Investigation of PESTEL factors driving change in capital project organizations

Abstract

In a volatile, uncertain, complex, and ambiguous environment, organizational change has been a central concern for capital project organizations, that continue to suffer from poor project performance in a growing industry. As such, capital project organizations must understand the changing environment and the factors driving change within their organizations to remain successful in a changing environment and adapt to change. To help the capital projects industry achieve successful organizational change efforts, this paper aims to 1) identify the external factors that are pushing capital project organizations to change and 2) investigate whether these factors impact organizations differently. To achieve the desired objective, a total of 22 PESTEL (political, economic, social, technological, environmental, and legal) factors were identified and validated with a group of 14 subject matter experts and defined via the context of literature. Then, the factors were evaluated via an online survey to understand whether they impact organizations differently based on their age maturity (including contemporary, transitional, and legacy organizations) and type of work (including owners, contractors, and service providers). Findings from this study can provide capital project practitioners and researchers with valuable insights needed to understand the external factors shaping change within the industry.

Determining Decision-Making Factors for Technology Adoption in the Construction Industry

“…However, construction organizations and construction projects serve diverse communities and thus, may "either feel a voluntary obligation to a society based on social expectations, norms, and codes of conduct", or be "placed in situations where they cannot ignore the social community due to rising public pressures" and growing need for sustainable and green construction [127,157]. Moreover, more research is providing evidence of digitalization's ability to enable better eco-friendly performance [158], by investigating how investment behavior is affected by an organization's social performance and responsibilities [159], and bringing organizations closer to their communities [19,160]. As such, the social responsibility factor remains relevant and requires increased attention in research.…”

“…Specifically over the past decade, the industry has made substantial investments in significant technological advancements and trends that have been introduced or pushed by the fourth industrial revolution, also known as Industry 4.0 [18]. Recent events have also pushed organizations to accelerate technology adoption, such as the surge in infrastructure investments, the demand for transparency within the supply chain, the rise in legislation to combat climate change, the arrival of Generation Z into the workforce, and the unexpected and unplanned outbreak of the COVID-19 pandemic that compelled organizations to conduct business in contactless environments and ensure the continuity of their operations [19,20].…”