contractual arrangements; conflict causation, and the selection of dispute resolution mechanisms for international construction projects. The paper reviews the characteristics of international construction activities and discusses the cultural context. It sets the research background for disseminating the findings of two surveys, carried out in Hong Kong and in London and Sydney. The study identifies the important features expected for the contract of international construction projects and ascertains their significance to further in-depth research.     

Forms of Collaboration and Project Delivery in Chinese Construction Markets: Probable Emergence of Strategic Alliances and Design/Build

Changes in regulations to allow foreign contractors to qualify as wholly foreign-owned “construction enterprises” came into effect in September 2002 as one of the steps taken by the Chinese government to honor its World Trade Organization commitments. Emerging markets have a significant impact on the strategic planning of contractors; based on an electronic survey covering foreign contractors, clients (foreign investors), and design institutes, the design/build procurement route in conjunction with strategic alliances has been found to enable foreign contractors to enter the Chinese marketplace. The writers present a strengths, weaknesses, opportunities, and threats (SWOT) analysis to inform readers where opportunities for development might be found and to warn of threats to entry. The research also found that mutual trust, synergistic strengths and complementarities, market demand for services, flexibility for both parties, and minimum change of top managers were ranked as the top five critical success factors for strategic alliances between foreign contractors and design institutes. Finally, medium-sized, state-owned, and large-sized design institutes were ranked as the first, second, and third preferences, respectively, for strategic partnering by foreign contractors.     

Activity Awareness as an Enabler for Communication and Network Building in Construction Design Teams

The paper reports on ongoing research into the facilitation of communication in distributed design teams of the type typically encountered in the construction sector. Ideas around social aspects in such design teams are discussed followed by our previous research efforts as an evolutionary process that has led us to develop in this direction. It is argued that facilitating timely and contextually grounded communication in a distributed environment can help to build the social networks and associated social capital common in collocated design teams but often absent in distributed ones. We describe our framework for providing such facilitation through monitoring and awareness of the information “space” of a construction project. We believe that by leveraging the relationships in the information space, we can go some way to identifying those individuals who would benefit from developing interpersonal relations in their work and further by exploiting those relationships in real time we can accelerate the formation of personal social networks and social capital between those individuals.     

Determinants of International Architectural, Engineering, and Construction Firms’ Project Success in China

As China becomes a member of the World Trade Organization, many international architectural, engineering, and construction (AEC) firms are undertaking or expected to undertake projects there. This study identifies the significant factors that contribute to the successful performance of projects undertaken by international AEC firms in China. Data were collected using structured questionnaires from foreign (non-Chinese) AEC firms that have completed projects in China. Personal interviews with 27 experts were also conducted to supplement and test the survey findings. The findings reveal that the variable that affects the most number of success measures is the AEC firm’s ability to understand the client’s requirement. Achieving this brings about good project quality performance and owner satisfaction. Furthermore, firms that have superior product or service quality would also achieve better project performance. The interviewees also exhorted the importance of having core competencies as a critical success factor for projects in China. Practitioners may use the findings to help them manage their projects in China, so as to achieve higher levels of success.     

Globalization Challenges, Legacies, and Civil Engineering Curriculum Reform

Across nations and industries, numerous changes are taking place due to globalization. Naturally, the effects are channelled back to the academic world and prominently felt at the level of higher learning in view of its constant contact with the industries. Universities and institutions have to reassess the adequacy of their existing curricula in fulfilling the needs arising from globalization. With reference to issues encountered in southeast Asia, this paper examines the necessity to rethink the curriculum of a baccalaureate degree in civil engineering and presents some recommendations for revamping the curricular structure. The context discussed is most relevant to small, developing countries, but generally concerns those countries with a legacy of educational systems similar to this region. One rising trend is the move toward a general engineering education at the undergraduate level; a professional degree is emphasized only at the master’s level. More management-related subjects may be included in the undergraduate curriculum to equip engineers with skills to cope with globalization challenges.     

Effect of Partner Fit in International Construction Joint Ventures

Joint ventures have been an important research topic over the last few decades primarily because of their importance as a strategic alternative in global competition. Due to the inherent complexities of international joint ventures (IJVs), involving a mixture of different managerial systems, attitudes, and business strategies, such entities are very difficult to manage. In this study, the effect of strategic, organizational, and cultural fit between IJV partners and of interpartner relations on IJV performance is examined through a questionnaire survey. IJV performance is measured by means of two constructs: “project performance” and “performance of IJV management.” The results point out the significance of the quality of partner relations for a successful IJV operation. Findings of the study also suggest that the level of organizational fit between the partners has a moderate influence on IJV performance. It was observed that strategic fit between IJV partners affects interpartner relations extensively, which in turn affects IJV performance. IJV partners with compatible technical and managerial skills, financial resources, organizational size, workload, and project experiences are expected to achieve greater IJV success.     

Strategies for Developing Countries to Expand Their Shares in the Global Construction Market: Phase-Based SWOT and AAA Analyses of Korea

Korea’s level of competitiveness in the global construction market has significantly improved over the years; from being an underdeveloped country in the 1960s, Korea is currently one of the top ten countries in terms of revenue in the global construction market. In general, an international construction business entails various risks and requires advanced financing and managerial and technical ability to become competitive. Therefore, it is challenging for developing countries to expand their share in the global construction market. In this regard, the case of the Korean international construction business (KICB) may serve as a benchmark for other countries aspiring to enter or reinforce their status in the global construction market. To this end, the strategies to achieve and maintain competitiveness need to be analyzed chronologically rather than focusing only on a particular period, especially the current status. This paper details the history of KICB, showing its evolution over the past 40?years, divided into four major phases that correspond with significant events. Moreover, the important aspects for securing competitive advantage in the market are clarified using four sets of strength, weakness, opportunity, and threat (SWOT) analyses. In addition, the strategic evolution over the four major phases is explored by introducing the adaptation, aggregation, and arbitrage (AAA) framework. The research findings indicate that the strategies adopted by KICB for achieving competitiveness included presenting a memorable performance in a primary country of a particular region (adaptation) during the initial phase, achieving economies of scale in a few regions during the development phase (aggregation), developing international specialization during the depression phase (arbitrage), and adapting to receive orders in a severely competitive market while coping with the local industry protection policy during the resurrection phase (adaptation).     

Strengths, Weaknesses, Opportunities, and Threats: Case Study of Consulting Firms in Shenzhen, China

After China became a member of the World Trade Organization, Chinese architectural, engineering, and project management consulting firms faced competition from not only their domestic competitors but also from foreign firms. As most Chinese consulting firms are used to operating under a protected setting, they may face difficulties competing in the globalized environment. This research involves a strengths, weaknesses, opportunities, and threats (SWOT) analysis of Chinese consulting firms based in Shenzhen; investigates how they respond to opportunities and threats; and recommends how foreign firms can respond to Chinese consulting firms’ SWOT. The case study research design is adopted. Using semistructured interview questions, face-to-face interviews were conducted with 23 Chinese consulting firms based in Shenzhen. Foreign firms’ responses are investigated through a case study of a U.S.-based consulting firm operating in China. The SWOT analysis reveals that Chinese consulting firms are lagging behind foreign firms in design and technical capability; experience in international projects; general and project management ability; and financial capacity. Industry practitioners from outside China who are contemplating entering the Chinese market can leverage on Chinese firms’ strengths by forming joint ventures with them. Foreign industry practitioners can take advantage of Chinese firms’ weaknesses by offering superior products and services which would improve their competitive advantage.     

VDC and the Engineering Continuum

In this paper, we provide a brief overview of the historical underpinnings of the design-construction industry and the development of design engineering and construction engineering as independent but related subdisciplines of civil engineering. The effects of the first and second generation of computer tools on design engineering are identified. The complementary and evolving definitions of construction engineering and design engineering are examined, specifically in the context of structural design engineering activities and deliverables and the corresponding construction engineering activities and deliverables. The concept of an “engineering continuum” is introduced, and the process is recast in light of that concept. Several case studies are used to examine the promise of third generation design-construction computing technologies such as virtual design and construction and their potential beneficial impact on the cost and schedule of the typical design-construction project. Refinements to the definitions of construction and design engineering that have the potential to maximize the benefits of third generation technology are proposed with an eye toward the form of fourth generation computing technologies that are on the horizon.     

Adoption and Use of Interorganizational ICT in a Construction Project

The objective of this research is to explain why actors are not using interorganizational information and communication technology (ICT) in construction projects in the intended way, by determining the mechanisms that influence the way actors use this ICT over time during a construction project. This explorative research results in a theoretical model that contains four key categories that explains the way actors use ICT in construction projects: (1) personal motivation; (2) external motivation; (3) knowledge and skills; and (4) acting opportunities. The model is compared with three existing influential models about the adoption and use of ICT: the unified theory of acceptance and use of technology, the theory of planned behavior, and the technology acceptance model. In these models missing elements are found. In addition, it is found that fundamental characteristics of construction projects, such as the fragmented and temporarily nature of construction projects, and the different working practices, resources, and objectives of the organizations involved cause most of the barriers to the intended use of interorganizational ICT.     

Enablers That Help Foreign Architectural, Engineering, and Construction Firms Win Construction Contracts in China

With China’s fast economic growth and entry into the World Trade Organization (WTO), more foreign architectural, engineering, and construction (AEC) firms are expected to venture into this huge and attractive market. This paper explores the important strategies to help foreign AEC firms clinch construction projects in China. Using a questionnaire survey approach complemented by in-depth interviews, it was found that firms need to pay more attention to the market and working conditions in China and to strengthen their own capabilities. To win projects in China, foreign AEC firms should also be able to offer project financing services. The findings are useful to foreign AEC firms because it may help them win projects in the Chinese construction industry.     

Strengths, Weaknesses, Opportunities, and Threats Analysis of Chinese Construction Companies in the Global Market

Recent years have seen a growing trend of Chinese companies making significant inroads into the international construction market. However, comparing to their fast development, only few studies have been reported to introduce the Chinese international construction companies (CICCs) as an emerging competing force. This research, by conducting a strength, weakness, opportunity, and threat analysis, aims to help understand CICCs which have been stereotypically viewed as a somewhat heterogeneous group. Data supporting the analysis were derived from multiple sources including statistical reports, literature review, interviews, and in particular first-hand experience from those who are competing on the forefront. The research opens a window through which all players in the global construction market can perceive internal and external conditions of their Chinese counterpart.