Sustainable Construction Practice and Contractors Competitiveness - Report Example

Sustainable Construction Practice and Contractors’ Competitiveness: A Preliminary Study Contractors need to implement justifiable practices that will foster smooth adaptation to the emerging needs of resource efficiency and climate changes since the future of competitive advantage lies in these practices. A number of studies have been formulated to inquire about the value that sustainable practices adds to a contractor’s efficiency. This paper is aimed at relating sustainable practices that can be practiced within the construction industry as well as relating sustainable endeavors to business attractiveness. Background information on improving contractor’s competitiveness by way of sustainable strategies are discussed in this document Introduction The environment is exposed to significant impacts resulting from construction activities (McDonald & Smithers, 1998; Poon, 2000; Shen & Zhang, 2002). Constructors are therefore charged with the responsibility of ensuring that environment and the society is least affected by the construction project while maximizing positive contributions. There are a number of advantages that a company gains by good collabourative governance of environmental issues such as good reputation. (SCTG, 2002). Numerous research have been done on sustainable construction practices (Kibert, 2008). For instance, Hill and Bowen (1997) projected environmental policy, organizational structure, internal environmental audit, project environmental evaluation and environmental management as the major concepts of sustainable construction works. According to Trufil and Hunter (20060, small and medium firms can base their sustainable practices on economic, social, environmental and process dimensions. In addition, clients in the construction industry are developing a trend of depending on contractors, consultants and suppliers in adopting sustainable performances in construction project. FTSE4Good only entails companies that have good relationships with their stakeholders, respect to humanity and environment (SCTG, 2002). Based on back setting, FTSE4Good organizations are preferred to FTSE100 companies. The Dow Jones Global Sustainability Index (DJGSI) confirms that companies with high sustainability index had the capacity to overtake those with standards DJGSI by 15% between 1994 and 2000 (SCTG, 2002). Consequently, there is need for contractors to increase the degree of their sustainable practices to stay on top of the game. This document aims to explore how contractors can continue being competitive by employing suitable practices. How sustainability is related to competitiveness Porter and van der Linde (1995: p. 120) established a positive relationship between sustainable practices and competitive ability of the business. They stated that well-defined environmental measures have the potential of initiating innovations that lowers and results to an increase in business affordability. These innovations promotes proper management of resources such as labour and raw materials and consequently covers up for the environmental management costs. Eventually, this increases resource efficiency makes the contractor more competitive. Edwards, 1998; Porter 1991; Schaltegger & Synnestvedt, 2002; Stanwick & Stanwick 1998; Toms, 2000; Wagner, 2001; Wagner, Schaltegger, & Wehrmeyer, 2002) observed that top officials involvement in environmental management enhances the creation corporate policies and financial efficiency. (Lee & Ball, (2003). Wagner and Schaltegger (2003) also contributed to sustainable policies by developing an empirical model that relates sustainable practices to business competitiveness shown below Fig. 1. However, the previous studies did not explore any unique relationship due to reasons, which were later explained, by Wagner and Schaltegger (2003) as: Relationship between economic success and sustainability performance. ( Wagner & Schaltegger, 2003). 1. Methodological reasons- inadequate data and substandard environmental sustainability statistics. 2. Theoretical reasons- this included strategies, which are less effective on economic and financial position of the firm. Wagner and Schaltegger (2003) suggested a relationship between sustainability practices and economic success basing their arguments on Schaltegger and Synnestvedt model. The negatively sloping curve demonstrates the neoclassical theory of economics, they postulated that firms can only increase environmental protection activities at the expenses of economic success and that environmental policies are there to minimize of practices that with will add a burden of additional cost to companies. The u-shaped curve is based on revisionist view that increased environmental protection activity results in competitive advantages leading to effective processes, increased productivity, and reduced compliance cost and market prospects (Porter, 1991; Porter & van der Linde, 1995; Sinclair-Desgagné, 1999). The benefits are destined to decrease after the peak point because of more that proportionate investments on sustainable practices. The dotted lines indicate long-term perspective of the relation whereby it becomes necessary to develop new technologies and production methods in order to maintain competitiveness than sticking to the old features (Porter & van der Linde, 1995). Trufil and Hunter model provides a background for achieving sustainable practices for small and medium firms, it forms the basis upon which these firms can evaluate and uphold maintainable performance. .Fergusson & Langford (2006) appreciated the fact that improved environments replicated into improved performance and economic advantages. They managed to create a model that relates a firm’s performance improvement and strategy development and economic advantage shown in fig.3. Contractors’ competency in environmental supervision increases with their involvement in implementing environmental plans, consequently, their business performance also increases. Current research shows that there is no direct relationship between management practices and business economy in the construction industry. In addition, it is also impossible to identify these relationships quantitatively. Nevertheless, it is most likely that sustainable practices will be the backbone of economic advantage in the future and as a result, contractors need not to have rigid formulae to adopt sustainable practices in construction. Manageable/sustainable practices in construction industry Sustainable practices can be defined as incorporating environmental, economic and social considerations into the construction business plan and practices. It involves incorporating sustainable development principles in the entire construction process from the raw material all through to intermediated stages and management of the final product. Fig. 3. Relationship between environmental strategy development, competitive advantage and performance improvement (Fergusson & Langford, 2006). Shen & Zhang, (2002) identified environmental improvements in construction sites as a major factor dictating a contractor’s competitiveness since construction projects have a significant impact on the environment. A lot of emphasis have been directed to waste material minimization and reduction in emissions of hazardous substances to the environments. Numerous research has been done to investigate the effects environmental concerns in construction projects including negative effects resulting from rapid infrastructural development, waste control in construction sites and methods of evaluating construction practices and contractor doings (Shen, Lu, Yao, & Wu, 2005; Shen & Tam, 2002; Shen, Wu, Chan, & Hao, 2005; Shen & Yao, 2006; Tam, Shen, Zeng, & Ho, 2006). Social equity and cultural issues have been considered in the construction industry. The idea of Corporate Social Responsibility (CSR) has been adopted to evaluate a company’s social, economic and environmental activities (Myers, 2005). Corporate social responsibility was defined in an official report submitted to European Communities, (2001: p. 6) as a situation whereby a company voluntarily incorporate both social and environmental issues in their operations as well as their interaction with stakeholders. Porter and Kramer (2006) justified CSR in four dimensions as moral accountability, sustainability, authority to operate and good reputation and considered limitations of these factors. Jones, Comfort, and Hillier (2006) established that chief UK’s construction firms are applying CSR practices. Petrovic-Lazarevic (2008) made the same observations in Australia, his observation included reputation, responsibility to citizens, good relationship with the community, suppliers and representatives as well as reporting their take on CSR. Kibert (1994), sustainable construction practices as that which focuses on building sustainable environment while observing the following principles: 1) Reducing resource consumption as possible 2) Proper resource utilization 3) Employment of renewable resources 4) Protection for the natural environment 5) Creation of toxic-free environment 6) Ensuring quality in creating built environments Hill and Bowen (1997) summarized sustainable construction principle into four categories as social, biophysical, technical and social moralities. Government and Strategic Forum for Construction (2008). DTI (2006) drawn key sustainable construction practices as: 1. Creating operative construction plans 2. Developing and backing up focused clients in the public sector; 3. Designs based on full life value 4. Applying appropriate procurement and contracting assistances 5. Involving wholly integrated teams 6. Examining performance and implanting project learning and observing observations of current studies such as Bakhtiar, Shen, & Misnan, 2008; Bourdeau, 1999; Christini, Fetsko, & Hendrickson, 2004; CIB, 1999; DTI, 2006; Hill & Bowen, 1997; HM Government and Strategic Forum for Construction, 2008; Kein, Ofori, & Briffett, 1999; Kibert, 2008; Manoliadis, Tsolas, & Nakou, 2006; Nelms, Russell, & Lence, 2007; Ngowi, 1998; Ofori, 1998; Pitt, Tucker, Riley, & Longden, 2009; Rwelamila, Talukhaba, & Ngowi, 2000; Shen & Tam, 2002; Shen & Yao, 2006; Trufil & Hunter, 2006; Watuka & Aligula, 2002), A framework for implementing sustainable construction practice to improve contractors’ competitiveness An outline for applying justifiable construction practices to increase contractors’ competitiveness/attractiveness The additional costs incurred, time consumptions and resource consumption are applying sustainable practices may appear to contractor as non-rewarding hence discourages their participation. They have a notion that reduces their competitiveness, as it has no short run economic advantages. Some contractors have managed to adopt Environmental Management Systems (EMS) in Hong Kong but this idea have not been fully embraced by others. Studies conducted to bring solution include Tse (2001), which proposed that government to enforce policies to ensure that construction companies comply with EMS. However, this is considered as an external force that seek to enforce sustainable construction practices without emphasizing on competitive advantage. Nevertheless, bearable performances can be embraced more when it is caused by an internal drive Deming Cycle is considered as a good framework that can guide contractors in enforcing sustainable activities since it is critical in environmental quality management systems, ISO1400 standards to ensure quality environmental practices (Cascio, 1996; Mitra, 2008). The cycle consists of four stages of planning, doing, checking and acting. The framework is shown in figure four. The two dimensions in the framework represent sustainable performance and business competitive advantages respectively. Integrating sustainable practices largely depends on good understanding of the principles of sustainability and the legislations involved. These two factors are guidelines for implementing effective sustainable practices. Review of the process and making correction is essential in ensuring improvement. If sustainable practices are successfully implemented, the result is business competitiveness. Principles of sustainability and legislation involved Sustainability in construction has turned out to be one of the key research topics from the late 1980s. The efficiency in application is a restraint (Kibert, 2008). Sustainable construction is defined as the formation and management of a vigorous built setting based on efficient use of resource and principles of ecology. The sustainability legislation requires contractors to take action to defend the ecology and assume their corporate social responsibility. In China for instance, the regulations on the prevention of air pollution require contractors to incorporate necessary measures in their construction plans. Contractors should clearly comprehend and adhere to the regulations when implementing sustainable construction practices. The policy is designed to comply with relevant sustainability principles and legislation. On the other hand, the policy is unique to a particular contractor by taking into account its own background and characteristics. Strategies on sustainability The implementation of sustainability strategies can realize competitive advantage by putting together long-run gain with their efforts in sustainable development. The sustainable strategic management has transformed from a simple idea to an established structure for managing business (Stead & Stead, 2008). Therefore, the contractors should develop their own sustainability strategy based on their own settings to improve their future competitiveness. The main purpose for practicing sustainable construction is to attain continuous progress of sustainability performance and competitive advantage to the business competitiveness. Conclusion In conclusion, the accomplishment of sustainable construction practices can lead to improvement of contractors’ a sustainable general performance and give a business a competitive age. The structure is a practical guideline for contractors to expand their sustainability strategy. References Bakhtiar, K. A. B., Shen, L. Y., & Misnan, S. H. B. (2008). A framework for comparison study on the major methods in promoting sustainable construction practice. Jurnal Alam Bina, 12(3), 55e69. Baumgartner, R. J., & Ebner, D. (2010). Corporate sustainability strategies: sustainability profiles and maturity levels. Sustainable Development, 18(2), 76e89. Bourdeau, L. 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