Project Management in the British Construction Industry - Dissertation Example

Culture, Behaviour and Management – Project management in the British construction industry and the credit crisis – mind-sets and ideologies The use of mind-sets and ideologies is a common practice in regard to various social, political and economic plans. The potential use of these frameworks in the construction industry has not been adequately examined. In this paper, the ideologies available to the managers of construction projects for facing various cultural and behavioural challenges developed in the construction industry are critically reviewed. The potential effectiveness of these ideologies is tested through the London Olympics 2012 construction projects. It is proved that such ideologies can be effective in the construction industry but only the terms that they are appropriately supported in all their aspects. 1. Introduction In the last decade, the rapid expansion of globalisation in countries worldwide has caused a series of changes in traditional organizational practices and frameworks. It is in the context of this trend that the recent credit crisis appeared. The specific crisis has been related to a series of mind-sets and ideologies. In this way, the management of the effects of the credit crisis is not an issue of organizational practices but rather of ideologies and behaviour. The role of mind-sets and ideologies in the development of the recent credit crisis is examined in this paper; emphasis is given on the potential use of these mind-sets for handling the effects of the crisis on the UK construction industry. The construction projects of the London Olympics 2012 are used as indicative examples for highlighting the potential value of mind-sets in handling problems related to the financial crisis – especially cultural and behavioural problems. It is concluded that the recent credit crisis has been closely related to mind-sets and ideologies; however, different approaches could be used for explaining the involvement of these ideologies in the specific crisis. On the other hand, the use of these mind-sets for managing cultural problems in the construction industry would help to improve the performance of the relevant projects – by limiting the effects of the crisis on the various phases of these projects. It is recommended that project managers involved in the particular construction projects – those related to London Olympics 2012 – emphasize more on the use of mind-sets for resolving the cultural and behavioural problems of these projects. At the next level, these practices could benefit the construction projects developed in markets with different characteristics, such as the Thai market. 2. An explanation of the recent ‘credit crisis’ taking the perspective of ‘ideologies and mindsets’ to account for the phenomenon. The recent credit crisis proved the inability of leaders in organizations of all industries to take the necessary measures for increasing the strength of their firm towards the market pressures. As noted in the study of Dotlich et al. (2009) in order to be able to face the developments in the global market, modern leaders should ‘develop four mind-sets: a) a global mind-set, b) an innovation mind-set, c) a virtual mind-set and d) a collaborative mind-set’ (Dotlich et al. 2009, p.36). The above mind-sets could be further explained as follows: a) the first (global) mind-set would help leaders to understand the conditions in the global market and set the appropriate strategic priorities, aiming to help their firm improve its position in the international market, b) the innovation mind-set would refer to leaders who are able to identify and promote creative ideas; these ideas could help organizations to increase their competitiveness or, at least, to avoid major losses in periods of severe crises, like the recent one, c) the virtual mind-set refers to leaders who are able to communicate effectively with external providers established in other countries worldwide (Dotlich et al. 2009, p.36), d) the collaborative mind-set reflects the leader who is capable of developing effective strategic alliances – referring to the cooperation not just in the external but also in the internal organizational environment; the collaborative mind-set leader could help to reduce conflicts within the organization and to improve the level of cooperation between the business and its suppliers. Through the issues discussed above it is made clear that the recent credit crisis is closely related to the mind-sets of leaders worldwide – reference is made not just to political leaders but also to organizational leaders. In fact, it seems that the mind-sets described above, which were adopted by leaders worldwide, were highly involved in the recent credit crisis. In fact, it could be stated that it was because of the lack of global mind-set and collaborative mind-set that the recent credit crisis was expanded rapidly in countries worldwide. The leaders of USA financial institutions who handled financial products of high risk (these products have been considered as being the cause of the recent recession) were not able to understand the potential effects of their decisions on the local and the international market – i.e. they were not global-mind set (Muolo et al. 2010). At the same time, the above leaders were not of collaborative mind-set, meaning that they were not able to identify and develop strategic alliances so that to minimize the risk of their decisions. Instead, these leaders supported the promotion of financial products, which were not appropriately secured; the lack of funds for covering the risk related to these products led to the appearance of the crisis and its rapid expansion internationally. At the same time, Gandevani (2009) supported that the recent financial crisis has been related to three factors: a) the offer to the public of money which was considered as cheap – afterwards, it was proved that there was no such case, b) ‘the borrowing of the banks from consumers, corporations and the government was excessive’ (Gandevani 2009, p.6) and c) lack of ability to foresee the potential outcomes of the above practices – at this point, the non-existence of global mind-set leader, as described above, has been made clear. In a recent report (in 2010) of the United Nations it is explained that the recent financial crisis revealed the lack of ‘dynamic interactive capability’ (United Nations 2010, p.40), meaning the power to develop a system that could respond rapidly to any negative sign regarding the performance of the financial market – both at regional and at international level. In accordance with the above, the appearance and the development of the recent credit crisis should be regarded as the result of the lack of specific mind-sets; if the leaders involved were willing to improve their leadership practices, then they would be able to respond effectively to the financial pressures of 2007; the credit crisis of 2007-2009 can be considered as the result of lack of appropriate ideologies and mind-sets (Muolo et al. 2010), as they were indicatively described above. A similar approach regarding the potential role of mind-sets in the recent credit crisis is developed in the study of Goldberg (2008). In accordance with the above researcher, the recent credit crisis has been related to the following practice: those involved in the management of funds for financial institutions across USA ignored the information available – reference is made to the information valuable for the management of the funds of investors in the country’s financial institutions. Moreover, even in cases that existing information was used for developing critical investment decisions, still problems existed: the information available was not used appropriately; in this way, the benefits from its use were extinguished (Goldberg 2008). The failure in retrieving and managing information has been resulted because of the personal beliefs of the individuals involve in these activities; there was a thought that the use of information related to the financial status or practices of their customers, would lead financial institutions to severe turbulences, an assumption which was verified in the years that followed (Goldberg 2008). In accordance with the above, the recent credit crisis has been the result of the failure of leaders and financial managers in USA to adopt their mind-sets to the needs of the particular industry; the above problem could be probably related to the lack of appropriate skills of the individuals working in the specific field. 3. A case study of one current UK construction project with a discussion of the ‘cultural and behavioural’ challenges in managing that project through the recent credit crisis. The construction projects for the London Olympics 2012, the Olympic Park and Village site, East London The Olympic Park and Village in East London are still in progress. The particular project has been proved to be quite demanding; it is perhaps for this reason that 12,500 employees have been asked to work in the particular site (Construction News 2011). The above work is an indicative example of the potential needs of a complex construction project but also of the cultural and behavioural challenges of construction projects with similar characteristics. The leaders of this project have to face the following dilemmas: Which will be the characteristics of the workforce? Reference is made in this case specifically to the cultural characteristics of employees in the particular project, since this issue is related to the subject of this study; Also, the question of how the workforce engaged in this project would achieve a high performance should be also responded. Issues of behaviour should be mainly discussed, due to their relevance to current paper. As of the first question, it seems that project managers of the specific construction project have set the following criteria: a high percentage of the employees should be local in order to avoid conflicts and increase the chances for effective communication. Indeed, a quarter of the workforce are locals (SportsBeat, 2011), a practice that helps to achieve the following targets: local economy is significantly supported; communication is effective, as possible; most important, conflicts with residents in the areas near the Park are effectively controlled – since a high number of locals participates in the particular project. At this point, the following issue should be highlighted: despite the extremely high number of the employees engaged in the particular project, no complaints have been developed – as revealed by reviewing the publications made in regard to the above project – in relation to cultural or other inequalities. As explained above, quarter of the workforce is consisted from locals. This means that there are 3 more quarters consisted from people living in other areas, a fact revealing that people from all areas of the country have been financially benefited from the specific project. The local residence has not been a decisive criterion for choosing employees, a fact which is a primary positive sign for the HR management rules applied on the relevant project. At the next level, issues like gender or race/ ethnicity have not been set as criteria in entering the workforce, not just indications exist in regard to the HR policies used in the particular project (SportsBeat 2011). In terms of the behaviour towards the employees, project managers in the specific project seem to emphasize on the promotion of equality and fairness in the workplace – people with no experience but appropriate academic knowledge have been chosen along with people of no working experience for working in the specific site. In practice by emphasising on the cultural and behavioural needs of the project, the project managers have managed to keep the cost of the specific project within the initial target. In terms of timing also regarding the completion of the project, everything seems to be under control – referring mainly to the time and the cost of the project as initially estimated. In terms of its economic and social effects, the particular project is important: by offering work to unemployed and apprentices project managers in the specific project have helped to improve the quality of life of people who had no chance to use their professional skills or to achieve their personal development (SportsBeat 2011). The advantages of the particular project – compared to other construction projects - in terms of the HR policies used for managing cultural and behavioural challenges can be identified at the following points (as retrieved through the relevant committee’s report on employment and skills, October 2010): a) emphasis has been given on the continuous development of the skills of employees; an example of this effort is the establishment of 350 Apprenticeships for people who are highly interested in entering the particular field; b) the involvement of women in the particular project has been highly supported; towards this direction, ‘an expo has been hosted for women working on the Olympic Park and the Athlete’s Village’ (London 2012, Employment and skills Report, p.4), c) the involvement of disabled people has been also supported, aiming to ensure equality and fairness in the project’s workforce, d) black people and people belonging in minorities have been given equal chances with candidates with different racial background to enter the workforce of the specific construction project (London 2012, Employment and skills Report, p.2). The efforts of the project’s managers for equality and fairness are reflected in the graphs 1, 2 & 3 in the Appendix section. In accordance with the above, the project managers in the specific construction project had to face a series of important cultural and behavioural challenges regarding the project’s workforce. The fact that the number of the project’s employees has been quite high has been another challenge for the project’s managers, in terms that it would be quite difficult for managerial initiatives to be developed when having to communicate effectively with such extensive workforce. At the next level, the fact that the particular project had to be developed in the context of a strong financial crisis, the effects of which continue to exist despite the claims that the specific crisis ended in 2009, is another sign indicating the effectiveness of the planning and the monitoring of the specific construction project; being on time in compensating the employees and keeping employees motivated in current market conditions can be characterized as important achievements of the project’s managers. Despite the above challenges, the particular project progresses fast in accordance with the terms of the relevant agreement; no failures in terms of cost or deadlines have been identified, a fact that would be quite encouraging for the managers of the construction projects who would have to face similar challenges. The use of similar ideologies and mind-sets, as derived through the strategic choices of managers in the specific construction project, could help managers in other construction project to overcome cultural and behavioural barriers related to the recent credit crisis, as explained below. 4. Concise recommendations for a project manager in managing the selected project through the credit crisis. The potential effects of the measures suggested on the Thai construction industry. In the context of the issues discussed above, a project manager who would wish to involve in a similar construction project, should set specific priorities in terms of the HR policies used in the particular project: fairness and equality should be promoted across the construction site; the use of appropriate mind-sets and ideologies could help to increase employee motivation and performance, a fact that will also benefit the entire project; in any case, for choosing the ideologies that would best serve the needs of a construction project, it would be necessary to take into consideration the characteristics and the needs of the local social and economic environment. The local culture and ethics should be also taken into consideration, as they would have a critical role in the success of any strategic initiative. The following recommendations would be made to project managers of the Thai construction industry who would try to develop similar construction projects: partnering should be used, along with other similar forms of collaboration (Thurairajah et al. 2007, p.111587) for facing any problem regarding cultural integration in a construction site’s workforce; the above practice has been proved to be quite effective in construction projects in UK and could be also used in Thai projects of similar characteristics. In general, the participation of women in the construction projects should be highly promoted; in fact, women can be quite effective in the specific industry, as proved through the research developed by Powell et al. (2008). From a similar point of view, Ginige et al. (2007) supported that in order for women to be motivated to work in construction projects, it would be necessary for the image of the specific industry to be improved – meaning the work conditions in the particular industry as reflected in the schemes promoted for the support of employees in construction projects. At the next level, it is noted that multiculturalism would be quite important for the success of construction projects – in terms of the need for a variety of skills/ competencies (Ochieng et al. 2009); however, multiculturalism would support the success of construction projects only if the project manager is ‘aware of the cultural variation’ (Ochieng et al. 2009, p.1). In any case, it should be made clear that the construction projects of the Thai construction industry would be benefited by the practices and the ideologies of project managers in the UK construction industry under the following terms: the project managers’ skills would be carefully reviewed – as of being able to capture and develop the ideologies highlighted above; moreover, the culture of the organizations involved should be aligned with the needs of the above ideologies – otherwise the mind-sets used in the UK construction industry would not be of any use in the Thai construction industry – at this point the level at which these ideologies would be aligned with the Thai culture and ethics should be also examined and evaluated. 5. Conclusion The success of the London Olympics construction projects up to now has been related to the HR policies used by the managers of the particular projects. The advantage of these practices, compared to similar ones in other industrial sectors, seems to be their dependency on particular ideologies and mindsets, especially in the context of the current credit crisis which has caused severe turbulences in all industrial sectors. These ideologies have been found to be critical for the success of construction projects across UK – referring especially to partnering, as a form of collaboration quite valuable in the construction industry ((Thurairajah et al. 200). These ideologies should be also effective in the Thai construction industry under the terms that the conditions in the internal and external environment are aligned accordingly, in the context described above. The skills of managers of the relevant construction projects should be also reviewed, ensuring that they are capable of promoting the ideologies required for the successful completion of the construction project involved. References Construction News. 20 April 2011. Olympic Park workforce hits 12,500. Available from London 2012. October 2010. Employment and skills update. Available from < http://www.london2012.com/documents/oda-publications/jobs-skills-futures/jsf-bulletin-october10.pdf> SportsBeat. 2011. LONDON 2012: Quarter of Olympic Park workforce are local residents. Available from < http://www.morethanthegames.co.uk/london-2012/2014447-london-2012-quarter-olympic-park-workforce-are-local-residents> Dotlich, D., Cairo, P., Rhinesmith, S. 2009. Leading in Times of Crisis: Navigating Through Complexity, Diversity and Uncertainty to Save Your Business. Hoboken: John Wiley and Sons Gandevani, N. 2009. Winning Edge Trading: Successful and Profitable Short and Long-Term Systems and Strategies. Hoboken: John Wiley and Sons, 2009 Ginige, K N, Amaratunga, R D G and Haigh, R. 2007. Improving construction industry image to enhance women representation in the industry workforce. In: Boyd, D (Ed) Procs 23rd Annual ARCOM. Conference, 3-5 September 2007, Belfast, UK, Association of Researchers in Construction Management, 377-385. Goldberg, R. 2008. The battle for Wall Street: behind the lines in the struggle that pushed an industry into turmoil. Hoboken: John Wiley and Sons, 2008 Ochieng, E.G., Price, A.D.F.. 2009. Managing cross-cultural communication in multicultural construction project teams: The case of Kenya and UK. International Journal of Project Management, doi:10.1016/j.ijproman.2009.08.001 Muolo, P., Padilla, M. 2010. Chain of Blame: How Wall Street Caused the Mortgage and Credit Crisis. Hoboken: John Wiley and Sons, 2010 Powell, A, Hassan, T, Dainty, A and Carter, C. 2008. The under-representation of women in European construction research. In: Dainty, A (Ed) Procs 24th Annual ARCOM Conference, 1-3 September 2008, Cardiff, UK, Association of Researchers in Construction Management, 881-890. Thurairajah, N., Haigh, R., Amaratunga, D. 2007. An empirical study of the cultural and behavioural challenges in the UK construction partnering, pp. 1587-1600 Available from < http://www.bear2008.org/post/208.pdf> Appendix Graph 1 – Characteristics of workforce in the Olympic Park – as in September 2010 (Source: London 2012, Employment and skills Report, p.6) Graph 2 – Characteristics of workforce in the Olympic Park – as in September 2010 (Source: London 2012, Employment and skills Report, p.7) Graph 3 – Characteristics of workforce in the Athlete’s Village – as in September 2010 (Source: London 2012, Employment and skills Report, p.9) Read More