Construction Management & Economics

Edum-Fotwe, Francis; Price, Andrew; Thorpe, Antony

doi: 10.1080/014461996373458pmid: N/A

There is a variety of financial ratio analytical methodologies for evaluation of construction companies corporate performance and identifying potential insolvent contractors. These methodologies comprise traditional approaches, subjective index and ratio models. The shortcomings of the financial ratio analytical methods are highlighted and some approachesto improving their efficiency presented. It has been suggested that standardizing the assessment criteria of subjective index methods for the construction industry can reduce the variation in different expert evaluations and so lead to a more uniform assessment. Secondly, the transformation approach has been recommended as a means of improving the efficiency of ratio models.

Shirazi, B.; Langford, D. A.; Rowlinson, S. M.

doi: 10.1080/014461996373467pmid: N/A

The links between the theoretical issues influencing the structure of construction project organizations are discussed. The impact of the environment of a construction project and the technological sophistication of the project are considered in terms of how these factors shape project organizations. The environment is variously assayed for its complexity, its dynamism and its hostility. The technology used in projects is assessed by its level of certainty (whether it is well understood), its complexity and the level of interdependence between subactivities in the project. The variables are used to formulate hypotheses concerning their impact upon the structuring of construction projects and these are studied in 18 case studies. The research has been developed within an interpretive (phenomenological) paradigm. The findings suggest that complex environments lead to greater decentralization of authority, mainly by delegation. In the dimension of technology, complexity led to a wider use of liaison devices on projects with a greater number of technical functional specialists being used by projects. As projects become more technically interdependent then informality and flexibility are the principal mechanisms of project control.

Gidado, K. I.

doi: 10.1080/014461996373476pmid: N/A

Construction production planning is a paramount preoccupation of contractors and the process is rapidly increasing in difficulty with a continuous loss in confidence by clients. Today, one of the difficult issues facing practitioners in planning is that of a continuous increase in the complexity of construction projects. There seems to be no available tool or technique for assessing project complexity; consequently practitioners tend to neglect or subjectively assume its effect on project managerial objectives. This paper proposes an approach that measures the complexity of the production process in construction. The approach enables the construction practitioner to focus his or her attention on the issue of project complexity from the beginning through to the end of a project. By using a literature search and structured interviewing of practitioners, the paper has defined project complexity and identified the factors that influence its effect on project success in relation to estimated production time and cost.

Tan, Raykun R.

doi: 10.1080/014461996373485pmid: N/A

Using the 13 leading engineering consulting firms in Taiwan as samples, this empirical research adapts Bakos and Treacy's (1986) model to study the impact and linkage of information technology (IT) and competitive advantage. The five sources of competitive advantage are; competence in design and trade-off analysis, unique capability and services, switching costs, internal efficiency and interorganizational efficiency. Twenty-five ITs are identified and classified into five categories; administration and decision support, engineering analysis, organizational communication, design and project management, and advanced computer technology. For the firms surveyed, the design and project management system and the administration and decision support system have offered very good implementation results. Different ITs are shown to impact on the sources of competitive advantage differently. The diverse relative weights attached to the different sources of competitive advantage from the individual firm match the general theory that the characteristics of the firm influences competitive strategy. The relationship between the perceived IT impact and the assessed realized competitive advantage is demonstrated. The linkage between business performance and the assessed competitive advantage is inconclusive. This research is an empirical study of IT from the perspective of competitive advantage rather than from the more usual operational perspective. The validity of some of the initial findings could be verified by further study using multiple year performance data with larger sample size or through extensive case analysis.

Horner, Malcolm; Zakieh, Rashad

doi: 10.1080/014461996373494pmid: N/A

Recent research has demonstrated the feasibility of identifying within any category of project, a small number of cost-significant work packages whose value represents a consistently high proportion of the total bill value. Using the allied principle of quantity-significance, it proved possible to build simple models which could predict both the cost and the duration of a project. In the course of that work, a surprisingly linear relationship between value and quantity was noted. This paper reports the background to and consequences of that finding. Quantity-significant work packages are formed by aggregating those items within a trade for which a linear regression of value against quantity yields a correlation coefficient greater than 0.99 and an intercept insignificantly different from zero. The price of packages formed in this way can be determined simply by applying to all the items within the package the rate associated with the largest quantity, the so-called ‘characteristic item’. Application of the concepts of quantity-significance and characteristic items is expected to lead to simpler estimating and more effective control procedures,because there isno longer any need to allocate cost and resources to each individualitem contributing to a work package.

Ming, Chan Siu; Runeson, Goran; Skitmore, Martin

doi: 10.1080/014461996373502pmid: N/A

This paper analyses the profits from 221 construction projects undertaken by an Australian building firm in the period 1910–1938 and examines the factors that influence the firm's profit levels. This involves a series of multiple regression analyses with three dependent variables representing profit and 26 independent variables representing economic conditions and project characteristics. From these, 11 models are derived of which two are chosen as having the best explanatory power in explaining approximately 72% of the variability in profit levels movements. The results show that unemployment, interest rates, level of construction activity in the state, change of wage level, inflation rate of building material and project value significantly influenced the firm's profit level during the period.

Burns, Scott A.; Liu, Liang; Feng, Chung-Wei

doi: 10.1080/014461996373511pmid: N/A

Construction planners face the decisions of selecting appropriate resources, including crew sizes, equipment, methods and technologies, to perform the tasks of a construction project. In general, there is a trade-off between time and cost to complete a task - the less expensive the resources, the longer it takes. Using Critical Path Method (CPM) techniques, the overall project cost can be reduced by using less expensive resources for non-critical activities without impacting the duration. Furthermore, planners need to adjust the resource selections to shorten or lengthen the project duration. Finding the optimal decisions is difficult and time-consuming considering the numbers of permutations involved. For example, a CPM network with only eight activities, each with two options, will have 28 alternatives. For large problems, exhaustive enumeration is not economically feasible even with very fast computers. This paper presents a new algorithm using linear and integer programming to obtain optimal resource selections efficiently that optimize time/cost of a construction project.

doi: 10.1080/014461996373520pmid: N/A