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Engineering, Construction and Architectural Management

Volume 11, Number 5, 2004


ISSN 0969-9988

Innovation in architecture, engineering and construction


Guest Editors: Professor Charles O. Egbu and Professor Chimay J. Anumba

Contents
294 Access this journal online 295 Abstracts & keywords 298 Editorial 301 Managing knowledge and intellectual capital for improved organizational innovations in the construction industry: an examination of critical success factors Charles O. Egbu 316 Creating, supporting and sustaining a culture of innovation John Steele and Mike Murray 323 Integrating procurement and operational innovations for construction industry development Mohan Kumaraswamy, Peter E.D. Love, Mohammed Dulaimi and Motiar Rahman 335 The innovation potential of integrated services and its utilisation through co-operation Andreas Hartmann and Gerhard Girmscheid 342 The role of technology transfer in innovation within small construction firms Martin Sexton and Peter Barrett 349 An innovative approach to identifying knowledge management problems A.M. Al-Ghassani, J.M. Kamara, C.J. Anumba and P.M. Carrillo 358 Technology-based learning and the project manager Robert C.T. Ellis, Gerard D. Wood and Tony Thorpe 366 Reconciling construction innovation and standardisation on major projects F.T. Edum-Fotwe, A.G.F. Gibb and M. Benford-Miller 373 Innovative 3D-modelling for selecting and locating mobile cranes Osama Moselhi, Sabah Alkass and Mohamed Al-Hussein

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Abstracts & keywords

Managing knowledge and intellectual capital for improved organizational innovations in the construction industry: an examination of critical success factors Charles O. Egbu Keywords Critical success factors, Innovation, Intellectual capital, Knowledge management, Construction industry

nancial growth and increased prots. Therefore, it is apparent that the development of a culture of innovation is of utmost importance if a business is to become universally proactive, entrepreneurial and remain successful. This owes much to the fact that the agility and ability of an organisation to respond to the changing marketplace is driven by its propensity to innovate. This paper does not attempt to resolve these problems; it merely attempts to raise awareness of the key issues relating to innovation, diffusion and the associated management of change. Moreover, it promotes the benets afforded by developing an organizational culture of innovation. The content will be of interest to industrialists and researchers and will describe the key issues associated with product derivation, introduction and wider diffusion. Ultimately, it aims to demonstrate that creativity, the promotion of a culture for innovation, and the development of intellectual capital are issues of utmost importance in generating and maintaining a proactive and entrepreneurial organisation.
Integrating procurement and operational innovations for construction industry development Mohan Kumaraswamy, Peter E.D. Love, Mohammed Dulaimi and Motiar Rahman Keywords Learning, Innovation, Risk management, Construction industry

Innovation is viewed as a major source of competitive advantage and is perceived to be a prerequisite for organizational success and survival. The paper explores the importance of knowledge management (KM) and intellectual capital (IC) in organisations. It also considers the critical factors that lead to successful innovations and the role of KM and IC in this regard. The paper argues that effective management of knowledge assets involves a holistic approach to a host of factors. It is also suggested that there are a host of factors that combine in different ways to produce successful organizational innovations. It recommends that more is needed on the education and training of construction personnel and that these education and training programmes should reect the nature of innovation and KM dimensions as very complex social processes.

Creating, supporting and sustaining a culture of innovation John Steele and Mike Murray Keywords Innovation, Change management, Intellectual capital, Construction industry

Uncertainty of eventual outcomes coupled with a reluctance to embark upon potentially long learning curves, have militated against muchneeded holistic innovations in our instant-resultsoriented construction industry. While sporadic initiatives towards new organizational and/or contractual arrangements have enabled incremental improvements in some scenarios, the increasing demand for step gains in construction industry performance levels evidently envisages a more solid launching pad with re-engineered paradigmatic foundations. Initial investigations suggest that the foregoing desired goals may be achieved together. Finally, a conceptual model that coherently synergises these strategies for institutional and industry development is presented and discussed.

The innovation potential of integrated services and its utilisation through co-operation Andreas Hartmann and Gerhard Girmscheid Keywords Integrated marketing, Competitive advantage, Innovation, Construction industry

Recently the industrys clients, designers and society as a whole, have begun to accept that innovation can offer key benets in the form of
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In the last few years an increasing demand for integrated services could be recognised on the

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Abstracts & keywords

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construction market. For construction rms this means that there is a wider scope for achieving advantages in competition. Based on a research project on the innovation behaviour of two Swiss contractors this paper presents the innovation potential of integrated services and the advantages and disadvantages of the present organizational structure of medium-sized contractors with respect to the usage of this potential. Moreover, possibilities for construction rms to build up and benet from internal and external co-operation and to generate innovative constructional solutions are discussed. It is concluded that an innovative construction industry requires the ability of construction rms to co-operate.

This approach was developed within the crosssectoral learning in the virtual enterprise (CLEVER) project and supports the denition of KM problems within a business context. The approach has been encapsulated into a prototype software system to make it easier to use. The paper describes in detail the operational level of the prototype. It also discusses the potential of the developed prototype, and concludes that it represents an innovative tool for improved KM.

Technology-based learning and the project manager Robert C.T. Ellis, Gerard D. Wood and Tony Thorpe Keywords Distance learning, Education, Training, Interactive video, Interactive audio, Construction industry

The role of technology transfer in innovation within small construction rms Martin Sexton and Peter Barrett Keywords Innovation, Construction industry, Information transfer, Small enterprises

Findings were drawn from an 18 month research project involving in-depth case study and action research eldwork with seven small construction companies to understand the role and signicance of innovation for them. A key nding of the work has been the importance of the role of effective technology transfer in the innovation process. The organizational factors of innovation model is presented as an analytical and prescriptive tool to assist small construction rms to understand better and manage the technology transfer process. The utility and application of the model is illustrated with a case study.

An innovative approach to identifying knowledge management problems A.M. Al-Ghassani, J.M. Kamara, C.J. Anumba and P.M. Carrillo Keywords Knowledge management, Organizations, Software prototyping

Construction is a project-oriented industry that benets from both the technical and interpersonal skills that a project manager has to offer. Increasingly, project management is viewed as being an integrated process relevant throughout the project lifecycle, which necessarily draws upon a broad range of knowledge and abilities. It is imperative that project managers, therefore, have ready access to education and training programmes that enable them to update their skills. This paper compares a new distance learning project management educational software application with a traditional multiple-media resource and a wellestablished postgraduate module delivered in parttime mode to establish the pedagogic effectiveness of distributed interactive multimedia. An analysis of quantitative data generated over a two-year period nds that whilst learning and condence gains occur in all delivery modes, there is no signicant difference in the academic performance of students between the traditional control and distance learning experimental groups.

Reconciling construction innovation and standardisation on major projects F.T. Edum-Fotwe, A.G.F. Gibb and M. Benford-Miller Keywords Standardization, Innovation, Design, Construction, Industry

The promised benets from implementing knowledge management (KM) attract an increasing number of organizations. However, many organizations, face several difculties when designing a KM system or implementing its initiatives. These difculties, along with some unsuccessful KM initiatives worry many organizations interested in the concept. This paper investigates the reasons for these difculties and discusses the issues that need to be addressed to develop robust KM systems. It then introduces a systematic approach for addressing these issues at the early stages of designing a KM system.

The concepts underlying innovation and standardisation presents an apparent divergence in what each strives to achieve. In the view of the authors, this has contributed in no small measure to the low take-up of standardisation within the construction sector as organisations strive to be innovative to improve on their performance and attain continuous improvement in their processes and operations as well as design solutions.

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The paper presents as a case, how one major public sector outt is striving to achieve innovation within an agenda that involves a widespread adoption of standardisation. It presents the motivations for adopting an organisation-wide agenda on innovation and standardisation, identies the elements of apparent incongruity between the concepts, and outlines how the case organisation has resolved the divergences.
Innovative 3D-modelling for selecting and locating mobile cranes Osama Moselhi, Sabah Alkass and Mohamed Al-Hussein Keywords Optimization techniques, Database management systems, Computer aided design

This paper provides an overview of a recently developed system for selecting and locating mobile cranes on construction sites. The proposed system

provides direct help on two fronts: cost and time savings, and improved safety arrangements. The system has a number of interesting features: a relational database designed to store the cranes geometry-related variables and to present them using powerful graphics; a selection module supported by an algorithm designed to satisfy geometrical requirements and necessary clearances, accounting for site constraints and lift congurations; and 3D animation to facilitate the planning of crane operations. The system provides a near-optimum selection of crane lift congurations, considering available cranes. This paper focuses mainly on case examples to demonstrate and to illustrate the use and capabilities of the developed system. Two actual cases, featuring different site constraints and lift congurations, are presented. In these cases, cranes were selected and their operations planned using the developed system. The ndings of the two cases are discussed and the benets of the proposed methodology are highlighted.

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Editorial

Construction organisations like others, from other industry sectors, are facing competition and pressure to provide better quality products and services, to improve the speed in the market, and to improve organisational agility and innovation. Trade liberalisation and rapid fall in communication costs; global communications; technological and scientic understanding; and the increasing knowledgeability of, and demand from, clients are some of the reasons why innovation is even more urgent today. The collection of papers in this special issue addresses various aspects of innovation in architecture, engineering and construction. Innovation is about the successful exploitation of an idea, where the idea is new to the unit of adoption. It covers product, process, service, technological and market innovations. In the rst paper of this issue, Egbu examines the role of knowledge and intellectual capital in improving organisational innovations. The paper commences with a critical appraisal of the different schools of thought on innovation, knowledge management and intellectual capital. Through a series of case studies he presents a host of factors that combine in different ways to produce successful organisational innovations. Some of the critical success factors include having a vision and an innovation strategy, an innovation supporting culture (including people issues, performance management, reward, and risk management) and an innovation champion. He argues that many of the debates on whether construction organisations are innovative or not are founded on weak premises. He suggests that understanding

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the innovation trajectory which an organisation embarks upon gives a better understanding as to whether the organisation has been successful at innovating or not. He notes that innovation is a complex process, and no best strategy exists or is suitable for managing innovations in every organisation. He reveals that knowledge and intellectual capital (human, structural and customer) are vital in building the core competencies and capabilities needed for sustained organisational innovations. He suggests that tacit knowledge, which is often difcult to mimic and copy, unlike explicit knowledge, offers greater potential for innovation and competitive advantage. Egbus paper makes a contribution to the development of the knowledge management theory and its link to innovation. It also offers practical suggestions for improving and measuring the impact of innovations in organisations. Steele and Murrays paper attempts to raise awareness of the key issues relating to innovation, diffusion and associated management of change. Their paper addresses a host of issues relating to the creation, support and sustaining of a culture of innovation. Resistance and fear of change are cited as real barriers to develop an organisational culture that embraces innovation in all its forms. The paper demonstrates that creativity, the promotion of a culture of innovation, and the development of intellectual capital are vital in generating and maintaining a proactive and entrepreneurial organisation. The paper is of interest to industrialists and researchers who are involved in promoting and introducing the products of innovation and R&D into industry. Kumaraswamy et al. consider the need for integrating procurement and operational innovations for construction industry development. They argue that uncertainty as well as the reluctance to embark upon potentially long learning curves, have militated against the much needed holistic innovations in the construction industry. Their paper presents and discusses a conceptual model to improve innovation in construction to deliver improved performance. At the heart of their proposed model is the integration of innovative procurement sub-systems and operational arrangements through intelligent selection to suit given priorities and contexts; increased transactionally efcient teamworkingbased relational contracting principles; assembling of more transactionally focused supply chains; appropriate supply chain integration; and strong product oriented linkages from R&D to marketing and maintenance. The effective integration and implementation of their model will, however, not be easy.

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Still on the theme of integration for improved innovation, Hartmann and Girmscheids paper focuses on the innovation potential of integrated services and its utilisation through co-operation. They dene co-operation, which can be internal or external, as the voluntary collaboration of persons or organisations with commonly agreed goals. It is noted that the development of trust among members of a network is an essential part of the ability to co-operate. They argue that the optimal solution for construction clients can only be found if the know-how of all levels of value added of a building is combined through integrated services. Innovation is not only the preserve of large organisations. Sexton and Barretts paper focuses on the role of technology transfer in innovation within small construction rms. Their study observed that small construction rms absorb and use technology that can contribute to the business in a quick and tangible fashion, and which links to their organisational capabilities. Any technology which requires too much investment and too much risk tends to be swiftly sifted out. The people factor is key in innovation in small construction rms. The study has shown that in technology transfer, the people factor centres around the capability of staff to use new technologies. A model is presented, which provides a framework or checklist to help owners identify necessary actions to be taken to progress an innovation in a systematic and integrated way. The ndings of their study have implications for policy makers and for small construction rms, especially with regard to how small rms absorb new technologies compared to large construction rms. Many organisations experience several difculties when designing a knowledge management (KM) system or implementing its initiatives. Al-Ghassani et al. present and discuss these difculties, and offers a systematic and innovative approach to identify KM problems. Their approach, which was developed within the cross-sectoral learning in the virtual enterprise (CLEVER) project and supports the denition of knowledge management problems within a business context which has been encapsulated into a prototype software system. The paper describes some of the features of the innovative prototype tool for improved knowledge management. A host of factors are worthy of consideration to develop a proper denition of KM problems, and have been incorporated into the developed prototype software. These include proper identication of the type and nature of knowledge that needs to be managed, clear business goals for implementing KM initiatives, proper identication of the characteristics of knowledge, and clear understanding of the relationships between

sources and users of knowledge, and associated enablers and resistors. The proposed and innovative prototype software will add real value to organisations. It is applicable to different types of organisations because it covers a wide range of issues. It allows users to add to the already built-in information, and allows for subjective answers, thereby ensuring that any type of KM problem can be individually considered. One of the outputs is a report containing a summary of KM problems and a distilled set of specic KM issues. There is an increasing need to offer innovative forms of learning delivery to meet the needs of construction professionals in an ever changing business environment. Practitioners require exible education and training, and one which complements work place experience rather than distract from professional obligations. Educational technology is seen to offer an exciting opportunity in this regard. Moreover, technology-based learning (TBL) is supported by the present UK government, which is keen on promoting a learning society, expansion of the higher education postgraduate education, as well as lifelong learning. Ellis et al. focus on technology-based learning and the project manager. Their paper compares a new distance learning project management educational software application with traditional multiple-media resources and a well-established postgraduate module delivered in part-time mode to establish the pedagogic effectiveness of distributed interactive multimedia. By examining the data related to the pedagogic effectiveness of the three alternative modes of delivering postgraduate project management education, this paper found no statistical difference in the performance and condence of students between the traditional control and distance learning experimental groups. Their study, however, did not examine contextual issues that characterise the implementation of novel educational learning resources. Their paper concludes that distributed interactive multimedia applications can offer an alternative means of delivering project management education. Their study also supports the view that the academic performance of students is not compromised by the use of computer-based delivery techniques. Edum-Fotwe et al. examine construction innovation and standardisation on major projects. They argue that the concepts underlying innovation and standardisation present an apparent divergence in what each strives. They contend that this has partly contributed to the low take up of standardisation within the construction sector. By discussing and presenting a case of how one major public sector (health sector) outt is

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attempting to achieve innovation within an agenda that involves a widespread adoption of standardisation, their paper identies the elements of apparent incongruity between the concepts, and highlights how the case organisation has resolved the divergences. The scheme and the case organisation has in place, which is based on a central standardisation database (CSD), inter alia, enables the effective capture of elements of innovation, which is then standardised to ensure that their standardisation effort reects changing developments within the industry. The approach has wider applicability beyond the health sector, and construction related organisations could deploy the approach to suit their requirements. The nal paper by Moselhi et al. describes an innovative 3D-modelling system for selecting and locating mobile cranes which is designed to assist practitioners in planning crane operations. The paper focuses mainly on case examples to demonstrate and illustrate the use and capabilities of the developed system. The key features of the proposed system include a relational database design to store the cranes geometry-related

variables and to present them using powerful graphics; a selection module supported by an algorithm designed to satisfy geometrical requirements and necessary clearances, accounting for site constraints and lift congurations; and 3D animation to facilitate the planning of crane operations. The main benets of the system are in avoiding potential accidents and in the reduction of time and cost associated with planning and execution of heavy and critical lifts on construction sites. The Guest Editors would like to express their gratitude to the referees who reviewed the papers. Each paper was reviewed by at least three referees. In addition, the Guest Editor would like to acknowledge the assistance provided by Professors Ron McCaffer and Professor Tony Thorpe, the Editors of the Engineering, Construction and Architectural Management Journal. Charles Egbu Glasgow Caledonian University, Glasgow, UK Chimay Anumba Loughborough University, Loughborough, UK

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Managing knowledge and intellectual capital for improved organizational innovations in the construction industry: an examination of critical success factors
Charles O. Egbu

1. Introduction
There is now a general acceptance in competitive business environments and projectbased industries that knowledge is a vital organizational and project resource that gives market leverage and contributes to organizational innovations and project success (Egbu, 1999a, 2000; Nonaka and Takeuchi, 1995). Few would also argue that an organisations capacity to innovate depends to a very considerable extent upon the knowledge and expertise possessed by its staff. It follows that, for leaders of construction projects and organisations, the processes by which knowledge is created or acquired, communicated, applied and utilised must be effectively managed. However, It has been raised elsewhere (Egbu et al., 2000) that our understanding of the important role of tacit knowledge in project innovations is limited, and so are the roles construction personnel play in knowledge management (KM) processes. A thorough review of the KM literature highlights an overwhelming emphasis on information technology (IT) (Egbu, 1999b, 2000; Egbu et al., 2001a; Scarbrough et al., 1999). Similarly, few empirical studies, in the construction industry, have been conducted that take a holistic view to address the relationships between KM, IC and innovation from a human dimensions perspective. Grant (1996) and Hall (1993) have argued that it is tacit rather than explicit knowledge, which will typically be of more value to innovation processes. Yet, tacit knowledge is knowledge, which cannot be easily communicated, understood or used without the knowing subject. The implication of the above discourse is that KM that focuses on creating network structures to transfer only explicit knowledge will be severely limited in terms of its contribution to innovation and project success.
The author is indebted to many people and organisations that have been involved in the research studies on which this paper is based. He is particularly grateful to the United Kingdom Economic and Social Sciences Research Council (ESRC), the Centre for the Built Environment (CeBE), Leeds Metropolitan University and the European Social Funding for the research projects on which the paper is based. A special recognition and thank you is left for Kate Botterill, who was supervised by the author, with whom many discussions on the subject area on the inuence of KM and IC on innovations in project-based industries informed this paper.

The author
Charles O. Egbu is based at the Glasgow Caledonian University, City Campus, Glasgow, Scotland, UK.

Keywords
Critical success factors, Innovation, Intellectual capital, Knowledge management, Construction industry

Abstract
Innovation is viewed as a major source of competitive advantage and is perceived to be a pre-requisite for organizational success and survival. The ability to innovate depends largely on the way in which an organisation uses and exploits the resources available to it. The paper explores the importance of knowledge management (KM) and intellectual capital (IC) in organisations. It also considers the critical factors that lead to successful innovations and the role of KM and IC in this regard. The paper argues that effective management of knowledge assets involves a holistic approach to a host of factors. It is also suggested that there are a host of factors that combine in different ways to produce successful organizational innovations. It recommends that more is needed on the education and training of construction personnel and that these education and training programmes should reect the nature of innovation and KM dimensions as very complex social processes.

Electronic access
The Emerald Research Register for this journal is available at www.emeraldinsight.com/researchregister The current issue and full text archive of this journal is available at www.emeraldinsight.com/0969-9988.htm
Engineering, Construction and Architectural Management Volume 11 Number 5 2004 pp. 301315 q Emerald Group Publishing Limited ISSN 0969-9988 DOI 10.1108/09699980410558494

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2. Objectives of the paper


The objectives of this paper are three folds: (1) To use the opportunity of this paper to attempt to further improve our knowledge and understanding of the complex areas of KM, IC and innovations. (2) To attempt to present the importance of knowledge and IC and how they impact upon organizational innovations (3) To highlight some of the critical factors that impact upon successful KM practices and organizational innovations.

project-based organisations in UK construction, manufacturing, aerospace and the utilities. Fifty-ve usable questionnaires were received. Of these, 40 were from the construction industry. The interviews were analysed using the NVIVO software package that assisted in establishing relationships between variables. The postal questionnaires were analysed statistically using the SPSS software package.

4. Knowledge management, intellectual capital and innovation a review of the relevant literature
Dening KM precisely can be problematic. Nowhere in the literature on KM is there a single unied meaning of the concept. Alvesson (1993) argues that KM is clearly on the slippery slope of being intuitively important but intellectually elusive (cited in Despres and Chauvel, 1999, p. 110). Many authors have attempted to explain certain elements of KM, specic to their own academic domains. Much of the ambiguity associated with KM is rooted in these authors epistemological beliefs. In order to understand KM, it is rst necessary to understand what is meant by knowledge. The debate about the meaning of knowledge is a pastiche of abstract ideas, which is too substantial to approach in this paper. However, it is useful to briey explore the epistemological ideas of some authors to establish a better conceptual understanding of knowledge in different contexts. Historically, a continuous dialectic between philosophers of East and West has been characterised by the merits and demerits of tacit and explicit knowledge. On one hand Western philosophy emphasised the authority of explicit knowledge in the search for truth, while Japanese philosophers stress the pre-eminence of tacit knowledge in epistemology. Nonaka and Takeuchi (1995) have adopted this distinction and applied it to the organisation. Explicit knowledge describes the type of knowledge that is documented and public, structured, xed-content, externalised, and conscious (Duffy, 2000). Tacit knowledge can be generally understood as the form of knowledge that exists within an individual, and is intuitive and unarticulated (Polanyi, 1958). Tacit knowledge has been conceptualised by a myriad of academics from differing perspectives. Collins (1995) sees three types of tacit knowledge that present challenges to epistemological concerns of management. Embodied knowledge describes a type of knowledge that is a function of the physical environment. It cannot be easily transferred from one brain to another, as it is

3. Research methodology
This paper is mainly based on ndings from three empirical studies conducted in the United Kingdom. The rst study (Study A) was a two-year research project funded by the United Kingdom Economic and Social Research Council (ESRC) under its innovation programme. The study (Egbu, 1999a; Egbu et al., 1998), which was completed in 1998, was aimed at developing a prototype-training simulator that will provide experiential learning of the cultural aspects of the innovation process in organisations. The study involved four case studies from four different innovative construction organisations; over 50 ethnographic interviews, company archive documents and video capture of innovative processes and products. The second study (Study B) was sponsored by the European Social Fund (ESF) under the ESF Objective 4 bid. It was completed in June 2000 and addressed the exchange of knowledge and the auditing of knowledge assets in small and medium enterprises (SMEs). The study adopts interviews, questionnaires and workshops in the elicitation of relevant research information. The third study (Study C) was conducted between October 2000 and 2001 and funded by the Centre for the Built Environment (CeBE), Leeds Metropolitan University, UK (Egbu et al., 2001b). It considered the role of KM and IC in improving innovations. The important role of IT in this regard was also explored. The research employed a combination of qualitative and quantitative research methods. Nineteen ethnographic interviews were conducted among ve UK project-based organisations to reveal contextually rich descriptions about the nature of KM in these organisations. The interviewees were chosen from senior management, middle management and junior level personnel. These interviews conducted served as multiple case studies. To supplement these ndings postal questionnaires were distributed to

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specic to the unique hardware that accompanies an individuals brain; it is an integral part of the unique make-up of the human body. For example, a boxers knowledge of ghting may be transferred to a professor but the latter may not be physically able to use that knowledge in practice. Secondly, embrained knowledge describes a type of knowledge that is specied by the exclusive physicality of an individual brain. Finally, encultured knowledge describes a type of knowledge that is embedded within a social context and cannot exist apart from it. There is some inconsistency and confusion between the terms KM and IC. There is an abundance of literature on both, each dealing with the same issue the value of knowledge as an organizational asset. However, few make a direct link between the two concepts. IC was neatly dened at the ICM Gathering in 1995 as knowledge that can be converted into prot (Harrison and Sullivan, 2000, p. 34). KM is about the process of conversion and how knowledge is effectively managed to produce prot in an organisation. IC is made up of three components: human, structural and customer capital (Bontis, 1998; Bontis et al., 2000; Edvinsson, 2000). Structural capital describes the internal structure of an organisation, such as its strategies, core competencies and culture, which is always context specic. Customer capital encompasses the external intangible assets of an organisation. External forces play a part in determining the market position and strength of an organisation. Customers are the principal determinants of this position (Smith and Saint-Onge, 1996). However, it is asserted that the human capital in an organisation is the most important intangible asset, especially in terms of innovation (Brooking, 1996; Edvinsson, 2000; Stewart, 1997). The unique tacit knowledge of individuals is of immense value to the organisation as a whole, and is the wellspring of innovation (Stewart, 1997). Identication of the different types of knowledge available to an organisation is the rst step to understanding how to manage them. Therefore, KM is intrinsically linked to IC. McConnachie (1997) differentiates IC from intellectual assets (IA), arguing that IC is knowledge with potential value (e.g. ideas) while an IA is the knowledge dened for a particular purpose within a particular context. Similarly, Sullivan (1999) observes IA as the codied knowledge owned by an organisation, in contrast to the human capital of a company that could walk out of the door taking the knowledge away. Once the tacit knowledge of employees is transferred into explicit form it can be codied and stored in

the organizational knowledge base, thus becoming an IA. Therefore, it can be leveraged into prot. A further component of IC is intellectual property (IP). When knowledge has become an IA it can be legally protected as IP in the form of copyrights or patents. This ensures that it remains a unique company asset and cannot be replicated by anyone else in the market (McConnachie, 1997; Sullivan, 1999). People conceptualise knowledge according to their subjective interpretations. There is a complex dialectic between those who dene knowledge as a scientic truth that exists independently of human action, and those who argue that knowledge is socially constructed. Knowledge has been traditionally thought of as a static concept, something that exists independently of human beings. Western philosophical preoccupations with the idea of knowledge as truth failed to account for essential dimensions in epistemology. Positivism took this view further by asserting that scientic truths exist objectively in the world and that knowledge is a random combination of these truths. Epistemologists of this perspective have repeatedly neglected the human element of knowledge. In contrast, there are those who assert that knowledge is socially constructed and is completely determined by social structures. In this respect knowledge is seen as a process that is context-specic. This social constructionist perspective has Marxist undertones and has been further revised by a view that human action determines knowledge (Habermas, 1984). Thus social interaction is the principle motor of knowledge and human beings are responsible for conditioning their own environment (Nonaka and Takeuchi, 1995). The literature on KM and IC is too complex to reduce to such linear categorisation; there are recurrent overlaps and transitory diversions that mark each author apart from the next. However, there are general strands of thought that may be linked in correspondence to the aforementioned dichotomy. According to advocates of the resource-based perspective, knowledge is perceived as a resource principally intended for economic exploitation. For the initiators of the IC debate the primary concern was the capital that could be harnessed from knowledge assets. Prusak asserts that IC can be dened as intellectual material that has been formalised, captured, and leveraged to produce a higher valued asset (Stewart, 1994, p. 28). Prusak has been associated with the resource-based perspective because he regards knowledge as an economic resource, similar to labour or land, neglecting the human and social aspect of knowledge in organisations. Concurrently, this

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perspective expresses IC management as a process of value extraction in which knowledge is the key resource. It is a goal-oriented (teleological) process where the end monetary gain determines the means. Brooking (1996) purports that KM is concerned with the strategies and tactics to manage IC. KM is about harnessing or leveraging the IC in an organisation so that it can be commercially exploited, leading to competitive advantage (Peters, 1992). The view of knowledge as an asset to be guarded sees humans as capital. It focuses on the need to prevent this capital from leaving an organisation; therefore, it advocates mechanisms like internal motivation as a means of protecting the human assets of an organisation. This mechanistic view of knowledge has positivist undertones and has serious limitations. The political and social aspects of knowledge are disregarded and complex processes are reduced to objective elements (McAdams and McCreedy, 1999). In contrast to those who view knowledge as a resource (Drucker, 1995; Sullivan, 1999), knowledge is also understood in terms of its creative capacity. Rather than focus on extracting value from an intangible resource, the heart of the knowledge-based perspective is the creation of value within an organisation. The knowledgebased perspective is ontologically grounded in the systems or contingency theory of management in which an organisation is viewed as a system of interdependent parts (Cole, 1996). While it is important to analyse the individual components of an organisation it is imperative to remain conscious of its relationships with other components in the system. IC is a combination of interdependent intangible assets. Fundamentally, this perspective emphasises a bottom-up approach to KM where people drive the managerial process rather than top-down approach, where people are managed to be creative and consequently more productive. This perspective offers a more complex view of organisations, as social episodes that rely heavily on creative individuals to drive them (Davenport and Prusak, 1998; Scarbrough et al., 1999), and therefore advocate open and exible organisations where the learning process is actively encouraged. Those who view the human being as a protmaking resource would warn against too much openness, associating it with issues of outsourcing, etc. There may be issues over the security of innovation, which in turn may threaten competitive advantage. However, too much protection of IC may in fact stie the innovation process and create an organizational culture dominated by bureaucracy and hierarchy. Therefore, there needs to be a balance between

the two competing theories to overcome, what has been termed, the boundary paradox (Quintas et al., 1997). Within the social sciences there are those who advocate a more altruistic approach to IC. Allee (2000) argues the need for an expanded social systems view of IC, addressing the challenges of global interdependencies, environmental concerns and larger social responsibility. She criticises the traditional view that sees intangibles as capital assets for monetary gain. Although this is important it should not be the sole approach to managing business. She calls for a redenition of value, as something integral to the social fabric rather than being dened purely in monetary terms (value network rather than value chain). In addition, she argues that wealth should be redened in accordance to the social and environmental health of a system. Success correlates better with these broader intangibles than with the narrow categories offered by those intellectually disposed to the resource-view of knowledge. There is a general agreement among researchers and practitioners that innovation is a vital proponent of success. Any intelligent corporate strategy must have innovation at its very heart (Houlder, 1996).In the construction industry, reports and view points from the construction research and innovation strategy panel (nCRISP), the Egan (1998) report and the movement for innovation (M4I), emphasise a growing awareness of the importance of innovation. However, there is a misplaced tendency to regard innovation as new. Therefore, it is necessary to state a distinction between innovation and invention. While invention is the creation of an original idea, innovation can relate to an idea that is perceived to be new within a particular context (Damanpour, 1987; Damanpour and Evan, 1984; Van de Ven et al., 1989; Zaltman et al., 1973). Similarly, innovation is often viewed as synonymous with creativity. Egbu (2001a, b) denes innovation as the successful exploitation of ideas, where the idea is new to the unit of adoption (Egbu, 2001b, p. 1). The value of innovation is also debated. There are those who see innovation as something that adds economic and social value (Drucker, 1985). West and Farr (1990) argue that innovation is intended for the benet of an individual, an organisation or wider society. In addition, Rothwell and Gardiner (1985) assert that innovation can be of immediate value to an organisation or can be of incremental benet, such as the introduction of small-scale changes to the way an organisation works. Innovation is a complex phenomenon, but despite diverse perspectives, researchers

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and practitioners have agreed on the importance of innovation as a pre-requisite for competitive advantage. Innovations come from many different sources and exist in many different forms. There is a dichotomy between radical and incremental innovation (Damanpour, 1987). Innovation can be radical, in response to crisis or pressure from the external environment, but it can also be incremental where step by step changes are more common. Moreover, a common typology distinguishes product and process innovation. Product innovation describes that where a new product is the outcome. Process innovation denotes innovation where the process by which a product is developed is exposed to new ideas and, therefore, leads to new and often more sophisticated methods of production. The implication is that an idea goes through a process, from its generation to its exploitation and it can therefore be understood in stages or sequences. Different researchers have different ideas about the amount of stages there are. Three stage models incorporate idea generation, adoption and implementation (Shepard, 1967; Thompson, 1965) while Zaltman et al. (1973) have developed a 12-stage process model. Rothwell (1992) has developed an historical model tracing the evolution of innovation models since the 1960s. His ve generations of innovation model explicates the transition from the simple, linear models of the 1960s to the complex and interactive models of innovation. In the fth generation, innovation is perceived as a multi-faceted process, which requires intra and inter-rm integration, through extensive networking. Similarly, Wolfe noted that . . .Innovation is often not simple or linear, but is, rather, a complex iterative process having many feedback and feed-forward cycles (Wolfe, 1994, p. 411). In essence, innovation can be viewed as a process of inter-linking sequences from idea generation to idea exploitation that are not bound by denitional margins and are subject to change. Therefore, it is necessary to understand the complex mechanisms of this process and the context in which the innovation takes place. Research on innovation has developed and taken on various shapes over the last 50 years. The level of analysis in innovation research is a useful preparatory consideration. The individualist perspective, which is grounded in social psychology, is predicated on the assumption that the individual is the source of innovation. They are the champion[s] (Madique, 1980) or change agents (Rogers, 1983) in an organisation. In contrast to the individualist perspective, it is postulated that the structures and functions of

an organisation are the pivotal determinants of innovation (Pierce and Delbecq, 1977; Zaltman et al., 1973). This structuralist perspective is grounded in open systems theory and structural contingency theory; therefore, organisations are analysed as systems of interdependent parts, which cannot exist autonomously. It is assumed that the organizational characteristics, such as size, strategy, longevity and function play a central part in organizational innovations (Pierce and Delbecq, 1977; Zaltman et al., 1973). The structuralist perspective has been criticised for drawing inert conclusions about the nature of innovation and perceiving the organisation as an objective entity that is driven predominantly by predictable forces (Slappendel, 1996). Increasingly there have been recommendations to take a more multivariate approach to the study of innovation. Integration of both the individual and organizational levels of analysis to achieve a synthesis between action and structure is encouraged (Van de Ven and Poole, 1988). Attempts to incorporate these diametrically opposed concepts have inuenced developments in process theory. In essence, process perspectives recognise the unpredictable and dynamic nature of innovation. It is a complex process with cognitive, social and political dimensions that should be understood in particular organizational contexts (Swan et al., 1999).

5. The relationship between knowledge, intellectual capital and innovation


One of the main objectives of this paper is to attempt to present the complex but important links between knowledge, IC and organizational innovations. To aid understanding of the complex relationships, an earlier conceptual framework developed by the author and colleagues (Egbu et al., 2001a) is presented in Figure 1. The main KM factors are presented, here, in a conceptual framework. They include people, process and systems, knowledge content and technology. Technology is an important enabler. It enables the process, people and the knowledge content, hence the dotted line in the framework. Other factors are organizational strategy and structure, culture, leadership and commitment, motivation and competition. As discussed, the leaning on a particular school of thought in the KM paradigm may also inuence peoples perception of KM. Similarly, the way knowledge is seen to impact upon projects and organisations (and hence on innovation) may depend on which area of the knowledge cycle is being considered

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Figure 1 A conceptual model of the main factors associated with knowledge management in project-based environments (Egbu et al., 2001a)

(e.g. knowledge creation, capture, transfer and exploitation). An understanding of these factors and how they interact in complex ways to improve KM in organisations is important for the competitive advantage of project-based organisations. These factors will be discussed in more detail demonstrating the link between KM, IC and innovation. As discussed earlier, people or human capital is seen as the most important intangible asset in an organisation (Brooking, 1996; Edvinsson, 2000; Roos et al., 1997; Stewart, 1997). Human capital is the knowledge of individuals that lends value to an organisation and is the focus of a wide-ranging debate in the management discipline.

Dening precisely what human capital is has been contested. Roos et al. (1997) suggest it is a mixture of competencies (skills and education), attitude and intellectual agility. Whatever its components, the unique tacit knowledge of an individual is a valuable asset to an organisation. It provides the innovation and intuition that structural and customer capital are unable to offer. It is, therefore, essential to provide the necessary structural capital to accommodate the generation and retention of human capital. The structural capital of an organisation is rooted in a unique context characterised by the internal and external position of that organisation. It denes how an organisation perceives itself, its core capabilities

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(internal and external realities) and where it exists in the marketplace. The organizational context may be expressed through strategic vision and is dependent on how this vision is incorporated into the internal structure of an organisation. More specically it exists in the organizational culture, its embedded routines, systems, procedures and processes that inuence outputs, which can be codied. The value and role of knowledge or IC is dependent on this context. KM and IC management is dependent on managerial understanding of these factors and how they relate to the bigger picture. A good internal structure, expressed through the strategies, processes and culture of an organisation, is one that is exible but supportive of the ideas propounded by employees. The organizational structure should respond just as effectively to external pressures. For example, Drucker (1995) claims that hierarchical structures become decient in turbulent environments. In contrast, structures determined by core competencies can adapt to chaotic external pressures more easily. Such competencies should be exible to meet new customer demands or exceed expectations (Prahalad and Hamel, 1990). Quinn (1985) asserts that excessive bureaucracy can stie innovation because of, for example, the amount of time it takes to approve every idea. While in small organisations this may require minimal bureaucracy, in larger, more complex organisations the process is incessantly cumbersome. Graham and Pizzo (1996) suggest that organizational structures need to sustain equilibrium between creativity and formal systems. They argue that bureaucracy can inhibit spontaneity and experimentation and thus threaten the innovation process. However, bureaucratic structures may also assist the rapid and continuous transformation of ideas into superior products (Bennett and Gabriel, 1999, p. 217). There is a similar debate about the degree of centralisation necessary to accommodate KM and the innovation process. While centralisation of decision making can create a denite medium of control, a more informal and exible structure is desirable for knowledge generation (Bennett and Gabriel, 1999). Woodman et al. (1993) assert that exible structures encourage better internal communications and a more change-friendly climate where ideas and knowledge are shared freely. In addition, it has been suggested that there is a need to establish relationship between people and the structures of an organisation, between individual knowledge and organizational knowledge (Bhatt, 2000; Byrne, 2001). As aforementioned the tacit knowledge of

individuals is an essential component of organizational success. However, such knowledge is often guarded by those who are reluctant to transfer this power from an individual level to the organizational level (Cole-Gomolski, 1997). Therefore, the employee must be sufciently motivated to share knowledge, through incentives. Byrne (2001) argues that the organizational structure should play a part in the encouragement of knowledge sharing. He contends that motivation is a key facilitator of loyalty and trust amongst employees and eventually fosters continuous learning. Furthermore, Byrne (2001) claims that employees are, now, more likely to have a general consciousness of their own marketability i.e. where they t into the larger picture of the employment market. Therefore, skills that can be utilised in diverse organisations allow the individual to pursue continual self-development in different organisations. However, for an organisation this leads to increased costs in recruitment, training and induction. Staff will pass through an organisation more quickly, learning organisation-specic information and experience but taking it away to use elsewhere. Byrne argues that this environment has been facilitated by the 1980s trends in outsourcing and downsizing, thus creating an insecure job market and compelling individuals to seek and develop transferable skills. Employees are viewed as commodities, consequently employee loyalty is lessened (Byrne, 2001). Every manager has a vision of the organisation he/she works for. The importance of expressing this vision to the rest of the organisation is paramount. Sullivan (1999) argues the need for a long-term vision to be incorporated into the corporate strategy of the company. This is only achievable if the context of the organisation is fully understood. Sullivan (1999) identies three key areas to be understood. First, what the real features of the business, i.e. the core competencies are? Secondly, what is the external context such as the socio-political and economic forces of change and their particular impact on the company? Finally, what the internal context, e.g. the strategy, culture, performance, strengths and weaknesses of the company is? In sum, Sullivan asserts the need for effective management of a companys capabilities, e.g. management of portfolio IPs and IAs, competitive assessment, human capital management. This has the potential for improving organizational innovations leading to competitive advantage and market leverage. In practice, such a management system has been established. The intellectual asset management system (IAMS) is a generic management system which details the process of

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value extraction from beginning to end (Harrison and Sullivan, 2000). Project-based industries, especially the construction industry, are under growing pressure to compete in new ways. Strategic planning and the need for growth are seen to require organisations to develop rm-specic patterns of behaviour, i.e. difcult to imitate combinations of organizational, functional and technological skills (Teece et al., 1997). These unique combinations create competencies and capabilities and take place as the organisations intangible knowledge is being applied in its business behaviour, especially in its value-adding business process. Competitive advantage stems from the rm-specic conguration of its intangible knowledge. The development of core competencies or capabilities creates an environment of strategic thinking, in which knowledge and ideas are key. Core competencies are extolled by Prahalad and Hamel (1990) as the roots of competitiveness and individual products and services are the fruit (Scarbrough et al., 1999, p. 8). Much of the literature on KM, IC and innovation focuses on the need to establish the right kind of organizational culture. Patel et al. (2000) stress that it would be a mistake to underestimate the importance of cultural factors in the adoption of KM and organizational learning. More specically, Tatum (1987) emphasises that a climate favourable to innovation must be achieved by committing resources, allowing autonomy, tolerating failure and providing opportunities for promotion and other incentives. Thus, an organisation must be exible enough to facilitate the innovation process (Zaltman et al., 1973). In order to establish a knowledge-based organisation there needs to be a supportive organizational culture. It has been argued that the cultivation of a learning organisation is an essential requirement for knowledge managers (Senge, 1990). If an organisation develops a learning culture there is scope for both formal and informal channels of dialectic thinking, where individuals develop their individual capabilities through positive experimentation (Bhatt, 2000). Further theories about organizational culture favour the evolution of a community of practice where social interaction of employees cultivates a knowledge sharing culture based on shared interests, thus encouraging idea generation and innovation (Adams and Freeman, 2000). In all organisations, the politics of knowledge sharing is an issue. Employees and employers from diverse backgrounds often come into conict over important decisions. It has been suggested that manipulating these tensions to achieve creative abrasion is a strategy to maximise innovation

(Leonard and Straus, 1997). However, it is a challenging task that involves disciplined management. Leadership is an inherent part of organizational culture, but also extends into areas of strategy and structure. According to Van de Ven et al. (1989), leadership is an organizational responsibility. They emphasise the value of institutional leadership, to create the structures, strategies and systems that facilitate innovation and organizational learning. It should build commitment and excitement, collective energy and empowerment. Sullivan (1999) argues the need for a managerial commitment to the longterm strategic vision of an organisation and the motivation to achieve the goals set out. Moreover, empowering employees to generate and share knowledge is the task of management. For example, implementation of rewards and punishment schemes are stimulus for successful KM (Scarbrough et al., 1999). Motivating employees to share the knowledge they have involves good people management, where trust is itself an incentive. The establishment of a psychological contract between employer and employee, for example, is a constructive approach to developing a knowledge-sharing culture (Scarbrough et al., 1999). Many organisations employ IT in one form or another to manage their knowledge. It is primarily used to store and transfer explicit forms of knowledge. However, IT is not just about computers. Tools such as video-conferencing may also be useful for the transmission of tacit knowledge as it is, in crude terms, a form of socialisation (Nonaka and Takeuchi, 1995). Capturing tacit knowledge and then storing it in repositories is vital for effective KM. Many organisations have developed sophisticated methods for storing their IC, including patenting knowledge assets to protect trade secrets. For example, Hewlett Packard use Lotus notes for both internal and external knowledge applications. It is argued that KM is about mobilising the intangible assets of an organisation, which are of greater signicance in the context of organizational change than its tangible assets, such as IT. While IT is an important tool for a successful organisation, it is often too heavily relied upon as a guarantee of successful business. Edvinsson (2000) contends that such tools as the Internet are merely enabler [s] and that the true asset of an organisation is the brainpower of its workforce. He stresses that it is the IC of an organisation that is the key to success (Dearlove, 2000, p. 6). Thus, KM is not just about databases or information repositories. In computer systems the weakest link has always been between the machine and humans because this bridge spans a space that

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begins with the physical and ends with the cognitive (McCampbell et al., 1999, p. 174). IT should be understood less in its capacity to store explicit information and more in its potential to aid collaboration and co-operation between people. Dougherty (1999) argues that IT should be seen as a tool to assist the process of KM in organisations. Such a process relies more on the face-to-face interaction of people than on static reports and databases (Davenport and Prusak, 1998). Some organisations have developed software to encourage social interaction in organisations in the hope that a unique forum for tacit knowledge exchange will be established. For example, Teltech is a consultancy service offering KM services to businesses, including an Expert Network which brings together a network of thousands of technical experts to share and develop knowledge in technical areas (McCampbell et al., 1999). A more holistic approach to integrating technology and people is BPs virtual teamwork (VT) initiative connecting employees all over the world through IT, such as video-conferencing, Lotus notes, electronic whiteboards and a corporate intranet. In a global forum, knowledge can be shared instantly which leads to the development of an empowered culture and a set of structures that transcends traditional boundaries (Chase, 1997). The external business environment is an essential dimension in this discussion. While not everyone would honour the social constructionist view that the principal determinants of individual and organizational knowledge are social structures, few could deny the inuence of external forces on organizational effectiveness. Achieving competitive advantage requires focused attention on consumer trends and the market. This has become increasingly complex since the globalisation of business environments, which has compelled organisations to compete and co-operate internationally. In the construction industry the advent of partnering, alliances, joint venturing, PFI projects and prime contracting has necessitated even further collaboration and knowledge sharing. Customer capital encompasses the external intangible assets of an organisation. External forces play a part in determining the market position and strength of an organisation. Customers are the principal determinants of this position (Smith and Saint-Onge, 1996). This component has also been termed relational capital to characterise the particular relationships an organisation has with the external environment, e.g. Kaplan and Norton (1996) argue that there is a causal relationship between employee satisfaction and customer satisfaction,

leading to customer loyalty and better nancial performance.

6. Managing intangible assets and critical factors to successful innovations


Innovation is a complex social process. No best strategy exists or is suitable for managing innovations in every organisation. However, any meaningful innovation strategy should have unequivocal support from the top. Its objectives need to be communicated and be accepted by the rank and le within the organisation. An innovation strategy needs to sit naturally within the overall strategy of the organisation. In addition, it is important that it is monitored and reviewed regularly. Construction organisations need to determine their positions in terms of processes, services, products, technologies and markets. Since an organisations innovation strategies are constrained by their current position, and by specic opportunities open to them in the future based on their competencies, construction organisations will need to determine their technological trajectories or paths. This will involve due cognisance of strategic alternatives available, their attractiveness and opportunities and threats, which lie ahead. The organizational processes, which organisations adopt in integrating the transfer of knowledge and information across functional and divisional boundaries (strategic learning), are essential. They need to be consciously managed. Since competitive advantage and nancial success are bound up with industry dynamics, it is necessary to place strategic change in competitive context and identify what kinds of changes lead to strategic innovation, and when these changes result in benets for the organisation. Core capabilities and competencies are difcult to imitate and provide competitive advantage for organisations. Leonard-Barton (1995) suggests that core capabilities are built through a knowledge building process which is clustered around four learning styles - present problem solving, future experimenting and prototyping, internal implementing and integrating, and external importing of knowledge. Grant (1995) sees resources and capabilities as keys to strategic advantage and notes that organisations must build and maintain capabilities if they are to innovate. Similarly, for Teece and Pisano (1994), an important capability is the expertise to manage internal and external organizational complementary resources. Kay (1993) also identies the architecture (structure)

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and innovation reputation (brand) as key elements for success. Through collaboration and by forming long term relationships, construction organisations are able to learn from projects, transfer knowledge to organizational base and along supply chains. Although the building of dynamic capabilities or core competencies is vital for organizational innovations, it is, however, important that core competencies do not turn into core rigidities, especially when established competencies become too dominant and important new competencies neglected or underestimated. In Study A which involved four innovative construction organisations, the author noted certain characteristics associated with culture and climate that were shown to be favourable to innovation by all of the four organisations. These include: . support from top management and the presence of a strong innovative champion; . exibility in the lines of communications allowing top-down, bottom-up and lateral communications within organisations; . a risk tolerant climate, where it is accepted that lessons could be learned through mistakes; . a climate where people genuinely feel valued and people feel some form of ownership or involved with the innovation; . a sharing culture where there is openness and willingness to share information, experience and knowledge across project teams and organisation; and . a climate where people feel secure in their jobs. It is generally accepted that an organisations competitive advantage can come from various sources such as size and assets. In the study of the four innovative construction organisations, it was noted that these organisations have been able to gain competitive advantage through their dynamic capabilities by mobilising knowledge, experiences and technological skills. In the main, these have been achieved through one or combination of the following: . focusing on a particular niche market; . novelty offering something which no other organisation can; . complexity The difculty associated with learning about their technologies and/or processes. This keeps entry barriers high; . stretching the basic model of a product/ process over an extended life and reducing overall cost;and . continuous movement of the cost and performance frontiers.

Discussions in workshops organised as part of the ESF sponsored research (study B) on knowledge exchange revealed some interesting issues with regard to the factors that promote and inhibit knowledge sharing in organisations. These are presented in no order of importance in below: Factors that promote knowledge sharing: . link to economic performance and strategy and coherent knowledge vision; . senior management support; . technical infrastructure (systems to obtain, organise, restructure, warehouse or memorise and distribute knowledge) including intranet, internet, repositories, databases and videoconferencing; . organizational infrastructure (teams, relationships and networks) including faceto-face meetings, brainstorming sessions, apprenticeships, job rotation, coaching and mentoring, communities of practice (COP) and quality circles, reports and project summaries, help desks and bulleting boards; . standard, exible knowledge structures; . knowledge friendly culture; . clear purpose and shared language and meaning of KM; . change in motivational practices (including performance management and team based rewards); . multiple channels of knowledge transfers/ dialogue with functional departments, interaction with clients/customers and suppliers;and . formal education and training. With regard to the factors that promote knowledge sharing, it can be seen that it is important for organisations to have a coherent vision of knowledge as well as to link their KM programmes to the strategic direction of the organisation. Similarly, having robust organizational infrastructure, exible knowledge structures, knowledge friendly culture and positive motivational practices are seen to promote knowledge sharing. In contrast, lack of appreciation of knowledge as an important asset is seen as inhibiting knowledge sharing in organisations. Similarly, lack of an information sharing culture and inexible organizational structures are seen as factors that inhibit the sharing of knowledge within organisations. Factors that inhibit knowledge sharing in organisations: . incoherent knowledge vision/ lack of ownership of the knowledge vision; . no appreciation/ lack of appreciation of knowledge as an important asset; . lack of an information sharing culture and climate;

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.

. . .

lack of/ or inappropriate methods/tools for measuring and valuing knowledge; lack of/ inadequate standardised processes; rigid /inexible organizational structures; time constraints and pressure on key staff/ knowledge experts; fear of the use and application of IT tools for KM (Technophobia); the knowledge is power syndrome and failure to see the law of increasing returns associated with knowledge creation - shared knowledge stays with the giver while enriching the receiver;and lack of a clear purpose and shared language and meaning of KM

Networking, CoP, story telling, coaching, mentoring and quality circles are important mechanisms for sharing and transferring tacit knowledge in project environments. These should be encouraged, considered and promoted more by construction personnel. Co Pare needed to encourage individuals to think of themselves as members of professional families with a strong sense of reciprocity. The human networking processes, which can encourage sharing and the use of knowledge for project innovations are important. Leaders of construction projects and organisations should also espouse the law of increasing returns of knowledge as a positive way of encouraging knowledge sharing. Shared knowledge stays with the giver while enriching the receiver. Intuitive knowledge is managed by individuals being valued and not by being heavy-handed through project controlled processes. It is folly to believe that any project organisation can make people have ideas and force them to reveal intuitive messages or share their knowledge in any sustained manner. An individuals intuitive knowledge cannot be manipulated in any meaningful way nor controlled without the individual being willing and privy to it. The process of trying to manipulate or control intuitive knowledge in fact creates their destruction. The issues of trust, respect and reciprocity are vital elements of a conducive environment for managing tacit knowledge. It is through these that individual members of the project can be motivated to share their experiences and exploit their creativity. Leaders of construction projects and organisations would need to recognise, provide incentives and reward knowledge performance and sharing behaviour patterns. He or she should also take action on poor knowledge performance. The regular communication of the benets of KM is important in sustaining the co-operation of project team members. A variety of ways exist for doing this, including regular meetings, project summaries,

project memos and through project groupware/ Intranet facilities where they exist. Every project strategy for KM should consider the training, recruitment and selection of project team members (e.g. subcontractors and suppliers). It should also pay due cognisance to the team members competencies, requisite knowledge and their willingness and effectiveness in sharing knowledge for the benet of the project. If construction leaders are interested in knowledge capture, sharing and exploitation, then it is necessary to consider that knowledge workers (project staff and team members) should be included in a dynamic KM process. This process is the one that for motivation, creativity, and an intellectual and comprehensive vision of the relationship between the project and the project team members. Simply put, individual and project knowledge should be seen as a projects IC, and an important factor in project success. Targeted education and training geared towards construction personnel is important to improve cultural awareness in these very important areas.

7. More contributions of KM to innovations: empirical evidence from project-based organisations


The quantitative ndings from Study C help us to understand a little bit more of the extent to which KM contributes to innovation. Table I presents the results of a frequency distribution test for those respondents from the study that claimed that KM contributes highly to innovation. The percentage responses were calculated and presented in descending order. In the study, organizational innovation was operationalised to mean the successful introduction, application and exploitation of an idea (process, product, service, technology, and market), new to the unit of adoption which is designed to signicantly benet the organisation. Knowledge consists of truth, beliefs, perspectives, concepts, judgements, expectations, methodologies and know-how. KM was to be understood as the process of continually managing knowledge of all kinds (explicit and tacit) in order to meet existing and emerging needs, to identify and exploit existing and acquired assets. An examination of the data on Table I reveals that about 50 per cent of the respondents noted that effective KM could lead to the exploitation of new technologies and new processes to benet the organisation. However, many of the respondents did not perceive KM to make a high-very high contribution to other types of innovation. Perhaps this is, in part, to do with the fact that many

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Table I The Contribution of KM to innovation types (percentages of high-very high responses) Measures of innovation New technology that has internal benets to the company New process that has benets to the company New approach to providing services to customers/clients New procedures for obtaining goods/services New product that provides competitive advantage for the company New external relations, e.g. partnering, joint ventures New administrative policy, e.g. incentive schemes, bonuses No of responses 52 51 52 52 52 52 52 Per cent 55 49 40 35 35 31 29

There are different types of innovations in project-based organisations. Those listed in Table I are seen to be important to the competitive advantage of project-based organisations. The data on Table I reveals that 55 per cent of respondents to Study C claimed that KM makes a high to very high contribution to the development of new technologies in an organisation. This suggests that respondents associate KM programmes with the implementation of new IT more than other types of innovation. The wider implication of this is that KM programmes are being viewed as a mechanism to further the dominance of IT in the workplace. Growing pressures on project-based industries to save time and money by incorporating technologies into the business process may be having an impact on the types of innovation being generated.

organisations do not have measuring instruments to capture the impact of KM on innovation, which is also revealed in this study. This tends to support the earlier ndings of the study relating to the lack of formal measurement of KM and IC in projectbased organisations. Moreover, other ndings from Study C have suggested that most of the project-based organisations that participated in the questionnaire in did not have highly developed KM strategies, structures or appropriate culture. It is asserted that there is a lack of awareness about the benets of KM specic to each organisation and how KM has the potential to contribute highly to innovation. It is recommended that a more reective analysis of how organisations can embrace KM as a facilitator of innovation is done. Furthermore, additional research needs to be conducted to identify the ways in which KM impinges on innovation in construction organisations and other projectbased organisations Only 35 per cent of respondents noted the contributions made by KM, to the introduction of a new product, as being high or very high. Egbu (1999a) argues that a key feature of the construction industry is the domination of its product (Egbu, 1999a, p. 119). The impact that KM is perceived to have on process innovation is marginally higher. Although the scores remain low, the introduction of new processes and new approaches to providing services to customers, were all ranked slightly higher than product innovation. It could be suggested that this indicates a marginal awareness that KM has a greater impact on the introduction of new processes rather than new products. Egbu (1999a) has noted elsewhere that the real innovation which changed the organisations capabilities and provided competitive advantage, is the shift to process from product.

8. Measuring innovation success


Organisations innovate for so many reasons. There are also different drivers that fuel innovation. Organisations might innovate to increase prot share, to enter a new market, to be a leader or rst follower in the market, for reasons of status, etc. Organizational strategies for innovation differ from one organisation to another. Similarly, the approaches which organisations put forward for measuring their innovation success as well as the time frame for judging innovation success differ greatly. What is perceived to be a highly successful innovation for one organisation may not be seen to be so by another organisation. There are organisations, which choose to exnovate (cease to continue with their innovation) after three or ve years after the release of their innovative products or solutions. There are some that might measure the success of their innovation after 10-15 years. It is therefore important to understand the modus operandi of an organisation involved in innovation before the judgement is made whether the organisation is successful at innovation or not. There is still an on-going debate whether many construction organisations are innovative or not. There are also those who suggest that the construction industry is less innovative. The author argues that many of these debates are founded on weak premises. Organisations and industrial sectors are impacted upon by different constraints and they handle these differently. Understanding the innovation trajectory which an organisation embarks upon gives a better understanding as to whether an organisation has been successful at innovating or not. The innovation strategies of organisations are strongly constrained by their current position and core competencies as well as the specic

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opportunities open to them in future. In other words, organizational strategies for innovation are path-dependent. The extent to which an organisation is successful in innovation can be measured through different variables. These include: . the percentage of prot/sale derived from the innovative product/solution; . the number of new products/solutions introduced over the last three/ve years; . the number of new/innovative ideas generated within a given period during the course of innovation; . the average number of man-hour input per new product/solution; . the average time to market of the innovative product/solution; . the level of satisfaction of the client/customer of the innovative product/solution; . the average failure rate of the innovation (during developmental stage, for testability and robustness of the product/solution); . the extent to which innovation planning is linked to overall organizational strategy; . the extent to which there are formal mechanisms to capture and share learning associated with the innovation;and . the extent to which the workforce is involved in innovation, supported, recognised and adequately rewarded.

9. Conclusions and recommendations


The paper has considered the important roles of knowledge and IC on innovations. This has been considered against the new differentiators of success in competitive environments, namely accelerated innovation and dynamic core capabilities. Organisations innovate for different reasons. They also assess the extent to which their innovations are successful in different ways. Understanding the innovation trajectory which an organisation embarks upon gives a better understanding as to whether the organisation has been successful at innovating or not. No one best strategy exists or is suitable for managing innovations in every organisation. However, any meaningful innovation strategy should have unequivocal support from the top. Its objectives need to be communicated and be accepted by the rank and le within the organisation. An innovation strategy needs to sit naturally within the overall strategy of the organisation. In addition, it is important that it is monitored and reviewed regularly. Some of the critical success factors to successful innovations include having a vision and an innovation strategy,

an innovation supporting culture (including people issues, performance management, reward, risk management) and having an innovation champion. Others are the ability to manage organizational knowledge (tacit and explicit) and build knowledge enhancing approaches, systems and technology, integrating the person and the team around the product and service. When managed effectively, innovation creates possibilities for competitive advantage. If the construction industry is to build core competencies, maintain capability and benet from innovation, it has to change from an adversarial and blame cultures to a sharing culture. Innovation and KM should be seen as long-term strategic concerns. They are complex social processes, which require an integrative approach and supportive organizational contexts which involve due consideration of the people, culture, nance, technology, environmental issues, effective organizational learning and process improvement dimensions. There still remains a paucity of empirical studies in construction that have addressed the people issues associated with KM and the important roles KM play in contributing to organizational innovations. There is therefore ample scope for research in these very important areas. In addition, more is needed on the education and training of construction personnel in the areas of innovation management, KM and IC for construction competitiveness. Targeted education and training programmes for practitioners should reect the nature of innovation and KM dimensions as very complex social processes.

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Madique, M.A. (1980), Entrepreneur champions and technological innovation, Sloan Management Review, Vol. 21 No. 2, pp. 59-76. Nonaka, I. and Takeuchi, H. (1995), The knowledge Creating Company, Oxford University Press, Oxford. Patel, M.B., McCarthy, T.J., Morris, P.W.G. and Elhag, T.M.S. (2000), The role of IT in capturing and managing knowledge for organizational learning on construction projects, Proceedings of CIT 2000, Reykjavik, 28-30 June, pp. 674-85. Peters, T. (1992), Liberation Management, Pan Books, New York, NY. Pierce, J.L. and Delbecq, A.L. (1977), Organization structure, individual attitudes and innovation, Academy of Management Review, January, pp. 27-33. Polanyi, M. (1958), Personal knowledge: Towards a Post-Critical Philosophy, University of Chicago Press, Chicago. Prahalad, C.K. and Hamel, G. (1990), The core competence of the corporation, Harvard Business Review, May-June, pp. 79-91. Quinn, J.B. (1985), Managing innovation: controlled chaos, Harvard Business Review, May-June, Vol. 63. Quintas, P., Lefrere, P. and Jones, G. (1997), Knowledge management: a strategic agenda, Journal of Long Range Planning, Vol. 30 No. 3, pp. 385-91. Rogers, E.M. (1983), Diffusion of Innovations, 3rd ed., Free Press, New York, NY. Roos, G., Roos, J., Edvinsson, L. and Dragonetti, N.C. (1997), Intellectual Capital Navigating the New Business Landscape, New York University Press, New York, NY. Rothwell, R. (1992), Successful industrial innovation: critical success factors for the 1990s, R&D Management, Vol. 22 No. 3, pp. 221-39. Rothwell, R. and Gardiner, P. (1985), Invention, innovation, re-innovation and the role of the user, Technovation, Vol. 3, p. 168. Scarbrough, H., Swan, J. and Preston, J. (1999), Knowledge Management: A Literature Review Issues in People Management, Institute of Personnel and Development, London. Senge, P. (1990), The Fifth Discipline, Doubleday, New York, NY. Shepard, H.A. (1967), Innovation-resisting and innovationproducing organizations, Journal of Business, Vol. 40, pp. 470-77. Slappendel, C. (1996), Perspectives on innovation in organizations, Organization Studies, Vol. 17 No. 1, pp. 107-29. Smith, P.A.C. and Saint-Onge, H. (1996), The evolutionary organization: avoiding a titanic fate, The Learning Organization, Vol. 3 No. 4, pp. 4-21. Stewart, T.A. (1994), Your companys most valuable asset: intellectual capital, Fortune, 3 October, pp. 28-33. Stewart, T.A. (1997), Intellectual Capital: The New Wealth of Organisations, Nicholas Brealey, London. Sullivan, P.H. (1999), Proting from intellectual capital, Journal of Knowledge Management, Vol. 3 No. 2, pp. 132-42.

Swan, J., Newell, S., Scarbrough, H. and Hislop, D. (1999), Knowledge management and innovation: networks and networking, Journal of Knowledge Management, Vol. 3 No. 4, pp. 262-75. Tatum, C.B. (1987), Process of innovation in construction rms, Journal of Construction Engineering Management, Vol. 113 No. 4, pp. 648-63. Teece, D. and Pisano, G. (1994), The dynamic capabilities of rms: an introduction, Industrial and Corporate Change, Vol. 3, pp. 537-56. Teece, D., Pisano, G. and Sheun, A. (1997), Dynamic capabilities and strategic management, Strategic Management Journal, Vol. 18 No. 7, pp. 509-33. Thompson, V.A. (1965), Bureaucracy and innovation, Administrative Science Quarterly, Vol. 10, pp. 1-20. Van de Ven, A.H. and Poole, M.A. (1988), Paradoxical requirements for a theory of organizational change, in Quinn, R.E. and Cameron, K.S. (Eds), Paradox and Transformation: Towards a Theory of Change in Organization and Management, Ballinger, Cambridge, MA. Van de Ven, A.H., Angle, H.L. and Poole, M.S. (Eds) (1989), Research on the Management of Innovation: The Minnesota Studies, Harper & Row Publishers, New York, NY. West, M.A. and Farr, J.L. (Eds) (1990), Innovation and Creativity at Work, Wiley, Chichester. Wolfe, R.A. (1994), Organizational innovation: review, critique and suggested research directions, Journal of Management Studies, Vol. 31 No. 3, pp. 405-31. Woodman, R.W., Sawyer, J.E. and Grifn, R.W. (1993), Toward a theory of organizational creativity, Academy of Management Review, Vol. 18 No. 2, pp. 293-321. Zaltman, G., Duncan, R. and Holbek, J. (1973), Innovation and Organizations, Wiley, New York, NY.

Further reading
Egbu, C. and Botterill, K. (2001), Knowledge management and intellectual capital: benets for project-based industries, Proceedings of the COBRA Conference,, Glasgow Caledonian University, Glasgow, 3-4 September. Gann, D.M. (2000), Building Innovation: Complex Constructs in a Changing World, Thomas Telford Publishing, London. Hamel, G., Doz, Y.L. and Prahalad, C.K. (1989), Collaborate with your competitors and win, Harvard Business Review, January-February, pp. 133-9. Nachmias, C. and Nachmias, D. (1982), Research Methods in the Social Sciences, 2nd ed., Edward Arnold, London. Winch, G. (1998), Zephyrs of creative destruction: understanding the management of innovation in construction, Building Research and Information, Vol. 26 No. 4, pp. 268-79.

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Creating, supporting and sustaining a culture of innovation


John Steele and Mike Murray

Introduction
Historically, the study of innovation and change in the construction industry has received scant attention from historians, economists, and construction management researchers alike (Gann, 2000). This is despite the fact that few areas of economic debate are characterised by agreement as the role of innovation for economic development of business and society as a whole (Schumpeter, 1934; Nystrom, 1979; Penrose, 1995). However, within the construction industry the construction research and innovation strategy panel (CRISP) has recognised this lack of focus and responded by commissioning work to investigate, and develop, diffusion mechanisms for construction research and innovation (Sexton et al., 1999). The UK government has traditionally promoted innovation through research councils (e.g. EPSRC, ESRC), and through a research programme funded through the Construction Directorate of the DETR. There has been a recent attempt to increase the prole of innovation and research through the introduction of a number of initiatives. These include (Crisp Consultancy Commission report, 1999): motivational campaigns (the construction best practice programme), directed research programmes (BRE and the passive solar programme), research schemes with higher education institutions (research council programmes and partners in innovation-PII), and subsidised consultancy (the energy design advice scheme). In addition to these, the industry has been attempting to adhere to the recommendations of Egans (1998). Although this document has motivated the industry to some degree, it makes little reference to how innovation should be promoted and more importantly, diffused within the industry. This paper attempts to highlight a number of issues regarding innovation and make basic recommendations on how to diffuse new concepts and products within the industry, before outlining the importance of managing the change that their introduction can introduce.

The authors
John Steele is a Consultant at Adept Management Limited, The Technocentre, Puma Way, Coventry, UK. Mike Murray is a Visiting Professor at the Department of Innovation in Design and Construction, Loughborough University, Loughborough, UK.

Keywords
Innovation, Change management, Intellectual capital, Construction industry

Abstract
Recently the industrys clients, designers and society as a whole, have begun to accept that innovation can offer key benets in the form of nancial growth and increased prots. Therefore, it is apparent that the development of a culture of innovation is of utmost importance if a business is to become universally proactive, entrepreneurial and remain successful. This owes much to the fact that the agility and ability of an organisation to respond to the changing marketplace is driven by its propensity to innovate. This paper does not attempt to resolve these problems; it merely attempts to raise awareness of the key issues relating to innovation, diffusion and the associated management of change. Moreover, it promotes the benets afforded by developing an organizational culture of innovation. The content will be of interest to industrialists and researchers and will describe the key issues associated with product derivation, introduction and wider diffusion. Ultimately, it aims to demonstrate that creativity, the promotion of a culture for innovation, and the development of intellectual capital are issues of utmost importance in generating and maintaining a proactive and entrepreneurial organisation.

Electronic access
The Emerald Research Register for this journal is available at www.emeraldinsight.com/researchregister The current issue and full text archive of this journal is available at www.emeraldinsight.com/0969-9988.htm
Engineering, Construction and Architectural Management Volume 11 Number 5 2004 pp. 316322 q Emerald Group Publishing Limited ISSN 0969-9988 DOI 10.1108/09699980410558502

Innovation
An innovation is an idea, practice or an object that is perceived as new by an individual or other unit of adoption (Rogers, 1995). It is irrelevant whether or not an idea is objectively new (the lapse of time since it was rst used or discovered), the perceived newness of the concept for the individual determines their reaction to it. In effect, an innovation is any program, technique, or activity

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perceived as being new by a population group or organisation (Rothman et al., 1976). Thus, innovation is not exclusive to new ideas, as an individual may have known about an innovation for some time but not felt any afnity with it and held judgement on adoption or rejection. In this respect, the newness aspect of an innovation may be expressed in terms of knowledge, persuasion, or a decision to adopt (Figure 1). Many people use the terms invention and innovation synonymously despite them having very different meanings. As has been stated above, innovation is the introduction of change via something new. Invention, conversely, is the creation of a new device or process. In this respect an innovation takes advantage of an invention, but an invention is not an innovation. Even though the terms are often confused, they have a highly interdependent relationship as innovators focus on the benets that inventions provide in order for people to value them sufciently to be willing to change to become participants in the innovation process (Rouse, 1992).

Why innovate?
Construction organisations, which need to adapt continuously to complex and changing conditions, can only survive and proliferate through innovation. The internal dynamics of construction organisations must be such that they can respond to change by adapting their structure and
Figure 1 Stages in the innovation diffusion process

orientation to reect, and be able to respond to, change. Thus the manner in which the company responds to change, through either adaptation or resistance, has fundamental implications on the development, and ultimately the survival, of that organisation. Innovation is often seen as a luxury when compared with real work (a term that can only be dened by the status quo). However, to remain ahead it is important to speculate on the future rather than sit tight and consolidate. There is growing evidence that companies committed to research and development as a driver for innovation reap rewards in future sales growth and stock market value. The current DTI international R&D scoreboard of companies shows that average R&D spend has risen from 1.7 to 3.4 per cent of turnover over a ten-year period (Financial times Director, 2000). This reects and supports existing evidence of the causal relationship between level of R&D investment and level of sales. Those companies investing a larger proportion of sales in R&D realise faster sales growth and proportional increases in stock value. At present, no construction organisation is placed in the top 250 R&D investors list. A consistent view in the industry is that lack of prots leads to lack of R&D investment. However, the DTI evidence suggests that the reverse is true for industry in general. Innovation is recognised as key to delivering a competitive edge, and there is considerable evidence that R&D is an essential component in driving the organizational culture of innovation. However, it is vital that the innovation is focussed, relating to the needs and objectives of

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the organisation, if sales growth and prots are to be improved as a result. Thus it is imperative that R&D is seen as a core component of business. However, recognising this only goes part way to make an organisation innovative. Once the innovations have been derived they must then be dispersed within the organisation and implemented in practice. This dispersion of ideas, concepts and products may be dened as diffusion, and is a key component in the development of the innovative business.

Diffusion
Diffusion (Figure 1) is the process by which an innovation is communicated, via the sending messages concerning new ideas, through certain channels over time among the members of a social system (Brown, 1981; Rogers, 1995). The communication of these ideas involves the exchange of information between individuals within a social group (e.g. an organisation). This, of course, is overly simplistic as it implies that this transfer process is linear. In reality, the exchange of information between parties is cyclic, representing an iterative process of knowledge transfer, persuasion, and decision-making between the individuals involved. Thus, the effectiveness of the diffusion process relies upon a complex web of negotiations within a vast social network. Only when the output from this process is a decision to adopt, the innovation will be implemented. Given this, it is clear that diffusion represents social metamorphosis, a process of alteration in the fabric and function of a social system. Although the process of diffusion appears to be simplistic and as such, fairly easy to instigate, it is driven by people a factor that introduces perception and subjectivity and thus, raises a number of potential barriers to its success. For example, those sending communications may be clear about the message they are transferring, but they have no control over how the receiver interprets the information. The receivers will understand the message from their perspective: they will or will not understand, agree or disagree with the information, and then react, possibly in a manner which is or is not evidently consistent with what they think (Smale, 1996). This communication, particularly when taking place across cultural, geographical, or professional boundaries, needs particular care, as resistance to change may, in reality, be a failure to comprehend (Steele and Murray, 2000). This results in difculties in getting new ideas adopted, even when the advantages they offer

are obvious. To compound this, most innovations diffuse at a surprisingly slow rate and typically require a lengthy period from the time they are made available to the time when they are widely utilised (Rogers, 1995). This time lag delays early realisation of the benets afforded by the adoption of the innovation and as such, many new concepts are disregarded before they had an opportunity to improve working practices. A further problem is that diffusion is dynamic, and both the population of potential users and the innovation itself will change during the process of diffusion (Hagedoorn, 1989). The diffusion process is dependent on two other key issues: the organisations functional breakdown and the spatial dispersion of its ofce. With the functional breakdown, reecting decisions made by different aggregations of individuals, and the spatial, reecting manifestations of these decisions as they may be observed within geographically dispersed ofces of a single organisation as opposed to a single ofce environment (Brown, 1981). These factors, in addition to those others stated previously, determine the organisations rate of adoption of an innovation.

Rate of adoption of innovations


Rate of adoption is the relative speed with which members of a social system adopt an innovation (Rogers, 1995). It is generally accepted that innovations will be adopted more readily if the decision to adopt is taken on a personal, as opposed to an organizational, level. However, there are many other extraneous variables involved in determining the rate of adoption of innovations (Table I). Generally, under the assumption of an unchanging innovation, all members of the population of potential adopters do not adopt simultaneously and some never adopt (Brown, 1981). This holds true for an evolving and changing innovation, although many researchers have disagreed about the advisability of adapting innovations. However, most agree that modication of an innovation is inevitable and, in the majority of cases, can be both desirable and possibly essential to promote uptake (Smale, 1996). The advantage of adaptation may be that rather than deciding to accept or reject innovations, potential adopters have the option to mould concepts; given this they have a greater afnity with the innovations and will endeavour to make them t within the local environment (Figure 1). Consequently, those innovations that have undergone an initial trial with a sample

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Table I Variables determining the rate of adoption of innovations Variables determining rate of adoption Dependent variable to be explained Rate of adoption of innovations

Figure 2 The diffusion process

Perceived attributes of innovations Relative advantage Compatibility Complexity Trialability Observability Type of innovation-decision Optional Collective Authority Communication channels Mass-media Interpersonal Nature of the social system Norms Degree of interconnectedness Volume Extent of promotion efforts
Source: Adapted from Rogers (1995)

population will have a higher adoption rate than those requiring total adoption without a pilot trial (Rothman et al., 1976). Rothman et al. (1976) have outlined two key components that should be introduced by organisations wishing to promote the uptake of an innovation: observability and trialability. In essence, an innovation is more likely to be adopted by an individual or group if the benets of its application can be demonstrated (observability) or a component of the innovation can be utilised without having to fully embrace it (trialability). Additionally, the likelihood of an innovation being adopted by a larger population is increased if it is rst utilised by a smaller group of opinion leaders (Rothman et al., 1976). Thus, typically, the successful diffusion of an innovation within an organisation describes a two-step process: uptake by early adopters and opinion leaders, and subsequent adoption by a larger population. Empirical research to date with regard to the uptake of innovation has identied ve adopter types. These are merely conceptualisations based on innovation adoption in practice but the framework of adoption provides an ideal mechanism with which to compare individuals and groups in terms of their willingness to adopt. Figure 2 describes how each of the categories exists within the diffusion process. It is important to recognise that the percentage adoption rarely, if ever, reaches 100 per cent.

Innovators Innovators are eager to try new ideas. They build communication networks around other innovators, even if this leads to geographically dispersed networks being formed. Consequently, the opportunity for transfer of innovations between elements of the network increases. Innovators must control nancial resources to absorb losses arising from unprotable innovation. They must also have the ability to understand and apply complex technical knowledge. The innovator plays a critical role in the diffusion process: that of initiating new ideas by introducing innovation from outside the social system of the organisation. Early adopters This category has the greatest degree of opinion leadership in most social systems. Potential adopters look to early adopters for advice and information about the innovation, and as a result they are best utilised as catalysts for the diffusion process. Early adopters are respected by their peers for their successful and discrete use of new ideas. According to Rogers (1995), the role of the early adopter is to decrease uncertainty about an idea by adopting it, and then conveying a subjective evaluation of the innovation to near-peers by means of interpersonal networks. Early majority Members of this category seldom hold leadership positions but interact frequently with their peers. Their adoption approach is based on deliberation through discussion with their peers, and they rarely, take leadership roles within their social networks. However, they hold a key position in the innovation process as they provide the communication link between the early adopters and the late majority.

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Late majority Typically, the late majority adopts innovation out of economic necessity and as a result of increasing peer-network pressure. They tend to be sceptical of the benets offered by innovation and as a result, are cautious in adopting new ideas. The volume of uptake already enjoyed, and the growing impact of peer pressure usually motivates adoption. Laggards Laggards are last in a social system to adopt an innovation. This tends to be the result of their desire to maintain the status quo and live by tradition. Their primary points of contact within the social network are other laggards holding similar opinion on innovation. When laggards nally adopt an innovation it may already have been superseded with a new idea that is already being adopted by the innovators. Thus, their traditional perspective slows the diffusion process to a crawl. Understanding these categories may seem academic. However, it is critical that the population of potential adopters is segregated in this manner to ensure that the laggards are never the rst to be introduced to innovation. This division should provide the corner stone of any change management strategy if diffusion and uptake are to be achieved.

Change management
When new ideas are derived, diffused, and adopted or rejected, leading to certain consequences, social change occurs (Rogers, 1995). Both the innovator, who is in effect an agent of change, and the innovation itself will promote changes in the environment within which they are introduced. The changes can precipitate many problems affecting the technical and commercial functionality of the corporate environment. A basic need of the innovative organisation is to eliminate as much as possible of the structural restrictions to achieve exibility, without disregarding the shortterm need for operational efciency. Achieving this balance between openness (development possibilities) and closure (conditions favourable to operational efciency) is a basic strategic problem to companies working in complex and changing environments (Nystrom, 1979). However, simply having a exible structure and a large innovation potential is not enough, in isolation, to ensure that innovation will be embraced, diffused and, ultimately, result in the desired change. Initiating change through the introduction of innovation requires an active component in the organisation, which starts and focuses change in company action

within the range of possibilities created by the new innovation. This active strategic component is change management and without this, the organisation will never realise the potential benets afforded. The consequences of change also affect the social aspects of the organisation. These consequences usually manifest themselves in the form of resistance to change, a human quirk that is inherent in all individuals to some degree. This generally leads to a great deal of frustration for the innovator and can lead to a potentially valuable concept or product being disregarded before it can be utilised with any degree of success. As such, it is important to recognise that managing change actually involves the management of a series of innovations, each of which must be managed differently. Thus, the strategy for planning and managing change involves differentiating between the complex, interrelated elements concerned, and making connections between people and the different changes taking place (Smale, 1996). Bearing this in mind, getting an idea or a product across to those who will be utilising it requires far more than describing the problems it is intended to address and how it should be applied in practice. It is imperative that the right personnel, with the appropriate skills, are appointed to ensure the change is controlled and managed efciently. The introduction of a change manager will provide a mechanism to create an atmosphere in which resistance to change is diminished and future innovation will be accepted more readily, thus improving the effectiveness of the organisation to adapt to innovation in the longterm. The majority of innovations will always be adapted to some degree when transferred from situation to situation and as such, it is essential that the introduction of an innovation be supported with a description of how, where and why it has been applied benecially elsewhere.

Promoting a culture of innovation and creativity


It is important to recognise that creativity, and the promotion of a culture for innovation, is of utmost importance in maintaining a proactive and entrepreneurial organisation. While understanding that creativity and invention can be chance events, a strategy needs to be installed that will ensure that: (1) the amount of creative ability at all levels of the organisation is adequate; (2) the creative potential of staff is identied;

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(3) the opportunity for the exercise of creativity on all projects is analysed;and (4) tasks and people are matched on the basis of this. (5) an environment is created in which: . unplanned creative ideas are received with an open mind and are not rejected out of hand because they do not accord with current plans or conventional practice; and . creative solutions within ongoing projects are encouraged, particularly in the early stages when exhaustive searches should be made to ensure that the subsequent investment of time and effort is well placed. Innovations that have emerged from or/are being implemented in specialist sectors of the business, are made universally available to all other sectors. This cross-fertilisation of ideas is itself a driver for innovation. As stated at the outset of this paper, it is important that organisations build, maintain and promote a culture of innovation if they are to remain successful. The agility and ability of an organisation to respond to the changing marketplace lies in the intellectual capital of its people. Thus, in order for the business to evolve it has to rst attract the right calibre of employee and then be capable of retaining these individuals. It is only by achieving this, that the organisation can access, and utilise, the innovation potential
Figure 3 Perpetuating organizational innovation and development

that exists within its key resource its people. It is unlikely that creative and enthusiastic individuals will wish to function in an environment in which they do not get opportunity to exercise that creativity and submit innovative ideas. Moreover, without motivating these individuals to release these ideas and use them to develop the organisation the business is neglecting to tap into its greatest resource of knowledge. Of course, not all ideas will be accepted or, if accepted, result in successful innovations, however, those innovations that do proliferate will further stimulate the desire of the individuals to propose imaginative and useful solutions in future. Indirectly a successful reputation for innovation will attract the creative and enthusiastic people to the organisation who will then represent the foundations for future innovation and development. In this respect, the development of an innovative culture will be self-perpetuating once initiated (Figure 3).

Concluding remarks the future


Recently, Lord Sainsbury, Britains Science Minister, suggested that a Businesss ability to innovate is vital to its global competitiveness. It is only by continually developing new products, processes and services that business can gain the competitive edge necessary for the increasingly global economy. R&D is a key component of this,

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helping to generate the advances that lead to new value-added products and enabling people and capital to be more effective. Given this it is apparent that R&D is essential to organizational innovation. However, if the innovation is not complemented with a strategy for adaptation and diffusion for application within the different environments of the business they are unlikely to give the company a competitive edge in the market, and may even de-motivate employees. As stated at the outset of this paper, the benets of investing in innovation are now being realised by many of the forward thinking (innovator/early adopter) organisations. Thus those organisations which are currently under-spending on R&D in comparison with their counterparts face an uphill battle, as they are lagging behind a dynamic market. In addition to this, Charles Larson, President of the US Industrial Research Institute, has inferred that the strong growth of industrial R&D is being driven by global competition and supported by healthy corporate prots and cash ow. He suggested that, other key factors include the need to expand a rms intellectual capital and competitiveness in the new economy, with shorter product life cycles and (more) motivation to manage rms for growth (Financial Times Director, 2000). This highlights the necessity for organisations to develop an internal culture for innovation that will attract the most innovative individuals, and thus lead to a self-sustaining rise in levels of innovation and focused R&D. Some economists are crediting increasing corporate expenditure in innovation and R&D with sustaining the productivity improvements resulting in overall global economic growth. According to the Financial Times, it is reasonable to assume corporate R&D spending will continue to grow and will become integrated more closely with standard organizational practice. As this occurs it will become increasingly important for directors to understand and involve themselves in R&D policy, and investment in R&D will become the differentiator in an ever-increasing marketplace.

CRISP Consultancy Commission (1999), Diffusion Mechanisms for Construction Research and Innovation, David Bartholomew Associates, Cheltenham, UK. Egan, J. (1998), Rethinking construction: the report of the construction task force, URN 98/1095, DT1, London. Financial Times Director (2000), FT supplement: R&D proving to be an engine for growth, Financial Times Survey, 15 September. Gann, D. (2000), Building Innovation: Complex Constructs in a Changing World, Thomas Telford Books, London. Hagendoorn, J. (1989), The Dynamic Analysis of Innovation and Diffusion: A Study in Process Control, Pinter Publishers Ltd., London. Nystrom, N.H. (1979), Creativity and Innovation, Wiley, New York, NY. Penrose, E. (1995), The Theory of the Growth of the Firm, 3rd ed., Oxford University Press, Oxford. Rogers, E.M. (1995), Diffusions of Innovations, Collier Macmillan Publishers, New York, NY. Rothman, J., Erlich, J.L. and Teresa, J.G. (1976), Promoting Innovation and Change in Organisations and Communities: A Planning Manual, Wiley, New York, NY. Rouse, W.B. (1992), Strategies for Innovation: Creating Successful Products, Systems, and Organisations, Wiley, New York, NY. Schumpeter, J. (1934), The Theory of Economic Development, Harvard University Press, Cambridge, MA. Sexton, M., Barrett, P. and Aouad, G. (1999), Diffusion Mechanisms for Construction Research and Innovation into Small to Medium Sized Construction Firms, A report to the CRISP consultancy commission 99/7. Smale, G.G. (1996), Mapping Change and Innovation, HMSO Publications, London. Steele, J.L. and Murray, M.A.P. (2000), Constructing the Team: a multi-cultural experience, paper presented at the Chartered Institute of Building Services Engineers (CIBSE) National Conference, Dublin, September.

Further reading
Becker, S. and Whisler, T.L. (1967), The innovative organisation: a selective view of theory and research, The Journal of Business, Vol. 40 No. 4. Barnard, G. (1995), Cross-Cultural Communication A Practical Guide, Cassell, London. Bradbury, J.A.A. (1989), Product Innovation: Idea to Exploitation, Wiley, New York, NY. Gold, B. (1983), On the adoption of technological innovations in industry: supercial models and complex decision processes, in MacDonald, S., Lamberton, D. and Mandeville, T.O. (Eds), The Trouble with Technology, Pinter Publishers Ltd, London. Steele, J.L. and Murray, M.A.P. (2001), The application of structured exploration to develop a culture of innovation, Proceedings of Chartered Institute of Building Services Engineers (CIBSE) National Conference, Regents College Conference Centre, June, London.

References
Brown, L.A. (1981), Diffusion: A New Perspective, Methuen and Co., London.

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Integrating procurement and operational innovations for construction industry development


Mohan Kumaraswamy Peter E.D. Love Mohammed Dulaimi and Motiar Rahman
The authors
Mohan Kumaraswamy is an Associate Professor and Motiar Rahman is a Post Doctoral Fellow both at the Department of Civil Engineering, The University of Hong Kong, Hong Kong, SAR, Peoples Republic of China. Peter E.D. Love is a Professor at the School of Management Information Systems, Edith Cowan University, Churchlands, Perth, Australia. Mohammed Dulaimi is a Senior Lecturer at School of Construction Economics, Management and Engineering, University of the West of England, Frenchay, Bristol, UK.

Introduction
Demand for dramatic leaps in construction productivity in countries such as Australia, Hong Kong, Singapore and the UK have led to a series of industry reports that identify compelling needs to break out from traditional procurement paradigms, to steer away from stereotype operational models and to trigger seismic shifts in collective cultures. For example, the Latham Report on the UK industry in 1994 by Latham (1994) argued that an endless rening of existing contract conditions would not address ingrained adversarial attitudes that are at the root of many industry ills. Considering this, Latham called for a new set of fundamental principles on which modern contracts may be based. The 1998 Egan Report (Egan, 1998) among other recommendations, called for the adaptation of modern managerial techniques from the manufacturing and service industries to target rapid productivity gains as had been achieved, for example in car manufacturing and off-shore engineering. The integrating role of a manufacturing industry type product focus has indeed been shown to be worthy of emulation and likely to lead to the sorely needed innovations in the construction industry (Dulaimi and Kumaraswamy, 2000). For example, the present functional segregation and separated risks allocation/management frameworks discourage innovations in design, construction and even managerial methods. Liabilities and penalties may well accrue to a party who strays beyond standard practice or the present state of proven industry knowledge. Furthermore, while innovative construction procurement and managerial systems are being advocated (Kumaraswamy, 1998), dominant industry pressures to get it right the rst time and to do this fast, direct participants towards already tried and tested procurement and operational routes. Such pressures point to desperate needs for: (1) a fundamental revamping of risk allocation and management principles, as was explored in a recent review of the General Conditions of Contract for Construction Works of the Hong Kong Government (Grove, 2000); and (2) well co-ordinated collective actions towards both innovative and continuous improvements which must necessarily be based on a common
Research funding from the Committee on Research & Conference Grants of the University of Hong Kong helped launch this Inter-University collaborative study. A grant from the Research Grants Council of Hong Kong (ref. HKU 7011/02E) is enabling deeper developments in this useful area. These valued inputs are gratefully acknowledged.

Keywords
Learning, Innovation, Risk management, Construction industry

Abstract
Uncertainty of eventual outcomes coupled with a reluctance to embark upon potentially long learning curves, have militated against much-needed holistic innovations in our instant-resultsoriented construction industry. While sporadic initiatives towards new organizational and/or contractual arrangements have enabled incremental improvements in some scenarios, the increasing demand for step gains in construction industry performance levels evidently envisages a more solid launching pad with re-engineered paradigmatic foundations. Initial investigations suggest that the foregoing desired goals may be achieved together. Finally, a conceptual model that coherently synergises these strategies for institutional and industry development is presented and discussed.

Electronic access
The Emerald Research Register for this journal is available at www.emeraldinsight.com/researchregister The current issue and full text archive of this journal is available at www.emeraldinsight.com/0969-9988.htm
Engineering, Construction and Architectural Management Volume 11 Number 5 2004 pp. 323334 q Emerald Group Publishing Limited ISSN 0969-9988 DOI 10.1108/09699980410558511

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(e.g. a product focused) motivational dynamic (Dulaimi and Kumaraswamy, 2000), as well as a strategic co-operative learning alliance (Holt et al., 2000). The purpose of this paper is to show that substantial synergies may be derived from co-operative approaches to common industry problems, while the much required innovations will not be workable without co-ordinated strategies. The paper draws together relevant outcomes from a cluster of a recent studies initiated in Hong Kong, Singapore, Australia and the UK in framing a solid platform from which to launch an integrated research project that will identify and develop such co-ordinated strategies towards innovation at industry, institutional and project levels. Space does not permit detailed descriptions of all the feeder studies, so these are summarised and those referred to where previously documented. However, relevant parts of the most recent study on the perceptions of risk allocation and the advantages of joint risk management ( JRM) are described more in depth. The freshly launched integrated study sets out to channel these parallel research streams into a synergistically convergent ow that can breach barriers to construction industry innovations, and provide the required multi-dimensional solutions to multifaceted construction industry problems.

In search of innovations
Innovations for their sake are apparently pursued in the spirit of discovery and progress on the one hand, or for pure competitive advantage on the other. Innovation may also be deemed necessary to yank lethargic sectors out of ruts of low productivity. Examples include the HK $5 Billion innovation and technology fund set up by the Hong Kong Government, the movement for innovation (M4I) and the network of construction creativity clubs in the UK. The latter set out to showcase innovative and best practice processes, technology and products . . ., to provide networking opportunities and a resource that can support dissemination of innovation in the construction industry . . .. Slaughter (2000) presented innovation (based on previous denitions) as non-trivial improvements in a product, process or system that is actually used and which is novel to the company developing or using it; also adding that it can form the backbone of a companys competitive strategy. Lenard (1999) lamented that the construction industry has lacked the vision of the manufacturing sector, where innovation has long been used as an

important tool for achieving competitive advantage, process improvements and cost efciency. But newness by itself may not always be good. Previous research has indicated that newness to the rm must be distinguished from newness to the market, and if it is just the former it may even be correlated with failure rather than success (Dulaimi and Kumaraswamy, 2000). Usually there will be higher risks associated with innovations. These have to be compared with the potential rewards and then managed efciently, hence underlining the criticality of improved risk management strategies discussed in a subsequent section. Flannagan (1999) identied two models of innovation, and differentiated the interactive model from the linear model. He discarded the latter as less realistic in confusing invention with innovation, whereas the former model requires well-dened innovative strategies. Milford (2000) distinguished between broader national systems of innovation vs those that are specic to construction industries; as well as between innovation systems for developed vs developing countries. The currently launched study, while recognising such differences, would draw inspiration from relevant process innovations in other industries in formulating innovative frameworks for construction industries. At a project level, Lenards study (Lenard, 1999) also indicated that the level of innovation and the ultimate success of a project depends largely on four key factors: (1) the clients recognition of the need for innovation; (2) contractual incentives to encourage innovation; (3) creation of a symbiotic learning environment; and (4) open communication at all levels. While the rst factor has been discussed in this section in particular, the other three factors are explored in the studies reported in the following sections, in order to develop an integrated strategy.

Procurement and operational innovations


Conceptualising and selecting projectspecic systems A profusion of apparently innovative procurement protocols have proliferated in recent decades in ad hoc and disjointed attempts to address some of the industry inefciencies (Tucker and Ambrose, 1998). Focusing on the need for a more integrated approach Kumaraswamy (1998) presented a holistic conceptualisation of the range of available

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procurement system options. This model frames a hierarchy of options within each of ve identied sub-systems of: (1) work packaging (e.g. how large projects are divided into reasonably sized contracts/ packages); (2) functional grouping; (e.g. whether separated or integrated design and construction functions; and whether management-led, e.g. construction management type groupings etc.); (3) payment modalities (e.g. whether lump sum/ re-measure/etc.); (4) conditions of contract (e.g. with many standard and non-standard options); and (5) selection methodologies (e.g. with recent pressures for non-price criteria in selecting contractors and fee competition in selecting consultants). Innovative options were incorporated and explored within each sub-system, for example in BOT type procurement systems (Kumaraswamy and Zhang, 2001), in contractual systems using performance-based contracting (Palaneeswaran and Kumaraswamy, 1999) and for the selection of design-build contractors (Palaneeswaran and Kumaraswamy, 2000). It was also shown that the synergistic integration of selected options (as are to be selected within each sub-system on the basis described above) into project-specic procurement systems should be carefully geared to project priorities and contextual conditions (Kumaraswamy and Dissanayaka, 1998). Moreover, the selection of the appropriate procurement systems themselves, in turn required innovative approaches. A knowledge-based decision support system (with an expert system front-end) was proposed and tested: to handle the many external and internal (project) variables, the profusion of potential procurement options and the scattered body of experiential knowledge about their applications and potential impacts on project performance levels (Kumaraswamy and Dissanayaka, 2001). Synergising innovative procurement and operational systems The need for the above decision support system was concluded on the basis of the outcomes from a recent research project that tested the impact of different procurement options on project time performance and project cost performance outcomes, using multiple linear regression and articial neural networks (Kumaraswamy and Dissanayaka, 2001). This study conrmed that while certain procurement options (e.g. within the payment modality sub-system) do in fact have an inuence on project outcomes, non-procurement

variables (e.g. relating to client type) also affect project performance signicantly. Thus while reengineered procurement systems geared to their performance-inducing potential were necessary, it was conrmed that these should be synergised: (1) with project-specic internal and external factors, while targeting particular project priorities; and (2) with complementary operational/managerial sub-systems (e.g. for quality, safety and dispute minimisation). The operational sub-systems themselves need to be carefully synergised. Therefore, intelligent upfront procurement system design should be integrated with synergistic downstream operational innovations, that together address project-specic priorities and are compatible with the project conditions. Murray et al. (1999) explored similar linkages of project organizational models with procurement systems. They also focused on co-operative and integrated procurement systems and on related post-Latham developments towards teambuilding, partnering and concurrent engineering for example. Findings from the foregoing studies rekindle interest in relational contracting (RC) principles which provide a theoretical basis for co-operative contracting. Here contracting parties are urged to co-operate in all operational aspects (Williamson, 1985), achieving, for example, benets from the teamwork expected in partnering scenarios.

Targeting transactionally efcient RC


Relational contracting (RC) and joint risk management ( JRM) Even before the popularisation of partnering, early efforts to counteract the confrontational attitudes generated in classical contracting rst led to neo-classical contracting (Macneil, 1978). The latter envisaged longer-term relationships, recognising that the world is complex that agreements are incomplete and that some contracts will never be reached unless both parties have condence in the settlement machinery (Williamson, 1985). RC principles go beyond neo-classical contracting in introducing a degree of exibility into the contract, encouraging long-term provisions and considering a contract to essentially be a relationship between the parties (Macneil, 1978). RC approaches appear useful in achieving the overall objective, which as summarised by Walker and Chau (1999) is to reduce the sum of production and transaction costs.

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Transaction costs themselves are taken to be the costs of drafting and negotiating agreements, set up and running costs of the governance structures which monitor and settle disputes etc. (Williamson, 1985). Most disputes arise from unclear and/or inappropriate risk allocation (Kumaraswamy, 1997), and risk allocation and management are considered central to contractual and governance structures. Even the most meticulous contract language is often inadequate in clearly specifying risk apportionment, as many clauses may be open to multiple interpretation (Hartman and Snelgrove, 1996). Furthermore, even the most careful drafters of contracts may not foresee all contingencies. JRM strategy appears necessary to deal with certain risks that can be more effectively managed dynamically through co-ordinated efforts. Extracts from a survey on risk allocation perceptions A Hong Kong based survey was recently launched to identify: (1) the degree of concurrence/diversity in the interpretation of contractual risk allocation (and thereby to estimate the degree of potential conict) in terms of both present and preferred risk allocation; and (2) the attitude towards JRM under a teamworking based co-operative environment. Respondents to a carefully designed and pilottested questionnaire, were requested to state a percentage (say X, from 0 to 100) of a particular risk that is perceived to presently lie with the contractor; thereby also implying that (100-X) percent of that risk presently lies with the employer. Secondly, respondents were asked to state the percentages of a particular risk that should, in their opinion, be borne: (1) by the employer, (2) by the contractor and (3) earmarked for joint management ( JRM) at post-contract stage (totalling 100). The detailed survey outcomes are being reported elsewhere, since much more space is needed to provide a comprehensive and in-depth discussion. Nevertheless, relevant observations from the survey that are summarised below, are useful in demonstrating particular perceptions on the need for JRM, since these reinforce the above theoretical arguments for JRM through RC approaches. The survey results indicate a divergence in both interpretations of present risk allocation, as well as of preferred allocation, both between and within the different project participant groups (employers, contractors and consultants).

This is consistent with previous observations, for example in Canada (Hartman and Snelgrove, 1996). However, extreme divergence (i.e. 0 and 100) within the same contracting groups is also observed in the present study. Such diverse perceptions of participants are a source of potential conict during project execution. Divergence in the same group may well arise from random personal experiences and therefore signal the need for co-operative organizational learning as discussed later. Better inter-group and intra-group understanding may be developed through co-ordinated training programmes and co-operative learning strategies. These should in turn generate co-operative teamwork and improved relationships. The 41 risk types that were incorporated in the questionnaire were identied in the initial study phase, based on the literature and interviews with experienced industry personnel and academics. Provision was made for respondents to add other risk types. Over 200 questionnaires were issued in Hong Kong and 35 in Mainland China. The respondent prole of the 47 usable responses is shown in Table I. The table focuses on summarising a relevant analysis of the responses on the perceived need for joint management of risks at post-contract stage which relates to one of the questions asked in the survey. It reveals that considerable percentages of most of the 41 risks cited in the survey questionnaire are generally perceived to require joint management. The table also indicates the divergence in perceptions on JRM between these groups. Out of 41 risks used in the survey, 11-50 percent of 29 (i.e. 23+6) risks are generally perceived (i.e. by the total sample) to require joint management. Within specic groupings in this sample, academics believe that 11-50 percent of 37 risks (the highest in numbers in this range) should be managed jointly, in comparison to the consultants, who think that 11-50 percent of 26 risks should be managed jointly. The contractors group think that 11-70 percent of 28 risks should be jointly managed. By contrast, the employers group only recommended 26 risks (the lowest in numbers) for joint management of more than 10 percent. But the range of percentages that they considered suitable, exceeds 50 percent for joint management of 2 of these risks. This appears contrary to previous conclusions that employers are risk evasive (Ahmed et al., 1999). Furthermore, in the percentage range slot of 31-50, the employers group recommended a greater number of risks for joint management than any other groups in this sample. The employers have also recommended more risks for joint management than the contractors in the percentage slot of 51-70.

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Table I Average perceptions on joint risk management Number of risks (out of 41 used in the survey) in each groupa Academics Consultants Contractors Employer (10) (14) (8) (15) 0 4 33 4 41 0 15 22 4 41 7 6 22 5 1 41 1 14 15 9 2 41

Percentage of risk that should be jointly managed 0 1-10 11-30 31- 50 51-70 Total No.
a

Total (47) 0 12 23 6 41

Note: Figures in parentheses indicate the number of responses

This suggests that the employers in this sample are more receptive to JRM than the contractors. This is useful in that any initiative for co-operative teamwork is expected to originate from the employers as the project initiators and nal decision makers on project procurement and operational modalities. It has also been observed that the respondents generally preferred to see reduced risk liabilities (as compared to present allocations) being imposed upon both of the contracting parties, while diverting the residual risks for JRM. Table II shows average perceptions of both present and preferred risk allocation of ten risk items under the Hong Kong General Conditions of Contract for Civil Engineering Works category that are recommended for JRM of over 40 percent, along with the differences of present and preferred risk allocation. It is seen that considerable percentages of different risk items have been reduced from the present risk liabilities of both the contracting parties and recommended for JRM. The table includes unforeseen ground conditions, third party interference and inclement weather, which were previously found to be some of the root causes of claims and disputes in Hong Kong

(Kumaraswamy, 1997). This may mean that the industry participants are now developing preferences for teamwork-based collaborative working arrangements. Hos (2000) contemporary report on a teamwork-based non-traditional guaranteed maximum price approach in Hong Kong conrms this observation. A prestigious private sector client brought in the contractor at the very outset of an ofce building project, to work with the consultant. The contractor contributed his experience on construction methods and buildability aspects, thereby improving the design. Suggestions on cost savings were incorporated with further inputs from the sub-contractors. The project was completed on time to the satisfaction of all the parties, and 11-38 percent cost savings were achieved compared to similar buildings constructed by the same contractor around the same time using the traditional procurement system. Translating industry enthusiasm for nontraditional approaches into action in the case of government/public sector clients will not be as easy as with private sector clients, as the former need to follow some pre-set rules and procedures. This also means that a well-performing contractor will

Table II Comparison of average perceptions between present and preferred risk allocation arising from the Hong Kong general conditions of contract for civil engineering works Per cent of risk that presently lies with C O 58 29 25 65 54 54 51 10 31 40 42 71 75 35 46 46 49 90 69 60 Per cent of risk that should be allocated to/managed jointly C O J 48 15 12 30 36 36 31 3 14 20 11 44 43 24 9 9 12 40 26 5 41 41 45 46 55 55 57 57 60 75 Diff. of present and preferred allocation C O 10 14 13 35 18 18 20 7 17 20 31 27 32 11 37 37 37 50 43 55

Risk items Buidability/constructibility Delayed payments on contracts Legal impossibility Unforeseen ground conditions Resolving contractual issues Resolving disputes/arbitration Third party interference/delays Physical impossibility Acts of god/ inclement weather Public disorder Notes: C-Contractor; O-Owner; J-Jointly

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not obtain any degree of assurance about improved chances for winning the next contract with the same public client. This scenario therefore pushes back both parties towards a traditional approach. The situation becomes more acute when the economy is in recession with less contracts and contractors who are starved for work. However, widespread dissemination of private sector successes that demonstrate clear high-margin benets to all parties concerned, as in the above example may motivate policy makers and ofcials to design a system that will be able to derive similar benets even within a public sector framework. This may include, for example: (1) more relationally driven and performance oriented contractor selection that would encourage an amicable RC environment and more collaborative teamwork (Rahman et al., 2001); (2) specifying partnering (experience or readiness/commitment) as a precondition for contractor prequalication (UDT, 1997); and (3) introduction of post contract partnering-type arrangements (ECI, 1997; Loraine and Williams, 2000; Scott, 2001), that will also include proper restorational techniques (Rahman and Kumaraswamy, 2002). This in turn will also compel contractors to develop a culture of partnering that will help to propagate RC in general (and partnering in particular) on a broader scale i.e. through the whole supply chain, as a standard way of doing business.

A tracking of claims and variations on this project showed that most were settled early, particularly in the rst two contracts. Only ve out of a total of 350 claims and variations were referred to the DRB, and of these four were in the abovementioned third contract. Such early settlement of potential disputes, coupled with the good performance level attained, were attributed to the good relations generated, one example of which was the clients post contract initiative to set up the DRB and improve working relationships. Elements of RC and JRM were thus discernible, although not formalised on this project. Interim conclusions from the foregoing studies The improvement strategy model shown in Figure 1 was developed through further analysis and subsequent synthesis of the ndings from: (1) the present study on the advantages (including transactional efciencies) of JRM through RC; and (2) the previous study (summarised in the previous section) on the need for synergising procurement and operational innovations, as well as for intelligent selection and integration of appropriate sub-systems in formulating a project-specic system. Furthermore, expanding on specic aspects, the perceptions on both present and preferred risk management (in the present study) also revealed a marked divergence between group perceptions. Differences within groups (although not discussed in this paper) were also quite evident. Together these ndings signal the need for both: (1) a re-alignment of objectives and relationships; and (2) co-operative/collective learning strategies that will reduce the (mis)shaping and distortion of attitudes/mind-sets by random individual and group experiences, as well as by narrow objectives and approaches.

Corroborative case-study A case study was next carried out on a major dam project site in Mainland China to test some of the above survey observations. While the details of this case study are described elsewhere (Rahman and Kumaraswamy, 2002), it is noteworthy in the context of this paper that: (1) the client with strong encouragement from the World Bank was proactive in improving intergroup relations, which included the post contract formulation of a Dispute Review Board (DRB) to anticipate and minimise conicts; and (2) there was a notable difference between both performance levels and speed of settlement of claims on two of the main contracts where relations were consistently better between client/consultants and the contractors as against the third contract which was kicked off with a claim for unforeseen site conditions even before excavation commenced!

Mobilising co-operative learning alliances


The growing popularity of partnering and alliancing is a manifestation of belated industry responses to long recognised needs for collaboration and co-operation, and in fact a movement towards the RC paradigm previously discussed. The terms partnering and alliancing have been used interchangeably to describe interorganizational forms for stimulating RC within the construction industry. While these terms have different meanings, both place emphasis on engaging collaborate behaviour (Lamming et al., 2000; Love et al., 2002). Like strategic and project

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Figure 1 Conceptual model of strategy development for improved procurement systems

partnering, alliances can be either collaborative or co-operative in nature (Kanter, 1994; Love et al., 2002; Morrison and Mezentseff, 1997). Collaborative alliances focus on the short-term and are similar to project partnering. Co-operative alliances, on the other hand, refer to the long-term and are similar in nature to strategic partnering. Essentially, long-term alliances refer to a co-operative relationship between at least two organizations, which is established for achieving long-term goals and objectives, for the purpose of achieving a competitive advantage. More specically, long-term alliances are a manifestation of inter-organizational co-operative strategies, and entail the pooling of skills and resources through the co-operation of organizations aiming to achieve common goals, as well as goals specic to individual partners. In such instances, intellectual capital and organizational intelligence might be seen as suitable motivations for developing longterm partnerships. Short-term alliances, on the other hand, are collaborative and established between two or more parties who strive for shortterm project-related benets. Usually, parties in short-term alliances have clear alliance objectives these being project-or-business-specic. However, as these objectives may not be compatible (perhaps even conicting) with each individual parties, internal organizational objectives, mutual trust and commitment cannot be easily developed. Collaborative strategic alliances and project partnering can provide opportunities for parties to work together and create value rather than merely full a basic commercial transaction (Voordijk et al., 2000). It is proffered, however, that organizations that look for short-term benets may inhibit learning and the ability to critically analyse

and improve themselves. Therefore, the type of relationship formed between construction organizations may inuence the structure, objectives and learning capabilities of the parties involved in the supply chain partnerships (Love et al., 2002). In other words, co-operative strategic alliance or strategic partnering should be the means for establishing a learning alliance in a supply chain. Inter-organizational learning is a factor that can signicantly contribute to stimulate innovation in the construction procurement process. For example, Lenard (1999) found that when contracting parties assumed a symbiotic relationship and gained knowledge and experience from each other, innovation levels were signicantly increased within and between organizations. Co-operative alliances are constructed to facilitate the transfer of knowledge, skills and resources to involved partners. This entire process relies on a learning mechanism to complete this cycle. Yet, the many construction organizations do not have learning mechanisms in place. For example, an explicit link between total quality management (TQM) and learning has been identied by several authors (Garvin, 1993; Hill, 1996; Love et al., 2000), yet TQM and its associated techniques are not effectively practised as a suite of activities by construction organizations. Needless to say, learning, particularly at an organizational and interorganizational level, has not become an integral part of the industrys culture. Without a learning environment to encourage the effective and accurate transfer of information, the benets to the formed alliance may be minimal. Senges (1992) denition of a learning organization addresses the issue of co-operative

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learning. Similarly, Crossan and Inkpen (1995) emphasise that the ability of alliances to extract knowledge and skills from each other is important for survival. They also noted that the process of learning is based on single loop learning. They found that learning opportunities are not typically exploited in a form that is consistent with their initial learning objectives. Consequently, the primary barrier to learning is considered to occur at an individual level where learning opportunities are not exploited because the alliance experience conicted with the existing set of managerial beliefs. Both Holt et al. (2000) and Love et al. (2002) have explored how learning is stimulated in alliances between construction organizations. Holt et al. (2000) presented a learning framework that can be used to foster successful co-operative strategic alliances between construction organizations. Holt et al. (2000) concluded that co-operative alliances could create a shared vision of mutuality per-se and hence stimulate the development of a learning organization. This type of learning enhances an organizations capacity to learn continuously and improve the effectiveness of its systems and operations. Thus, improved and more effective operations bring with them improved internal and external customer satisfaction. Holt et al. (2000) suggested that co-operative relationships, if nurtured, could cultivate a climate for mutual learning, trust and client benets. To mobilise a co-operative learning alliance between construction organizations, Love et al. (2002) have suggested that organizations should strive to use its key attributes, as identied in the list below. . The learning alliance adopts a holistic rather than fragmental approach to problem solving. . Benchmarking is used as a feedback mechanism with respect to the performance of the alliance. Feedback processes need to be in place to provide information about what has to be learned as well as what has been undertaken. . Collective establishment of common goals with nancial (business performance), technical (productivity measurement) and efciency (human contribution measurement) indicators for comparing the performance of alliances to achieve the goals over a period of time. . Emphasis on customer-supplier relationship to develop a strategy for relationship building for alliance parties. This involves the establishment of an inter-organizational team that consists of members along the supply chain. . Using jointly agreed goals to guide behaviour.

Select the right people into the interorganizational team who have the ability and the necessary skills to develop a learning culture within the team and an appropriate organizational climate for learning. Design support structures and create an overall organizational attitude that encourages learning. Mistakes must be seen as opportunities to learn. Development of a learning culture. For example, honesty, trust, openness to new ideas, commitment from senior management, are all critical factors that can encourage employees to learn. Encourage dialogue with alliance members. Workshops or meetings should be put in place to develop and experience the learning culture. IT such as Internet helps to receive and transmit information in a virtual environment. Alliance becomes aware of and identies new knowledge. Alliance is able to transfer and interpret new knowledge. Alliance uses new knowledge by adjusting behaviour to achieve anticipated outcomes. Alliance institutionalises new knowledge by reecting on what is happening and adjusting learning behaviour. Alliance team challenges the existing practices when performance is not favourable. A problem that cannot be solved in one joint meeting should be put forward to the next meeting and so on, until the problem is solved. Measures are used to evaluate the performance and agenda is used to raise the issues for discussion, so team members can study the issues independently or collectively through other possible means such as e-mail before attending the meeting. Establish reward and incentive systems that encourage both individual and organizational learning. Establish mechanisms for collecting and transferring information from inside and outside the alliance. Shared learning is encouraged within the alliance team. Senior management should encourage and assist with the development of the interorganizational team. Representatives in the team are the change agents and should be empowered. An independent facilitator should be hired for developing shared vision and goals.

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Advantages of adapting a productfocused paradigm


Lessons may be learned from the manufacturing industry in pursuing the above objectives, as for example indicated in the recent formulation of a learning framework founded on TQM for the formation of co-operative alliances between manufacturing organizations in a supply chain (Love and Gunasekaran, 1999). Lessons may also be drawn from the common product focus that permeates all participant groups in a manufacturing scenario from R&D to marketing in the development of a marketable product (Dulaimi and Kumaraswamy, 2000) and even through to after-sales service (translating to maintenance in a construction context). The dynamics of design-manufacturing integration in new product development in the manufacturing sector (Rusinko, 1999) provide specic examples to draw upon. The alignment of motivation and the empowerment of participants through this common focus on an innovative product is not difcult to emulate as every construction product is unique. Furthermore, innovative processes could be generated along the lines discussed in this paper, in achieving each such product successfully. Success in this sense would then include both higher project participant productivity and client satisfaction. A product development focus is thus proposed to re-integrate segregated groups in construction scenarios, and to empower and inspire the innovations that are now needed to achieve long awaited leaps in productivity, as well as to enable the rapid development of construction institutions, and in turn the industry itself. The model in Figure 2 is developed to encapsulate the essence of the convergent streams of research that are described in this paper, and which led to this conclusion.

Mapping the way forward


The main challenges confronting the movements towards: (1) innovative governance structures, (2) JRM, (3) partnering/ alliancing type collaboration and co-operation and (4) innovative strategies and mechanisms as at the 2nd level in Figure 1 are expected to be encountered in the major cultural shift that has been urged for over more than 50 years: ranging for example from recommendations in the 1944 Simon Report in the UK (CCWB, 1944) to those in the 2001 Tang Report in Hong Kong (Tang, 2001).

Whilst the analyses and applications shown at the 1st (top) level of Figure 1 require considerable efforts and a clear focus, they should be achievable with a reasonable degree of certainty given adequate resources and time. Formulating the above procurement strategies including governance structures etc. [i.e. items (a) to (d) above] at the second level (based on the ndings at the rst level) also appears reasonably feasible, despite the likelihood of debates and disagreements on the relative effectiveness of different approaches. However, achieving the needed radical culture change is the major common obstacle to be overcome in moving actual industry practice towards the bottom line (3rd level in Figure 1) of improved project procurement through innovative governance structures, JRM and allied operational innovations. Kumaraswamy et al. (2001) formulated a framework for analysing how this culture change may be targeted. One practical approach that is recommended therein is to trigger the culture change at the outset, by incorporating relevant non-price selection criteria (e.g. related to partnering potential) when choosing consultants, contractors and sub-contractors. This should be extended to clients representatives and suppliers and all other key project stake-holders in the supply chain. Since the aspiring candidate participants should be most receptive (if at all) to cultural conditioning (or re-conditioning) at the selection stage, it is argued to be the best stage to achieve some degree of cultural (e.g. attitudinal) shift. Its possibility is demonstrated in a recently cited case-study of sub-contractor selection by a European contractor in the UK where partnering potential was evaluated (Kumaraswamy and Matthews, 2000). This led to demonstrable mutual benets, e.g. with potential subcontractors quoting lower bid prices in the knowledge that their relationship would be partnered. In a more general supply chain scenario, involving key suppliers as well, Lawton et al. (1997) demonstrated how mutual benets were derived by partnering throughout the team. Figure 2 conceptualises the expansion of initiatives such as the above to the entire industry. The initiatives of institutional stake-holders should be synergised at a macro (industry) level, so that mutual benets would reinforce further innovative efforts at both project and industry levels. For example, endorsement of RC and JRM approaches by trade and professional bodies, as well as by governmental authorities will be needed to legitimise and monitor their development. Big construction industry clients would need to take the lead in running pilot programmes and projects

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Figure 2 Conceptual model for generating integrated innovations in individual, institutional and industry development

to test and rene the innovative approaches that are formulated. Such big clients would include both public bodies with extensive construction programmes, large private developers and proactive construction organizations, including contractors, consultants and major suppliers. The public bodies will of course need to adjust accountability and regulatory requirements develop the degree of exibility needed to implement these initiatives meaningfully. However, recent experiences on demonstration projects in the M4I programme in the UK provide excellent examples of how this can work well. Figure 2 also illustrates how educational and professional development programmes could then also incorporate the theoretical frameworks for the inter-disciplinary, cross-functional and transcultural product-focused re-integration that will be undergoing continuous improvement in the eld. For example, a recent initiative at the University of Hong Kong brings nal year civil engineering and architectural students to work together on an inter-disciplinary design project. This is yielding considerable benets in the following: (1) providing direct insights into the way other disciplines approach problems;

(2) an appreciation of their priorities and concerns; and (3) laying foundations for future inter-disciplinary and cross-functional co-operation, that does not have to overcome mutual suspicions based on stereotyped images of other professions and functions. Similar exercises or programmes in the work place and at junior professional level designed around a focus on the end product, would help to gradually dismantle functional and cultural barriers and build bridges instead. Figure 2 further conveys (at the uppermost level) the over-riding need to integrate all these innovative initiatives at industry level.

Conclusion
The main message emerging from the foregoing mapping of the way forward on the issues discussed in this paper, are the needs for both: (1) particular innovations in procurement systems; operational systems; educational, training, professional development and cooperative learning systems; and technological systems; and

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(2) macro-level integration of the above innovative initiatives from a broader and longer term industry perspective, in order to align their thrusts and derive sustainable synergies. Such developments should empower both institutions and individuals (human resources as in Figure 2) to generate the long awaited product and productivity improvements. These should in turn lead to (greater) client satisfaction and feed back to reinforce the accelerated development of construction personnel, institutions and the industry itself. Specic initiatives are seen to be of particular benet in accelerating the long journey ahead, e.g. for: (1) procurement system selection/assembly, coupled to synergistic integration with downstream operational sub-systems; (2) more transactionally efcient RC that would empower greater collaboration throughout the supply chain; in turn enabling the development of (3) co-operative learning alliances and (4) end-product focussed linkages that span from R&D through to marketing and maintenance. Integrating these individually demanding strategies into a holistic master plan with viable action agendas will not be easy. But it needs to be done and should prove worthwhile. Recent experiences in the implementation of recommendations from much publicised industry reports in countries such as the UK and Australia may be drawn upon in formulating and translating these concepts into coherent action plans that can achieve meaningful results.

References
Ahmed, S.M., Ahmad, R. and de Saram, D.D. (1999), Risk management trends in Hong Kong construction industry: a comparison of contractors and owners perceptions, Engineering Construction and Architectural Management, Vol. 6 No. 3, pp. 256-66. CCWB (1944), The Placing and Management of Building Contracts, (CCWB) Central Council for Works and Buildings, HMSO, London. Crossan, M. and Inkpen, A. (1995), The subtle art of learning through alliances, Business Quarterly, Vol. 60 No. 194, pp. 68-78. Dulaimi, M. and Kumaraswamy, M.M. (2000), Procuring for innovation: the integrating role of innovation in construction procurement, Proceedings of ARCOM 2000 Conference, Glasgow, September 2000, Vol. 1, pp. 303-12. ECI (1997), Partnering in the Public Sector, European Construction Institute, Loughborough.

Egan, J. (1998), Rethinking Construction, The Report of the Construction Task Force, Department of Environment, Transport and Regions, July 1998, London. Flannagan, R. (1999), Winning projects and satisfying customers through innovation, in Bowen, P.A. and Hindle, P.D. (Eds), CIB Joint Triennial Symposium, Cape Town, September 1999, pp. 15-25. Garvin, D. (1993), Building a learning organization, Harvard Business Review, July-August 1993, pp. 78-91. Grove, J.B. (2000), Consultants report on review of general conditions of contract for construction works, Proceedings of Conference on Whose Risk? Managing Risk in Construction Who Pays?, Hong Kong, November 2000, pp. 133, ixx. Hartman, F. and Snelgrove, P. (1996), Risk allocation in lumpsum contracts concept of latent dispute, Journal of Construction Engineering and Management, Vol. 122 No. 3, pp. 291-6. Hill, F.M. (1996), Organizational learning for total quality management through quality cycles, TQM Magazine, Vol. 8 No. 6, pp. 53-7. Ho, O.S. (2000), Enhancing construction technology through strategic partneringa contractors perspective, Quality Housing: Partnering Symposium, Hong Kong, available at: www.info.gov.hk/hd/eng/events/conf00/day1.htm Holt, G.D., Love, P.E.D. and Li, H. (2000), The learning organisation: toward a paradigm for mutually benecial strategic construction alliances, International Journal of Project Management, Vol. 18 No. 6, pp. 415-23. Kanter, R.M. (1994), Collaborative advantage: art of alliances, Harvard Business Review, Vol. 73 No. 4, pp. 96-108. Kumaraswamy, M.M. (1997), Common categories and causes of construction claims, Construction Law Journal, Vol. 13 No. 1, pp. 21-34. Kumaraswamy, M.M. (1998), Industry development through creative project packaging and integrated management, Journal of Engineering, Construction and Architectural Management, Vol. 5 No. 3, pp. 228-38. Kumaraswamy, M.M. and Dissanayaka, S.M. (1998), Linking procurement systems to project priorities, Journal of Building Research and Information, Vol. 26 No. 4, pp. 223-38. Kumaraswamy, M.M. and Dissanayaka, S.M. (2001), Developing a decision support system for building project procurement, Building & Environment Journal, Vol. 36 No. 3, pp. 337-49. Kumaraswamy, M.M. and Matthews, J.M. (2000), Improved subcontractor selection employing partnering principles, ASCE Journal of Management in Engineering, Vol. 16 No. 3, pp. 47-57. Kumaraswamy, M.M. and Zhang, X.Q. (2001), Governmental role in BOT-led infrastructure development, International Journal of Project Management, Vol. 19 No. 4, pp. 195-205. Kumaraswamy, M.M., Rowlinson, S.M. and Phua, F.T.T. (2001), Origins and desired destinations of construction project cultures, paper presented at the CIB TG 23 Workshop at the CIB World Congress, Wellington, April 2001, p. 6. Lamming, R., Johnsen, T., Zheng, J. and Harland, C. (2000), An initial classication of supply networks, International Journal of Operations & Production Management, Vol. 20 No. 6, pp. 675-91. Latham, M. (1994), Constructing the Team, HMSO, London, UK. Lawton, M., James, V., Crawford, B., Muir, A. and McKay, H. (1997), Partnering in the team taking partnering down the supply chain, Members Report CPM 724N, Construction Productivity Network, CIRIA, London, p. 13.

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Lenard, D. (1999), Future Challenges in construction management: creating a symbiotic learning environment, Journal of Construction Procurement, Vol. 5 No. 2, pp. 197-210. Loraine, B. and Williams, I. (2000), Partnering in the Social Housing Sector, European Construction Institute, Loughborough. Love, P.E.D. and Gunasekaran, A. (1999), Learning alliances: a customer-supplier focus for continuous improvement in manufacturing, Industrial and Commercial Training, Vol. 31 No. 3, pp. 88-96. Love, P.E.D., Faniran, O., Li, H. and Irani, Z. (2000), Total quality management and the learning organisation: a dialogue for change in construction, Construction Management & Economics, Vol. 18 No. 3, pp. 321-32. Love, P.E.D., Irani, Z., Cheng, E.W.L. and Li, H. (2002), TQM, A model for supporting inter-organisational relations in the supply chain, Engineering, Construction and Architectural Management, Vol. 9 No. 1, pp. 2-15. Macneil, I.R. (1978), Contracts: adjustment of long-term economic relations under classical, neoclassical and relational contract law, North Western University Law Review, USA, part 2, Vol. 72 No. 5, pp. 854-905. Milford, R.V. (2000), National systems of innovation with reference to construction in developing countries, Proceedings of 2nd International CIB TG29 Conference on Construction in Developing Countries, Gaborone, November 2000, pp. 235-43. Morrison, M. and Mezentseff, L. (1997), Learning alliances a new dimension of strategic alliances, Management Decision, Vol. 35 No. 5, pp. 351-7. Murray, M., Langford, D., Hardcastle, C. and Tookey, J. (1999), Organisational design, in Rowlinson, S. and McDermott, P. (Eds), Procurement Systems: A Guide to Best Practice in Construction, Chapter 4, E&FN Spon, London, pp. 83-118. Palaneeswaran, E. and Kumaraswamy, M.M. (1999), A fresh approach to improve quality in design-build projects, in Karim, K., et al. (Eds), Proceedings of 2nd International Conference on Construction Process Re-engineering, Australian Centre for Construction Innovation, Sydney, July 1999, pp. 73-84. Palaneeswaran, E. and Kumaraswamy, M.M. (2000), Innovative initiatives in design-builder selection, Proceedings of

COBRA 2000 Conference, Greenwich, September 2000, pp. 252-61. Rahman, M.M. and Kumaraswamy, M.M. (2002), Joint risk management through transactionally efcient relational contracting, Journal of Construction Management and Economics, Vol. 20 No. 1, pp. 45-54. Rahman, M., Palaneeswaran, E. and Kumaraswamy, M. (2001), Applying transaction costing and relational contracting principles to improved risk management and contractor selection, Proceedings of the International Conference on Project Cost Management, Beijing, May 2001, pp. 171-81. Rusinko, C.A. (1999), Exploring the use of designmanufacturing integration (DMI) to facilitate product development: a test of some practices, IEEE Transactions on Engineering Management, Vol. 46 No. 1, pp. 56-71. Scott, B. (2001), Partnering in Europe Incentive Based Alliancing for Projects, ECI (European Construction Institute), Loughborough. Senge, P. (1992), The Fifth Discipline: The Art and Practice of the Learning Organization, Random House Australia, Sydney. Slaughter, E.S. (2000), Implementation of construction innovations, Building Research & Information, Vol. 28 No. 1, pp. 2-17. Tang, H. (2001), Construct for Excellence Report of the Construction Industry Review Committee (CIRC), Hong Kong SAR Government, Hong Kong, January 2001. Tucker, S.N. and Ambrose, M.D. (1998), Innovation and Evaluation in Process Improvement, 14th ARCOM Conference, Reading, September 1998, pp. 349-58. UDT (1997), I-15 corridor reconstruction project: special experimental project 14-design/build contracting, Initial Report, October 1997, Utah Department of Transportation (UDT), Salt Lake City, UT. Voordijk, H., de Haan, J. and Joosten, G. (2000), Changing governance of supply chains in the building industry: a multiple case study, European Journal of Purchasing and Supply Management, Vol. 6 No. 3, pp. 215-27. Walker, A. and Chau, K.W. (1999), The relationship between construction project management theory and transaction cost economics, Engineering, Construction & Architectural Management, Vol. 6 No. 2, pp. 166-76. Williamson, O.E. (1985), The Economic Institutions of Capitalism, Free Press, New York, NY.

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The innovation potential of integrated services and its utilisation through co-operation
Andreas Hartmann and Gerhard Girmscheid

Introduction
Construction rms are nowadays more and more faced with changes of the basic conditions of their business (Pries and Janszen, 1995). As a result of globalised markets competitive national economies must efciently construct industrial and infrastructural facilities, a fact that is even more intensied by an increasing number of privatisations of former state-owned enterprises. Clients ask for more and more constructional solutions that pay attention to the whole building life cycle. The client is concerned about yields and values and is looking for solutions that will guarantee the lowest possible expenses for maintenance and operation as well as high values for a certain time. He wants to get buildings that can be easily, exibly and quickly adapted to possible changes in utilisation (Slaughter, 2001). As a consequence, buildings are more and more characterised only by their functions and the requirements resulting from them. Construction rms will have to nd out how to meet these requirements and thereby nd new ways of extending their service offers and organising their work. The single service necessary for designing, producing and operating a building can be brought together and combined so that they result in an optimal solution for the clients demands. Moreover, such integrated services will increase the incentive to realise new or improved design principles, construction materials and methods as well as building equipment, because of their contribution to achieving an optimal constructional solution. However, the construction industry is predominately characterised by numerous different interest groups and especially by the separation of design and production (Winch, 1998). The sequential procedure of construction projects leads to the fact that goals of project participants differ and only services of the single level of value added can reach the optimum, but the results of the total constructional solution remain suboptimal (Barlow, 2000). In addition, the competence and incentive that is necessary to develop new technical solutions, to implement these solutions into buildings and to co-ordinate the implementation is mostly lacking. Consequently, construction is still associated with a traditional and slowly changing industry (Atkin, 1999). This paper is reecting the innovation potential of integrated services and organizational solutions that aim at combining the competences necessary to use this potential. It is based on research project, which was conducted together with two Swiss contractors. The project consisted of two parts. In the rst one the innovation processes that take

The authors
Andreas Hartmann is an Assistant Professor at the Department of Construction Process Management, Faculty of Engineering Technology, University of Twente, Enschede, The Netherlands. Gerhard Girmscheid is a Professor at the Institute for Construction Engineering and Management, Swiss Federal Institute of Technology Zurich, ETH Hoenggerberg, Zuerich, Switzerland.

Keywords
Integrated marketing, Competitive advantage, Innovation, Construction industry

Abstract
In the last few years an increasing demand for integrated services could be recognised on the construction market. For construction rms this means that there is a wider scope for achieving advantages in competition. Based on a research project on the innovation behaviour of two Swiss contractors this paper presents the innovation potential of integrated services and the advantages and disadvantages of the present organizational structure of medium-sized contractors with respect to the usage of this potential. Moreover, possibilities for construction rms to build up and benet from internal and external co-operation and to generate innovative constructional solutions are discussed. It is concluded that an innovative construction industry requires the ability of construction rms to co-operate.

Electronic access
The Emerald Research Register for this journal is available at www.emeraldinsight.com/researchregister The current issue and full text archive of this journal is available at www.emeraldinsight.com/0969-9988.htm

Engineering, Construction and Architectural Management Volume 11 Number 5 2004 pp. 335341 q Emerald Group Publishing Limited ISSN 0969-9988 DOI 10.1108/09699980410558520

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place within the rms were examined and the factors that inuence these processes were determined. The second part aimed at developing and implementing tools for promoting innovations in these two rms. For data gathering group discussions with the upper and middle management, semi-structured interviews on all hierarchical levels of management and analyses of strategic documents were carried out. For working out measures fostering innovation project groups were established, which developed several tools during workshops. In the following sections the current possibilities of the two medium-sized contractors to innovate are evaluated. The innovation potential of integrated services too is highlighted and illustrated with different examples from literature. The organizational qualications of the examined contractors to use this potential are discussed and possible organizational solutions of co-operation are shown enabling these rms to generate innovative constructional solutions.

Possibilities for contractors to innovate


Up till now a major characteristic of the contractors under examination is the fact that they offer different production services (like carcass or pavement work) within different lines of business (like building construction or road construction). Usually they take part in a construction project only at a point of time when the design is nearly nished. This means that they have to make the production process adapt to the structural and local conditions of the building. An efcient solution to the problem of adaptation is combining known and/or new production methods. Using new methods can mainly be equated to the introduction of new developed equipment. This introduction process is well organized in the rms and does not have special requirements apart from the nancial resources needed, because in most cases it is the introduction of almost applicable solutions and continuously made improvements. As the new developments of the suppliers of construction equipment are available for every contractor, too, the advantage in competition that can be gained here is relatively small. It increases, if the knowledge acquired from former projects is used to mutually adapt the structure of the building and the construction methods in a way that an entirely optimised construction solution is obtained. However, these alternative tenders often include the following problems.
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every client wants to get suggestions of possibly better solutions. It has to be convincingly proved that the alternative solution has visible advantages in comparison to the rst plan, but if the alternative solution is convincing and worked out in detail, there is also the danger that the client will look for another rm that will realise the idea for less payment. Furthermore, especially with ideas that are new for the rm it is difcult to prove the advantages of a solution (references). The designer of the specication may fear a loss of image in the eyes of the client as a result of the contractors alternative tender, and may reject the alternative tender. In most cases the actual tender has to be further developed, so that an additional offer can only be provided with additional expenditures of time or staff. Often good ideas cannot be realised, because the time that is given for working out an offer is too short and the staff needed for this is not available. With larger projects parts of the execution are passed on to subcontractors. This leads to the fact that many subsystems of the facility and the construction process have to be coordinated, which in turn leads to higher expenditures on co-ordination and makes it more difcult to reach the optimum for the whole building.

The problems with alternative tenders in both rms clearly showed that without an early consideration of production issues in construction projects an overall optimised constructional solution is hardly to achieve and the potential of contractors to innovate is restricted. Integrated services open up a wider range of possibilities, as they allow combining the knowledge necessary for solving the entire constructional task at earlier stages of the construction project. Before discussing organizational forms of connecting design and production services the innovation potential of integrated services is highlighted.

The innovation potential of integrated services


Characterisation of integrated services In simplied terms a constructional task can be regarded as a transfer process which translates the clients demands into qualitative and economic characteristics of a building. The transfer process is successful, if in the view of the client an optimal constructional solution can be found. An optimal constructional solution is achieved, when

Principally the client has to accept an alternative tender of the contractor, but not

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materials, components and building equipments applied constitute a structural and architectural combination that meets the functional and qualitative requirements made on the building for a certain period of time. If these requirements are met within the framework of a dened amount of investments and a set construction period and if they can be guaranteed within the dened period of utilisation, while the expenses for maintenance and operation remain moderate, the constructional solution can be regarded as economically optimal too. Such an optimal constructional solution may be provided by integrated services, which connect the single services or levels of value added of designing, producing and operating a building. In doing so, the interdependencies between the single components of the building as well as the inuences of the design, production and operation processes on the components and the building on the whole can be recognised at an early point in time and can be formed deliberately. It is assumed that the view of the building as a system in its total life cycle also allows more innovative solutions, as starting points for innovations can be comprehensively detected, impacts of innovations on the building and the construction process can be determined in sufcient time and conditions of realising innovations can be appropriately considered. In the following the relation between service integration and possibilities for innovation is pointed out and illustrated with examples from literature. First, the innovation potentials connected with design and production services are separately depicted. Second, the additional potential resulting from a combined consideration of both kinds of services is presented. Innovation and design services The innovation potential related to design services can be obtained from a system-orientated view of buildings, which represent the primary design objects. Portrayed in simplied terms a building is made of different components, which are structurally combined with each other. They form the functional and qualitative characteristics (e.g. usable space, energy efciency) of the building, while the characteristics of each component result from the coaction of different construction materials. Based on that, two main starting points for inuencing the characteristics of a building by innovative solutions can be detected.
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The development and/or usage of an engineering principle that makes use of the existing characteristics of construction materials by combining components in a new way. Segmental bridges with external prestressing can serve as an example for nding a new structural design while applying known construction material, such as concrete and prestressing steel. As the segmental superstructure is prefabricated and stressed together externally, an economical and high quality facility can be achieved (Girmscheid and Hartmann, 1999).

Both innovation streams can be interrelated, if the changed characteristics of a new or improved construction material lead to new engineering principles. For example, the development of a waterproong membrane for shotcrete coatings, applicated by spraying, in tunnel construction brings about a structural connection between the formerly separated internal and external arch formwork and the sealing. Instead of the two-leaf arch formwork there is just a one-leaf arch framework, which results in a considerable reduction of material requirements (Amberg, 1998). Innovation and production services Regarding the innovation potential related to production services one can nd starting-points for innovations in the structure of production processes. Production processes can be dened as the temporal and spatial organisation of activities necessary to erect a building. These activities possess the function of changing material, energy and information, which is carried out by the construction equipment and its operator. For changing a materials structure, shape, position etc. the construction equipment uses a specic method based on a recognised law of nature. With this view three main starting-points for improving the characteristics of the production process (e.g. efciency, operational safety) can be found.
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The development and/or usage of a new or improved construction material. For example, by combining special aggregates (i.e. y ash), binders, thermal resistant materials and additives a concrete with better re safety can be realised (Wetzig, 1999).

The development and/or usage of a new construction equipment which substitutes a function of human work. Computercontrolled shotcrete robots can serve as an example for this. Shotcrete was usually applied by hand-operated nozzles. The development of manipulators aimed at substituting the operators function of guiding the nozzle to improve the work safety and the performance. The next step includes the substitution of the operators function of controlling the application process. Fully automated shotcrete robots ensure

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the quality of the thickness, compactness and evenness of the layers (Girmscheid and Moser, 2001). The development and/or usage of a new method of changing the construction material. While most tunnel boring machines overcome the rocks resistance to pressure, some tunnel boring machines make use of the far lower tensile strength of the rock, which allows a more efcient excavation of different tunnel cross sections (Baumann and Zischinsky, 1994). The development and/or usage of a new way of organising the production process. For example, by using a suspended platform for drill and blast heading the supply and disposal of the heading can be executed at the same time with the work on the tunnel base. Thus, the efciency of drill and blast headings can be extended (Gruber, 1997).

The examples indicate that all three streams can be interrelated, too. For instance, a new construction method which is normally followed by a new construction equipment and a new organisation principle can be triggered by the implementation of a new or improved construction equipment. Innovation and the integration of design and production services Up till now the innovation potential with regards to design and production service were shown separately, but if they are examined together, additional possibilities for innovation can be found. They emerge from the fact that the building and the production process are mutually dependent. The building is shaped by the production process which realised it. The impact on the innovation potential can be shown on the above-mentioned example of segmental bridges with external prestressing. In this case a new engineering principle led to the usage of new construction equipment and to a new organization of the construction process. The structural division of the superstructure into single segments was accompanied by the development of a new formwork system for the production of segments and new construction scaffolding for the segmental installation. At the same time the production process could be organized in a new way. The segments can be prefabricated and the superstructure can be erected parallel to the substructure. By this, the production period can be reduced and the quality of the superstructure can be increased considerably (Girmscheid and Hartmann, 1999). Considering the operation process, too, the innovation potential enlarges in the sense that the behaviour of the building and its components can be observed over the period of

usage, conclusions on the building design can be drawn for future projects and specic further developments of single components can be made. Furthermore, systems that allow simple measures of maintenance can be developed deliberately. For example, in the segmental construction with external prestressing the prestressing of the tendons can be measured permanently and additional stressing may be carried out if necessary. It is also possible to change the tendons or to put in additional ones if the requirements have changed (Girmscheid and Hartmann, 1999). It can be stated that the innovation potential of integrated services does not just consist of the single view of the building at its single life phases, but results from the early and specic consideration of the inuences from the whole life cycle on the building system. This means considering a lot of different components and relations, the knowledge of which a rm normally has not completely in-house. Here co-operation provides the access to the innovation potential of integrated services.

Integrated services by co-operation


Characterisation of co-operation Co-operation can be dened as the voluntary collaboration of persons or organisations with commonly agreed goals. They are strived for if the goals of the involved persons or organisations are reached more efciently by a common than an individual fullment of tasks. For structuring a co-operation different variables are available. First one is the intensity of co-operation, which describes to which extent the involved organisations possess rights of property and disposal regarding the resources necessary to full the common task. With the co-operation intensity the transition between internal and external collaborations can be marked. The second one is the duration of the co-operation, which can vary from adhoc to strategic. A third variable is the number of organisations taking part in co-operation, which needs at least two organizational entities but can also include a comprehensive network of organisations. The last variable is the direction of co-operation, which mirrors the levels of value creation the involved organisations belong to and which can be horizontal, vertical or diagonal. The specication of each variable depends on the context a co-operation emerges from and is subject of a rms strategy. For example, construction rms offering services on one level of value added and operating in several market segments like the examined contractors are able to

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achieve integrated services trough internal and external, horizontal and vertical as well as strategic and adhoc co-operations. In the following it should be exemplied how the variables can be specied for these types of rms. Internal co-operation The rst step on the road to integrated services is bringing together services for different subsystems of the building on one level of value added. Medium-sized contractors have the possibility for internal and horizontal co-operation, because they offer production work for different subsystems of buildings (for example foundation and carcass of a building) and for subsystems of different buildings (for example road construction and tunnelling). Thus, they can use for example the potential for new ways of organising the production process or implementing new construction equipment applicable in different segments of the market. As the rms are structured into regional and specialised business units, which act autonomously, sometimes hindrances for cooperation appear. If the market requires integrated services for a construction work, for example the renovation of a road bridge, the necessary services can be executed by one rm, but the business unit responsible for bridge engineering and working on the total offer might not get an offer that corresponds with the market price from the business unit responsible for demolition work. There is the danger that the chance to benet from an internal co-operation is wasted, because in working out an internal offer there is a lack of a feeling for competition. A further problem emerges, if new services which cannot be assigned to a business unit have to be carried out with future potential. For example, in one of the rms protection walls against noise represented a new service. They had to be erected along with the renovation of the mentioned bridge but no business unit felt responsible for it. Here, an instrument is needed that can react quickly and beyond the limits of business units to such demands for integrated services. A task force established with regards to the requirements of the problem and consisting of persons from different business units, who are only temporarily working together, can take on this (Figure 1). The task force is formed within a very short time and has a dened project management. It gets a clear task, fulls it and disbands after the work is done. It acts autonomously on the rm level, is directly responsible to the top management and thus is largely free from single interests of the business units. In this sense it can be regarded as a strategic instrument of the top management.

Figure 1 Internal co-operation through task force organisation

As with new service mostly unknown technical problems appear and the project team is often under a pressure of time, another organizational solution is required that supports internal co-operations. In one of the contractors under examination such instruments could be provided, which means, for example, enlarging an internal department for engineering services to an innovation centre. Fullling this new function, the department will on the level of construction projects develop alternative tenders during the tender phase and work out special solutions during the stage of production. Therefore, e.g. one member of the innovation centre will be included in the team of the construction project, in order to balance out a lack of know-how or contribute to the know-how of the team because of lacking capacities. Besides this project-related work the innovation centre can also tackle problems that go beyond the framework of projects and nd solutions to them. Thus, innovations can be deliberately generated and developed in services that are of prime importance for the rm. External co-operation Along with internal co-operation medium-sized contractors nowadays often make use of external possibilities for co-operation, to combine services for production. This co-operation with other contractors is in most cases only temporary and related to one project, for example in order to be able to execute a large-scale project for which the capacities of one single rm are insufcient and the risks of which are unbearable for one rm alone. Working as a team (contractor combination) enables the rms to make capital-intensive investments like purchasing new large construction equipment like drilling jumbos for tunnelling. In these cases the introduction process usually goes on without problems, too, and options

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like renting the machines or selling them back to the producer make the decision for the investment easier. Nevertheless, the innovation potential is not exhausted by the co-operation on one level of value added. The range of services offered can be extended and the possibilities to innovate can be increased, if in a second step the services of different levels of value added for different subsystems of the building are combined. As the range of services offered by most of the contractors that have the size of the companies under examination does not include services except for the production of buildings, it is possible to ll this gap using external and vertical co-operation. As it is the case in internal co-operation, organizational solutions are needed with the help of which integrated services can be generated in an innovative way. A suitable solution are strategic networks of rms, consisting of independent rms that are specialized in different levels of value added (Figure 2). Along with their production work medium-sized construction rms can take on the role of a focal rm or system integrator within the network. Fullling this function, they co-ordinate and integrate the complementary services of the participants of the network and activate them according to the specic requirements of the construction project. Depending on the size of the rm or of the construction project this integrative work may be restricted to subsystems of the building or include the whole constructed facility. That is to say, different activated rms, the services of which are in turn co-ordinated by a superordinated focal rm, can autonomously realise subsystems of the building. On the one
Figure 2 External co-operation through network organisation

hand this gives the freedom that is necessary for innovative partial solutions, while on the other hand the combination of partial solutions with each other, so that they form an optimal total solution, is guaranteed. Moreover, a long-term co-operative network that exists beyond the limits of one project allows the initiation of innovative projects aiming at a further development of the common range of services offered and thus gaining advantages in competition. This will make it possible to co-ordinate the developments of the levels of value added with each other and to generate extensive innovations in the above-mentioned sense.

Conclusion or what is additionally needed?


This paper tried to point out that optimal constructional solutions for the client can only be found, if the know-how of all levels of value added of a building is combined through integrated services. At the same time, by looking at the building as a system in its life cycle the innovation potential increases. By building up integrated services medium-sized contractors have the chance to make use of the innovation potential involved and to employ it as a means to gain advantages in competition. A prerequisite for this is the ability to co-operate, which has to be transferred into organizational solutions. Possible solutions for an approach from internal to external co-operation in two steps could be demonstrated. Modern Information Technology considerably supports the communication within these network

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organisations and thus helps to contribute to their successful work. However, there are two important aspects for the functioning of networks that arise from the mentioned fact that nowadays many different interest groups are at different times and just temporarily involved in the construction project. First, there is not only a lack of possibilities for innovation, but also a lack of incentives to be innovative. The interests of the different groups are not always orientated on the aim on the whole, that is a building that optimally meets the demands of the client. Integrated services can provide the necessary orientation of single interests on one aim, as the inclusion of the requirements from the different life phases of the constructed facility takes place at a point in time, when they can be considered for the design of the total solution. If, for example, networks of designers and contractors offered operation services, too, these rms would have a greater incentive to look for innovate solutions as they aim at having low expenditures on maintenance and operation of the building and securing yield and stability of value. In order to make the requirements from the operation a part of the system of aims of the networks, the client may also let the companies participate in the savings or the exceeding costs from the operation by implementing for example a Bonus-Malus-System. The second aspect is the development of trust in each other among the network members which is of much greater importance and an essential part of the ability to co-operate. All those who take part in the construction sector will have to change their ideas and views in this respect and to nd a new cultural orientation. If a cultural change is a prerequisite for the successful work of organizational solutions like networks, at the same time a closer collaboration of rms within networks supports the development of trust. Consequently, establishing new organizational solutions has to be seen as a gradual process of nding common values and rules.

References
Amberg, F. (1998), Innovative konzepte fur den tunnelbau, Schweizer Baublatt: Verkehrsbau, Vol. 99, pp. 33-6. Atkin, B. (1999), Innovation in the Construction Sector, European Council for Construction Research, Development and Innovation, Brussels. Barlow, J. (2000), Innovation and learning in complex offshore construction projects, Research Policy, Vol. 29, pp. 973-89. Baumann, L. and Zischinsky, U. (1994), Neue Lose-und ausbautechniken zur maschinellen fertigung von tunneln in druckhaftem fels, Felsbau, Vol. 1, pp. 25-9. Girmscheid, G. and Hartmann, A. (1999), Fast track projects im bruckenbau anwendung und bauprozess der segmentbauweise mit externer vorspannung, Bauingenieur, Vol. 74 Nos 7/8, pp. 332-44. Girmscheid, G. and Moser, S. (2001), Fully automated shotcrete robot for rock support, Computer-Aided Civil and Infrastructure Engineering, Vol. 16 No. 3, pp. 200-15. Gruber, L. (1997), Vereina tunnel south high performance blast heading, Tunnel, No. 4, pp. 23-30. Pries, F. and Janszen, F. (1995), Innovation in the construction industry: the dominant role of the environment, Construction Management and Economics, Vol. 13, pp. 43-51. Slaughter, S. (2001), Design strategies to increase building exibility, Building Research and Information, Vol. 29 No. 3, pp. 208-17. Wetzig, V. (1999), Beton mit erhohter brandbestandigkeit, Schweizer Ingenieur und Architekt, Vol. 43, pp. 934-7. Winch, G. (1998), Zephyrs of creative destruction: understanding the management of innovation in construction, Building Research and Information, Vol. 26, pp. 268-79.

Further reading
Girmscheid, G. (2000), Baubetrieb und Bauverfahren im Tunnelbau, Ernst&Sohn, Berlin. Hentschel, H. (2000), TBM with innovative support concept, Tunnel, No. 2, pp. 20-5.

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The role of technology transfer in innovation within small construction rms


Martin Sexton and Peter Barrett

Introduction
Technology transfer is widely considered to be a potentially powerful source of innovation which can provide construction rms with new technologies that can, appropriately, transform and complement current technologies to create and sustain better levels of performance (Sexton et al., 1999; Nonaka and Takeuchi, 1995; Kogut and Zander, 1992). Technology transfer is viewed as the movement of knowledge and technology via some channel from one individual or rm to another (Inkpen and Dinur, 1998; Gibson and Smilor, 1991; Devine et al., 1987). Further, we take a broad view of technology, dening it as the know-how about the transformation of operational technologies and processes; material technologies; and knowledge technologies (Wilson, 1986; Hickson et al., 1969). The construction industry delivers its product to its client base by way of a stream of generally single and unique projects. These projects typically draw together a signicant number of diverse small and large construction rms into varying collaborations (Betts and Wood-Harper, 1994). The ambition to bring about the kind of step change improvements in construction industry performance called for by the Egan report (amongst others) must, by necessity, appropriately envision and engage large and small construction rms. Further, the scale of small rm activity in the UK construction industry is considerably, in 1999, 99 percent of UK construction rms having 1-52 staff (Department of the Environment, Transport and the Regions, 2000: table 3.1), delivering some 52 percent of the industrys workload in monetary terms (Department of the Environment, Transport and the Regions, 2000: table 3.3.) Therefore any overall performance in the improvement of the industry through technology transfer is signicantly inuenced by the ability of small construction rms to absorb and use new technology. The role of technology transfer in the innovation of construction rms in general, and
The ISCF project was funded by the EPSRC / DETR: IMI Construction Link programme (grant number: GR/M42107/01), and this support is gratefully acknowledged.The academic team was supported by Marcela Miozzo and Alex Wharton, University of Manchester, Institute of Science and Technology, and Erika Leho, University of Salford. The seven collaborating rms were Bosco Construction, Christodoulou Marshall Architects, Contract Services (R&R), Parker Wilson, PLP Construction, Taylor Hutchinson & Partners, and Wardle Associates. Thanks are due to all the members of staff involved.

The authors
Martin Sexton is a Senior Lecturer and Peter Barrett is a Professor at the Research Institute for the Built and Human Environment, University of Salford, Salford, UK.

Keywords
Innovation, Construction industry, Information transfer, Small enterprises

Abstract
Findings were drawn from an 18 month research project involving in-depth case study and action research eldwork with seven small construction companies to understand the role and signicance of innovation for them. A key nding of the work has been the importance of the role of effective technology transfer in the innovation process. The organizational factors of innovation model is presented as an analytical and prescriptive tool to assist small construction rms to understand better and manage the technology transfer process. The utility and application of the model is illustrated with a case study.

Electronic access
The Emerald Research Register for this journal is available at www.emeraldinsight.com/researchregister The current issue and full text archive of this journal is available at www.emeraldinsight.com/0969-9988.htm

Engineering, Construction and Architectural Management Volume 11 Number 5 2004 pp. 342348 q Emerald Group Publishing Limited ISSN 0969-9988 DOI 10.1108/09699980410558539

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small rms in particular, is poorly understood, and there is a clear need to rectify this (Atkin, 1999; CRISP, 1999). The aim of this paper is to contribute to this under developed area of innovation in small construction rms by offering new theoretical and practical insights and models coming out of an 18-month EPSRC IMI Innovation in Small Construction Firms (ISCF) project. The structure of this paper is as follows. First, key issues from the technology transfer literature will be presented. Second, the aims and the research methodology of the ISCF project will be briey described. Third, key ndings from this project will be presented. Finally, conclusions and implications will be drawn, and in doing so, it offers a more detailed understanding of the role of technology transfer in ISCF.

Key issues from the literature


Performance improvement based on technology absorbed into construction rms through technology transfer does occur successfully. However, rms need to understand and manage technology transfer activity to ensure consistent success. Sung and Gibson (2000) identied the following variables as affecting the degree of success in the process and results of technology transfer: person-to-person contacts; knowing whom to contact; variety of communication channels; set up transfer ofce or committee; a sense of common purpose; understanding of the nature of the business; attitude and values; increase in awareness of transfer; concreteness of knowledge/technology; establishment of a collaborative research program; clear denition of transfer; provision of incentives for transfer and product champions. However, present construction industry technology transfer endeavours are being severely hampered by a lack of proper understanding of such technology transfer issues and their interrelationships to both company capabilities and processes, and the knowledge characteristics of the technologies being transferred; in particular (Barrett and Sexton, 1999): . First, current approaches tend to view technology transfer as a mechanistic pickand-mix exercise identifying new technologies, and trying to insert them in their existing form into (unsurprisingly) unreceptive construction rms. . Second, current technology transfer mechanisms are not sufciently informed by, or engage with, company strategic direction and organizational capabilities and processes necessary to enable them to absorb technologies and to turn them into

appropriate innovations. Experience from the manufacturing sector, for example, has stressed that the capacity of companies to understand and effectively use new technologies from external sources is heavily inuenced by the level of prior-related knowledge and expertise (Alder and Shenhar, 1993). Finally, current technology transfer mechanisms do not fully appreciate both the ability and motivation for construction rms to absorb and use new technologies are signicantly inuenced by the knowledge characteristics of the technologies. Hard technologies which are characterised by explicit knowledge require very different diffusion mechanisms and organizational capabilities and processes than those required for soft technologies which are tacit in nature.

The implications of these barriers for technology transfer in small construction rms crystallises the systemic nature of technology transfer, and can be fruitfully viewed, as shown in Figure 1, as a technology transfer system (Sexton et al., 1999): . Organizational direction and capability the motivation and ability of small construction rms to absorb and innovate from new technologies has to come from within the rm; through envisioning technology strategies and supporting organizational capabilities. . Inter-organizational networks small construction rms, along with all rms, do not operate in a vacuum; rather, they are situated
Figure 1 The technology transfer system

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in a number of uctuating inter-organizational networks of varying complexity. Interorganizational networks promote and facilitate the development and transfer of knowledge and resources needed to encourage learning and innovation in participating rms. Knowledge characteristics of technology the extent to which new technology can be effectively absorbed by small construction rms is substantially inuenced by the characteristics of the technology being transferred. Two characteristics are especially important. The rst is the extent to which the knowledge embodied in the technology is explicit or tacit. Tacit knowledge is hard to formalise, making it difcult to communicate or share with others. Tacit knowledge involves intangible factors embedded in personal beliefs, experiences and values. Explicit knowledge is systematic and easily communicated in the form of hard data or codied procedures. The second characteristic is complexity. Whether based on explicit or tacit knowledge, some technologies are just more complex than others. The more complex a technology is, the more difcult it is to unravel.

The seven collaborating small rms consisted of four consultants and three contractors. Firm size varied from 11 to 26 staff, and the turnovers (in 1999) ranged from 0.44 to 3.2 m. The overall research process used in the ISCF project is given in Figure 2 (Sexton and Barrett, 2003).

Key ISCF project results


Denition of appropriate innovation The ISCF ndings dened appropriate innovation as:
the effective generation and implementation of a new idea, which enhances overall organizational performance

This denition contains the following assumptions. (1) Idea ideas are taken to mean the starting point for innovation. Ideas can be administrative and technical in nature. (2) New not all ideas are recognised as innovations and it is accepted that newness is a key distinguishing feature. The idea only has to be new to a given rm, rather than new to the world. Further, the newness aspect differentiates innovation from change. All innovation implies change, but not all change involves innovation. (3) Effective generation and implementation innovation requires not only the generation of an idea (or transfer of a new idea from outside the rm), but also its successful implementation. The implementation aspect differentiates innovation from invention. (4) Overall organizational performance innovation must improve organizational
Figure 2 ISCF research methodology

The argument is that technology transfer will only be effective if all three elements strategic direction and capability, inter-organizational networks and the knowledge characteristics of technology are appropriately focussed and integrated to achieve a specic aim. In summary, the literature stresses the important role of technology transfer in successful innovation and offers prescriptive guidance on how to manage the technology transfer process activity. Research within the construction industry, however, indicates signicant barriers to effective technology transfer. Results from the ISCF project provide insights into the nature of technology transfer in small construction rms. Before presenting these results, the aims and research methodology of the ISCF project will be briey detailed in the next section.

ISCF project aims and research methodology


This paper is based on results from an 18-month project looking at innovation in small construction rms. The key aims of the project were to: . Determine what innovation meant for small construction rms, particularly with respect to what is the motivation to innovate; and what constitutes appropriate innovation. . Investigate how small construction rms create, manage and exploit innovation.

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performance, either individually, or collectively through the supply chain. Innovations that improve some isolated aspect at the expense of overall performance are undesirable.

Organizational factors of innovation model The key implication of the ISCF denition of innovation for technology transfer for small construction rms is that they need the organizational capability and an appropriate response to the interaction environment to absorb and use appropriate new technologies. The ISCF ndings produced a model of the organizational factors critical to successful innovation (Figure 3) which proved to be useful in both understanding and managing innovation activity i.e. it is both an analytical and prescriptive model. The variables which make up the model are dened as follows. . Business strategy is concerned with the overall purpose and longer-term direction of the rm and its nancial viability. . Market positioning is the chosen (or emergent) orientation towards desired target markets for the purpose of achieving sustainable protability. . Technology is the machines, tools and work routines used to transform material and information inputs (for example, labour,
Figure 3 Organizational factors of innovation model

raw materials, components, capital) into outputs (for example, products and services). People are viewed as possessing knowledge, skills and motivation to perform a variety of tasks required to do the work of the rm. Organization of work involves the creation and coordination of project teams and commercial networks both within the rm and across its business partners. Interaction environment is that part of the business environment which rms can interact with and inuence. Given environment is that part of the business environment which rms are inuenced by, but which they cannot inuence themselves.

The model proposes that business strategy / market positioning, organization of work, technology, and people are the key organizational variables in understanding and improving innovation in small construction rms. The model emphasises and embraces both the holistic and systemic dimensions of innovation. The creation, management and exploitation of innovation involves consideration of not only the content of a chosen innovation, but also the management of the process of innovation and the context in which it occurs. The model considers two aspects of context: the inner and outer contexts of

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the rm. The inner context refers to the business strategy / market positioning, organization of work, technology and people. The outer context refers to the given and interaction business environments. The process of innovation refers to the actions, reactions and interactions of, and between, the various organizational variables in the outer and inner contexts. The utility of the organizational factors of innovation model for understanding and managing technology transfer will be discussed by drawing upon a case study of one of the ISCF project collaborating rms. Case study of technology transfer The case study describes Consultant Bs absorption and use of an off-the-shelf computerized quantity surveying system. Consultant B is a quantity surveying and construction cost consultancy with a turnover of 0.44 million in 1999. The rm has two partners and eleven staff. The case study will be structured around the organizational factors of innovation model. Given / interaction business environment The ISCF project ndings identies clients as being the driving inuence in the interaction environment. In common with all of the collaborating rms, Consultant B emphasised that:
our strategy is very much driven from the outside by clients . . . it is difcult for a practice our size to be proactive.

quantities, the industry wanted things quicker, and we needed something that would allow us to make short-cuts and wouldnt keep us in a straightjacket. Weve just done a job for which one document was required for three different buildings. Basically once youve got one, its very quick to do the other two. Much quicker that it would have been before; it is more efcient.

A further critical consideration in this sifting and evaluation process is the nancial implications of a given technology transfer issue. The nancial constraints faced by small construction rms affect the general capacity and capability for innovation. A partner of Consultant B argues that:
small rms have a tight budget, so they dont have the people around to tackle a specic problem . . . the cost of innovation is the short-term human involvement, and then having committed the capital to physically spend, you need some human time to make it work. The three go together. The big one though is the cash one.

This signicant barrier to innovation is evident in Consultants B future thinking for the computerised QS system:
. . . we B would like to digitise its QS system, enabling staff to quicken the speed at which they measure external areas of buildings. However, the idea is considered too expensive and would need guaranteed work to make it worthwhile.

This was the case with the trigger to adopt and use the new computerised quantity surveying system, with it being stressed that:
our clients initially drove it . . . ten or twelve years ago we were working for [a UK water utility] and they insisted that all their bills be produced on a particular package.

The key argument presented here is that, owners of small construction rms need to be condent of the business benet of absorbing and using a new technology before they commit signicant resources. In summary, the business strategy / market positioning dimension to technology transfer is very much centred around an informal, intuitive process of identifying business needs and carrying out cost benet analyses to determine optimal solutions. The owners are close enough to their rms markets and capabilities to instinctively know what will work and what will not. Technology The computerised quantity surveying system chosen by Consultant B was proven off-the-shelf solution. This was emphasised in the observation that:
At the end of the day, its a system that any QS could buy; its not something thats specic to us.

Business strategy/market positioning The ISCF project ndings suggest that owners of small construction rms view the increasing investment in information technology as an area of signicant innovation activity in itself, and as a powerful enabler for innovation in enhancing the quality and efciency of the services their rms offer. Consultant B believed that it needed to invest in specialist software to enable them to compete with its competitors. Having measured a job, the rm wanted to be able to produce a more exible document:
We wanted something that we could adapt and alter slightly, because, although it is based on a standard library, which is based on the standard method and measurement, which is the time-honoured way of producing a bill of

One of the partners of Consultant B stressed that although the software was, in itself, a piece of explicit, off-the-shelf technology, a signicant amount of tacit knowledge had to be developed and shared before the technology could be absorbed into the rm and used. Indeed, it is acknowledged that we are fortunate, in may ways, that we have one guy who works here who lives and breathes computers and that:

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it is a fair comment to say that much of the knowledge needed [to use the software] is in peoples heads . . . I think that what happens is that if someone notices that if you press Alt-B this happens, then the word gets around; but apart from that no, theres no conscious decision to disseminate the information.

In summary, small construction rms often lack the organizational capability and capacity to readily absorb and use technology requiring a high degree of tacit knowledge. Small construction rms focus on consumable technology which can quickly and more easily be absorbed into the organization by informal, mini-experimentation through learning-by-doing. Organization of the work The organization of the technology transfer process involved Consultant B developing a relationship with the supplier of the quantity surveying software and the users of the software, i.e. the rms staff. The supplier relationship provided Consultant B with access to the technical expertise of the software house, and the experience of other rms using the package. The benets and nature of this relationship were described as follows.
One of the benets of the package is the support from the software people, so that if we say this didnt work well, or it would be handy to have this in here, they will look at it. They have workshops with various practices from around the country who use it.

Second, as described in the technology section above, staff consolidated and developed their knowledge and skills through informal learning by doing. The ability of staff to use the new technology was not sufcient in itself; staff also had to be motivated to use it. This managing people through change aspect was considered as core to the nal success of the technology transfer. This imperative was captured in the following observation by one of the partners:
I think we took people along with us when we were looking at it and making decisions; we didnt impose it. So people understood what we were trying to do and where we were trying to go. I dont think there was any doubt that we were going to do it. But because we wanted to keep the staff wed invested a lot of time and money in them we wanted to take them along with us, and make sure they were happy.

In summary, the people factor of innovation centres on developing the capability of staff to use new technologies. This principally takes the form of incoming expertise and experience from supplier and external users networks (see organization of work section) and learning-bydoing. The motivation of staff to adopt new technology is important, with appropriate engagement and communication to effective manage staff through change required.

Conclusions and recommendations


The ISCF results reveal that small construction rms absorb and use technology which can contribute to the business in a quick, tangible fashion, and which can be dovetailed into organizational capabilities they already possess, or which can be readily acquired or borrowed through their supplier and business networks. Any technology which is too far removed from this comfort zone, and which requires too much investment and contains too much risk, tends to be intuitively and swiftly sifted out. A safe evolution approach to innovation through technology transfer is taken as the way forward, not risky revolution. These results have implications for policymakers and small construction rms. Policymakers need to understand the differing ability and motivation of small construction rms to absorb and use new technologies compared to large construction rms. Further effort by government bodies and professional institutions is needed to lter and package well proven technologies that would appeal to small construction rms (Sexton et al., 1999). For small construction rms, the organizational factors of innovation

The staff engaged in the technology transfer process at the piloting stage to ensure that the technology met the needs of the business and to nurture widespread ownership of the adoption of the new technology. The purpose and aim of the piloting stage was described as follows:
The job on which we trailed the packages was a very, very simple job, a little bungalow . . . I think it enabled us to choose the system; it showed us that (a) it worked, and (b) people were happy to use it, didnt nd it too confusing and difcult.

The organization of work aspect, then focused on developing supplier and external users network to access expertise and experience, and to combine this with the recipient rms own capabilities. The combining of network and rm knowledge was facilitated through internal piloting to enable safe mini-experimentation and staff empowerment of the new technology. People The staff of Consultant B need the knowledge, skills and motivation to properly use the quantity surveying software. The knowledge and skills were developed in two ways. First, the software supplier provided three training days as part of the package.

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model assists in identifying the factors critical to successful innovation through technology transfer: business strategy / market positioning, organization of work, technology and people. The model provides a framework or checklist to help owner(s) identify what action has to be taken to progress an innovation in a systemic, integrated way.

References
Alder, P.S. and Shenhar, A. (1993), Adapting your technology base: the organizational challenge, Sloan Management Review, Vol. 32 No. 1, pp. 25-37. Atkin, B. (1999), Innovation in the Construction Sector, European Council for Construction Research Development and Innovation, Brussels. Barrett, P. and Sexton, M.G. (1999), The transmission of out-ofindustry knowledge into construction industry wisdom, Linking Construction Research and Innovation in Other Sectors, Construction Research and Innovation Strategy Panel, London, 24 June. Betts, M. and Wood-Harper, T. (1994), Reengineering construction: a new management research agenda, Construction Management and Economics, Vol. 12, pp. 551-6. CRISP (1999), Workshop on Linking Construction Research and Innovation to Research and Innovation to Research and Innovation in Other Sectors, CRISP, London, 24 June. Department of the Environment, Transport and the Regions (2000), Construction Statistics Annual: 2000 Edition, DETR, London. Devine, M.D., James, T.E. and Adams, I.T. (1987), Government supported industry research centres: issues for successful

technology transfer, Journal of Technology Transfer, Vol. 12 No. 1, pp. 27-38. Gibson, D. and Smilor, R. (1991), Key variables in technology transfer: a eld-study based empirical analaysis, Journal of Engineering and Technology Management, Vol. 8, pp. 287-312. Hickson, D.J., Pugh, D.S. and Pheysey, D.C. (1969), Operations technology and organizational structure: an empirical reappraisal, Administrative Science Quarterly, Vol. 14, pp. 378-9. Inkpen, A.C. and Dinur, A. (1998), The transfer and management of knowledge in the multinational corporation: considering context, working paper 98-16, Carnegie Bosch Institute, Pittsburgh, PA. Kogut, B. and Zander, U. (1992), Knowledge of the rm combinative capabilities, and the replication of technology, Organization Science, Vol. 3, pp. 383-97. Nonaka, I. and Takeuchi, H. (1995), The Knowledge-creating Company: How Japanese Companies Create the Dynamics of Innovation, Oxford University Press, New York, NY. Sexton, M.G. and Barrett, P. (2003), Appropriate innovation in small construction rms, Construction Management and Economics, Vol. 21, pp. 623-33. Sexton, M.G., Barrett, P. and Aouad, G. (1999), Diffusion Mechanisms for Construction Research and Innovation into Small to Medium Sized Construction Firms, CRISP-99/7, London. Sung, T.K. and Gibson, D.V. (2000), Knowledge and technology transfer: levels and key factors, Proceedings of the 4th International Conference on Technology Policy and Innovation, Brazil, August. Wilson, I. (1986), The strategic management of technology: corporate fad or strategic necessity?, Long Range Planning, Vol. 19, p. 2.

348

An innovative approach to identifying knowledge management problems


A.M. Al-Ghassani J.M. Kamara C.J. Anumba and P.M. Carrillo
The authors
A.M. Al-Ghassani, C.J. Anumba and P.M. Carrillo are all based at the Department of Civil and Building Engineering, Loughborough University, Loughborough, UK. J.M. Kamara is based at the School of Architecture, Planning and Landscape, University of Newcastle upon Tyne, Newcastle upon Tyne, UK.

1. Introduction
Understanding and managing organizational knowledge is difcult and involves many resources. Knowledge relates to information and data. It is the actionable information that adds value to an organization. Information is data with meaning, which is added through conceptualising, categorising, calculating, correcting, and condensing. On the other hand data can be dened as set of discrete facts about events (McConalogue, 1999). Knowledge management (KM) is a relatively new concept and there are many denitions. It is usually dened from two main perspectives namely; process perspective and outcome perspective. A process perspective denition considers KM as the process of controlling the creation, dissemination, and utilisation of knowledge (Kazi et al., 1999; Newman, 1991). Another process perspective denition considers KM as the . . .identication, optimisation, and active management of intellectual assets, either in the form of explicit knowledge held in artefacts or as tacit knowledge possessed by individuals or communities to hold, share, and grow the tacit knowledge (Snowden, 1998). The outcome perspective, on the other hand, focuses on the benets that an organization gets from managing its knowledge. An example is a denition that considers KM to be concerned with the way an organization gains competitive advantage and builds an innovative and successful organization (Kanter, 1999). Another example of an outcome perspective denition considers KM as the management of organizational knowledge for creating business value and generating competitive advantage (Tiwana, 2000). A third example denes KM as the ability to create and retain greater value from core business competencies (Klasson, 1999). A combined perspective denes KM by considering both its process and outcome. One example is that: Knowledge management enables the creation, communication, and application of knowledge of all kinds to achieve business goals (Tiwana, 2000). Another denition states that KM is any process or practice of creating, acquiring, capturing, sharing and using knowledge, wherever it resides, to enhance learning and performance in organizations (Scarbrough et al., 1999). Regardless of the different perspectives for dening KM, all denitions focus on the fact that knowledge is a valuable asset that needs to be managed and that managing this knowledge is important to improve organizational performance. KM can be simply dened, as a systematic process of capturing, transferring, and sharing

Keywords
Knowledge management, Organizations, Software prototyping

Abstract
The promised benets from implementing knowledge management (KM) attract an increasing number of organizations. However, many organizations, face several difculties when designing a KM system or implementing its initiatives. These difculties, along with some unsuccessful KM initiatives worry many organizations interested in the concept. This paper investigates the reasons for these difculties and discusses the issues that need to be addressed to develop robust KM systems. It then introduces a systematic approach for addressing these issues at the early stages of designing a KM system. This approach was developed within the cross-sectoral learning in the virtual enterprise (CLEVER) project and supports the denition of KM problems within a business context. The approach has been encapsulated into a prototype software system to make it easier to use. The paper describes in detail the operational level of the prototype. It also discusses the potential of the developed prototype, and concludes that it represents an innovative tool for improved KM.

Electronic access
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Engineering, Construction and Architectural Management Volume 11 Number 5 2004 pp. 349357 q Emerald Group Publishing Limited ISSN 0969-9988 DOI 10.1108/09699980410558548

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knowledge to add competitive value (Drucker, 1993; Hjertzen and Toll, 1999; Scarbrough and Swan, 1999; Skyrme and Amidon, 1997) and to improve performance (Robinson et al., 2001). KM provides several benets such as facilitating staff training, problem solving, and decision-making. It also enables the intellectual capital of an organization (its skills, knowledge, and processes) to be used effectively, creatively, and consistently to improve business performance and customer satisfaction (TFPL Ltd, 1999). KM is therefore critical to an organizations survival in competitive markets and it is becoming a strategic necessity for organizations willing to lead the market (Cannon, 1999) and even to those just wishing to keep their places in the market. The number of organizations that are implementing or planning to implement KM initiatives is increasing exponentially because (Tiwana, 2000):
.

2. Need for a structured approach


Several cases of successful KM systems have been encountered during the literature review. However, many unsuccessful cases have also been observed where rectifying or altering the system was difcult, time-consuming, and expensive (CPN E0100, 2000) and failure resulted, in some cases, in the deterioration of the implementation of KM (Al-Ghassani et al., 2001). Review of some unsuccessful cases (Al-Ghassani et al., 2001) and semi-structured interviews with industrial collaborators in the cross-sectoral learning in the virtual enterprise (CLEVER) project show that better KM systems can be developed if the KM problem is properly dened at the early stages of designing a system. Many factors need to be considered to develop a proper denition of KM problems. These factors are as follows. 2.1 Proper identication of type and nature of knowledge that needs to be managed Many organizations start implementing KM by gathering any knowledge they could codify and store. This makes organizations busy for some time during the creation of the knowledge base. After a while, organizations may nd that much of the knowledge they gathered was not really important to the organizations business although it could be important in the long term. Organizations rst need to identify the type of knowledge (e.g. best practices, lessons learned, etc.) that needs to be captured and shared. 2.2 Clear business goals for implementing KM initiatives Organizations manage their knowledge to improve business performance and to stay ahead of competitors. This necessitates clear and explicit business goals that KM should deliver. Unclear business goals could result in managing knowledge that the organizations do not benet from. It may also reduce commitment of top management to the system because business benets are not clear. Unclear business goals could also lead to unclear, incomplete, and unsustainable KM strategies (McConalogue, 1999; Storey and Barnet, 2000; Tiwana, 2000). 2.3 Proper identication of the characteristics of knowledge Organizations need to identify the characteristics of the knowledge of interest. Knowledge can take different forms, e.g. tacit or explicit and is located in different repositories, e.g. peoples heads, organizational processes, supply chains, etc. In addition, knowledge is acquired in different ways, e.g. socialisation, internalisation, etc.

. .

. . . .

companies are becoming knowledge intensive rather than capital intensive; unstable markets necessitate organised actions with regards to replacing old products and introducing new ones; KM allows companies to lead change; only the knowledgeable organizations survive; cross-industry amalgamation is already breeding complexity; knowledge supports decision-making; shared knowledge multiplies; tacit knowledge can be lost easily; and competitors exist worldwide.

The growing body of literature recommending how KM strategies could be developed (Bollinger and Smith, 2001; Storey and Barnet, 2000; Tiwana, 2000) is opposed by the fact that developing methods and strategies for KM is a delicate task that is dependent on many factors. This explains why these recommendations only describe KM strategies in very broad terms. Organizations different cultures and different business goals make it impossible that one KM system or tool would suit every organization and developing methods and strategies for implementing KM needs the integration of several issues such as people, culture, and technology. This means that proper planning is required to design robust KM systems. This paper presents a structured approach to help organizations understanding their KM problems, at the early stages of designing the system. First, it justies the need for the approach, and then describes its development and operation.

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Knowing the characteristics of knowledge helps in designing efcient methods for capturing and sharing this knowledge. It also helps in strengthening ways in which existing knowledge is retrieved from its current repositories. 2.4 Clear understanding of the relationships between sources and users of knowledge and associated enablers and resistors Relationships between sources and users of knowledge are sensitive and ambiguous as one source of knowledge can be a user of another. Poor understanding of the relationships between sources and users leads to further difculties in understanding the relationships between the enablers and resistors associated with transferring knowledge from sources to users. This poor understanding eventually results in two main problems with regards to technology and culture. Technological implications can result in one of the two extremes; the focus on IT as the main tool or not dedicating an IT resource. Cultural implications, on the other hand, can result in systems that are not compatible with the environment within the organization and its structure. The foregoing shows that several issues need to be identied at the early stages of designing KM systems and that a fundamental thinking about the KM problems is required. Senior management would be more committed to the system if they understand its nature and realise its benets. KM teams would be more prepared if they fully understood the KM problem before implementation (Storey and Barnet, 2000). Likewise employees, provided that other cultural issues are addressed, would be pleased to contribute their knowledge and to use the contributed knowledge if they recognise that real KM problems are identied and addressed. An ideal way to help organizations to understand their KM problems is to develop a structured approach that supports an extensive exploration of the KM problem and claries the problem into specic issues of KM. The CLEVER project introduces such a structured approach that supports fundamental analysis of KM problems (Kamara et al., 2001). This approach is discussed in the following section.

3. Developing the approach


The problem denition template (PDT) introduces a structured approach that assists in dening KM problems within and across organizations. This approach, which was developed within the CLEVER project at

Loughborough University, facilitates the identication of the overall KM problem within an organizational business context. Four aspects were considered in the development of the approach namely: type of knowledge that needs to be managed (including the business drivers for KM); its characteristics; its sources and users; and the current processes of managing knowledge. Figure 1 shows the rst section, type of knowledge. Each of these sections comprises a set of questions that address relevant KM issues. Figure 2 illustrates the system architecture of the developed approach. The approach is designed to address issues that need to be considered in order to develop a proper identication of a KM problem within an organization. The rst section, type of knowledge that an organization needs to manage, investigates the type and classes of that knowledge and the categories of drivers underpinning it. The second section, characteristics of knowledge, consists of a set of dimensions that explore the characteristics of the knowledge of interest, its location, and how it is acquired within the organization. The third section, sources and users, investigates sources where knowledge is generated and/or currently stored and user types for each source. It then explores the enablers and resistors involved in the transfer of knowledge between sources and users. The fourth section, current processes for managing knowledge, investigates the ways and methods that already exist in an organization to manage its knowledge. Four processes of KM are considered: obtaining new knowledge, locating and accessing existing knowledge, propagating or transferring knowledge, and maintaining and modifying knowledge. Answering all the questions enclosed in the developed approach allows organizations to identify their specic KM problems and to be aware of what these problems are. It also allows adequate reection into the factors that affect the implementation of KM and relates the identication of KM problems to organizational business drivers. This new approach of gathering information for the identication of KM problems is simple to use and cost-effective. It is equally applicable to large organizations as well as smallto-medium-sized organizations. The paper version of the developed approach was evaluated using four industrial collaborators at individual workshops. The evaluation workshops included directors, senior managers, and site personnel. Based on the comments received from the evaluation workshops, it is evident that the developed approach provides a very useful way to structure thinking about KM problems.

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Figure 1 A section of the paper version of the approach

Figure 2 System architecture of the developed approach

Furthermore, it was agreed that very little else exists to assist companies in structuring their thinking in this way. However, in its paper version, the approach had problems that needed to be addressed. These related mainly to the format and the need for a facilitator. The format was seen as uninviting and not easy to use without guidance. Users also thought that the guidelines included in the approach need to be much slimmer, simpler, and automated for the approach to be a readily usable tool. Without this, users could view its completion

as a trivial exercise. These comments have been taken into account and a software prototype system was therefore developed.

4. Encapsulating the approach into a prototype software system


The developed approach contains a range of question types that need to be answered by organizations interested in identifying and exploring their KM problems. One difculty found

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in using the developed approach in its hard version is the duplication of information input and the relatively long time required to answer the questions and to nally create a clear overview on the KM problem. To make the use of the developed approach easier and less timeconsuming a soft version has been developed through encapsulating the approach into a prototype software system using Microsoft Access. The system displays the questions in forms, which the user can complete easily. While completing the forms, the user can return to any previous form to modify or change the input. The operation of completing these forms is described in the subsequent part of this paper. First, the type and nature of the knowledge problem is explored (Figure 3). Here, the user is asked to describe the KM problem that needs to be managed. This is a general statement, which does not need to be very specic at this stage and the user will be allowed to revise and rene the statement later. Establishing a general statement helps the user to start thinking about the KM problem. It also ensures that one KM problem is treated at a time. After the general statement has been specied, the user is required to select, from a set of given tick boxes, the classes that best describe the knowledge of interest. Several classes of knowledge have been built in the prototype, e.g. best practice, product knowledge, operational processes/procedures, etc. Other classes of knowledge may be added. The user is then required to identify the business drivers that relate to this knowledge. Several categories of drivers are
Figure 3 Sample screen for identifying type of knowledge

considered, e.g. structural change, external change, etc. The business driver(s) for every category should then be identied. These vary from one organization to another for example, business drivers that can affect structural change can be expansion, re-structuring, merger and acquisition, etc. while those that can affect external change can be new market, new technology, etc. The system also allows the user to add other business drivers. To ensure that KM is linked to the organizational business drivers, the user is required to relate them to the relevant KM processes i.e. what are the business drivers for every KM process, e.g. knowledge generation, propagation, etc. The second form (Figure 4) investigates the characteristics of knowledge, its location, and how it is acquired within the organization. The identication of these three dimensions is important because this denes the organizations current status and therefore helps in recognising the required status. Identication is done through selecting from a ve-point scale the position that best describes the current status. For example, knowledge can be tacit, partly tacit, mostly tacit, explicit, etc. Denitions are given for every dimension. The system also allows users to add more dimensions that reect more specic characteristics of knowledge in a particular organization. The third form investigates the relationships between the sources and users of knowledge (Figure 5). Two matrices are considered. The rst investigates where the knowledge comes from and

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Figure 4 Interface for identifying characteristics of knowledge

who/what uses it, while the second investigates the enablers and resistors that inuence the transfer of knowledge from its sources to its users. A source can be an individual, software, or paper. The user rst needs to specify the sources of knowledge i.e. if the source is people then these people need to be specied, e.g. technicians, engineers, sales staff, etc. while if the source is a software then the type of software needs to be specied, e.g. a database, email system, etc. Users of each source also need to be identied, e.g. knowledge in the drawings (source) is used by the technicians (user). In the second matrix, the user is required to identify the enablers and resistors that enable or disable the transfer of knowledge from its sources to users. Using this matrix promotes a wider thinking about the enablers and resistors of every type of knowledge transfer. The next question asks the user to elaborate issues arising from these two matrices. This allows users to develop an overall view with regards to the key sources of knowledge, their intended users, and the potential enablers and resistors. Help buttons explain to the user how the form could be completed. The last form (Figure 6) investigates if the organization currently uses any processes to manage its knowledge and asks the user to describe how those processes are performed. This allows organizations to properly understand their existing infrastructure so that new systems are deigned to be compatible with existing ones and to prevent conict. Four processes are considered but again; users are allowed to add new ones. After the four

forms are completed, the user can click on the Restate the Knowledge Problem button, which re-states the KM problem and asks the user to conrm the input or modify it. This allows a revision of the general statement that was rst entered. Finally, the system produces a report containing a claried KM problem and a rened set of KM issues. This report can be used as a reference point for the organization when developing methods and strategies for KM. Figure 7 shows a screen-shot of a report created by the system.

5. Discussion
The developed approach introduces a structured way for identifying KM problems within the context of organizations. The approach whether used in its paper or electronic format, is useful because of several reasons. First, it questions the main concerns that have an affect on any KM problem. Secondly, it is applicable to different types of organizations because it covers a wide range of issues and also allows users to add to the already built-in information. Thirdly, it allows for subjective answers thus ensuring that any type of KM problem can be individually considered. The system is simple to use, requires a relatively short time to complete, and contains a guide that provides help during each stage of its operation. Finally, it can be used by any one who wishes to implement KM, e.g. top management, business

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Figure 5 Interface for identifying sources and users of knowledge

Figure 6 Interface for identifying KM processes being used in the organization

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Figure 7 A screen-shot of a report created by the system

departments, IT departments or chief knowledge ofcers (CKOs). The rationale underpinning this approach is based on a number of issues arising from literature and semi-structured interviews with industrial collaborators. First, KM aims at adding competitive value and improving business performance (Drucker, 1993; Hjertzen and Toll, 1999; Kanter, 1999; Klasson, 1999; Robinson et al., 2001; Scarbrough and Swan, 1999; Scarbrough et al., 1999; Skyrme and Amidon, 1997; Tiwana, 2000). The approach was therefore linked to the business drivers for change within an organization. Secondly, most problems associated with the implementation of KM initiatives are a result of inappropriate understanding of the KM problems within the context of organizations (Storey and Barnet, 2000). What is required therefore, is a methodology that supports the understanding and clarifying of KM problems within the context of organizations (Al-Ghassani et al., 2001; Kamara et al., 2001).

PDT was encapsulated into a prototype software system to make it easier to use. The output is a report containing a summary of the KM problem and a distilled set of specic KM issues. This report forms an appropriate platform for the development of methods and strategies for KM in any business organization.

References
Al-Ghassani, A.M., Kamara, J.M., Anumba, C.J. and Carrillo, P.M. (2001), An innovative tool for knowledge problem denition, paper presented at 1st International Conference on Innovation, in Architecture, Engineering and Construction (AEC), 18-20 July, pp. 249-56. Bollinger, A.S. and Smith, R.D. (2001), Managing organisational knowledge as a strategic asset, Journal of Knowledge Management, Vol. 5 No. 1, pp. 8-18. Cannon, T. (1999), CEO, Management Charter Initiative. CPN E0100 (2000), Report of workshop on Applying Knowledge Management to the Construction Industry, CIRIA, London, January. Drucker, P. (1993), Post-Capital Society, Butterworth-Heinemann, Oxford. Hjertzen, E. and Toll, J. (1999), Measuring knowledge management at cap gemini AB, MSc dissertation, available at: http://i94emahj.island.liu.se/thesis/paper. html, Linkoping University, Sweden (accessed 20 December 2001). Kamara, J.M., Anumba, C.J. and Carrillo, P.M. (2001), Selection of a knowledge management startegy for organisations, in Remenyi, D. (Ed.), Proceedings of the Second European Conference on Knowledge Management, 8-9 November, Bled, Slovenia, pp. 243-54.

6. Conclusions
This paper has described a structured approach to the identication of KM problems, which was developed within the CLEVER project to assists organizations in identifying their KM problems within a business context. The paper version of

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Kanter, J. (1999), Knowledge management, practically speaking, Information Systems Management, Vol. 16 No. 4, pp. 7-15. Kazi, A.S., Hannus, M. and Charoenngam, C. (1999), An exploration of knowledge management for construction, in Hannus, M. (Ed.), Proceedings of the 2nd International Conference on CE in Construction (CIB Publication 236), 25-27 August, Espoo, Finland, pp. 247-56. Klasson, K. (1999), Managing knowledge for advantage: content and collaboration technologies, The Cambridge Information Network Journal, Vol. 1 No. 1, pp. 33-41, in Tiwana, A. (2000), The Knowledge Management Toolkit. Prentice-Hall Inc., Upper Saddle River, NJ. McConalogue, N.H. (1999), Knowledge management in the construction industry: a study of major UK contractors, MSc dissertation, Loughborough University, Loughborough. Newman, B.D. (2001), An open discussion of knowledge management, The Knowledge Management Forum, available at: www.3-cities.com/~bonewman/what_is.htm (accessed 5 October 2001) Robinson, H.S., Carrillo, P.M., Anumba, C.J. and Al-Ghassani, A.M. (2001), Linking knowledge management strategy to business performance in construction organisations,

Proceedings of the ARCOM2001 conference, 5-7 September, Salford, pp. 577-86. Scarbrough, H. and Swan, J. (1999), Case Studies in Knowledge Management, Institute of Personal Development (IPD), London. Scarbrough, H., Swan, J. and Preston, J. (1999), Issues in People Management: Knowledge Management: a Literature Review, Institute of Personnel and Development, The Cromwell Press, Wiltshire. Skyrme, D.J. and Amidon, D.A. (1997), A Report on: Creating the Knowledge-Based Business, Business Intelligent Limited, London, UK. Snowden, D. (1998), A framework for creating a sustainable programme, in Rock, S. (Ed.), Knowledge Management: a Real Business Guide, Caspian Publishing, London, pp. 6-18. Storey, J. and Barnet, E. (2000), Knowledge management initiatives: learning from failure, Journal of Knowledge Management, Vol. 4 No. 2, pp. 145-56. TFPL Ltd (1999), A Report on: Skills for Knowledge ManagementBuilding a Knowledge Economy, 1st ed., London. Tiwana, A. (2000), The Knowledge Management Toolkit, Prentice-Hall Inc., Upper Saddle River, NJ.

357

Technology-based learning and the project manager


Robert C.T. Ellis Gerard D. Wood and Tony Thorpe

Introduction
The conventional view of project management is challenged by a contemporary construction industry that is rethinking its processes and procedures as it seeks to align itself with clients business needs. The construction industry is being urged to adopt a culture that adheres less to traditional contract based procurement in favour of partnering, framework agreements and integrated project processes (Egan, 1998). Egan, some commentators suggest, is not asking the UK construction industry to simply look at what it is doing and to do it better. He is advocating industry to operate in an entirely different way. Project managers can contribute to improved performance but there is also a need to review the nature of the education and training available to them. Practitioners require exible education and training that complements work place experience rather than distracts from professional obligations. Educational technology offers an exciting opportunity to accommodate these, often conicting, requirements. Technology-based learning (TBL) is supported by a government keen to promote a learning society, the expansion of higher education (HE) postgraduate provision and the construction industrys own initiatives to engender a culture of lifelong learning. Enthusiasts argue that TBL provides greater access, enhances quality and overcomes the inherent disadvantages of distance learning. Yet the apparent eagerness to develop innovative TBL applications is not evidenced in an educational survey of built environment postgraduate course provision (Ellis, 2001). On the contrary, only small pockets of TBL activity are available. Through a longitudinal evaluation, a broader research project examined the pedagogic effectiveness of three alternative modes in the delivery of postgraduate project management education. A hybrid approach to evaluation was adopted to include both qualitative and quantitative data. This paper focuses specically on the quantitative results in order to determine relative student performance and condence by examining the academic abilities and self-efcacy ratings of students pre and post module delivery.

The authors
Robert C.T. Ellis is a National Teaching Fellow and Principal Lecturer at the School of the Built Environment, Leeds Metropolitan University, Leeds, UK. Gerard D. Wood is a Lecturer at the School of Construction and Property Management, University of Salford, Salford, UK. Tony Thorpe is a Professor of Construction Information Technology and Head of Civil and Building Engineering at the Loughborough University, Loughborough, UK.

Keywords
Distance learning, Education, Training, Interactive video, Interactive audio, Construction industry

Abstract
Construction is a project-oriented industry that benets from both the technical and interpersonal skills that a project manager has to offer. Increasingly, project management is viewed as being an integrated process relevant throughout the project lifecycle, which necessarily draws upon a broad range of knowledge and abilities. It is imperative that project managers, therefore, have ready access to education and training programmes that enable them to update their skills. This paper compares a new distance learning project management educational software application with a traditional multiplemedia resource and a well-established postgraduate module delivered in part-time mode to establish the pedagogic effectiveness of distributed interactive multimedia. An analysis of quantitative data generated over a two-year period nds that whilst learning and condence gains occur in all delivery modes, there is no signicant difference in the academic performance of students between the traditional control and distance learning experimental groups.

Electronic access
The Emerald Research Register for this journal is available at www.emeraldinsight.com/researchregister The current issue and full text archive of this journal is available at www.emeraldinsight.com/0969-9988.htm
Engineering, Construction and Architectural Management Volume 11 Number 5 2004 pp. 358365 q Emerald Group Publishing Limited ISSN 0969-9988 DOI 10.1108/09699980410558557

Evaluation methodology
Macleod (1998) states that every educational intervention is an experiment in some sense of the word. However, many academics (Draper, 1997; Gunn, 1997; Oliver, 1997) recognise the drawbacks associated with the sole use of experimental methods in determining

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the effectiveness of educational software. Evaluation of courseware, as Draper (1997) argues, should be based on the performance and feedback of real students as part of a real course. The well known work of Kirkpatrick (1960) provides a systems-oriented, hierarchical model which is suited to hybrid evaluations of this nature. It comprises four levels, namely, reaction, learning, application and results, i.e. a consideration of student feedback, learning gain, workplace performance and organizational improvement (Table I). This paper concentrates on the learning and application stages where emphasis is most often placed on experimental approaches. Despite recurring criticism of experimental evaluations, experiments that compare alternative ways of teaching are deemed to be more convincing than those based solely on the effectiveness of TBL software (Clow, 1999; Draper, 1997). To this end, a new distance learning project management educational software application (DIMEPM) is compared with a traditional multiple-media resource (MM) and a well-established postgraduate module delivered in part-time (PT) mode (Figures 1, 2 and 3). Traditional PT delivery is characterised by seven three-hour taught sessions, which rely heavily on classroom based, hands-on activities. Sessions comprise formal debates, design exercises, management games and specialist input from practitioners and guest lecturers. Students receive printed guides that contain session outlines and essential reading. Informal support either face-to-face or by telephone or e-mail is encouraged. This group acts as the control against which the effectiveness of each delivery mode is compared. The second implementation is a multiple-media distance learning module. Students attend a oneday induction event where they are introduced to the topic areas and receive printed guides, readers, video, audio tapes and independent software applications. Communication thereafter comprises e-mail and telephone tutoring. The third implementation used Authorware Attain software to create DIMEPM a CD-ROM that incorporates hyperlinks and scripted
Table I Methods and tools used in comparative evaluation Kirkpatricks model Evaluation stage Methods Reactions Learning Application Results Student attitude Student performance Student condence Organizational impact Tools Feedback questionnaire Interest and involvement charts Pre and post-tests Summative assessment Self-efcacy rating scales Case study

Figure 1 Distributed multimedia educational software (DIMEPM)

interactive activities together with a virtual learning environment (VLE) and online learning resources. The VLE incorporates synchronous and asynchronous communication facilities to enhance the traditional support mechanisms.

Sample
Harvey (1998) argues that involving the whole cohort in an evaluation study will provide a more representative sample than would otherwise be achieved by testing a small sample. Accordingly, all students enrolled on the project management module were invited to take part in the evaluation study. However, the number of postgraduate students enrolled in any one semester was not large. Newton (1998) states that ideally one
Figure 2 Multiple-media distance learning resources

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Figure 3 Part-time delivery supported by paper-based study guide

Table II Sample group proles PT n 5 27 Mean age (s.d.) 34.4 (7.58) Gender balance 20 male/7 female Learning stylea(per cent) Activist 3 (11) Pragmatist 9 (33) Reector 10 (37) Theorist 5 (19) Course (per cent) PM 9 (33) FM 6 (22) CLA 4 (15) MBA 8 (30) Note: aLSQ strongest preference Group prole MM n 5 44 33.0 (7.93) 31 male/13 female 5 (11) 14 (32) 15 (34) 10 (23) 18 (41) 9 (21) 5 (11) 12 (27) DIMEPM n 5 33 35.8 (7.72) 25 male/8 female 4 (12) 10 (30) 14 (42) 5 (14) 10 (30) 8 (24) 2 (6) 13 (40)

Method
should aim to achieve a student group of at least 30 for pre and post-testing, therefore, the evaluation was conducted over three semesters. Newton (1998) emphasises the need to create student proles when seeking to control variables in quasi-experimental research designs. This was achieved by reference to student information services (SIS) records at Leeds Metropolitan University. SIS listings in the 2000/2001 academic year indicated that the course composition, age and gender balance matched that in 1999/2000. However, additional data regarding the learning styles proles of students was gathered via a learning style questionnaire which was distributed with the initial enquiry. The initial sample size was 126. However, four students returned their CD-ROM in exchange for the multiple-media learning pack and a further 18 students withdrew from the module, prior to submission of the Part 1 assessment (3 No. PT; 5 No. MM; 10 No. DIMEPM). Despite the loss of subjects from the sample (17.5 per cent), it is contended that the proles (Table II) are sufciently similar to allow a comparison of the control and experimental groups. The reason cited for the return of DIMEPM, in all cases, was due to technical problems associated with the audio and video capabilities of student computer platforms. The high withdrawal rate, although a concern, is peculiar to the administration of courses within the School of the Built Environment and Leeds Business School at Leeds Metropolitan University. It is common practice for students to attend induction events for alternative elective modules before making their decision regarding which elective to undertake. In order to compare the effectiveness of each implementation on student performance and condence, three instruments were used to gather data: . summative assessment; and . self-efcacy ratings Pre-test post-test Dugard and Todman (1995) acknowledge that the pre-test post-test control group design is particularly common in educational research which examines the change in outcomes that result from modications to the learning process (Table III). Random selection of students within cohorts is recognised as being an important aspect of experimental studies (Fraenkel and Wallen, 1996) if the impact of extraneous variables associated with particular cohorts and individuals are to be removed. However, the PT treatment, delivered in the 1999/2000 academic year, comprised intact groups. Course Committee approval did not extend to the concurrent delivery of PT and distance learning formats in the same semester. Whilst this is acknowledged as a limitation of the study, various measures were put in place to eliminate or minimise the possible threat this might cause to internal validity. Newton (1998)
Table III Pre-test post-test control group design (conventions devised by Campbell and Stanley, 1963) Control (PT) Experimental (MM) Experimental (DIMEPM) O1,2 O1,2 O1,2 X1 X2 X3 O3,4 O3,4 O3,4

Notes: O1,2 refers to the pre-test (learning gain and selfefcacy); O3,4 refers to the post-test (learning gain and selfefcacy); X represents the exposure of a group to a particular delivery mechanism

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offers advice in this respect. He suggests that student proles are created that reect motivational, personal and educational factors. Control and experimental groups, therefore, should comprise students from the same courses, with similar age, gender and learning style proles. Marchant (2001) refers to this procedure as stratied sampling. Paired testing of students using a matching-only pre-test post-test control group design was not adopted due to sample size. As such, the evaluation did not assume a true experimental design and therefore, the necessary correlation between the dependent and independent variables had to be fairly substantial (Fraenkel and Wallen, 1996). Prior to the commencement of the project management module, a pre-test was administered to establish a baseline of knowledge and technical skills of participants in undertaking certain project management related tasks. The questions were mapped against each of the three content related Units, i.e. project perspectives, tools and techniques and interpersonal skills, so that the instrument reected the content balance within the module. Students were alerted to the status of the evaluation, i.e. the tests were to be used to evaluate the learning materials and not to evaluate individuals. In accordance with the procedure outlined by Kromrey and Purdom (1995) all questions were validated by two judges, i.e. module tutors, who were conversant with the content of the instructional material. Design, Newton (1998) states, is critical to the success of the test. He recommends that a proportion, though not all, of the original test materials are retained in the subsequent post-test. However, repetition of the same test questions, he concludes, is not a sound solution to achieve comparability. In order to ensure the reliability of the instruments a crossover design or equivalent forms re-test (Fraenkel and Wallen, 1996) was employed, whereby two tests were randomly assigned to students, either as a pre or post-test. The pre-test post-test design adhered to the guidelines described by Wilson et al. (1998), and was designed such that it did not take long to complete i.e. 30 minutes. They comprised shortanswer questions, with few multiple-choice questions being used. The latter were excluded from the later analysis, thus ensuring that correct responses could be attributed to students denitely knowing the answers (Wilson et al., 1998). The pre-test and post-test were administered prior to the induction event and immediately upon completion of the module, respectively. Reinforcement of test concepts has the added value of contributing to knowledge assimilation

(Mann and Robertson, 1996). Clearly, such testing can be of benet to participants but it is also acknowledged that the measure of change in learning might be inated if the tests are conducted immediately on completion of the programme. Although Mann and Robertson (1996) recommend that post-tests be undertaken one month after the training programme to provide a more realistic evaluation, this requirement could not be satised due to the structure of the postgraduate awards. Attempts to secure student participation in evaluations conducted outside the registration period were deemed impractical. A low student response rate would have been inevitable. Macleod (1998) suggests that analysis of data gathered through an experimental approach will most likely focus on determining whether your innovation has had the particular effect. However, he cautions against thinking that statistical signicance is an all or nothing thing. Rather it is used to express the researchers condence in the conclusions put forward. Summative assessment The premise that evaluation can be divorced from the assessment of the merits and de-merits of the student work is criticised by Jacobs (1998). Assessment is perceived to be a subset of evaluation. Therefore, the summative assessment in the project management module, which comprises two components, adds a further source of data to the holistic evaluation: . Part 1 A presentation to camera, the topic being self-selected from a pre-dened list of debate motions (40 per cent total module marks); and . Part 2 An assignment that required the preparation of a network, bar chart and functional linear responsibility chart (60 per cent total module marks). Kirkpatrick (1967) cautions that evaluations of this nature provide evidence, not proof of benet. Indeed, the need for alternative measures is reinforced by Newton (1998) who states that one must be prepared to make only very limited claims for any ndings which seek to provide an accurate measure of the change in learning which can be attributed to the intervention (Newton, 1998). Self-efcacy Kirkpatrick (1960) suggests that there may be a difference between knowing principles and techniques and using them on the job. Following a review of experiments that measured the effectiveness of training programmes in terms of

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on-the-job behaviour, in order to determine effectiveness as he concludes, attempts must be made to measure work-place performance. Mann and Robertson (1996) examined the relationship between learning and on-the-job performance and using the concept of self-efcacy, i.e. the conviction that one can successfully execute the behaviour required to produce outcomes (Bandura, 1977), devised a surrogate measure of performance. A self-efcacy evaluation instrument was used in this study to predict the performance of project management students in the work place and an identical pre-test post-test design (as described above) was adopted. The tool itself was based on a managerial self-efcacy scale developed by Robertson and Sadri (1993). As such, the approach adopted comprised the following four stages: . identify the behavioural category to be measured; . represent the behavioural category as a set of specic activities or task items; . arrange these task items into a hierarchy of increasing difculty; and . request the respondent to assess his/her degree of certainty that he/she can perform the activity when exerting maximum effort. Recommendations regarding the length of the selfefcacy inventory, scale development, the degree of difculty of the tasks, reliability testing and directions regarding the use of the instrument were adhered to during the design and implementation of the instrument. The nal scale comprised 34 specic task items drawn from the Association for Project Managements Body of Knowledge 4th edition (APM, 2000).

promoted by the educational programme, as a direct consequence of reinforcement and practice. Figure 4 shows a box plot of the pre-test and posttest scores achieved in each delivery mode. Box plots were considered to be the most useful tool to present and help interpret the results since they characterise the distribution of a variable. Each shaded box represents the responses between the 25th and the 75th percentile for one variable and the line across the box is the median. Whiskers indicate the lower and upper extremes of the range (SPSS, 1998). An analysis of co-variance (ANCOVA) on post-test scores was calculated, using the pre-test score as the co-variate. The argument that ANCOVA assigns the pre-test its correct status as a true co-variate (Dugard and Todman, 1995) was persuasive in the selection of an ANCOVA on post-test scores. However, for an ANCOVA it must be assumed that there is linearity in the relationship between pre-test and post-test, that the regression lines are parallel (Marchant, 2001) and that there is homogeneity of variances of residual post-test scores (Dugard and Todman, 1995). A quadratic term (i.e. the squared pre-test score) was introduced to account for a curved line relationship but was not found to be signicant. The scatter plot of the pre-test post-test scores showing the regression line and 95 per cent condence intervals (Figure 5) suggests that parallel regression lines are a reasonable assumption and from an analysis of SPSS normality plots there appears to be homogeneity in the variances of residuals. Neither MM nor DIMEPM showed a signicant improvement over the control group (Table IV).
Figure 4 Learning gain (SPSS v10)

Results
Pre and post-test Pre-tests and post-tests were analysed to discover if there had been a learning gain (Wilson et al., 1998). All students were required to undertake a pre-test during the induction event that preceded the module. Two tests (A and B) were prepared and a cross-over design was employed. An independent samples t test (not assuming equal variances) reveals no signicant difference between pre-test A and pre-test B mean scores (t 91:4 0:73, p 0:465, 95 per cent CI of A and B 2 6.7+3.1). Of the 104 students, 97 performed better in the post-test than in the pre-test, two students achieved the same result and ve students performed worse in the post-test. However, Wilson et al. (1998) suggest that experimental methods per se exaggerate the learning gains

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Figure 5 Scatter plot (SPSS v10)

Figure 6 Parts 1 and 2 (combined) summative assessment (SPSS v10)

Whilst there is a clear indication that performance has improved during the period of the experiment, it is concluded that there is no signicant difference in the learning gain between the control and experimental groups. The ndings, therefore, suggest that academic performance is unaffected by the delivery mode. Summative assessment A box-plot of the combined Part 1 and 2 assessment indicates that the median score for PT students is higher than their peers in the experimental groups (Figure 6). The mean scores for each group are PT 56:4 per cent, MM 57:1 per cent and DIMEPM 54:3 per cent. However a one-way analysis of variance (ANOVA) indicates that there is no signicant difference between the means of the three groups on total scores (F 2;101 1:184, p 0:310). Self-efcacy Self-efcacy rating scales were implemented immediately prior to commencement and upon completing the module. The median scores,
Table IV ANCOVA (SPSS v10) Coefcientsa,b Unstandardized coefcients Standardized Model Constant PRE DIME MM B 35.539 0.487 4.992 5.932 Std error 4.074 0.113 3.678 3.468 coefcients b 0.391 0.152 0.192

pre and post the instructional treatment, indicated that self-efcacy had increased on completion of the module (Figure 7). Using the Wilcoxon test (Table V), the self-efcacy gains in each delivery mode were found to be highly signicant p , 0:0005: The Sign test reinforces these ndings (Table VI). Caution must be taken in the application of further quantitative techniques. As Jacobs (1998) states a judgmental scale is not necessarily a true linear scale . . . thus the results obtained may be mathematically valid while not meaning what they appear to suggest. A similar opinion is expressed by Mogey (1998). He states that data collected
Figure 7 Self-efcacy ratings pre and post intervention (SPSS v10)

t
8.724 4.302 1.357 1.710

Sig. 0.000 0.000 0.178 0.090

Notes: aDependent variable: POST; bSelecting only cases for which GROUP.1

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Table V Wilcoxon signed ranks test (SPSS v10) Test statisticsa PT post-pre self-efcacy MM post-pre self-efcacy Z Asymp. Sig. (2-tailed) 2 4.517 0.000
b

DIME post-pre self-efcacy 2 4.735a 0.000

2 5.603 0.000

Notes: aWilcoxon signed ranks test; bBased on negative ranks

Table VI Sign test (SPSS v10) Test statistics GROUP PT Z Asymp. sig. (2-tailed) MM Z Asymp. sig. (2-tailed) DIME Z Asymp. sig. (2-tailed) Note: aSign test
a

Postself-preself 2 4.619 0.000 2 5.795 0.000 2 4.874 0.000

using a Likert scale is ordinal, i.e. they have an inherent order, but one cannot assume that the difference between no condence and complete condence is the same as between no condence and undecided. However, in Kruskall-Wallis test, the non-parametric equivalent of the one-way ANOVA, shows that there is no signicance in the median self-efcacy scores pre and post-implementation of the treatment (Table VII).

Conclusion
This paper examines quantitative data related to the pedagogic effectiveness of three alternative modes of delivering postgraduate project management education. It nds that there is no statistical difference in the performance and condence of students in the DIMEPM, multiple-media distance learning and PT groups. Not unexpectedly, student learning and application increased in all delivery modes on completion of the module. There is undoubtedly tension between the evaluatory approach described here, that seeks to
Table VII Kruskall-Wallis test (SPSS v10) Test statisticsa,b Preself Chi-square df Asymp. Sig 2.898 2 0.235 Postself 0.266 2 0.876

produce generalised results, i.e. to determine the pedagogic effectiveness of TBL, and qualitative studies that consider contextual issues. While the work complements similar studies in the project management domain, undertaken by Shinkins (1995) and Passerini (2000), it does not address contextual issues that characterise the implementation of novel educational learning resources. Criticism that experimental, albeit comparative, evaluations are inadequate in an educational setting, seem well founded. There is need to examine the reaction of students and determine both the changes in workplace performance and organizational improvements that might result from undertaking such studies. A complementary study by Ellis and Thorpe (2004), for example, suggests that computer-based training requires greater discipline and commitment on the part of the learner if maximum value is to be gained from the use of educational technology. Despite these concerns it is concluded that distributed interactive multimedia applications can offer an alternative means of delivering project management education. Accordingly, the perceived benets of TBL, i.e. access, exibility, scope and consistency, may be tapped by postgraduate education and training programmes. The evaluation supports the view that the academic performance of students is not compromised by the use of computer-based delivery techniques. However, further research is necessary to target specic areas where TBL will be of most benet. Not only should this address the needs of learners enrolled on academic awards but also the needs of employees undertaking in-company staff development courses.

References
APM (2000), Body of Knowledge, 4th ed., available at: www.apm.org.uk/pub/bok.htm Bandura, A. (1977), Social Learning Theory, Prentice-Hall Inc., Englewood Cliffs, NJ. Campbell, D.T. and Stanley, J.C. (1963), Experimental and quasiexperimental designs for research, in Cage, N.L. (Ed.), Handbook of Research on Teaching, Rand McNally & Company, Chicago, IL.

Notes: aKruskal Wallis test; bGrouping variable: GROUP

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Clow, D. (1999), Types of Evaluation Findings, PLUM, available at: www.-iet.open.ac.uk/iet/PLUM/evaluation/ Findings.html Draper, S.W. (1997), Prospects for summative evaluation of CAL in higher education, ALT-J, Vol. 5 No. 1, pp. 33-9. Dugard, P. and Todman, J. (1995), Analysis of pre-test post-test control group designs in educational research, Educational Psychology, Vol. 15 No. 12, pp. 181-99. Egan, J. (1998), Rethinking construction: the report of the Construction Task Force to the Deputy Prime Minister, John Prescott, on the scope for improving the quality and efciency of UK construction, Department of the Environment, Transport and Regions, July. Ellis, R.C.T. (2001), Lessons in project management, PhD thesis, Loughborough University, Loughborough. Ellis, R.C.T. and Thorpe, A. (2004), An illuminative evaluation of distributed interactive multimedia project management resources, IT in Architecture, Engineering and Construction, Vol. 2 No. 1, pp. 33-45. Fraenkel, J.R. and Wallen, N.E. (1996), How to Design and Evaluate Research Education, 3rd ed., McGraw-Hill Inc., New York, NY. Gunn, C. (1997), CAL evaluation: future directions, ALT-J, Vol. 5 No. 1, pp. 40-7. Harvey, J. (Ed.) (1998), Guidelines for writing good questions, LTDI Evaluation Cookbook, Learning Technology Dissemination Initiative, available at: www.icbl.hw.ac.uk/ltdi Jacobs, G. (1998), Evaluating courseware: some critical questions, Innovations in Education and Training International, Vol. 35 No. 1, pp. 3-8. Kirkpatrick, D.L. (1960), Techniques for evaluating training programs, Journal of American Society for Training and Development, Vol. 14 No. 1, pp. 13-32. Kirkpatrick, D.L. (1967), Evaluating Training Programs: the Four Levels, Berret-Koehler, San Francisco, CA.

Kromrey, J.D. and Purdom, D.M. (1995), A comparison of lecture, cooperative learning and programmed instruction at the college level, Studies in Higher Education, Vol. 20 No. 3, pp. 341-4. Macleod, H. (1998), Designing experiments, in Harvey, J. (Ed.), LTDI Evaluation Cookbook, Learning Technology Dissemination Initiative, available at: www.icbl.hw.ac.uk/ ltdi Mann, S. and Robertson, I.T. (1996), What should training evaluations evaluate, Journal of European Industrial Training, Vol. 20 No. 9, pp. 14-20. Marchant, P. (2001), Interview held at Leeds Metropolitan University, 19 June 2001. Mogey, N. (1998), So you want to use a Likert scale technique, in Harvey, J. (Ed.), LTDI Evaluation Cookbook, Learning Technology Dissemination Initiative, available at: www.icbl.hw.ac.uk/ltdi Newton, R. (1998), Pre and post testing, in Harvey, J. (Ed.), LTDI Evaluation Cookbook, Learning Technology Dissemination Initiative, available at: www.icbl.hw.ac.uk/ ltdi Oliver, M. (1997), A Framework for Evaluating the Use of Educational Technology, BP ELT Report No. 1, University of North, London. Passerini, K. (2000), Obtaining a project management education, PM Network, October, pp. 33-6. Robertson, I.T. and Sadri, G. (1993), Managerial self-efcacy and managerial performance, British Journal of Management, Vol. 4, pp. 37-45. Shinkins, S. (1995), Using computers to teach project management, Journal of Management Development, Vol. 14 No. 7, pp. 4-14. SPSS (1998), SPSS Base 8.0 for Windows: Brief Guide, Prentice-Hall, Englewood Cliffs, NJ. Wilson, J.M., Lerski, R.A. and Hau, C. (1998), Pre- and post-testing in evaluating a CAL program: preliminary ndings, ALT-J, Vol. 6 No. 1, pp. 19-24.

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Reconciling construction innovation and standardisation on major projects


F Edum-Fotwe .T. A.G.F. Gibb and M. Benford-Miller

Introduction
Coming in the wake of a major recession, the decade 1990-2000 presented an opportunity for a continued commitment by the UK government to modernise the construction industry. The purpose of this commitment was primarily to ensure that UK construction is able to compete with the best in the evolving climate of a globalised market for national economies (McCaffer and Edum-Fotwe, 2000). However, it also addressed the provision of value for money for the industrys clients with regard to their investments in physical developments (TTF, 2000a, b). Although there have been previous studies on the performance of the construction industry within the UK, such as the Emmerson report in 1962, the efforts to improve the performance of the sector in recent times was instigated by the publication of the Latham report (Latham, 1994) to be followed by the report on rethinking construction (Egan, 1998). These two reports brought into prominence the differential rates of technological and managerial innovation in the delivery of construction infrastructure developments compared to other sectors, especially manufacturing. This has resulted in an innovation agenda within construction, taken up by the initiatives and movements that emanated from the reports. While this slow rate of innovation within construction had relevance to the private developer, it presented an even greater signicance for the public organisation (Van de Ven and Rogers, 1988; Pavitt, 1991). This was particularly the case for departments such as Health that have considerable assets in physical developments. At the same time, the expected levels of performance improvement in construction are often demonstrated in the manufacturing sector to be partly attributable to standardisation of components and processes (Grifth et al., 2000; Kondo, 2000). This underscores the relevance of standardisation and its potential for bringing about improvement in development schemes for major clients such as the NHS. However, the concepts underlying innovation and standardisation presents an apparent divergence in what each strives to achieve in order to attain the performance improvement. The paper presents as a case, one major public sector outt is making efforts to achieve innovation within an agenda that involves a widespread adoption of standardisation. The paper also discusses the motivations for adopting an organisation-wide agenda on innovation and standardisation within construction. It also identies the elements of apparent incongruity between innovation and standardisation, and

The authors
F.T. Edum-Fotwe and A.G.F. Gibb are based at the Department of Civil and Building Engineering, Loughborough University, Loughborough, Leicestershire, UK. M. Benford-Miller is based at the MBM Healthcare Planning Limited, Stockport, Cheshire, UK.

Keywords
Standardization, Innovation, Design, Construction, Industry

Abstract
The concepts underlying innovation and standardisation presents an apparent divergence in what each strives to achieve. In the view of the authors, this has contributed in no small measure to the low take-up of standardisation within the construction sector as organisations strive to be innovative to improve on their performance and attain continuous improvement in their processes and operations as well as design solutions. The paper presents as a case, how one major public sector outt is striving to achieve innovation within an agenda that involves a widespread adoption of standardisation. It presents the motivations for adopting an organisation-wide agenda on innovation and standardisation, identies the elements of apparent incongruity between the concepts, and outlines how the case organisation has resolved the divergences.

Electronic access
The Emerald Research Register for this journal is available at www.emeraldinsight.com/researchregister The current issue and full text archive of this journal is available at www.emeraldinsight.com/0969-9988.htm

Engineering, Construction and Architectural Management Volume 11 Number 5 2004 pp. 366372 q Emerald Group Publishing Limited ISSN 0969-9988 DOI 10.1108/09699980410558566

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presents how the case organisation has resolved the divergences.

Construction innovation versus standardisation


According to Lansley (1996) the occurrence of innovation within the construction industry is often characterised by the widespread adoption of new practices as a result of advances in technological and business processes. Whilst its eventual impact will be a marked shift in the traditional or accepted pattern of processes and products within the industry, the notion often associated with innovation is continuous change (King, 1992; Tzokas and Saren, 1997). As such, organisations and individuals have to continually generate different and improved systems and products to address changing competition from rivals and shifts in customer demands and requirements. Lansley (1996) also points out that whilst major advances do occur rarely does innovation within construction involve such a major or sudden shift. Instead, much of the innovation within construction presents itself as small renements over a period of time. This long time frame ensures a gradual implementation and better understanding of the new systems that result from such innovation. Notwithstanding this slow pace identied with construction, the imperative of innovation in modern industries and economies cannot be over-emphasised given the accentuated nature of competition faced by both public and private organisations. Porter (1986) for example argues that such increased competition is not limited only to individual organisations within a country, but also across different countries, and this called for continuous innovation to maintain any competitive advantage they possess. Within construction and project-related organisations this innovation is driven by several factors including: . change in technology for operations and processes; . development of breakthrough technologies; and . major shift in managerial approaches, e.g. from prot maximisation to customer satisfaction. A notable consequence of the impact of the above innovation drivers is the obsolescence of technologies and processes applied within the industry. Figure 1 depicts the cyclic relationship between innovation and obsolescence. The very essence of continuous improvement activities undertaken by many organisations and establishments both in products and processes therefore derives from this drive to innovate

(Thorpe et al., 1998). The rationale for such innovation is that without it organisations become affected by obsolescence. Figure 1 also shows the role of standardisation in the innovationobsolescence cycle. The cycle indicates that achieved advances and performance improvements (innovation) often form the basis of industry norms and accepted practices, which in turn leads to obsolescence as further changes and improvements are achieved. The introduction of standards (standardisation) could assist in achieving consistency for the widespread deployment of innovation. Such consistency necessitates a stable system and structure (as well as procedures and processes). However, a stable and unchanging system could be inimical to adopt and sustain innovation (Kondo, 2000). The essential drivers of innovation and standardisation as mechanisms for performance improvement within organisations therefore present diverging requirements. On the one hand, a continuous change is implied in innovation drives to ensure that the organisation, operation or process under consideration remains efcient at levels consistent with achieving desired performance improvement. On the other hand, a degree stability, which is the essence of standardisation is essential for any performance improvement measures to become embedded in operational processes. In particular, such standardisation lends to the performance improvement agenda through a shortening of the learning curve associated with processes. Figure 2 illustrates how the use of either mechanism to improve performance stems from contrasting factors. The divergence creates an apparent gap in the deployment of both mechanisms and for which organisations need to develop appropriate effective solutions in order to benet from the two modes of performance improvement (Beer et al., 1990). Subsequent sections of this paper focus on developments by a major public sector body to bridge the gap as a means of achieving continuous performance improvement.

Background of case
The case was drawn from an organisation that is an executive arm of the Department of Health in the UK, with responsibility for advising on effective, efcient and economic management of infrastructure and physical assets used for healthcare delivery. This role includes the promotion of excellence in design, and generating solutions and options for enabling better value for money in new build and refurbishment schemes. It also involves encouraging and facilitating the professional development of the estates community in the health sector. As part of the activities required

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Figure 1 The perpetual cycle of improvement and innovation

Figure 2 Characteristics of innovation vs standardisation

in fullling its role, the organisation has committed to a modernisation programme in response to the initiatives generated by the Egan and Bates reports. This modernisation exercise has been implemented as ProCure21, which addresses issues relating to the design, procurement and investment associated with hospital developments, as well as facilities management function. It also covers issues such as environmental concerns and training of staff involved in the delivery and management of health infrastructure facilities with respect to the proposed modernisation regime advocated within the ProCure21 agenda. Within the decade from 2000 to 2010, the organisation will be involved in nearly 400 schemes of varying sizes ranging from new onestop primary care centres to the development of major hospital schemes, all amounting to nearly 12 billion. The importance of getting it right from

the start for such a large number of developments is quite obvious. Equally, the volume of construction involved in such an investment programme could lend itself readily to the objectives of standardisation for components and processes with obvious efciency benets. Within the engineering construction sector, the standardisation of processes and components has become synonymous with increased efciency and productivity throughout the supply chain. The rationale for such standardisation has been the achievement of simplication in design, which in turn should lead to cutting down of unnecessary variety to bring about improved productivity and better client and end-user satisfaction (Gibb et al., 1999). However, the term is often used loosely within the construction sector. On the one hand, it addresses the production of standard types of whole buildings as in the case of standard houses. On the other hand it refers to standardisation in the technology of construction. This latter reference includes standardising dimensions, components and other materials, construction techniques, and operational and labour processes. The history of construction activity within the health sector in the UK is replete with examples that reect both extremes of such standardisation (Payne and Rees, 1999). This includes the nucleus concept whereby a high order volumetric modularisation is adopted for hospital development. Subsequent progression of the nucleus saw the replication of the basic module in both horizontal and vertical directions. At the other extreme, the development of component databases, technical memoranda provide guidance on secondary order

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standardisation for hospital departments and health centres. It is essential to bear in mind that each of these examples cited to illustrate the use of standardisation in the health sector were considered as major innovations in their day. On a general level, the construction industry has witnessed various attempts at standardising whole buildings and complete facilities in the past. These attempts at complete standardisation have been largely discredited and the contemporary approach involves meeting clients needs by customised use of standard processes and components. Within this document therefore, the use of the terminology will assume the following meaning: the widespread and systematic use of processes and components with repeated regularity in construction and engineering projects with the conscious object of achieving optimum economy, quality and functionality. The case presented in this paper was part of a review exercise aimed at eliciting the characteristics of standardised processes and the use of standardised components for major private nance initiative (PFI) schemes in the health sector. The purpose of this exercise was to enable the organisation explore options for improving value for money on future development schemes through the adoption of appropriate standardisation practices and innovation as part of the ProCure21 agenda.

Change catalyst
Beside the main wave of performance improvements instigated by the Egan report, there were two major aspects that served as an internal catalyst for the modernisation exercise, namely the introduction of PFI and the existence of a comprehensive set of legacy standards within the health sector. Introduction of PFI The use of standardisation to promote quality and efciency for hospital developments in the health sector is not new. This has been co-ordinated in the past by guidance documentation. Providing and maintaining this guidance documentation had been an in-house activity, due to the direct involvement of the executive organisation in hospital development schemes. With the introduction of PFI, this role appears to have shifted to the project consortium (TTF, 2000a, b). As a result, standardisation efforts were characterised by an individual projects pursuit for the schemes covered in the review. In some cases this effort existed only at the individual project partners level. This isolated approach to implementing standardisation presented an

inherent challenge for the use of the standards established in the guidance documentation. Figure 3 shows this change in role for the executive agency under the two forms of procurement. In particular, on some contractor-led schemes these guides appear to present major points of conict based on the degree to which the contractors were prepared to innovate and explore alternative options for obtaining improvement in value for money. A notable feature of procurement under PFI that is consistent with good design is the encouragement of innovation. This includes breaking the grip of historic or standard public sector design approaches, which have often reected poor (including over specied) design. Public sector procurers are required to take a look at how to achieve synergy between building design, facilities management and the operation of core services irrespective of whether or not the latter are to be contracted out (Featherstone and Baldry, 2000). They are also required to encourage in-built exibility in the specication to respond efciently to changing requirements without causing excessive disruption to users. This includes undertaking value engineering to save time and cost in the delivery of new services, avoid over specication and encourage modern production processes. These requirements result in a departure from the use of some accepted standards as PFI consortia explore innovative solutions to address the particular hospital scheme they are involved in (Payne and Rees, 1999). Considering that a capital investment of 7 billion is planned for PFI schemes in the health sector to the period 2010, the implication of the introduction of new standards of design and construction could have a considerable impact on value for money over the life of the buildings. Legacy archives The executive agency over a considerable period has accumulated a comprehensive database on the performance and functional requirements of health facilities. This is administered as an activity database (ADB) and standard engineering specications, which is based on current health building guidance and offers a wealth of design expertise. The database holds information for an extensive range of departments, rooms, assemblies, and components and allows for an accurate and cost effective brieng process as well as complimenting the development of concept and detail design. The database is also is complimented by other health guidance documentation, including health building notes (HBNs), health technical memoranda (HTMs). Health facilities notes

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Figure 3 PFI vs traditional Trust-led developments schemes

(HFNs). These have been maintained as legacy archives of standards by the executive agency. However, with the introduction of the PFI procurement arrangements, this stable system has been faced with the potential of discontinuity, as external agencies foster their own innovative design solutions outside these standards. However, it should be noted that the guidance is largely adhered to as it has established an international reputation of good practice and establishes minimum standards for the Private Sector to demonstrate it can improve upon.

Making standardisation innovative


To address the challenges posed by the two internal factors outlined in the previous section a simple case that addresses the aspects of continuous innovation and standardisation is presented. The case is already operational within a major organisation involved in the healthcare facilities as well as other developments outside the health sector. The scheme involved in the case was essentially the implementation of a centralised monitoring system for the elements of standardisation and innovation. The case works on a fundamental principle of an independent centre for the management of the two aspects of performance improvement for the health sector. The centre is charged with the responsibility of rationalising elements of innovation and standardisation on each development project within the sector and operates in an advisory capacity. This is achieved by maintaining a central standardisation database (CSD), which

links into all facility related developments within the sector. Figure 4 illustrates the positioning of the CSD with respect to facility development projects in the sector. The CSD provides a generic framework of standardisation for each new project. In addition the centre promotes innovation by encouraging architects and design engineers to exercise design freedom. All completed designs and details of processes for each project (Pn) are submitted to the centre for review with regard to standardisation and rationalised for conformity to CSD guidelines. Any variations from the CSD guidelines are investigated based on the organisations measures of innovation performance. In order to assess such performance and progress objectively the centre recommends that all areas of the innovation were reduced to quantitative measures. All innovations that emerged from each project solution were carefully scrutinised regarding their context and
Figure 4 Schematic diagram of interaction between individual projects and CSD

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applicability and then registered and retained in the standardisation database. This way the CSD was kept up to date with changing technology and developments within the sector. In particular, the centre recognised the dynamic nature and the different participants that inuence innovation in the sector. Figure 5 presents the principal participants that inuence innovation under the PFI arrangement for delivering healthcare facility developments. This illustrates the signicant involvement of supply chain members and external organisations in the ownership of innovations within the PFI procurement arrangement. This presented a potential problem due to the commercially exploitable nature associated with the solutions they provided. By formalising the role of the centre within each PFI scheme, this setback could be harmonised by incorporating relevant clauses into the contract conditions. The unique approach of the case not only addressed the innovation standardisation conundrum, but also ensured effective access to elements of innovation for future schemes.

pre-assembly. However,the effort transcended a focus on the fabric of the structure and material inputs to include and address process and managerial-related aspects that could promote continuous and sustained change in both on and off site operations.

Conclusion
The paper has presented a case of how an organisation involved in generating innovative solutions for the health sector manages the elements of standardisation alongside the innovations. The purpose of the approach adopted by the case was to ensure that the standards and guidelines they maintained provided the basis of consistent performance throughout the organisation. Equally, such standards have to be amenable to benet the individual organisations involved in delivering healthcare facilities that can bring through their disparate innovative solutions. The scheme they have in place enables the effective capture of these elements of innovation, which is then standardised to ensure that their standardisation effort reects changing developments within the industry. By doing so the case is able to address the incongruity between innovation and standardisation to achieve a harmonised performance improvement for the organisation and projects. The approach of the case could have wider applicability beyond the health sector, and construction related organisations could deploy the system by customising the CSD to suit their requirements.

Application of the CSD concept


The CSD concept was effectively applied for the development of a large hospital development scheme procured under a PFI arrangement. The scheme amounted to a capital value of 212 (US$ 350) million and provided the fastest build of a hospital of its size in UK. The object of the innovation-standardisation reconciliation was to address the traditional aspects of standardisations such as system approach to building elements and

Figure 5 Innovation participants within the new procurement arrangement

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References
Beer, M., Eisenstat, R.A. and Spector, B. (1990), Why change programs do not produce change, Harvard Business Review, Vol. 68 No. 6, pp. 158-66. Egan, J. (1998), Re-thinking construction, Report of the Construction Task Force on the scope for improving the quality and efciency of UK construction, DETR, available at: www.construction.detr.gov.uk/cis/rethink/index.htm Featherstone, P. and Baldry, D. (2000), The value of the facilities management function in the UK NHS community healthcare sector, Facilities, Vol. 18 Nos 7/8, pp. 302-11. Gibb, A., Groak, S., Sparksman, G. and Neale, R. (1999), Standardisation and Pre-Assembly: Adding Value to Construction Projects, CIRIA, London. Grifth, D.A., Hu, M.Y. and Ryans, J.K. (2000), Process standardisation across intra and inter-cultural relationships, Journal of International Business Studies, Vol. 31 No. 2, pp. 303-24. King, N. (1992), Modelling the innovation process: an empirical comparison of approaches, Journal of Occupational Psychology, Vol. 65, pp. 89-100. Kondo, Y. (2000), Innovation versus standardisation, The TQM Magazine, Vol. 12 No. 1, pp. 6-10. Lansley, P. (1996), Innovation: the role of research, education and practice, in Harlow, P. (Ed.), Construction Papers, No. 59, CIOB, Ascot. Latham, M. (1994), Constructing the team, Joint Review of Procurement and Contractual Arrangements in the United Kingdom Construction Industry: Final Report, HMSO, London.

McCaffer, R. and Edum-Fotwe, F.T. (2000), Engineering and the future of construction industry: realities and emerging possibilities, Proceedings, 4th Asia-Pacic Structural Engineering and Construction Conference (APSEC 2000), Kuala Lumpur, 13-16 September, pp. 31-40. Pavitt, K. (1991), Key characteristics of the large innovating rm, British Journal of Management, Vol. 2, pp. 41-50. Payne, T. and Rees, D. (1999), NHS facilities management: a prescription for change, Facilities, Vol. 17 Nos 7/8, pp. 217-21. Porter, M. (1986), Changing patterns of international competition, California Management Review, Vol. 27, pp. 9-40. Thorpe, A., Edum-Fotwe, F.T. and Mead, S. (1998), Managing construction projects within emerging information-driven business environments, in Fahlstedt, K. (Ed.), Construction and the Environment, Gavle, 7-12 June, Sweden, pp. 1901-10. TTF (2000a), Value for money drivers in the private nance initiative, A Report by Arthur Andersen and Enterprise LSE. TTF (2000b), How to achieve design quality in PFI projects, Technical Note No. 7, available at: www.ogc.gov.uk Tzokas, N. and Saren, M. (1997), On strategy, typologies and the adoption of technological innovations in industrial markets, British Journal of Management, Vol. 8, pp. S91-S105. Van de Ven, A.H. and Rogers, E.M. (1988), Innovations and organisations: critical perspectives, Communication Research, Vol. 15 No. 5, pp. 632-51.

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Innovative 3D-modelling for selecting and locating mobile cranes


Osama Moselhi Sabah Alkass and Mohamed Al-Hussein

Introduction
Selecting and positioning cranes on construction sites are essential tasks for planning construction operations efciently, to avoid bottlenecking in material handling, and for improving productivity. The problem of crane selection is not new; a number of computer systems have been developed for crane selection (Al-Hussein, 1999; Al-Hussein et al., 2000, 2001; Warszawski, 1990; Zhang et al., 1999). Computer modules for planning heavy and critical lifts were also developed using integer programming (Lin and Haas, 1996). Other research involved 3D graphics and simulation (Al-Hussein et al., 1999; Dharwadkar et al., 1994; Hornaday et al., 1993). Database management systems have also been used to support crane selection and lift planning (Al-Hussein et al., 2000; Haas and Lin, 1995). This paper presents a newly developed crane selection methodology, designed to assist practitioners in planning crane operations. The methodology is practical and provides a nearoptimum selection, which considers available cranes. It has been incorporated into a computer system, encompassing a crane selection module, supported by 3D graphics and four databases dedicated, respectively to cranes (geometry and load capacity charts), lift attachments, crane accessories, and project information. The crane database contains information on 48 different crane models, varying in capacity from 20 to 880 tonnes. This set of cranes provides 209 different crane lift congurations; each has a number of lift capacity settings. Those lift capacity settings range in number from 63 to 5,197 per crane conguration. The total number of stored crane lift congurations and their capacity settings is, therefore, in excess of a 100,000. The rigging database contains information on rigging equipment including slings, shackles, and spreader beams. The project information database is essentially a transactional database, designed to store information about projects, clients, and the names of participants. The selection module, the databases, the 3D-CAD and animation modules have been developed using MS-Visual Basic programming language, MS-Access, Auto-CAD
The nancial support of the Natural Science and Engineering Research Council of Canada and that of the industrial partner, GUAY Inc. is gratefully acknowledged. The authors wish to thank specically Jean MacDonald, former Branch Manager of GUAY Inc.; Pascal Bouliane, an engineer for GUAY Inc.; and Donald E. Dickie, the Assistant General Manager of the Construction Safety Association of Ontario for their time, effort, and valuable information.

The authors
Osama Moselhi is an Assistant Professor and Sabah Alkass is a Professor and Department chair, both based at the Department of Building Civil and Environmental Engineering, Concordia University, Quebec, Canada. Mohamed Al-Hussein is an Assistant Professor based at the Department of Civil and Environmental Engineering, University of Alberta, Alberta, Canada.

Keywords
Optimization techniques, Database management systems, Computer aided design

Abstract
This paper provides an overview of a recently developed system for selecting and locating mobile cranes on construction sites. The proposed system provides direct help on two fronts: cost and time savings, and improved safety arrangements. The system has a number of interesting features: a relational database designed to store the cranes geometry-related variables and to present them using powerful graphics; a selection module supported by an algorithm designed to satisfy geometrical requirements and necessary clearances, accounting for site constraints and lift congurations; and 3D animation to facilitate the planning of crane operations. The system provides a near-optimum selection of crane lift congurations, considering available cranes. This paper focuses mainly on case examples to demonstrate and to illustrate the use and capabilities of the developed system. Two actual cases, featuring different site constraints and lift congurations, are presented. In these cases, cranes were selected and their operations planned using the developed system. The ndings of the two cases are discussed and the benets of the proposed methodology are highlighted.

Electronic access
The Emerald Research Register for this journal is available at www.emeraldinsight.com/researchregister The current issue and full text archive of this journal is available at www.emeraldinsight.com/0969-9988.htm
Engineering, Construction and Architectural Management Volume 11 Number 5 2004 pp. 373380 q Emerald Group Publishing Limited ISSN 0969-9988 DOI 10.1108/09699980410558575

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and 3D-Studio environments, respectively. This paper focuses mainly on case examples for demonstrating and illustrating the use and capabilities of the developed system. Two cases are presented, the rst focuses on selection and the second on lift planning and placement. Both cases feature different site constraints and lift congurations.

Crane selection
The developed system consists of four modules: crane selection module, crane location optimization module, 3D-CAD module, and 3D-animation module. All the modules share a system database, which consists of four databases dedicated, respectively to cranes (geometry and load capacity charts), lift attachments, crane accessories, and projects. In addition, there is a library of 3D drawings of crane elements to support both the 3D-CAD module and the 3D-animation module (Figure 1). Detailed description of the selection module and the systems database can be found in (Al-Hussein, 1999; Al-Hussein et al., 2000, 2001). The selection module follows a four-steps process, shown in Figure 2, to determine the technical feasibility of each lift setting retrieved from the crane database. It conrms the lift settings feasibility by ensuring that it satises: (1) the cranes lift capacity; (2) the cranes ability to t on-site; and (3) the boom and jib clearances from adjacent buildings and from the lift itself.
Figure 1 System components

The output consists of a list of technically feasible crane settings for the lift being considered. To avoid duplication, the algorithm developed to mathematically dene these constraints is integrated in the case examples (equations (1)-(6)). The process begins by entering the data pertaining to the lift, to the building, and to the site being considered. The lift weight and size determines the rigging equipment. After the total lift weight (lift and rigging equipment) is determined, the selection module queries all crane congurations and their lift settings from the crane database and retrieves all technically feasible crane congurations. These are the congurations that can perform the lift, accounting for all geometric constraints associated with the lift and the site. To demonstrate the selection process and to illustrate the system capabilities, two cases are presented in the next section.

Case examples
Two actual cases are used in this paper to demonstrate the application of the crane selection module for heavy and critical lifts and its dynamic linkage to the databases. The rst case is used for comparison between the traditional (manual) way of crane selection and the new way using the crane selection module. The second case demonstrates the added value of using 3D-CAD and computer animations in planning lift operations. Case 1: The case considered involved the replacement of major equipment in the heating system for the Hall Building of Concordia

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Figure 2 Selection process (equations are listed in the case study)

University, located downtown in the city of Montreal in Canada. The equipment is located in a service area on the roof of the building shown in Figure 3. The old heating system has been dismantled into parts, the largest of which had a weight of 40,000 lb (18,144 kg). It is required here to select the most suitable crane capable of performing the task, i.e. to carry the total lift weight and reach a total height of 198 ft (60.35 m) and a total width of 97 ft (29 m) measured, respectively from the ground level to the roof of the service area and from the edge of the roof of
Figure 3 Elevation view of Case 1

the building to the centre of the opening in the service area. The selection module considers the dimensions of the site and those of the lift to satisfy all required clearances between the crane and the building, on one hand, and between the lift and both the building and the crane, on the other. The lift weight and its key dimensions are rst entered into the selection module. The lift characteristics limit the search for the rigging type and size. The user has the option of selecting the rigging equipment from the systems rigging database or, alternatively, can enter the height and weight of the rigging of his or her choice. In this particular case, four slings, each 10 ft (3 m) long, were selected, weighing a total of 1,200 lb (544.32 kg). The selection process follows these steps: (1) Satisfy the cranes capacity to carry the lift: the cranes congurations are stored in the database along with their associated gross capacities. These lift capacities are compared with the total lift weights (the weight of the lift and that of all accessories needed to hock the lift to the crane, as in Figure 3. The cranes lifting capacity, as associated with any given conguration, should be greater than or equal to the total lift weight to satisfy equation (1). GC $ T W In which: T W LW H W SLW SPW 2 1

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where: GC is the lift settings gross capacity; TW is the total lift weight; LW is the lift weight; HW is the hock weight; SLW is the total weight of slings; and SPW is the total weight of spreader beams. (2) Ensure that the crane can t on the ground: the shape of the building, the nal location of the lift, and the site constraints are entered into the selection module. Regarding the cranes ability to t geometrically on the site, specied clearances between the surrounding buildings, the cranes carrier, its outriggers, and its counterweights must be satised. Since the building is located in downtown Montreal, cranes were evaluated for their lifting capacity over the side of the crane as shown in Figure 4, to allow space on the street for pedestrians. Based on the site characteristics, the selection module uses its algorithm to check the cranes carrier, its outriggers, and its counterweight tail-swing for possible t on the ground. As shown in Figure 4, the cranes lifting radius (R) must be equal to or greater than the total width of the building or of the obstruction (TBW), plus the default or user-specied value for the carrier clearance to the building (CLR), plus half of the outriggers length (1/2 OTL), to satisfy equation (3). R $ TBW DCLR 1=2 OTL 3

(3) Verify clearances related to the cranes main boom and jib: Crane congurations that satisfy all conditions included in steps 1 and 2 (i.e. the cranes capacity to lift the object and the cranes ability to t on-site) are evaluated for their boom and jib clearances to the load and to the adjacent buildings. There are two possible scenarios: the crane can either lift on its main boom or on its jib. This paper considers lifting on the jib. Three clearances are checked: the clearance between the main boom and the building; that between the lift and the building; and that between the lift and the jib. The main boom must provide sufcient clearance above the height (Hi) of the main building and the service area (Figure 5). Considering the geometry shown in Figure 5, the distance (G1F1) must be larger than the building height (H1), in order to satisfy equation (4). H 1 # G1 F 1 G1 A1 AA1 tana In which: AA1 R 2 D1 D2 D3 where H1 is the main building height; R is the lift conguration radius; a is the boom angle to ground; D1, 2, & 3 is the buildings width. The lift conguration height (H ) must provide clearance above the buildings to account for the cables and the hock block carrying the lift. The height (H ), must be greater than or equal to the sum of the building height (Hi), the lift height (Wh), the rigging height (Rh), and the minimum 4

where R is the lifting radius; TBW is the total building or obstruction widths (nal lift location depth); DCLR is the default (2 ft) or user-dened value for CLR; CLR is the crane clearance to building; OTL is the outriggers length.
Figure 4 Plan view: Case 1

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Figure 5 Elevation view: Case 1 (Necessary clearances)

hock clearance (Min-CL), in order to satisfy equation (5). H $ H 3 W h Rh Min CL 5

To prevent a collision between the lift and the jib, half of the lift width dimension (1/2 WL) must satisfy equation (6). 1=2W L # {H 2 H 3 W h 4 tana} 6

Upon choosing a particular crane conguration and a lift setting from the list, more information and details about this particular conguration and its associated lift setting are displayed on a summary screen. The summary screen includes the type of crane, its lifting radius, tip height, boom and jib length, boom and jib angles, clearances, and crane capacity. A report is then produced,
Figure 6 Selection module list of technically feasible cranes

where H is the lift conguration height; a is the Boom angle to ground; H3 is the total height of the service area; Wh is the Lift height; WL is the Lift width. The search for technically feasible crane congurations and their lift settings begins by choosing the List Cranes option from the Cranes screen, shown in Figure 6. A list of technically feasible crane congurations along with their lift settings is then displayed. The cranes are listed and ranked in a descending order based on their rental costs. However, it should be noted, that the lift settings for each crane are listed based on their sequence of existence in the cranes database and not based on cost. The user has the option to choose the setting that results in less mobilization/demobilization costs (e.g. a shorter boom length for the lattice crane and/or a shorter jib length).

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including a summary of relevant information about the project, the selected crane conguration, its lift capacity, along with a 2D-elevation view of the crane and the building. The report contents are stored in a separate transactional project database. A manual selection was carried out earlier by the cranes supplier and is used here for comparison. The highlighted option in Figure 6 and Table I represents the manually selected conguration and its associated lift setting. It indicates that the selected crane is a Demag TC 2000 with a main boom length of 177 ft (53.95 m) and a lufng jib length of 177 ft (53.95 m). It should be noted that the crane, in this case, is operating at a radius of 138 ft (42.06 m) and at 84 per cent capacity, in view of its 55,000 lb (24,948 kg) gross capacity and the 46,138 lb (20.93 kg) total lift weight (40,000 lb lift, 4,938 lb hook block, and 1,200 lb slings). In contrast to the manual-based selection, which provides only one conguration, the selection module, upon an evaluation of the companys entire eet of cranes, provides the users with not only the same crane but also a list of technically feasible crane congurations. In particular, the list in Table I represents a set of alternatives that uses the same crane, but with shorter boom and/or shorter jib congurations, resulting in a reduced cost (saving on mobilization and demobilization cost). A longer boom/jib length means an additional section(s), therefore an additional truck(s) is required to transport the crane to and from the site. Furthermore, a shorter boom and/or jib will increase the cranes lifting capacities. In addition, the developed selection module using the crane database can signicantly reduce the time and effort involved in the selection process. It also provides the user with alternatives, supported by detailed reports and drawings. Case 2: This case demonstrates the use of the 3D-CAD and 3D-animation modules in locating the crane and in visualizing the lift throughout the entire process from pickup to the nal location. The case involves adding a large lter for a paper pulp manufacturer located in New Richmond,

New Brunswick, Canada. This case exhibits the following constraints: (1) the nal location of the load is surrounded by facilities from all sides; (2) the route to its nal location must pass over a new steel structure, designed to provide permanent support of the lter itself; and (3) to consider the use of an available crane (a 300 tonne M-250 Manitowoc Crawler crane) near the site, as it would result in considerable cost and time savings compared to the alternative of transporting a larger crane from Montreal to the site (over 700 km). Following a similar process similar to that described in Case 1, the crane selection module conrmed the technical feasibility of the crane, but was rather limited in evaluating the safety (avoidance of collision with adjacent structures) of the operation along the lift path. The 3D-CAD module was used to overcome this limitation. The lift and the site were drawn in 3D using AutoCAD and subsequently imported into 3D-Studio Max for animation purposes, as shown in Figure 7. The 3D-animation module demonstrated that the selected crane can adequately perform the lift, considering the two possible options for the placement of the lift. In the rst option, the lift is to be swung over the steel structure used to support the lter, as shown in Figure 8; alternatively, the crane may swing the lter over the existing building, as shown in Figure 9. The 3D-animation module illustrated that the rst option would result in a collision between the lter and the steel structure. This mishap was evident despite the fact that the lter was rotated on the screen around its hoist cable, specically in order to avoid collision with the steel structure. The second option required the removal of objects from the roof of the building. The use of 3D-animation assisted in avoiding cost over-runs, which would have resulted from using a larger crane (880 tonne Dimag TC-4000) and transporting it from Montreal to the site. Guesswork was also eliminated and unsafe and time-consuming on-site testing was avoided.

Table I Comparison between manual and automated selection No 1 2 3 4 5 6 Crane model TC-2000 TC-2000 TC-2000 TC-2000 TC-2000 TC-2000 Main boom length (ft/m) (177/53.95) (138/42.06) (138/42.06) (138/42.06) (157/47.85) (157/47.85) Lufng jib length (ft/m) (177/53.95) (157/47.85) (177/53.95) (177/53.95) (138/42.06) (138/42.06) Lifting radius (ft/m) (138/42.06) (138/42.06) (125/38.10) (138/42.06) (125/38.10) (138/42.06) Lifting capacity (lb/kg) (54880.25/24893.68) (61600.00/27971.76) (61800/28032.48) (57474.60/26070.48) (68600/31116.96) (59400/26943.84) Selection type Manual and selection module Selection module Selection module Selection module Selection module Selection module

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Figure 7 Animated 3D view Case 2

Figure 9 Animated 3D view: proximity from the building

Figure 8 Animated view: proximity from the steel structure

The use of 3D-modelling and animation has also increased the efciency of planners. Once the site is drawn in 3D and the crane and lift are placed, the planner can easily generate any number of views for evaluation and assessment prior to the approval of the plans for executing the lift. The clients engineers and safety representatives received the report along with nine different 2D and 3D drawings of the lift plan. A 3D-animation le displaying the entire crane operation was also included. These visual outputs expedite the work of safety ofcers to facilitate the approval of the lifting plans.

Summary and concluding remarks


A newly developed methodology for crane selection and planning of heavy and critical lifts using cranes has been presented. The developed methodology integrates 3D graphics, a selection module, and four databases. The selection module provides the system with powerful, accurate, and instant evaluation tool for assessing lift congurations retrieved from the crane database. Two case examples were used to demonstrate the effectiveness of the developed methodology in avoiding potential accidents and in reducing the time and cost associated with planning and execution of heavy and critical lifts on construction sites.

Based on the drawings generated in the 3D-animation module, crane operators were able to prepare the site and clear the lift path while waiting for the cranes arrival. This resulted in considerable cost saving for the company and their client.

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3D-modelling for selecting and locating mobile cranes

Engineering, Construction and Architectural Management Volume 11 Number 5 2004 373380

Osama Moselhi, Sabah Alkass and Mohamed Al-Hussein

References
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