The project boundary and how it affects renewal in the construction industry
2012 (English)Conference paper (Other academic)
This paper addresses the relationship between project organization and renewal in the construction supply chain, and proposes an investigative framework for studying this matter further. In an earlier study of innovation in the Swedish construction industry we reached some interesting conclusions in regard to the degree and variation of renewal. (Håkansson & Ingemansson, forthcoming) The study was based on a survey including 440 companies and was also complemented with a dozen CEO interviews, where the survey was used as a basis for the interviews. We found that a substantial part of the companies, 61%, had engaged in renewal during the last five years, and while this is certainly an encouraging result, it also means that 39% of the companies had done very little or not engaged in any renewal activities at all. This suggests that there is a renewal pattern which needs to be investigated further. We also concluded that it was mainly larger companies and business units within larger corporations that had engaged most in renewal, which appears to be related to the access of an extended internal network of other business units and earlier/ongoing projects, and to an external network of suppliers, customers and other collaborators which this in turn provides. This access creates learning and development opportunities through a continuous knowledge and resource exchange. (Håkansson & Ingemansson 2011, Håkansson & Ingemansson forthcoming) Still, a second finding was that even if renewal seems to take place both in regard to customers and suppliers it is mainly the internal network (staff and other units within the corporation), besides customers, that is regarded the most important driving force of renewal. This indicates that the forming of relationships with suppliers, subcontractors or specialists is not considered very important for renewal. One important explanation for this seems to be the way that the construction industry is organized, namely that the main part of the activities takes place within time-limited projects. Every project introduces the single construction company to new local conditions, a new constellation of actors and the necessity to create new and specific solutions. This result in efficient ways of adapting to new conditions and creating temporary solutions but complicates the forming of long-term relationships and therefore to learn collectively. If construction companies generally do not engage in close relationships with their suppliers and subcontractors they probably do not have a very deep understanding of how these supplying companies work internally or how they engage in renewal. Thus, there might be a lot of renewal activities going on in the supply chain which is more or less hidden to the construction companies and the customers, or which the construction companies fail to take notice of since it does not necessarily affect their internal processes. Consequently, an important result from the study is that there is probably both direct and indirect renewal happening in the construction supply chain, which means that in relation to construction activities the definition of renewal, i.e. what it means and how it happens, is not really obvious. And therefore it is not obvious how renewal is brought into and affects the single project. Based on these results we argue for a continued study taking the project as an organizational unit of analysis in examining the industry’s opportunities (or lack of opportunities) for renewal. What we will study is thus the project organization in relation to renewal activities. The boundaries of the project and the renewal which is brought into the project can be characterized in relation to its interfaces. The first interface is in relation to the construction company or joint venture that has the final responsibility. The project is anchored in relation to this organization in terms of some personnel, some routines, and some resources/assets. The second interface is in relation to the customer/user. This interface is obviously important and can be defined in relation to type of agreement and the way the customer want to be involved during the project. The third interface is in relation to used suppliers and other entrepreneurs. Again the agreement with those can be designed in different ways and they can be more or less involved in the renewal activities. The fourth interface is with other projects that are more or less related to the focal one. It can be projects already conducted, it can be contemporary projects or it can be projects that will start in the future. The project organizing emphasize that these interfaces should be distinct and clearly managed. In this way the management becomes important for the renewal activities. The single project is free to make changes but all changes have to be managed through the interfaces. None occur in a simple organic way. These interfaces can represent direct renewal, and indirect renewal through the association to other interfaces in the supply chain. Therefore, it is not clear where the boundaries of the project, i.e. of the renewal effects influencing the single project, lie and which direct and indirect interfaces that the project include. With the project organization as a primary unit for studying renewal within construction the intention is to go deeper into the issue of what type of interfaces (to counterparts and their resources) that drives and hinders renewal activities within this particular industry.
Place, publisher, year, edition, pages
construction industry, renewal, projects, case studies
Research subject Business Studies
IdentifiersURN: urn:nbn:se:uu:diva-188534OAI: oai:DiVA.org:uu-188534DiVA: diva2:578169