Causes of Failures of Construction - Essay Example

Introduction Failure of construction projects is one of the most dreadful consequences that can occur as a result of executing the project as it not only brings a bad name to the parties involved in the execution of the project, but also incurs them a lot of cost and waste of time. Failure of a construction project can be defined as, “1) the act of falling short, being deficient, or lacking; 2) nonattainment or nonsuccess; 3) nonperformance, neglect, omission; 4) bankruptcy; and 5) loss of vigor or strength” (Hohns, 1985, p. 75). Failures of construction projects can be divided into two basic categories; procedural failures and technical failures (Yates and Lockley, 2002, p. 8). The difference between procedural failures and technical failures is that the former happen because of human errors while the latter occur because of physical proximate causes. In a vast majority of cases, technical failures are an outcome of the procedural failures. Procedural failures include but are not limited to the problems of communication between the parties involved in the project, and lack of resources. On the other hand, technical failures include such circumstances as settlement of the structure because of inadequate soil compaction. According to Thornton (1985), three categories cater for the failures of construction projects; namely safety, ancillary and functional. Thornton (1985) suggests five areas of failure in the construction projects, which are the deficiencies in design, material, construction, administration, and maintenance. Owing to the difference in the nature and scope of different projects, causes of failure of the construction project may differ from one case to another. However, there are certain risk factors that are commonly experienced on construction projects and which assume immense potential to affect the chances of successful completion of a project for the least if not make the project fail. Identification of the potential causes of failures of the construction projects is an important step in the way of making the projects successful (Yates and Lockley, 2002, p. 8). This paper discusses the administrative causes of failure in the construction projects. Administrative causes of failure of a construction project are fundamentally controlled by the project management. Management’s ability to cope with both the internal and external factors of risk for a certain construction project plays a decisive role in determining the success of a project. Causes of failure of construction projects discussed in this paper include human and organizational aspects and change management with referral to certain case studies. Case Study: Canyon Views Project Canyon Views Project is a project of construction of villas in DHA Phase II Extension, Islamabad, Pakistan. Bridgestone Construction Company has served as the general contractor on this project. Although the project is in progress and cannot be considered as a failure altogether, yet the individual milestones in the way of execution of the project were not timely accomplished due to which the customers of villas had to wait for considerable time to enter their villas after making the payment. One reason for the delay of accomplishment of milestones is the frequency of change of project managers of the general contractor. Bridgestone Construction Company saw many changes of project manager. Within just the first two years of the start of project’s execution, at least three project managers had been changed. Some left the company on their own after working in it for some while while the others were terminated b the general manager (GM). The reason project managers could not stay for long on the project was not quite hidden from the workforce. The GM had had so much influence and control on the project, that he would not let the project managers exercise their rights as a project manager on the construction site. Any decision taken by the project managers seeked approval of GM before implementation, while GM any time passed instructions counter to the ones passed by the project managers. This left the status of the project manager little more than a dummy who was controlled and wired by the GM. Probably the project would not have suffered quite as much had the project managers submitted themselves to the GM, because that way, the GM could be assumed to be playing the role of a project manager. The project actually suffered when the project manager tried to exercise his rights as a project manager counter to the will of the GM. There were certain subcontractors whose payment was withheld by the GM despite their work had completed. The GM did that with an intention to keep them working further and might release the payment in the end. But there were times when the project manager paid such subcontractors on his own out of his sense of responsibility and sensitivity towards their issues. This not only caused the project manager to lose money as such grants were not promised to be reimbursed by the GM, but also made the paid subcontractors go away as they would not like to keep working with a contractor who is very reluctant to release their payments in a timely fashion. Consequently, the project manager was terminated by the GM and new subcontractors had to be arranged which not only consumed time, but also required extra effort from the contractor to customize the skills of the new subcontractors according to the individualistic needs of the project. Case Study: Turkish Companies One of the most fundamental causes of failure of construction projects is failure of the construction companies. In order to optimize on its potential to successfully complete a project, it is imperative that the company has a stable home office with a stable organization structure. Failure of a construction project can in part be attributed to the failure of the construction company that is rendering its services on it. Kivrak and Arslan (2008) conducted a research on 40 Turkish construction companies to identify the critical causes of failure in small to medium-sized construction companies. As a result of this research, two factors that were identified as the most important causes of failure of the construction companies were the economic conditions of the country and lack of sufficient experience of the companies in business. Sub-factors of lack of experience of business included problems with cash flow and poor relationship between the contractor and the client. Risk Factors: Change Changes experienced during a construction projects can be classified into two types depending upon the level of severity of change; gradual changes and radical changes (Sun et al., n.d., p. 7). A gradual change has a low intensity, occurs slowly, and is generally spread over a prolonged time. A radical change, on the other hand, is unexpected and sudden having a large impact. There is difference between the time at which the two types of changes occur, with the gradual changes generally occurring in the stage of design development while and the radical changes generally occurring after the completion of the project design. Gradual changes in general and radical changes in particular have a large impact on the tendency of a construction project to be successful as the changes experienced along the way definitely mean a consequential change of cost of the project. “Based on time, change could be anticipated or emergent, proactive or reactive, or pre-fixity or post-fixity. Based on need, change could be elective or required, discretionary or nondiscretionary, or preferential or regulatory. Based on effect, change could be beneficial, neutral or disruptive” (Motawa et al., 2007). The tendency of parties involved in the execution of project to manage the gradual or radical changes depends upon whether the changes were anticipated or emergent. Generally, it is easier to manage anticipated changes than the emergent changes because the latter are unplanned for. Management of change in the construction projects requires the parties involved to develop an integrated solution for the organization and coordination of the change process. This involves organization and coordination of drawings, documents, costs, information, personnel and schedule. Miscellaneous Risk Factors Miscellaneous causes of failure of construction projects include but are not limited to failure of a qualified leader, lack of consistency between construction sequences and design considerations, subjectivity about the division of responsibilities among the project participants, financial stress to speed up the project, poor communication among the parties involved in construction, lack of competence of the workforce, and obliviousness about the actual site conditions (Yates and Lockley, 2002, p. 12). In addition to that, unrealistic profit margin has been found to cater for more than 50 per cent of the total studied cases of business failures in construction (Kangari, 1988). Importance of Learning Risk and uncertainty in a construction project are indicative of lack of experience and knowledge. Every construction project is unique which implies that after executing a project, there is some learning effect that is definitely accomplished by the parties involved in the execution of the project. Lack of learning in a construction project has not frequently been identified as an important cause of failure of the project (Storm, n.d., p. 2). Causes of failure that have been conventionally determined relate to the conceptual level of learning. Baker, Murphy, and Fisher (1974) refers to them as “abundance of bureaucracy” and “inadequate control techniques”. Lack of learning is among the main factors that cause failure of a construction project as learning has been frequently considered as a fundamental part of project management (Bredillet, 2004; Cooper, Lyneis, and Bryant, 2002). A construction project on which certain parties have worked is a potential source of learning for all of them. Learning derived from the execution of a construction project can be used to improve the construction practices in the future. Learning takes place at different levels, but three main areas of learning can be identified, namely the managerial learning, operational learning and organizational learning. Learning occurring on all of these is distinguishable from one another owing to the fact that managers, organizations and workers are separate entities. It is irrational to assume that learning in one of these entities results in a consequential learning in the others as well. Learning is essentially a process which needs to be understood in order to be able to identify its causes and effects. Change Management Strategy Sun et al. (n.d.) have proposed a change management toolkit that may be adopted for effective management of change in the construction projects. The aim of this toolkit is to address two of the most fundamental aspects of the process of change management, which are the prediction of change and the organization’s reaction to it. Sun et al. (n.d.) suggest that it should be achieved by rescheduling the workflows. Two tools have been proposed for this; the Change Dependency Framework (CDF) and the Knowledge Management Guide (KMG). CDF makes all project parties use standardized terminologies and procedures for different projects as well as for various phases of the same project whereas KMG “provides advice not only on how to use this system but also on how to better understand project change and change management as well as on how to learn from the process of managing project changes” (Sun et al., n.d., p. 19). Kotter’s Change Management Model Numerous theories have conventionally been proposed to help the organizational leaders implement and manage change. John Kotter’s contribution in this field cannot be overstated. Kotter has suggested an eight step model which may prove helpful in change management if implemented effectively. The eight steps of management of organizational change given by Kotter sequentially include creation of urgency, development of powerful coalition, creation of a change vision, communication of the change vision, eradication of obstacles, creation of short-term success goals, building on the change, and integration of change into the corporate culture (Mind Tools, 2012). In order to implement Kotter’s change model, construction project managers should start from emphasizing upon the need for an urgent change, work on the development of team to gain people’s consent for implementing the change, introduce a link between the concept of change and overall vision so that people may understand what is happening, take measures for quick communication of change and the vision, identify barriers in the way of working of process and do the needful to remove them, inculcate a sense of appreciating the achievement of preliminary goals in the team, and at the same time, make the team aware of how to progress in the same direction to achieve the ultimate success, and keep motivating the organizational personnel to review and modify the change. Conclusion Concluding, construction projects are susceptible to failure because of myriad of factors. One of the most important factors affecting the construction project’s success is administrative failures. Before executing a project, it is imperative that a contractor has a sound project management organization in place with a stable organization structure that has well-established communication lines all across the managerial hierarchy. Division of responsibilities among the senior management is a fundamental pre-requisite of success on a construction project. Boundaries and interfaces between the job responsibilities of individual managers should be well-defined and communicated so that there occur no overlap of responsibilities. The tools CDF and KMG can be used to reduce the number of changes as well as to reduce the negative effects of changes that are unavoidable on a construction project. This reduces the tendency of a construction project to be delayed or incur extra costs to the parties involved in its execution. In order to adjust to the changing needs of the projects at every stage of execution, it is imperative that management remain consistent in the development, implementation, evaluation and modification of their change management processes. References: Baker, BN, Murphy, DC, and Fisher, D 1974, Determinants of project success, NGR, National Aeronautics and Space Administration. Bredillet, CN 2004, Projects: Learning at the edge of organization, in Morris, PW, and Cooper, KG, Lyneis, JM, and Bryant, BJ 2002, Learning to learn, from past to future, International Journal of Project Management, Vol. 20, pp. 213-239. Pinto, JK, The Wiley Guide to Managing Projects, Hoboken: John Wiley & Sons. Hohns, M 1985, Procedural changes in the design and construction process to reduce failures, Reducing Failures of Engineered Facilities, ASCE, New York. Kangari, R 1988, Business failure in construction industry, Journal of Construction Engineering and Management, Vol. 114, No. 2, pp. 172-190. Kivrak, S, and Arslan, G 2008, Factors causing construction company failure, Building Abroad, pp. 297-305. Mind Tools 2012, Kotter's 8-Step Change Model, viewed, 13 April 2012, . Motawa, IA, Anumba, CJ, Lee, S, and Peña-Mora, F 2007, An integrated system for change management in construction, Automation in Construction, Vol. 16, No. 3, pp. 368-377. Storm, P n.d., Lack of Managerial Learning as a Potential Cause of Project Failure, Open University of the Netherlands, viewed, 13 April 2012, . Sun, M, Sexton, M, Aouad, G, Fleming, A, Senaratne, S, Anumba, C, Chung, P, El-Hamalawi, A, Motawa, I, and Yeoh, ML n.d., Managing Changes in Construction Projects, viewed, 13 April 2012, . Thornton, C 1985, Failure statistics categorized by cause and generic class, Reducing Failures of Engineered Facilities, ASCE, New York. Yates, JK and Lockley, EE 2002, Documenting and Analyzing Construction Failures, Journal of Construction Engineering and Management, Vol. 128, No. 1, pp. 8-17. Read More