Research Needs to Improve Management and Organization in Construction

The increasing scope and complexity of construction projects, along with a greater number of externally imposed requirements, has expanded the challenge to project managers for the successful completion of their projects. Increased competition and changing client demands are requiring construction managers to address a wider range of issues than ever before in areas such as strategic analysis, worker problems, knowledge management, and emerging technologies. As a result, new forms of project organization and project delivery systems are evolving with the introduction and practice of new concepts such as Partnering, Constructability, Total Quality Management (TQM), Best-Value Contracts and Value Engineering. However, the education structures in the construction industry, both at the university and professional levels, fail to provide construction professionals with the tools required to fully address these emerging forces.

These reasons illustrate the growing requirements for construction leaders to expand current management theories and knowledge. To that end, this paper presents: 1) the emerging issues and problems that are affecting the way construction managers work; 2) what should be the focus of construction research to address those problems.

The construction industry is the second largest industry in the United States after the computer industry. The industry had an annual revenue of about $ 863 Billion in 2001, 6% higher than the year of 2000 (Census Bureau, 2001). The industry involves owners (government, industry, private parties and investors), designers (architects/engineers), contractors, field managers (superintendents/project managers), suppliers and craftsmen. In addition, the outcome is usually "custom made" with almost every project a separate and unique entity, conceived, financed, designed, constructed, and operated separately.

Each of the groups that contribute directly or indirectly to construction is represented by individuals, organizations, or associations with diverse and often fragmented interests. There are about 1,000,000 contractors, competing for work either directly/indirectly. There are at least twenty-five separate construction specialists, each with unique problems and requiring special education and experience. Construction workers are represented by about 15 crafts unions and twelve national trade groups. Other contributors such as planners, engineers, architects, lawyers, bankers, bonding companies, material /equipment suppliers, and accountants are equally diverse in their talents, interests and ways of operating. The structure of the industry is specialized and layered, with complex interlocking interests and traditions. Its character makes it highly effective on practical or project matters, yet often ineffective on general or program matters (Oglesby, 1990). But there is little general perspective on how all the separate entities fit together. There is no real central focus to integrate all the activities and entities, which only can be achieved by efficient use of construction managers.

The construction project, itself, has another set of complexities. It involves the entire life cycle of a physical facility from the 'gleam in the eye' of an owner who is exploring the need for the facility, to its completion, operation and management. The steps in the project life cycle of conception, planning, authorization and financing, design, procurement, construction, start-up, operation/maintenance and dismantling are unique and each has a peculiar set of problems to solve.

The most profound recent developments in construction may be judged as the increasing size of many of its projects and organizations, the increasing technological complexity of such projects, more complex interdependencies and variations in the relationships between its organizations and institutions, and proliferating regulations. At the project level, management has just begun to integrate design, procurement, and construction into one total process through total quality management (TQM), value engineering and constructability analysis. There are now and will continue to be shortages of resources, including skilled workers, and technical and supervisory staff. There are more and more governmental regulations such as safety of the design and construction methods, the environmental consequences of projects and human resource policies at all levels (EEO). Management must also cope with the new economic and cultural realities resulting from mergers and acquisitions, the slowing economy, the energy crisis, changing world development patterns, and new societal standards. These trends have been accelerating and will most probably continue into the future. Fig. 1 summarizes some of the interrelated elements that are involved for the problems and success of the project. Despite continuing economic problems, there is an ongoing need for the construction industry to expand and improve its capabilities and its scope of operation to meet changing and, in the long run, growing demands for its services.

Fundamentally, construction organizations are being affected by many of the same forces as other industries. General business as well as construction engineering and management literature indicate that many of the emerging

issues and trends that other industries are encountering will similarly impact construction organizations (Drucker 1995; Hamel and Prahalad 1994; Harrigan and Neel 1996; Yates 1994). Specifically, those anticipated to most affect construction have been categorized based on interviews conducted by the authors and are documented in the literature as follows:

A shift from repetitive tasks to knowledge work is changing the nature of professional work and the development of construction employees. Companies will be asking employees at all levels to be flexible and innovative, to retrain, to bring new knowledge to work, to take responsibility for their own development and to enlarge their jobs. In terms of loyalty, the employees worth keeping will be those with many more choices of employment; thus new strategies for retaining and developing employees will become important (Drucker 1995).

Companies demonstrating leadership excellence, both within the competitive industry and in the community, will enhance their overall performance results. Within the industry, creating organizational environments that facilitate exceptional leadership and decision-making capabilities at all levels will become important. Companies will also be responsible for exhibiting corporate citizenship by taking a more proactive approach in the community and in the development of U.S. regulations and implementation of existing regulations. Conducting business with a focus on the environment and future generations will become a critical success factor demanded by clients and other stakeholders.

New methods and tools for acquiring useful information for construction will continue to emerge. Increased access to information is changing the roles of managers and employees, and the types of information required by employees will vary depending on the nature of their work (Drucker 1996). Altogether, a major shift is occurring, where managing knowledge within an organization is becoming one of the greatest challenges (Drucker 1996; Cerny 1996).

Rapid change ensures that forward-thinking leadership and management will be essential for business and projects. Successful companies will be conducting new forms of business in diverse markets with an expanding range of competitors. Organizations must be capable of simultaneously assessing on-going situations and new opportunities, changing course of direction as needed.

In an environment where competitors can enter the marketplace at an increasing pace, clients will, above all else, demand that construction companies understand their needs and expectations. Construction professionals, including every participant from field personnel to executives, will be asked to incorporate this understanding into their work (Lih 1997; Zachary 1997).

Given all these voices and the variety of operations that make up the construction field, efficiency of the management and organization of construction are very vital the project success. Based on the above information, this paper will identify, set priorities for, and focus high-level attention on the need for basic research in construction in terms of management and organization. This paper explains the problems in each specific area related to management and organization, and then identifies the core areas where research focus should be carried-out.

The present economy notwithstanding, it appears certain that some of the most critical problems in many sectors of construction are an existing and future shortage of skilled technical talent and effective employment of the human resources that are available. Especially on large and complex projects, many companies are finding that existing organizational structures cannot adequately cope with growing needs. It is important to examine general areas such as human and organizational development; the interplay of design and construction, and the evaluation of management productivity.

Two major requirements for implementation of research efforts to solve managerial and organizational problems in Construction are: 1) Individuals and institutions with the resources, experience, interest and capabilities to carry out such research; and 2) the incentives and means to provide funding.

In the last two decades, many college and university programs have evolved that are aimed primarily at the construction industry. There are now about sixty four-year undergraduate Construction Management programs, many are divisions within architecture, management, civil engineering, and architectural engineering or stand-alone programs (ASC Web). There are also a significant number of graduate education and research programs such as those at Southern Polytechnic State University.

Research in graduate construction programs is worthy since this, in turn, may become an important source of information in construction. Although many are still fairly new, established graduate programs have already made significant progress in both research and education. Until a few decades ago, there was very little university research and no coherent body of college-level coursework aimed specifically at construction. Many innovations that are increasingly taken for granted in the industry today either originated in or advanced through research efforts of these programs. Examples include computer simulation of field operations, software development, development and implementation of constructability and partnering, behavioral science research into the workings of project management teams, computer-based information systems, studies of labor and industrial relations, and new methods and techniques for the planning, scheduling, and control of resources on projects.

On the education side, there are now many widely-accepted courses that make up the core curricula of today’s graduate and undergraduate programs. New courses continue to be introduced and many of these will become standard subject matter in the future for research and real-world practice.

As mentioned earlier, the fragmented and intensely competitive nature of construction makes it difficult to undertake industry-wide programmatic efforts such as a significant venture into basic and/or applied research. Furthermore, construction is primarily a service industry and thus does not accumulate significant amounts of capital when compared to industries such as computers, transportation, and minerals. Thus, if a company cannot preserve the fruits of its research innovations in the form of new processes or more efficient capital facilities, it has less incentive to invest in research. For these and other reasons, it is unlikely that the construction industry itself could invest in research on the scale found in capital- and technology-intensive industries.

Nevertheless, there are major financial incentives for investing not only in applied research in construction, but in basic research. These days one too often hears of large projects with cost escalation measured in millions of dollars. The cumulative effect of cost escalations on smaller projects is undoubtedly even greater. American ingenuity and know-how are still effectively coping with most technological problems in construction, but management and administration are too frequently inadequate on larger and more complex projects. If investments in research could overcome some of these difficulties and begin to pare down these million-dollar cost increases, someone ought to benefit. Industry needs to understand that it is their organization that ultimately should be willing to make such investments, since they and their customers will be the primary beneficiaries. Once recognized, however, there is still a quantum leap required to develop effective institutions to support such research in a coordinated and productive fashion.