The importance of the early phase: the case of construction and building projects

Kolltveit, Bjørn Johs.; Grønhaug, Kjell

doi:10.1016/j.ijproman.2004.03.002

Cited by 87 publications

(51 citation statements)

References 1 publication

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“…The early phases of a project are of par� ticular interest because the level of in� fluence on total project costs is highest early on, whereas the impact of early decisions on total project costs is the highest (Hendrickson and Au, 1989). The potential influence of stake�hold� ers is also highest in the early project phases, before a detailed agenda is set and the cost for making changes is low (Kolltveit and Grønhaug, 2004).…”

Section: Asymmetric Information In Construction Projectsmentioning

confidence: 99%

Communication risk in contruction Projects: Application of principal-agent theory

Cerić¹

2012

OTMCJ

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between the project owner, the contractor, and their project managers, as well as between the two project managers working for them. These are the key four parties in any construction project. In construction projects, the principal-agent problem is even more pronounced than is usually the case because of their short-term employment relationship. This problem is characterized by three issues concerning the relationship between the principal and the agent: adverse selection, moral hazard, and hold-up.Asymmetric information is common to all three. An exploratory survey was conducted in order to establish an understanding of the relative importance of the relationships between the key project parties in terms of the above communication risks. The respondents were project managers with considerable experience in the construction field. They agree that the main relationship in a construction project before the contract is signed is that between the project owner and contractor. However, they suggest that the main relationship after the contract is signed is that between the project owner's and contractor's project managers, both of whom are agents, which points to new and promising areas for further research. INTRODUCTIONGood communication between project participants is crucial for project suc� cess. Poor communication is one of the most common project risks (Ceric, 2003;Zerjav and Ceric, 2009 523Information asymmetry is the situa� tion in which one of the two parties is better informed than the other. One of the best known applications of infor� mation asymmetry in economics is the principal-agent problem (e.g., Jäger, 2008). Either buyers or sellers do not have reliable information about a par� ticular product or service. For example, a project owner as buyer is less well informed about the quality of a con� structed facility than a contractor as seller. Similarly, a contractor as buyer is better informed about the key char� acteristics of a construction projectsuch as time, cost, and quality-than an insurance company as seller of project insurance, for instance.The project owner and the contrac� tor form the key relationship in con� struction projects (Turner and Müller, 2004). Delegation of tasks establishes a principal�agent relationship between the project owner and contractor, where the principal (project owner) depends on the agent (contractor) to undertake a task on the principal's behalf (Müller and Turner, 2005). One can act on as� sumption that agents will try to maxi� mize their own benefit even when that may involve a higher damage to the client (Schieg, 2008). This problem is characterized by three issues of risk concerning the relationship between the principal and the agent: adverse selection, moral hazard, and hold�up. Briefly, adverse selection occurs when the principal does not have the exact qualifications of the agent before the contract is signed. In the case of moral hazard, the principal cannot be sure that the agent will fully act on the princi� pal's behalf after the contract is signed. ...

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Section: Asymmetric Information In Construction Projectsmentioning

confidence: 99%

Communication risk in contruction Projects: Application of principal-agent theory

Cerić¹

2012

OTMCJ

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“…These changes may also require deep cultural changes [26]. Some authors add that it is necessary to align organisational effort to build trust [27], which is a prerequisite to working together in the early phase of a project in order to design and plan the project execution and thereby optimise project value generation [3,28].…”

Section: Literature Reviewmentioning

confidence: 99%

A process for developing partnerships with subcontractors in the construction industry: An empirical study

Errasti

Beach

Oyarbide-Zubillaga

et al. 2007

International Journal of Project Management

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“…The total value of project including innovations in the project are described only in the early planning phase of the project (Kolltveit & Grønhaug, 2004;. In general, the companies take decisions about sustainability without complete knowledge of critical decision factors and later while executing the project the companies update their information and revise their decisions for material selection, development procedures and an estimate of resources is required for the completion of projects (Kolltveit & Grønhaug, 2004;Wu & Pagell, 2011).…”

Section: Critical Parametersmentioning

confidence: 99%

The sustainable project management: A review and future possibilities

Chawla¹,

Chanda²,

Angra³

et al. 2018

10.5267/j.jpm

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Sustainability in project operations such as financial, social and environmental sustainability is one of the most prominent issues of the present times to address. The increased focus on sustainable business operations has changed the viewpoint of researchers and corporate community towards the project management. Today sustainability in business operations along with sustainability of natural and environmental resources are of paramount significance which has further caused a huge impact on conception, planning, scheduling and execution of the project management activities. In this paper, a literature review between 1987 and 2018 on different issues affecting the sustainability in project management is carried out. The present study also identifies and discusses the future possibilities to apply computational procedures in order to estimate and optimize the sustainability issues in the management of projects, for example the computational evolutionary algorithms can be applied to formulate the multi-objective decisionmaking problem after considering critical factors of sustainability in the projects and then yielding optimized solutions for the formulated problem to achieve sustainability in the projects. A new integrated framework with the inclusion of feedback function for assessment of each decision and actions taken towards the sustainability of the projects is also identified and presented.

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The importance of the early phase: the case of construction and building projects

Cited by 87 publications

References 1 publication

Communication risk in contruction Projects: Application of principal-agent theory

Communication risk in contruction Projects: Application of principal-agent theory

A process for developing partnerships with subcontractors in the construction industry: An empirical study

The sustainable project management: A review and future possibilities

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