Construction Industry

I.It’s always been a high risk industry

Projects in the construction industry has always been categorised as complex. Such endeavours that embrace complex functions tend to come with numerous uncertainties in operations. (Hood and Jones 1996, 37) These uncertainties then continue to add up to the overall risks that a construction project accrue over time. Aside from these uncertainties, the industry embraces further risks as each and every construction project inevitably involves a whole lot of stakeholders in the process. These include the investors, contractors and the rest of the community on which the project is being erected. In this regard, this manifests a need for the implementation of risk management theories in the process. However, studies have recognised the considerable difference between the dynamics of the organisation in the construction industry. Primarily, the definition of “high risk” has placed itself in a whole new level when it is being used in area of construction; all the more that risk management theories have to be implemented. (Finkel 1997, 153) This is not to say that contractors, construction managers, and supervisors are completely oblivious of this fact. The problem rests on the fact that some of these theories are not properly done by these people. Hence, comments like the one mentioned above would be among the more common ones seen in safety performance in the construction industry. 

Studies have shown that risk management is one of the vital elements that managers should consider in the operation of a project. (Hood and Jones 1996, 37) Mitigating, if not totally eliminating, the risks in the project are the primary elements that contribute to the ultimate failure of the project. To this end, one must reiterate the processes involved in the risk management process so as to make managers and even supervisors become aware of the procedure. Some of the phases involved in the management of risk involve risk identification, risk estimation, risk response which includes planning and implementation.

It is also important to point out that this process of reducing the risks should take place early on in the conduct of the project. (Meyer 2003, 74) Identification of the actual risks allows the management to pinpoint what courses of action the company should undertake to actually mitigate and consequently manage these risks. Nonetheless, this part of the process should be continuous, and should not be considered as a phase. This is because risks may come up anytime in the course of the project. Personally, this part of the process is possibly the most relevant part of risk management. Once these risks are identified, the estimation and risk response automatically follows. Thus, identification triggers the notion that something should be done right away even before it is too late to deal with it.

II.Contractors Can’t Manage Change

Commonly, the concept of change management points to the actual pinpointing of the areas on which change is needed and managing the implication of these changes on the culture and other elements related to the human resource of the organisation. In the field of construction, change management is used in an entirely different context. In the case of the construction industry, dealing with change essentially means attempting to reduce the costs and other improvident construction iterations in projects. (Dinsmore and Cabanis-Brewin 2006, 134) This commission of dealing with the changes in the project is placed on the shoulders of the contractors.

Basically, changes refer to the alterations that takes place with the status of the work required, the processes, and even the methodologies employed with reference to the original construction plan of the project. Changes could also be seen as a cause of other subsequent changes in the construction project. Minor changes in the design, for example, may lead to significant changes in other areas of the project such as human resource and the actual operations.

Aside from these attributes of change, the construction project will also have to encounter unintended change and managerial change. (Dinsmore and Cabanis-Brewin 2006, 200) The former consist of unforeseen changes that are devoid of any actions from the management level employees. On the other hand, managerial change is induced by decisions made by managers in the course of the project. These could take in the form of subtle adjustments made during the supervision and monitoring of the project.

Looking the crux of this assessment, it appears that managers are not unable to manage change. It is more probable that they are not aware of what exactly they need to do. At some point, managers fail to distinguish changes from rework. Essentially, both concepts do translate added work for the managers in the sense that they have to distinguish whether completely deleting a problem through rework or adding concrete elements on the process through instituting change is required from them by any given situation.

At some point one cannot blame the managers for having this kind of mentality, aversion to change in the projects. Looking at the possible tradeoffs of inducing managerial change in the project, it shows major repercussions like the demolition of the erected structure. That translates to added work and wasted time and resources. However, this aversion to change, inability to manage it, and fear of the repercussions of proper change management should not be entertained in anyway by the construction managers or supervisors. To do such a thing will compromise not only the structural integrity of the building but also welfare of the stakeholders of the project. 

III.TQM and QA is Needed

In this comment on safety, the issue of quality and sustaining this level of quality is deemed imperative in the construction industry. In this regard, the application of the prevailing theories of quality management and the top standard in quality is often referred to in the process: total quality management and quality assurance. Total quality management theories have developed several models throughout the years. Each model points to a specific intent and improve a particular area on which the organisation seeks to develop. For instance, for companies intending to reduce costs, the TQM method that they tend to implement is the Just-in-Time Method. (Vokurka, Lummus, and Krumweide 2007, 14) This often leads to a considerable reduction in the inventory of the company, ergo less costs in storage. This is used in line with the Work-In-Progress which basically reduces the necessity of supervision and consequent maintenance of the operations of the company. (Eom and Karathanos 1996, 8) The essence of such actions is the imposition of continuous improvement on the part of the organisation. The constant presence of a top level quality, especially in the construction industry provides for the greater opportunity for growth and development.

On the other hand, quality assurance refers to the standards that provide the bar on which the organisations have to satisfy. For the purposes of the construction industry, the EN ISO 9000 is the more accepted standard for quality assurance. (Barnes 1998, 23) This accounts for a process-based approach in maintaining a viable standard of quality in the company. It is composed of a cluster of standards reviewed by the ISO. These standards include EN ISO 9000, EN ISO 9001, EN ISO 9004, EN ISO 90011. Specifically, these standards measure the fundamentals and vocabulary; requirements; performance improvement; and auditing quality systems respectively. Studies observed that these standards have shifted towards a more process-based approach as compared to its initial intention of primarily being for manufacturing.

Construction companies have already implemented the EN ISO 9000 in their operations thus ensuring a level of quality assurance. The problem in this regard is that construction companies find it difficult to integrate both the TQM and QA theories provided for in the earlier parts of the study. The issue lies on the dynamic nature of the industry. Marred with the attribute of high uncertainty with reference to its operations and high risk, companies in the construction industry find it hard to implement theories that depend highly on repetition, predictability and constancy. Hence, it is observed by this paper that in order to use both TQM theories and QA models on the construction industry, companies should possess a high dexterity in the area of managing change. With the significant reductions in the said area of uncertainty, then an unequivocal manifestation of development and growth is more likely to take place.

IV.We Need Increased Punishment, Fines and Imprisonment

In the field of construction, liability often falls on the legal concept of tort. In its simplest terms, the legal issue of torts refers to a breach of duty that is imposed by law. In a general sense, this duty refers to the responsibility of the common person to act in a reasonable manner and exercise diligence in his/her chosen field. (Berreth 1996, 59) In relation to the field of construction, liability falls on the possible breach of contract between the parties involved. Needless to say that construction companies, managers, and supervisors are covered primarily by some form of indemnity in the instance that they become liable to some actions caused by fault. However, when a third party is involved, the possibility of a tortuous liability is imminent.

It is important to emphasise that the presence of liability is essentially established with the actual proof of the existence of duty of care on the part of the contractors. (Gorton 2000, 811) For instance, a contractor that erected a structure that separates the construction site from the surrounding environment may well be held liable if these installations are discovered to be defective. This is similarly true in the case of a designer who have a duty to ensure that his/her design is reasonable such that the welfare of the stakeholders in the community is not compromised by any imminent injury caused by a defective design.

Hence, the punishments present for contractors in the construction industry is limited to civil and administrative sanctions. Criminal liability is very unlikely in incidents of defective designs or construction is present. These conditions may well be the case because of the fact that even before the construction begins, the creation of the contracts allows for the allocation of the risks between the parties involved. As mentioned earlier, there is also the possibility that the parties are indemnified in instances of third party claims emerge. However, they could not e covered by such insurances in instances of gross negligence and wilful misconduct are established.

Seeing the discussions above, it is not the fault of contractors that there are less punishments, fines and crimes present in the industry. Earlier remarks on the uncertainties present in construction establish the need to protect themselves from any undue or unforeseen liability. Even as simple acts like getting statutory clearances and strict compliance with the guidelines provided by law is a significant reduction of that risk of legal liability. Thus, only those who doesn’t show a level of responsibility required of them by law should be given due punishment.

V.We Have a Good System but Bad Managers

In the field of construction, everything is planned out from the beginning. The resources to be used, the ways of getting things done, and what is required of the people involved in the project. This is the rationale why the industry have a good system. The problem rests on the management of this system. In the intention of having an advantage over the other players in the industry, managers tend to veer away from what is prescribed. There are several elements that are considered in the process. One of the elements required to improve is to sustain this advantage of the organisation is through its leadership styles employed in the organisation. Studies have indicated that the most strategic post in any company is held by managers. The studies have sustained this claim as managers deal directly with both the top and bottom positions in the organisation. Moreover, managers assist the top management to determine a more precise description of the culture in the organisation. Moreover, the managers are the ones required to confirm which type of leadership approach would suit and set off the requisites of the company and balance the existing culture in the organisation. (Laclair and Rao 2002, 17)

It seems that the volume of responsibility is instituted on the managers and those who hold leadership posts in the organisation. Lowry (2006, 313) pointed out in his article that the proper performance of management activities in the organisation tends to be triggered by appropriate supervision and leadership, all of which ultimately points to efficiency of the project. Hersey and Blanchard (1995 in Polleys 2002, 117) indicated in their study that the performance of the leaders in the organisation is openly related to the enthusiasm of the subordinates. The concluding element directly bears a resemblance to the interest of employees in the organisation. (Laclair and Rao 2002, 17) In this manner, it is given to the leaders to show flexibility on their positions as they will  come across diverse situations and different responses regarding the workforce. Unfortunately for construction managers, the task is immensely daunting as they have to contend with high levels of risk, uncertainty and fast paced environment.

In the same regard, managers in the construction industry tend to forget the motivational element of work. A lot of motivational theories are used in the structure of the organisational setting. (Lowry 2006, 313) In addition, most of these models have a basic assumption pointing to that development in the motivation level of the employees will successfully set off positive outcomes for the organisation. Examples of these supposed in the appropriate operation of communication systems in the organisation. This assertion thus proposes that the continuation of such effective systems of offer the companies the ability to be closer to their organisational objectives.

 

VI.Adversarial Relationship

The construction industry is known for its competitive nature between the parties involved in an agreement. With the risks of losing massive amounts of capital and possible future investments, no one could blame these contractors and investors if they do engage in an adversarial relationship. (Finkel 1997,) All would be fine if the outcome of this phenomenon is a top level structure that gives way to growth and development to society as a whole. Reports have shown that the outcomes of these incidents often include poor buildings with unsound structural integrities caused by poor performance and belligerent disputes between parties. In an ideal world, parties to a construction contract share the same objectives and are willing to equally allocate the risks involved in the project. However, reports manifest a clear opposition on the said conditions.

It all boils down to the lack of trust between the parties involved. Calls for a shift in the overall cultural status in the relationship between the parties have been present in numerous articles and journals. (Finkel 1997) The degree of trust present in a contractual relationship especially in a construction agreement is vital to the better relationship of the individuals. One factor that would improve is the communication between the parties. An improved and non-antagonistic relationship allows for compromise and better judgement in the process.

In recent construction literature, the concept of a project culture is advocated. This basically points to the shift from an adversarial culture to a more cooperative and collaborative one. (Finkel 1997) More importantly, the issue of trust is provided, specifically the lack of it. Without the presence of trust in a business relationship, the possibility of success is less likely. On the whole, if a business relationship is devoid of trust, it serves as a barrier for the swift and opportune performance of the parties involved in the industry.

This again highlights the importance of the management staff in establishing this culture in the organisation and conveying it to their allies. In addition, a more positive outlook in the relationship between the parties is required. Certain levels of trusts accrue certain levels of success on the project. Thus, the comment indicating that there is an adversarial relationship points to the lack of cooperation between the parties involved in the project. The discussions above have shown the courses of action needed to deal with this issue. In the end, the key to a great contractual and business relationship is trust. 

 

References

Barnes, F. (1998) “ISO 9000 Myth and Reality: A Reasonable Approach to ISO 9000.” SAM Advanced Management Journal. 63(2), 23.

Berreth, C. (1996) “Workers’ Compensation Laws Enacted in 1995.” Monthly Labor Review. 119(1-2) 59.

Dinsmore, P. and Cabanis-Brewin, J. (2006) The AMA Handbook of Project Management. New York: AMACOM. p134.

Eom, S. and Karathanos, D. (1996) “The Role of Expert Systems in Improving the Management of Processes in Total Quality Management Organizations.” SAM Advanced Management Journal. 61(4), 8.

Finkel, G. (1997) The Economics of the Construction Industry. New York: M.E. Sharpe. p153.

Gorton, M. (2000) “Intentional Disregard: Remedies for the Toxic Workplace.” Environmental Law. 30(4), 811.

Hood, C and Jones, D. (1996) Accident and Design: Contemporary Debates in Risk Management. London: UCL Press. p37.

Laclair, J. and Rao, R. (2002) “Helping Employees Embrace Change.” The McKinsey Quarterly. p17.

Lowry, W. (2006) “Potential Focusing Projects and Policy Change.” Policy Studies Journal. 34(3), 313.

Meyer, D. (2003) The Economics of Risk. Michigan: W.E. Upjohn Institute for Employment Research. P74.

Polleys, M. (2002) “One University’s Response to the Anti-Leadership Vaccine: Developing Servant Leaders.” Journal of Leadership Studies. 8(3),

Vokurka, R., Lummus, R., Krumweide, D. (2007) “Improving Manufacturing Flexibility: The Enduring Value of JIT and TQM.” SAM Advanced Management Journal. 72(1), 14.

 

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