The Ability of the Construction Industry to Adapt to Change - Literature review Example

The Ability of the Construction Industry to Adapt to Change Introduction Change and its implications on industrial relationships, have been an intriguing topic among post-modern theorists of the 21st century context. With its wider realm ranging from economic issues to societal factors, management of change processes has always been challenging to organisational decision-makers, demanding high level of efficiency in managing resources, forecasting ability and planning as well as risk taking attitude. Arguments presented in Horta & et. al. (2012), similar to any other given industry of the modern era, change in the global construction industry is also quite apparent. However, it is deemed to have its own boundaries, limitations and flexibility constraints, which have given a distinctive structure to the change processes and factors identified in this industry context. The ability of the construction industry to adapt the change has also been a major influencing factor in this regard, giving rise to many challenges along with opportunities of growth through sustainable innovation (Pachon & Jacob, 2013). Contextually, influenced by the rising globalisation trends and effects of rapid urbanisation, the significance of the construction industry has also increased in manifolds in the global platform (Wibowo, 2009). In many countries, the construction industry is also said to have gained the stance of an economic pillar, as it ensures sufficient developments in the infrastructural advancement of the nation and subsequently, benefits the economy through better exposure to international trade (International Labour Organization, 2001). To be precise, change management in construction industry evokes many questions if considered its economic and social significance in the 21st century. Firstly, the inherent constraint to adapt change may be a crucial hindrance to effective change management within this industry. Again, if the construction companies are facing the challenge of low industry adaptability to change, they might have devised strategies that are unique to this particular sector and illustrative as best practices. With the objective to obtain justifications and reliable answers to these questions, a literature review will be conducted in the discussion henceforth. References will be drawn from the findings derived by scholars and accordingly, a comprehensive rationalisation will be provided to their thoughts in response to the questions noted. Literature Review Overview of the Changes Witnessed in the Global Construction Industry and Evidences to its Change Adaptability According to the report of Chartered Institute of Building (2011), the concept of construction was introduced during the 1950s. During that phase, construction project was practiced based on the principles of planning, co-ordination and controlling processes and hence, was quite simple in its nature. Following a simple management process, during the project management practices conducted in the conventional period, emphasises was provided to procurement of the project team, financial planning and inspection at repeated instances by the contractor team rather than a government affiliated third party. In this context, the report of International Labour Organization (2001) claimed that during the last 20 to 30 years, the performance of the construction industry has changed drastically, due to the poor practices of the project management principles, which further demanded a degree of government intervention. According to International Labour Organization (2001), it was owing to these discrepancies that players in the construction industry emphasised on the improvement of its employment scenario and labour skills to enhance quality of the management practices. This further resulted in the overall development of the efficiency of the industry and working culture, further sufficing the sustainability needs of the construction industry (Chartered Institute of Building, 2011; International Labour Organization, 2001). According to the viewpoints of Dingsdag & et. al. (2006), during the early 21st century, the global construction industry had to witness several challenges owing to the developmental needs in accordance with the transforming requirements of the society. While on one hand, these requirements impose considerable challenges for the construction industry players, it also expands the opportunities for the same in terms of innovation and efficiency. Correspondingly, changes in the construction industry can be identified in varied assortment having substantial influence on its technology aspects as well as on ethical considerations such as those related to safety policies essential in projects (Biggs & Williamson, 2012; Chan & et. al., 2011). For instance, Biggs & et. al. (2005) claimed that the responsibility of the construction industry is not only to construct a building or implement a project; rather it is highly essential for the players of this particular industry to ensure the safety of construction more accurately. Accordingly, Dingsdag & et. al. (2006) claimed that irresponsible attitudes of the contractors had in the conventional period led the industry towards uncertainties, which had not only hampered the confidence level of the stakeholders but also affected the public health to a certain extent. In subsequence, to avoid such discrepancies and uncertainties, safety policies and ethical guidelines were developed within the industry that would further help uplift the responsible attitude amid the industry players. Biggs & et. al. (2005) also argued that lack of skills of the labours, unavailability of labours and insufficient instruments have initiated several challenges for the construction industry in the global market. Moreover, lack of concern about the safety issues has also generated certain difficulties for the construction industry, whereby the notion of profit maximization at the cost of quality has motivated the enforcement of strict laws and regulations (Dingsdag & et. al., 2006; Biggs & et. al., 2005; International Labour Organization, 2001). Nevertheless, Marhani & et. al. (2012) argued that in order to incorporate these changes, construction industry players of the modern era has become much emphasised on the development of a systematic structure. From a critical perspective, it can be argued that the changes witnessed in its traditional procedure encouraged the development of a new system for implementing a construction project that was much time efficient, resourceful and effective in assuring quality (Pachon & Jacob, 2013). However, because the modern process was much complex and demanded high degree of compatibility within the quality and quantity aspects, companies in the construction sector were forced to develop a systematic process to accommodate the required changes. In agreement to this particular notion, Marhani & et. al. (2012) also claimed that construction projects in the modern day are being conducted through customised step-by-step procedures, based on the requirements of the project. As already mentioned, cost, time and quality issues were gradually becoming increasingly apparent with the influence of changes witnessed in the construction sector. It was in order to adapt this change that the construction industry took certain major steps in its quality and quantity control systems. According to Marhani & et. al. (2012), a major leap taken by the construction industry to adapt to the changes witnessed in the modern era can be identified in terms of the Lean Construction (LC) approach. The LC approach is accredited to be effective in reducing wastes and increasing productivity of construction projects taking adequate measures against the safety issues witnessed in the process (Amirah & et. al., 2013). This particular fact can also be identified as a noteworthy illustration advocating the ability of construction industry to adapt changes. Another change argued by Amirah & et. al. (2013) was the greater intervention measures taken by the governments to assure adequate transparency in construction projects owing to the associated safety issues and cost factors. It is in this context that in many countries, such as Australia and similar others have focused on the implementation of strict guidelines that encourages project initiators to appoint contractors on the basis of their credential on the basis of the previous performances deciphered by the contractors (Horta & et. al., 2012). This particular change has however inhibited contractors’ independence but has in turn increased their bargaining power, as limited contractors are encouraged by the government, which is insufficient to serve the rising demand for construction projects. Hence, it also has a considerable influence on the competitive positioning of the industry. As a result, the industry structure changed substantially within the construction sector as compared to its traditional shape (Biggs & et. al., 2005). According to the report of Chartered Institute of Building (2011), the industry guidelines specified today indicate the requirements for detail monitoring of the construction, resource allocation and risk management evaluation. Eventually, these guidelines have become one of the most essential constituents of project management principles. There are several other essential factors, such as timeline of the project and the costs associated with the same are also taken into consideration when planning and implementing a construction project with the aim to enhance the standard of the project effectively (Chartered Institute of Building, 2011). Furthermore, in agreement, the report published by Commonwealth of Australia (2012) also depicted that these issues related with quality and cost of the project are undertaken most consciously with the aim of enhancing the sustainability of the construction industry (Chartered Institute of Building, 2011). Correspondingly, evidence of adapting the change can be apparently observed with reference to the significance provided by the industry players towards incorporating advanced technological mechanisms with the aim of enhancing the performance and productivity of the industry. According to the modern trend, the industry players have also tried to incorporate modern mechanisms with the aim of reducing dependency on human workforce and thereby eradicating the issue of lack of skills labour in the present day context, as an effect of the changes witnessed (Wibowo, n.d.). Such advancements of technology can be identified in the form of software developments and the innovation of new techniques to plan and implement construction projects, keeping parity with stakeholders of the project. For instance, the modern construction industry has incorporated the Building Information Modelling (BIM) to enhance the efficiency of the industry at a larger extent. The BIM framework is specifically designed in order to ensure quality based operations and maintenances of the buildings during the construction (Wibowo, n.d.). Such innovations have undoubtedly helped in the development of the construction industry, making it able to adapt to the changes witnessed. The Trend of the Construction Industry over the Last 20-30 Years The global construction industry has apparently been one of the fastest growing sectors. According to the report of NBM Media (2004), the significance of the industry can be identified with reference to its ability to have maintained a stable growth rate since 2 to 3 decades, with substantial contributions to the Gross Domestic Product (GDP) of several nations. NBM Media (2014) also claimed that the industry has faced enormous amount of challenges from the global market due to the persistent construction flaws and financial turmoil witnessed since the past few years. To be noted in this regard, such stability and development on a continuous basis would have been somewhat impossible if the industry lacked adequate adaptability to changes. In agreement, McOrmond (2004) argued that the industry had to face several impacts on the varied sectors in the global market, including steel, cement, power, petroleum, and aluminium along with information technology among others. Evidence to such claim can be identified in terms of enhanced telecom, railways as well as oil and gas industries, which have further been correlated with the developments witnessed in the construction industry of specific nations (Calderon & Serven, 2014). Subsequently, the industry has played a major role to enhance the quality of urban infrastructure and communication processes through its stable effort during the last couple decades, which certainly proves its ability to adapt change (NBM Media, 2014; McOrmond, 2004). During the late 20th century, the construction industry relied on four basic phases and thereby followed a simple approach, constituting project selection, project delivery system and project planning along with project control as noted by Wiegers (2014). As an effect, the degree of independency was high among the contractors while challenges of management process implementation were substantially low (NBM Media, 2014; Wiegers, 2014; McOrmond, 2004). Fig.1: Traditional Trend of the Global Construction Industry [Source: Wiegers (2014)] However, it was with the intention to adapt changes that the industry began incorporating innovative ideas to systematise its management process and gain efficiency in the overall project implementation process. Correspondingly, the report of National Institute of Building Sciences (2014) claimed that delivery processes and controlling factors are the key aspects that assist the construction project. In agreement to the provided fact, Amirah & et. al. (2013) further explained that with the intention of the construction industry to ensure the ethically sound and productive function of the industry, contractors have been much emphasised to improve quality measures and suffice the expectations of the clients to the maximum extent. The report of National Institute of Building Sciences (2014) mentioned that with the aim of enhancing the quality of construction and to satisfy the need of stakeholders, the industry has emphasised towards a few factors, which intend to directly initiate its performance, efficiency and significance and thus, provides evidence to its adaptability of the changes witnessed within the society (National Institute of Building Sciences, 2014). The following diagram is depicted below for better understanding of the project management concept of construction industry as applied in the current phenomenon. Fig. 2: Multiple Phases of Project Management Principles of Global Construction Industry in the Modern Era [Source: National Institute of Building Sciences (2014)] According to National Institute of Building Sciences (2014) in order to enhance the efficiency of the construction industry, it is essential to conduct a project management plan, through which entire planning, controlling, implementation, development planning can be done for ensuring proper accomplishment of the determined objectives. Arguably, it is through the assistance of this project management plan that the potential resources, accurate schedules, budgetary limitations, involved risks and expected quality of the construction can be identified, as noted by McOrmond (2004). The development of a project management plan also helps to recognize the technical requirements, essential authorisation and required constructional documents, which in turn delivers managerial efficiency to the industry players (National Institute of Building Sciences, 2014). Such flexibility in altering, reforming and transforming the managerial perceptions imposes significance influence on the adaptability of the industry to accommodate changes. As stated by Weil (2010), effective scope of management principles has also assisted the construction industry to conduct a systematic process for monitoring and managing all the factors related to constructing a particular project. At the same time, effective scope of management principles played a significant role in enhancing project designs and accuracy features to increase efficiency in the construction phase as well as in case of project delivery (National Institute of Building Sciences, 2014). This particular fact also signifies the adaptive nature of the construction industry to suffice the growth needs in the modern societal contexts through better change management. As per National Institute of Building Sciences (2014), innovating and pioneering strategies taken by the construction industry players with regard to their objective of cost management is also one of the most essential constituents through which, project planning, project designing and implementation could be conducted more effectively. In this regard, it can be asserted that through systematic cost management process, it is possible to identify the differences between budgetary costs and actual costs of the construction project, which can assist in identifying the current market scenario. At the same time, it also assists the construction industry to take adequate decisions according to the situation, increasing its adaptability to changes (National Institute of Building Sciences, 2014). Similar to cost management initiatives, the construction industry have also taken due measures towards schedule management, which has accelerated the efficiency of the industry in managing time constraints during the project implementation process. This has further helped it reduce time management challenges within the industry and likewise, help it adapt changes with greater flexibility (Weil, 2010). To be mentioned in this regard, evidences postulate that changing expectations of the contractors and industry stakeholders have also been a major driver of change within the industry. Contextually, sufficing the needs of the modern stakeholders was also a significant challenge for the construction industry to adapt change effectively (National Institute of Building Sciences, 2014; Weil, 2010). Simultaneously, in order to deliver successful construction projects, Wiegers (2014) argued that the construction industry has been able to incorporate a specific approach in terms of an integrated delivery process through which, the industry can deliver quality projects in terms of design and stability. At the same time, through this measure it was possible to ensure the quality of construction within its expected deliverance timeline, which can be argued as another major evidence to the adaptability of the construction industry to incorporate the changes (National Institute of Building Sciences, 2014). Summary Based on the above discussion, it can be asserted that by incorporating various innovative ideas and strategies, the construction industry has been able to decipher a high degree of adaptability to change. In this regard, it can be asserted that during the last couple of decades, the industry had been lacking in the global market due to its constructional flaws, but by incorporating several modern measures and techniques the industry has reinforced its position in the global market that had hindered its ability to adapt changes. Governmental interventions, technology innovations and strategic diversity have been some of the crucial changes witnessed in the construction industry, which were adapted efficiently to enhance its overall significance within the industry. Thus, it can be asserted that the growing potentiality of the construction industry is positive in the global market, which is the biggest evidence of its adaptive nature (Weil, 2010). Therefore, it can be inferred from the literature review conducted that the concept of project management had been introduced in the construction industry during the year 1950s. The aforementioned diagram shows the change in the construction industry in terms of modern era for the transparency and standard maintenance of the nation. Over the year, the industry had operated its operations, adhering the traditional project management principles and also witnessed growth in the global market. During the early 21st century, when the WTC building collapsed in the USA, the industry had experienced massive criticism from the entire global market. In this regard, in order to enhance the performance of the industry and to ensure effectiveness of the industry, a new structured project management principle has been incorporated by the construction industry. Moreover, several new technologies and mechanism has been applied with the aim of enhancing the efficiency of the industry. Thus, in order to conclude the topic it can be asserted that the construction industry needs to consider the scope of project along with the risks involved, quality of the project, time schedule and the financial budget of the construction project, through which it can ensure future growth of the construction industry in the global market. References Amirah, N. A. & et. al., 2013. Safety Culture in Combating Occupational Safety and Health Problems in the Malaysian Manufacturing Sectors. Asian Social Science, Vol. 9, No. 3, pp. 182-191. Biggs, H. C. & et. al., 2005. A Study of Construction Site Safety Culture and Implications for Safe and Responsive Workplaces. The Australian Journal of Rehabilitation Counselling, Vol. 11, Iss. 1, pp. 1-8. Biggs, H. C. & Williamson, A. R., 2012. Safety Impacts Of Alcohol And Other Drugs In Construction: Development Of An Industry Policy And Cultural Change Management Program. 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