Procurement in the Context of Commercial Management

Murray, Michael; Langford, David

doi:10.1002/9780470759509.ch4

Cited by 3 publications

(4 citation statements)

References 23 publications

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“…More recently, Hurley (2012a) and Dainty and Loosemore (2013) exposed an array of unfair practices adopted by UK main contractors towards their subcontractors, including: late payments; demanding cash rebates; giving incomplete and inaccurate information; giving unrealistic timeframes; and acting aggressively. Langford and Murray's (2006) review of procurement within the UK construction industry also highlighted a range of unfair business practices and abuses of power in the construction supply chain as did Chen (2002) in the Taiwanese construction industry where actors frequently manipulated payment conditions at their vendors' expense by slowing payments, withholding payments and reducing payment frequency. More recently, Loosemore's (2014) analysis of productivity from a subcontractor's perspective also pointed to a wide range of business practices which subcontractors felt were not only unfair but also lacked integrity and morality.…”

Section: Procedural Justicementioning

confidence: 96%

Inter-organizational unfairness in the construction industry

Loosemore

Lim

2015

Construction Management and Economics

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There are numerous examples of unfair inter-organizational business practices in the construction industry. Conflict and confrontation, corruption, bid-shopping, insecurity of payment and supply chain exploitation are just some examples which have been documented over several decades in many countries. There have been numerous initiatives to make the construction industry a fairer business environment, but these have been largely developed in a conceptual vacuum. Consequently, few advances have been made in making the industry a fairer place to do business. To address the lack of theory in this area and provide a conceptual foundation for future improvement, theories of organizational justice were used as the basis for a survey of 135 consultants, contractors, subcontractors and suppliers from across the Australian construction supply chain. The findings reveal that mainstream theories of justice may need refinement and reorganization to be applied to a construction industry context. Furthermore, in contrast to much previous research, the results indicate that levels of interpersonal, social and informational justice are high within the Australian construction industry. However, they also show that more can be done to improve levels of procedural and distributive justice, particularly in relation to subcontractors and suppliers in the construction supply chain. Many of these findings are transferable to other countries which are culturally, contractually and organizationally similar to the Australian construction industry.

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Section: Procedural Justicementioning

confidence: 96%

Inter-organizational unfairness in the construction industry

Loosemore

Lim

2015

Construction Management and Economics

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“…Although superficially strategies have altered, they have continued to keep the source of profit outside the company, separated from the firm's main activity – construction. Langford and Murray (2006) illustrate this with an example of the private house building sector of the 1970s where spectacular margins were achievable on the back of the site management procedures and more profit came from intelligent land bank acquisition rather than “lean” process improvement at production level. It was impossible for the production system to gain the same importance as commercial deal making, which naturally shifted the power balance toward the latter.…”

Section: Testing the Validity Of Lean As Commercial Strategymentioning

confidence: 99%

“…The construction industry responded with another attempt to generate profitability by changing commercial arrangements on projects rather than improving the construction process itself. Clients can now choose among numerous procurement routes, however no performance guarantees are offered by the supply side meaning this choice is turned into an illusion (Langford and Murray, 2006).…”

Section: Testing the Validity Of Lean As Commercial Strategymentioning

confidence: 99%

Applying lean thinking in commercial management

Zimina

Pasquire

2011

Journal of Financial Management of Property and Construction

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PurposeThe purpose of this paper is to develop two hypotheses explaining the role of commercial management in the lean business model: lean construction is a viable choice of commercial strategy; and lean commercial management is an integral part of lean construction system subordinate to the project delivery. This is completed as a part of conceptualisation of the lean commercial management discipline in construction on the abstract level and followed by deriving its main principles.Design/methodology/approachThe research is based on the direct observation of the companies pursuing lean strategy in construction as well as of those following non‐lean business models, review of case studies and literature.FindingsTraditional commercial arrangements do not comply with the lean construction requirements and may hamper the exploration of its full potential. Lean commercial management differs in the way that its primary role is to support the production process thus it is subordinated to it.Research limitations/implicationsThis research would benefit from links with the existent field of social and economic studies where deeper reasoning to substantiate the theory might be found. Experiments with lean companies in the construction sector are also necessary for theory validation.Practical implicationsThe approach offered in this paper vectors the way of dealing with the commercial decisions within lean enterprise. This potentially can further enhance benefits from lean construction.Originality/valueThe paper builds upon the related research and papers, further advancing the topic of lean construction.

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“…While some projects enjoy wide publicity of their success and enhance research in critical success factors for construction procurement (Parfitt and Savindo, 1993;Pinto and Slevin, 1998;Westerveld, 2003), lessons can be equally learnt from less successful projects fraught with conflict due to cultural incompatibility. Researchers and government reports (Latham, 1994) allege that the construction industry is perceived to have a culture of conflict (Langford and Murray, 2008;Rooke et al, 2003). Disputes on projects can destroy relationships (Fenn, 2008); project performance is consequently reduced and dissatisfaction ensues (in which all participants apportion blame and seek redress from contract provisions).…”

Section: Introductionmentioning

confidence: 99%

Conflict on multi-national construction projects

Fellows

Liu

2010

Proceedings of the Institution of Civil Engineers - Management,

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By definition, multinational construction projects bring together organisations and individuals from different countries and, therefore, almost inevitably, different cultures. As cultures underpin behaviour and behaviour has major impacts on performance-both what is desired and what is realised-issues of cultural compatibility between project participants are important. A further aspect relates to attitudes to conflict and thence disputes regarding their likelihood, causes and consequences-in essence, how they may be managed. This paper aims to critically review the theory and literature regarding cultures and to examine their relevance to selection of multinational project participants, management of conflict and resulting outcomes for project performance and participant satisfaction. Of particular note are aspects of cultural compatibility/cultural distance for both selection of project participants and resultant performance. A common theme in the array of definitions of conflict is anticipated or actual frustration of one actor perceived by that actor to be caused by the actions or inactions of another(s), which impacts on the former's potential outcomes-often couched in terms of goal attainment (McKenna, 2000). Thus, the presence of conflict arises from negative feelings. Management, Procurement and Law 163 Issue MP3 Conflict on multinational construction projects Fellows. Liu 101 102 Management, Procurement and Law 163 Issue MP3 Conflict on multinational construction projects Fellows. Liu

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Procurement in the Context of Commercial Management

Cited by 3 publications

References 23 publications

Inter-organizational unfairness in the construction industry

Inter-organizational unfairness in the construction industry

Applying lean thinking in commercial management

Conflict on multi-national construction projects

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