Impact of Resources and Strategies on Construction Company Performance

Globalized competition and customer needs forced construction companies to measure their performance beyond the financial measures such as profitability, turnover, etc. As qualitative determinants were added to measurement systems, their investigation and evaluation became a major area of research. In this study, the impact of “resources and capabilities,” “strategic decisions,” “project management competencies,” and “strength of relationships with other parties” on “company performance” was investigated. A questionnaire survey was administered to 73 Turkish contractors and the results of the survey were analyzed using structural equation modeling. The findings indicate that, as expected, resources and capabilities and strategic decisions have an important and direct impact on company performance, whereas project management competencies and strength of relationships with other parties impact company performance only indirectly, through their impact on companies’ resources and capabilities and strategic decisions.     

Comparable Performance Measurement System for Construction Companies

The construction industry has mainly relied on financially focused performance measurements, and studies on performance measurement systems (PMSs) have been carried out at the project level. However, recently, the demand for performance evaluation and management at the company level has increased. A few previous efforts have aimed to develop a conceptual framework for company performance, but there have been few follow-up studies. From this perspective, we have developed an implementation model and practical methodology to measure and compare the performance of construction companies. First, our thorough qualitative and quantitative analysis was used to develop a set of indicators for performance measurement, and an analysis of the relative weightings of the indicators was carried out. Second, we calculated the performance score of construction companies using a study of 34 Korean construction companies. Finally, we carried out a performance evaluation and system analysis using the calculated performance scores and identified practical issues for the implementation of our PMS. Using the results of our analytical processes identified in this work, further research is suggested.     

Management’s Perception of Key Performance Indicators for Construction

There is a great need in the construction industry for identifying a set of common indicators to be used by construction executive and project managers in measuring construction performance at the project level. The focus of this research was to collect management perceptions of the key performance indicators currently utilized in the construction industry. Both quantitative performance indicators and qualitative performance indicators are represented. A literature search was used to generate the initial set of perceived key performance indicators, which were administered to the construction industry via a survey. A statistical analysis of the collected survey responses provided information for the identification of a common set of perceived Key Performance Indicators (KPIs) by construction sector, management level, and experience level. Correlations were performed for both the quantitative and qualitative indicators to determine which type of indicator is used most extensively. Basic statistical analyses and frequency distributions provided evidence in support of some of the hypotheses of the research. The results of the survey data analysis support the hypothesis that KPIs vary according to management’s perspective. Further analysis displayed a substantial difference between construction executive and project management’s perceptions. However, six indicators were reported as being most useful by every segment of the construction industry involved in this study. The correlation between quantitative indicators and qualitative indicators proved to be inconclusive.     

Strategic-Operational Construction Management: Hybrid System Dynamics and Discrete Event Approach

A significant number of large-scale civil infrastructure projects experience cost overruns and schedule delays. To minimize these disastrous consequences, management actions need to be carefully examined at both the strategic and operational levels, as their effectiveness is mainly dependent on how well strategic perspectives and operational details of a project are balanced. However, current construction project management approaches have treated the strategic and operational issues separately, and consequently introduced a potential conflict between strategic and operational analyses. To address this issue, a hybrid simulation model is presented in this paper. This hybrid model combines system dynamics and discrete event simulation which have mainly been utilized to analyze the strategic and operational issues in isolation, respectively. As an application example, a nontypical repetitive earthmoving process is selected and simulated. The simulation results demonstrate that a systematic integration of strategic perspective and operational details is helpful to enhance the process performance by enabling construction managers to identify potential process improvement areas that traditional approaches may miss. Based on the simulation results, it is concluded that the proposed hybrid simulation model has great potential to support both the strategic and operational aspects of construction project management and to ultimately help increase project performance.     

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.     

Performance Assessment of Construction Companies Integrating Key Performance Indicators and Data Envelopment Analysis

The web benchmarking systems broadly used in the construction industry (CI) are designed to provide results based on key performance indicators (KPIs). No insights concerning organization overall performance and improvements targets are available. This research aims to fulfill this gap using data envelopment analysis (DEA) as a method to complement the information provided by a set of KPIs. The methodology proposed is useful to all organizations involved in benchmarking routines. To enable a more realistic assessment of CI companies, two types of DEA models were used, one allows factor weights to vary freely and the other includes weight restrictions. These models assign an efficiency score to each organization, identifying efficient organizations and providing performance improvements targets for the others. To enable suggesting targets for all organizations, expert opinion was used to specify virtual units which were included in the efficiency assessment to define a practical frontier located beyond the productivity levels of the original DEA frontier. Based on a sample of 20 Portuguese leading contractors, the Portuguese web benchmarking system for CI, icBench, was used to demonstrate the advantages of integrating the DEA method with KPIs benchmark scores.     

Benchmarking Framework to Measure Extent of ICT Adoption for Building Project Management

This paper discusses a component of the research study conducted to provide construction organizations with a generic benchmarking framework to assess their extent of information communication technology (ICT) adoption for building project management processes. It defines benchmarking and discusses objectives of the required benchmarking framework and development of the framework. The study focused on ICT adoption by small and medium enterprises (SMEs) in the construction industry and with respect to SMEs it is important to understand processes, their indicators, and measures in the local context. Structure of the suggested benchmarking framework has been derived after extensive literature survey and a questionnaire survey conducted in the Indian construction industry. The suggested benchmarking process is an iterative process divided into four stages. It can be implemented at organization and industry levels for rating the construction organizations for ICT adoption and performance measurement. The framework has a generic structure and can be generalized and applied for other countries with due considerations.     

Benchmarking the Lean Enterprise: Organizational Learning at Work

Following the success of the Toyota Production System in the world of automotive manufacturing, the new business philosophy of the lean enterprise is gaining ground in that industry and in many others, among them construction; it appears to be positioned well to replace nearly a century of conventional or mass production practices. This study investigates the use of benchmarking in transforming a conventional organization into a lean enterprise. In this transformation, the management of knowledge and the practice of continuous learning and improvement figure prominently. From the perspective of benchmarking as a learning tool designed to reduce uncertainty in the organizational environment by reference to peer experience, the study distinguishes various forms of benchmarking and then addresses issues in knowledge management, information seeking and use, the diffusion of innovations, resistance to change, benchmarking strategies and practices, and benchmarking teams and protocols, concluding with a critique of its limitations.     

Cost and Schedule Impacts of Information Management on EPC Process

As with most industries operating in a worldwide business environment, engineering and construction companies have a need to quantify the business impact of information management strategies and the associated investment in information technology. The prevailing assumption that corporate investment in information technology will immediately result in more efficient business operations and inevitably improve the standard measures of business performance is now highly suspect in many U.S. industries. It is not uncommon for companies to be dissatisfied with their information technology investments, and to be frustrated over their inability to objectively quantify the anticipated process benefits. These issues raise two important questions: (1) how can companies objectively measure the potential benefit of information management investments?; and (2) what information management strategies can be successful in construction engineering? This paper summarizes a research project designed to specifically answer these two questions. A methodology is provided to objectively predict the project schedule and cost impacts of process changes that may result from strategic investment. The methodology is then used to identify the potential impact of three proposed information management strategies on the construction engineering process should the strategies by implemented successfully. The research concluded that substantial cost and schedule reductions result from improving internal information exchange and integrating project-based information across organizational boundaries.     

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.     

Strategic Management in Construction

The traditional philosophy of management in construction, both in academia and in industry, places great emphasis on the ability to plan and execute projects. In contrast, a similar emphasis on strategic management has received less attention in the construction industry. Although the pressures of project performance can often obscure the broader social, economic, and professional context in which strategic management is undertaken, it is these broad contextual areas that make strategic management an essential issue for construction organizations. Rapidly changing social and technological issues are creating a professional environment that will look very different in the coming decades from that experienced in today's organizations. This paper introduces a study of the current strategic management practices of construction organizations. This paper also introduces the concept of strategic management and the areas that organizations must address to compete in the global marketplace. A summary of an industry survey is documented together with the background research that prompted the investigation of these topics.     

Management of Construction Firm Performance Using Benchmarking

In today’s highly competitive construction industry, there is a critical need for managers to continuously improve their firm’s efficiency and effectiveness. More specifically, managers need to know which performance measures are most critical in determining their firm’s overall success. Benchmarking, when done properly, can accurately identify both successful companies and the underlying reasons for their success. However, rigorous benchmarking within the construction industry still remains an embryonic field. This paper analyzes and critiques both the performance measures and metrics used traditionally in the construction industry and the benchmarking models developed to date for the industry. Based on the results of this analysis, benchmarking models using data envelope analysis are proposed that offer significant improvements over current models. The proposed models measure construction firm performance on a company-wide basis, foster trade-off analyses among various performance metrics, and tie the resources expended by construction firms to how well those firms perform overall. The models also provide managers guidance in determining how specific company resources can be reallocated to improve overall company performance.     

Determination of Key Performance Indicators with Enterprise Resource Planning Systems in Engineering Construction Firms

The study focuses on developing a unified approach to define information specificities for key performance indicators (KPIs). Borrowing from the time-system theory, the paper defines different types of KPI and identifies that a KPI has two dimensions—knowledge specificity and time specificity. Different approaches are presented to analyze knowledge and time sensitivities. This paper addresses a key question related to enterprise resource planning (ERP) systems applications in the engineering construction industry: what are the areas of business processes within the engineering construction industry where ERP cannot be used to collect KPIs related to business processes? The writers review empirical and specialized processes within the construction industry to identify business processes not covered by existing ERP systems. A survey focused on qualitative aspects of ERP systems implementation in engineering construction firms was conducted among ERP-enablers in the construction industry and provided a basis for the presented case study. Data collected are from major engineering and construction firms in the United States and therefore the results are relevant for researchers and industry practitioners concerned with application of enterprise management systems in the respective firms.     

Quantitative Analysis of Partnered Project Performance

Partnering is a technique that has become the construction industry's application of total quality management and enjoys widespread use throughout the industry. This paper details the results of a statistical analysis of over 400 Texas Department of Transportation construction projects worth a total investment of nearly $2.1 billion. Half the projects were completed under partnering agreements. After comparing the two groups of projects, the paper concludes that partnering promises to furnish a means to control the two prime project performance indicators—cost growth and time growth. Additionally, in a large construction program the continuous application of partnering will result in improved project performance across the entire program.     

Facility Maintenance Performance Perspective to Target Strategic Organizational Objectives

While facility design is increasingly playing a role addressing strategic organizational objectives, issues pertaining to facility maintenance have typically been left out of the decision-making process. Reasons include the traditional disconnection between facility design and facility maintenance, mainly originating from the lack of a modality to meaningfully represent facility maintenance information during design decision making. This paper discusses two sets of facility maintenance indicators that have the potential to bridge this traditional divide. The objective of this paper is threefold: (1) to illustrate how maintenance performance indicators can support higher-level decision making; (2) to explain how the methodology could be mapped across building sectors; and (3) to show how facility maintenance could play a crucial role in informing strategic decision making. Two types of indicators are introduced based on: (1) normative models in biophysics and physiology and (2) empiricist models of environment-behavior studies. Using examples from hospital, courthouse, and office building design, the paper articulates the manner in which facility performance indicators could be developed and used to support organizational strategic decision making. The paper demonstrates that facility maintenance indicators could be developed for all types of buildings and could be meaningfully represented for consideration during strategic decision making. Moreover, using an example of a healthcare setting, the paper emphasizes how facility maintenance strategies have an impact on higher-level organizational objectives, and vice versa, thereby underscoring the importance to consider maintenance performance during strategic decision making. The paper shows how the two sets of key performance indicators—the hard and the soft—are designed to address different scales of decision making, thereby allowing facility maintenance performance to be considered at all phases of a procurement cycle.     

Environmental Management of Urban Construction Projects in China

This paper presents a systematic approach to environmental management of pollution and∕or hazards caused by urban construction projects in China. It proposes a qualitative approach to assess and control the problem and a method to calculate the construction pollution index (CPI), which provides a quantitative measurement of pollution and∕or hazards caused by the urban construction projects. Based on the analysis and discussions, the paper further proposes that major construction companies in China should obtain ISO 14001 Environmental Management System (EMS) certifications. By doing so, the construction companies can integrate the concept of environmental management into their construction management practice.     

标杆管理的理论探索与实践

标杆管理、卓越绩效模式、六西格玛是当今世界公认的三大质量管理方法,而标杆管理又是卓越绩效模式的核心内容。发展要对标,营销要对标,生产过程要对标,企业只有瞄准先进企业实施比、学、赶、帮、超,才能持续改进,追求卓越。安阳钢铁集团公司争创首届省长质量奖,安阳钢铁股份有限责任公司争创全国质量奖的过程就是一个比、学、赶、帮、超的过程。     

Understanding and Improving Your Risk Management Capability: Assessment Model for Construction Organizations

Implementing risk management in construction projects and organizations may bring a number of benefits and therefore it is necessary to have risk management as an integral part of a construction organization’s management practice. The aim of this paper is to develop a risk management maturity assessment model for construction organizations. The paper describes the development process of a Web-based RM3 (risk management maturity model), including its contents, its validation and testing, as well as its applications. The RM3 developed has five attributes namely, management, risk culture, ability to identify risk, ability to analyze risk, and application of standardized risk management process/system. These attributes are measured against four levels: initial, repeated, managed, and optimized. It is found that the proposed RM3 was suitable and useful. Using the RM3, it is found that the Australian construction industry’s overall risk management maturity level was relatively low (where 32% rated at Level 2 and 52% rated at Level 3). Furthermore, it is found that the weakest attribute was “analyzing risks” followed by “application of standardized risk management process.” It is therefore necessary to provide more training on qualitative and quantitative risk analysis to construction personnel and to develop and apply standardized enterprise risk management. It is concluded that the proposed RM3 is suitable for construction organizations to assess their risk management maturity levels and find ways for improvement.     

Do the Effects of Job Stressors on Health Persist Over Time? A Longitudinal Study With Observational Stressor Measures.

Observational work analyses were conducted among 222 office workers (131 women, 91 men) from 12 German companies to measure stressors independently of worker appraisal. Stressors were determined twice (1990, 1991), along with 7 health indicators separately assessed by questionnaire. Health indicators were assessed again in 1992 and once more in 1998. This 2-wave, 2-variable design with 2 follow-up measurements of health indicators determines (a) the causal directions using cross-lagged partial correlations (stressors seem to have an impact on health); (b) the strength of the impact (cross-lagged correlations for Waves 1 to 4 range from .18