Many organizations are project-based in their operations and process, therefore they had to plan, manage and complete the project more successfully. Such project-based operations put pressure on project manager to plan, integrate, control schedule and improve overall organizational performance. However many organizations are uncertain, complicated and misdirected about the current applications of project management. Consequently, many companies are having major problems in implementing or improving their project management processes. This is especially important to project managers who have responsibility for implementing project management processes and practices in their organization. To perform the project success, engineering and construction organizations need to have high maturity levels and capabilities in performing in project activities.
Myanmar is a developing country which infrastructure needs to develop from buildings, transportation, telecommunication and etc. Many companies are interested in construction business for sure profit, but most projects are not successful. Therefore, how to enhance the success of the projects has become the important task for Myanmar practitioners and researcher. These delays can be avoided or reduced by identifying the major causes of delay and implementing good project management.
The management of construction projects has faced many difficulties, so project management (PM) should be improved. Ms. Saw Sandar made a case study which main objectives were: (1) to study PM implementation and PM process in Myanmar Construction Company; (2) to investigate organizational maturity and project management maturity; (3) How organizational maturity and project management maturity affect the project performance; and (4) How organizational maturity affect the project management maturity
Results of the Study
The results are based on the SPSS analyses.
1. Project management process in Myanmar construction organizations
Most of the construction companies in Myanmar were small and medium enterprises and they were family types. Authority and power was distributed to the lowest level, so the organization structure was flat and communicate easily. In addition, top manager of Myanmar construction companies were spent enough time in running the projects and the quality control system. As a result the quality of construction project was good and they got acceptable client satisfaction.
For the project management, although Myanmar construction projects were created WBS by subdividing the major project deliverables, project managers were weak in looking for impacts to constraint of time and budget when change order occurred. For the procurement management, most project managers were not assured the timely flow of materials and they cannot minimize the procurement to reduce the purchase costs which were excess uses of resources. As a result, most of the construction projects were cost overrun and cannot deliver on time.
2. The dimension of organizational maturity and project management maturity
In this study, organizational maturity is the combination of project management knowledge, project management attitude and actual project practices. The organization will be mature when the organization has knowledge on input, process and output and an understanding of the whole picture. The maturity level of organization will increase if the organization has attitude of low uncertainty avoidance, low power distance, femininity and collectivism which is strongly cohesive force between the groups. In addition, the organizational maturity level will be increased when the actions at top management level, tactical level, admin level and operative level are well applied during the project operation.
Project management maturity is based on nine knowledge area that means project management maturity is the degree of project management best practices which are developed by implementing project integration management, project scope management, project time management, project cost management, project quality management, project human resource management, project communication management, project risk management and project procurement management.
3. Organizational Maturity, Project Management Maturity and Project Performance
The result of analysis showed that the organizational maturity and project management maturity is significantly positively correlated to project performance. Organizational maturity is the combination of project management knowledge, project management attitude and actual project practices. The results indicate that these factors are significantly positively correlated with project performance. That means that the mature the organization, the better the project performance.
The results showed the time criteria for project performance are not correlated with the dimension of organizational maturity of project management knowledge about input, process and output. However the mean score of project management knowledge about input, process and output are not too low, over 3.5 (acceptable). It can be concluded that most of the Myanmar construction companies have acceptable knowledge on how to acquire qualified construction materials and human resources requirements and good understanding in the effective way to operate the projects, the projects were still cost overrun and delay. This is due to external factors such as rising in construction costs, lack in updating technical performance, took long time to meet the government regulation and sometimes the projects were have to stop due to heavy rain and flooding. Therefore, in order to successfully operate the construction project, external factors must have to consider.
Project Performance
Based on the result of this study, it can be concluded that in order to finish the project on time, project scope management, project quality management and project procurement management should be given emphasis when running the project. The researcher found out that most of the Myanmar construction projects were weak in this project management and especially in procurement management. Most developer and construction contractors were suffering from lack of finance, since construction materials were imported and the prices varied all the time. Therefore they cannot manage the materials to reach the project sites on time.
4. Organizational maturity and Project management maturity
The result of analysis showed that the organizational maturity is significantly positively correlated with project management maturity. That means the higher the organizational maturity, the better the project management maturity. On the other hands organizational best practices influenced project management best practices and vice versa.
Organizational maturity assessment provides identifying and measuring the participants knowledge about project management, attitude towards project management and actual project practices of an organization. Furthermore, project management maturity assessment also provides measuring project management maturity by analyzing nine project management knowledge areas. This study analyzed the strength and weakness of project management practices of construction companies and it also identified the problems that the project managers face in the project management process. In addition, companies should benchmark their operation by using these assessment questionnaires which are logical references to make process improvement.
Her thesis abstract is copied and posted.
Abstract
The construction industry is vital for the development of any nation, even though construction projects are commonly faced in uncertainty due to low maturity of project management and the nature of the project. Construction industry is performance industry compare to another industry. To perform the project success, engineering and construction organizations need to have high maturity levels and capabilities in performing in project activities. This study was based on quantitative research through questionnaires and conducted to identify the organizational maturity, project management maturity and how it effect on project performance.
This study was conducted in Myanmar construction companies and construction projects to study organizational maturity and project management maturity. The overall organizational maturity means score for Myanmar construction industry is 3.66. The result found that project management knowledge, project management attitude and actual project practices of organization are prerequisite for organizational maturity. The best project management practices based on nine knowledge area and it can improve the project management maturity.
The result showed that the organizational maturity and project management maturity is significantly positively effect on project performance. That means the mature the organization and project management, the better the project performance. In addition the organizational maturity is also positively correlated with project management maturity. On the other hands, organizational best practices influences project management best practices. This study indicates not only correlation of organizational maturity, project management maturity and project performance but also the best practices for organization and project management
Tuesday, 6 July 2010
Monday, 5 July 2010
Owner’s Contract Administration For Project Time And Cost Control Strategy In Commercial Building Projects
The construction industry development in Vietnam suddenly improved when it becomes a member of World Trade Organization (WTO). Vietnam impressed foreign investors who come to find the opportunities to invest in construction market. In recent years, a number of the investment in commercial construction building has increasing. Majority of foreign investors invest with projects such as office building, commercial center, apartment and commercial center building, hotel, resort with commercial services etc. These projects have gaining a large amount of GDP bringing benefit for economic growth.
Commercial building projects are especially time sensitive. Due to high construction costs and tight deadlines, they require state-of-the-art analysis and design, innovative thinking, quick turnaround, and quality service. Owners and contractors must have a good contract which can contain activities such as change control and contract maintenance, cost monitoring and charges, payment procedures and ordering, management reporting. The critical of contract administration for the contract’s success, and for the provider and customer relationship, could not be underestimated.
Following Patil, causes of delay in completion of projects include:
• Failure to handover full possession of the site within a reasonable time from the date of commencement.
• Failure to supply full and complete set of working drawings, designs, decisions etc., at the commencement of the work or as and when necessary. In some projects the delay is on account of late approved by the engineer to the Engineer to the working drawings, where the same are required to be prepared by the contractor.
• Failure to supply materials and/or power agreed to be supplied by the employer to the contractors as and when needed or demanded.
• Failure to organize and get done the work to be executed by other agencies so as not to hinder the main contractor’s program.
• Failure to pay at proper time the mobilization advance, the running account bills, cost of extra items and also failure to release requisite exchange, etc.
Therefore, weakness of capacity from owner side in managing construction contract lead to project cost overrun compared with estimated cost. It might rise from the shortcoming of preparing of project inception such as:
• Poor project scope definition and control.
• Design changes from client.
• Inadequate preparing for bill of quantity (BoQ)
• Various construction contract types
• Change orders in construction phase
Mr. Nguyen Xuan Phong wanted to find out usual and specific problems which affect directly to contract management on all phase of the entire of project. He conducted a survey to client contract managers to identify successes and fail factors and how these factors affect to project cost and project cost control, then, giving the comment to help clients control the contract to minimize cost overrun in commercial building project. His study objectives were to: (1) investigate the contract administration which can be used by project client to manage commercial project in Vietnam; (2) investigate the existing practices of project client in Vietnam in managing contract; and (3) propose recommendations and develop a process of contract administration by using multi-case study method.
Conclusions
The results of this study are discussed in three main catalogues.
1. Investigate the Owner’s contract administration
Six projects are determined under the applying of multi-case analysis in qualitative methodology and they are gathered into two cases groups. Once, DB cases group reveals the trend of the investor in commercial building in Vietnam when choosing delivery method is employing fast-tracked method for time saving and sooner operate the constructed building. Once, current practices of DBB cases group emphases the weakness of project time scale. For instance, in the life cycle of tender phase it takes time if there were no bidder selected.
Almost cases reveal a usual attitude of the owner when choosing the out sources of contract administration which prove that the need of a contract administration process is highly emphasis. It is able to apply the process whether the owner have or have no in-house staffs of contract administration
2. Commons and specifics activities in existing practical
The existing practical are investigated in effort of attempting to find the commons activities and specific activities by examining the critical problems occurred during all the phases of project.
3. Process of contract administration
Common activities are collected by the selected answers in the papers of multi-choice questionnaire and including verbal interview. A development of construction process between DB and DBB delivery is summarized which will be the fundamental to develop a contract administration process for these kinds of project delivery. Table below contains the full activities for individual stage of project from concept to close-out. It distributes an improvement to the system control capability, reducing cost overrun and project delay, examining potential cost benefit saving.
Recommendation
In area of construction project, to prevent the project from cost overrun and delay and smoothly implement construction activities regarding continue phases within budget and scheduled time contract management engineer need to be aware of construction phases in detail and having their own requirement. Nevertheless, the phases of construction project should be adopted appropriate with contract administration progress. Thus, author develops a process of construction project, purpose a progress of contract administration for DB and DBB projects comprise with other forms of check-list that mentioned on the chapter 2 and on the discussed cases.
His thesis abstract is copied and posted.
Abstract
For construction project, contract is the most important to every project’s participation such as owner, constructor, vendor, and supplier. Therefore, the appropriate contract administration for contract management is vitally important to determine the practical of any construction project. In decade of construction industry, the traditional delivery known as design-bid-build and design-build delivery is widely using in commercial building projects. According to construction industry development, nature of construction project are increase in size and becoming more complex that led to number of shortcoming in management system. Thus, this study conducts to assist the project owner understanding and implementing contract administration in Vietnam.
The study conducts to analysis cases on implementing the design-bid-build and design-build of commercial building projects which are highly increasing on demand of trading services market, domestic and foreign investments in Vietnam by using multi-cases study methodology. The objectives are emphasized on how the owner’s organization interact with the efforts of contractor, implementation of contract administration process, critical problems and their responds during phases of construction project. Data were collected through personal interview from project manager department and contract management members; it included contract documents, relevant reports of these cases.
The study finding covers the lack of contract administration capability in the owner organization to manage the contract. The commons of existing practical are determined as well as problems occurred on practices with specific activities of contract administration of each case. Assisting the owner to overcome the worsening situation, it is recommended that a detailed process of contract administration should be developed that investigate the contract management of each project.
Key words: Construction Contract Administration, Design-Build, Design-Bid-Build, Construction Phases, Project Delivery, Project Owner.
Commercial building projects are especially time sensitive. Due to high construction costs and tight deadlines, they require state-of-the-art analysis and design, innovative thinking, quick turnaround, and quality service. Owners and contractors must have a good contract which can contain activities such as change control and contract maintenance, cost monitoring and charges, payment procedures and ordering, management reporting. The critical of contract administration for the contract’s success, and for the provider and customer relationship, could not be underestimated.
Following Patil, causes of delay in completion of projects include:
• Failure to handover full possession of the site within a reasonable time from the date of commencement.
• Failure to supply full and complete set of working drawings, designs, decisions etc., at the commencement of the work or as and when necessary. In some projects the delay is on account of late approved by the engineer to the Engineer to the working drawings, where the same are required to be prepared by the contractor.
• Failure to supply materials and/or power agreed to be supplied by the employer to the contractors as and when needed or demanded.
• Failure to organize and get done the work to be executed by other agencies so as not to hinder the main contractor’s program.
• Failure to pay at proper time the mobilization advance, the running account bills, cost of extra items and also failure to release requisite exchange, etc.
Therefore, weakness of capacity from owner side in managing construction contract lead to project cost overrun compared with estimated cost. It might rise from the shortcoming of preparing of project inception such as:
• Poor project scope definition and control.
• Design changes from client.
• Inadequate preparing for bill of quantity (BoQ)
• Various construction contract types
• Change orders in construction phase
Mr. Nguyen Xuan Phong wanted to find out usual and specific problems which affect directly to contract management on all phase of the entire of project. He conducted a survey to client contract managers to identify successes and fail factors and how these factors affect to project cost and project cost control, then, giving the comment to help clients control the contract to minimize cost overrun in commercial building project. His study objectives were to: (1) investigate the contract administration which can be used by project client to manage commercial project in Vietnam; (2) investigate the existing practices of project client in Vietnam in managing contract; and (3) propose recommendations and develop a process of contract administration by using multi-case study method.
Conclusions
The results of this study are discussed in three main catalogues.
1. Investigate the Owner’s contract administration
Six projects are determined under the applying of multi-case analysis in qualitative methodology and they are gathered into two cases groups. Once, DB cases group reveals the trend of the investor in commercial building in Vietnam when choosing delivery method is employing fast-tracked method for time saving and sooner operate the constructed building. Once, current practices of DBB cases group emphases the weakness of project time scale. For instance, in the life cycle of tender phase it takes time if there were no bidder selected.
Almost cases reveal a usual attitude of the owner when choosing the out sources of contract administration which prove that the need of a contract administration process is highly emphasis. It is able to apply the process whether the owner have or have no in-house staffs of contract administration
2. Commons and specifics activities in existing practical
The existing practical are investigated in effort of attempting to find the commons activities and specific activities by examining the critical problems occurred during all the phases of project.
3. Process of contract administration
Common activities are collected by the selected answers in the papers of multi-choice questionnaire and including verbal interview. A development of construction process between DB and DBB delivery is summarized which will be the fundamental to develop a contract administration process for these kinds of project delivery. Table below contains the full activities for individual stage of project from concept to close-out. It distributes an improvement to the system control capability, reducing cost overrun and project delay, examining potential cost benefit saving.
Recommendation
In area of construction project, to prevent the project from cost overrun and delay and smoothly implement construction activities regarding continue phases within budget and scheduled time contract management engineer need to be aware of construction phases in detail and having their own requirement. Nevertheless, the phases of construction project should be adopted appropriate with contract administration progress. Thus, author develops a process of construction project, purpose a progress of contract administration for DB and DBB projects comprise with other forms of check-list that mentioned on the chapter 2 and on the discussed cases.
His thesis abstract is copied and posted.
Abstract
For construction project, contract is the most important to every project’s participation such as owner, constructor, vendor, and supplier. Therefore, the appropriate contract administration for contract management is vitally important to determine the practical of any construction project. In decade of construction industry, the traditional delivery known as design-bid-build and design-build delivery is widely using in commercial building projects. According to construction industry development, nature of construction project are increase in size and becoming more complex that led to number of shortcoming in management system. Thus, this study conducts to assist the project owner understanding and implementing contract administration in Vietnam.
The study conducts to analysis cases on implementing the design-bid-build and design-build of commercial building projects which are highly increasing on demand of trading services market, domestic and foreign investments in Vietnam by using multi-cases study methodology. The objectives are emphasized on how the owner’s organization interact with the efforts of contractor, implementation of contract administration process, critical problems and their responds during phases of construction project. Data were collected through personal interview from project manager department and contract management members; it included contract documents, relevant reports of these cases.
The study finding covers the lack of contract administration capability in the owner organization to manage the contract. The commons of existing practical are determined as well as problems occurred on practices with specific activities of contract administration of each case. Assisting the owner to overcome the worsening situation, it is recommended that a detailed process of contract administration should be developed that investigate the contract management of each project.
Key words: Construction Contract Administration, Design-Build, Design-Bid-Build, Construction Phases, Project Delivery, Project Owner.
Wednesday, 30 June 2010
Asset Management in Public and Public Private Partnership (PPP) Hydropower Stations in Nepal
The need of infrastructure assets is increasing day by day. People around the globe are facing the infrastructure deficit each day. Generally government focuses on the new development of the infrastructure without keeping view of management of the infrastructure assets. Negligence to maintain asset to its designed performance level well in time will cost huge investment later on to recover (Hudson et al., 1997). In the past, decisions on investment and maintenance of infrastructure were made as per the political considerations, personal experiences, intuition and resource availability. Instead of considering strategic asset management, controlling backlogs as a short term solution was a common practice to measure success in asset management (Too et al., 2006). The conventional approach of asset management focused much on operation and functionality while failed to prove infrastructure asset as an economic resource where investment could be financially feasible, and socially and environmentally sustainable.
Hydropower, an electricity generation from kinetic energy of water, is a type of infrastructure. Electricity generation in Nepal is inadequate, unreliable and expensive (Asian Development Bank, 2009). For the past five year, public hydropower stations are able to generate only 73% of the designed average annual generation. In the year 2009, NEA has suffered a loss of 4.68 billion with cumulative loss of 12.33 billion (NEA Annual Report, 2009). Furthermore, Nepalese people are suffering from load shedding ranging from 2 hours to 16 hours a day for years. A part of these consequences can be attributed to asset management of hydropower stations. In this connection, it is worthwhile to investigate the asset management in hydropower stations of Nepal.
The contribution of asset management towards the overall performance of the asset is very high. However, the asset management is seldom practiced in a structured approach. Mr. Raj Kumar Lakhe made a study which main objective was to compare asset management practices in public and PPP hydropower stations in Nepal applying the investigation criteria developed in this study. To achieve this main objective, these sub-objectives were required:
1. To explore hydropower asset management factors and then develop criteria to investigate asset management practices in hydropower stations in Nepal.
2. To investigate the existing asset management practices in public and PPP hydropower stations of Nepal and conduct comparative study on distinct features which can affect the operation and maintenance sustainability.
3. To propose and recommend for improving the asset management in hydropower stations in Nepal
Conclusions
Investigation Criteria for Asset Management of Hydropower Stations
The investigation criteria for the asset management practices in hydropower stations along with the identified factors are validated by face-to face interview with the professionals in this sector. The verified criteria under seven factors are: 1) Local people as stakeholder, issues from them and attempts to address those issues from the management 2)Organizational development in terms of capacity development, motivation and training to the plant staff 3)Inventory management system in keeping records of operation and maintenance and balance of the spare parts and tools 4) Generation with respect to annul average designed generation and major outages & breakdowns as key performance indicators at the station level 5) Maintenance approaches adopted by the management 6) Provision of project documents as well as maintaining asset database and 7) Existing conditions of structures and equipment assessment process of the hydropower stations. The criteria are applied in each of two public and PPP power stations in this study. The investigation criteria can be used to other hydropower stations to know the internal strengths and weakness of the power station in managing their hydropower assets for operation and maintenance sustainability.
Public and PPP Practices in Hydropower Asset Management
Hydropower stations in Nepal both public and PPP are weak in managing hydropower assets. The cross case synthesis implied that within public and PPP power stations, there are significant differences in asset management practices. The size of the project basically governs the structure of asset management, the larger the power station, the better the asset management practices. However, lower cost of financing, operation and maintenance cost within the estimated amount and maintaining minimum balance of spare parts are observed in public practices. PPP power stations have shown better structured asset management in terms of project implementation, stakeholder relationship, organizational development, maintaining asset database, monitoring asset condition and carrying preventive maintenance for high reliability. The research findings on distinct features in asset management of public and PPP hydropower projects are summarized in the figure 1 below.
The procurement guidelines set by the donors with specified consultant, contractors and equipment supply are the main causes for the high initial investment cost of public projects. The decision making process is highly bureaucratic and centralized in public sector that is why all issues from local people are dealt at corporate level. Lack of determination and sense of belongings are the results of frequent transfer of staff. Lack of core technical personnel is apparent everywhere in public stations. Less attention to maintenance of existing plants and annual maintenance budget based on history without any initiation in schedule maintenance have made breakdown maintenance as the rule of work. The end result is, huge investment required to bring back the plant in operation, forced outages and hence low plant utilization, low productivity and higher generation cost. The researcher finds difficulties associated with operations of intake gate, trash rack, and other civil and hydro mechanical parts are caused due to lack of attention which do not require the especial expertise in the field.
Different financing structure is practiced but a joint venture with the vendors, contractors and power purchaser is in common practice in PPP projects. A proper mix-up of national and international design and construction team either through competitive bidding or direct negotiations have helped to lower the initial project cost in the context of PPP projects. A direct negotiation with the vendors establishing long term relationship in operation and maintenance are also in practice. A partially decentralized system is there for the operation and maintenance team and most of local peoples’ demands are assessed and addressed by the station management. PPP power stations are effective in retaining staff by implementing motivation schemes and developing sense of belongings of the individual to the company. The structures are intact and schedule maintenance is the maintenance approach carried out incorporating the hydrological cycle of the plant so as to optimize the generation. Higher plant utilization and higher productivity is the end result of the structured asset management practice in the PPP hydropower stations in Nepal.
Recommendations for the Improvements
Instead of taking into account long term structured asset management, tactical asset management is a common practice and measuring the success in terms of overcoming backlogs are the main pitfalls in the asset management of public hydropower power stations. While PPP better know the investment in strategic asset management of hydropower station is financially feasible and economically viable. Following recommendations for the improvements with intended objectives in asset management practices of hydropower stations in Nepal are summarized in the Table 1.
His thesis abstract is copied and posted
Abstract
The hydropower organizations in Nepal are constantly striving to ascertain the value addition to its stakeholders. Traditional delivery system alone has not been able to fulfill and sustain hydropower development. To overcome this limitation, public private partnership (PPP) has been introduced as an innovative public policy tool for the need of dynamism in traditional delivery approach. Despite the abundant hydropower potential in the country, the electricity generation is inadequate, unreliable and expensive. A part of these consequences can be attributed to hydropower asset management. In this connection, this study attempts to investigate the existing asset management practices in public and PPP hydropower stations in Nepal.
Based on the verified investigation criteria, each of two public and PPP hydropower stations are investigated through direct interview with station managers and site observations. The results are analyzed using explanation building as the specific analytic approach in the case study. The distinct features of asset management in public and PPP practices are identified, analyzed and highlighted.
The research findings reflect that both public and PPP practices are weak in managing hydropower assets in Nepal. The cross case synthesis implies that within public and PPP power stations, there are significant differences in asset management practices. However reduced cost of financing, though initial investment is higher by 35% than in PPP, maintaining minimum balance of spare parts and lower operation and maintenance cost are identified in the public practices. While, PPP practices have revealed better structured asset management in terms of project implementation, stakeholder relationship, organizational development, maintaining asset database, monitoring asset condition and carrying preventive maintenance for high reliability which has resulted maximum plant utilization and higher productivity.
Hydropower, an electricity generation from kinetic energy of water, is a type of infrastructure. Electricity generation in Nepal is inadequate, unreliable and expensive (Asian Development Bank, 2009). For the past five year, public hydropower stations are able to generate only 73% of the designed average annual generation. In the year 2009, NEA has suffered a loss of 4.68 billion with cumulative loss of 12.33 billion (NEA Annual Report, 2009). Furthermore, Nepalese people are suffering from load shedding ranging from 2 hours to 16 hours a day for years. A part of these consequences can be attributed to asset management of hydropower stations. In this connection, it is worthwhile to investigate the asset management in hydropower stations of Nepal.
The contribution of asset management towards the overall performance of the asset is very high. However, the asset management is seldom practiced in a structured approach. Mr. Raj Kumar Lakhe made a study which main objective was to compare asset management practices in public and PPP hydropower stations in Nepal applying the investigation criteria developed in this study. To achieve this main objective, these sub-objectives were required:
1. To explore hydropower asset management factors and then develop criteria to investigate asset management practices in hydropower stations in Nepal.
2. To investigate the existing asset management practices in public and PPP hydropower stations of Nepal and conduct comparative study on distinct features which can affect the operation and maintenance sustainability.
3. To propose and recommend for improving the asset management in hydropower stations in Nepal
Conclusions
Investigation Criteria for Asset Management of Hydropower Stations
The investigation criteria for the asset management practices in hydropower stations along with the identified factors are validated by face-to face interview with the professionals in this sector. The verified criteria under seven factors are: 1) Local people as stakeholder, issues from them and attempts to address those issues from the management 2)Organizational development in terms of capacity development, motivation and training to the plant staff 3)Inventory management system in keeping records of operation and maintenance and balance of the spare parts and tools 4) Generation with respect to annul average designed generation and major outages & breakdowns as key performance indicators at the station level 5) Maintenance approaches adopted by the management 6) Provision of project documents as well as maintaining asset database and 7) Existing conditions of structures and equipment assessment process of the hydropower stations. The criteria are applied in each of two public and PPP power stations in this study. The investigation criteria can be used to other hydropower stations to know the internal strengths and weakness of the power station in managing their hydropower assets for operation and maintenance sustainability.
Public and PPP Practices in Hydropower Asset Management
Hydropower stations in Nepal both public and PPP are weak in managing hydropower assets. The cross case synthesis implied that within public and PPP power stations, there are significant differences in asset management practices. The size of the project basically governs the structure of asset management, the larger the power station, the better the asset management practices. However, lower cost of financing, operation and maintenance cost within the estimated amount and maintaining minimum balance of spare parts are observed in public practices. PPP power stations have shown better structured asset management in terms of project implementation, stakeholder relationship, organizational development, maintaining asset database, monitoring asset condition and carrying preventive maintenance for high reliability. The research findings on distinct features in asset management of public and PPP hydropower projects are summarized in the figure 1 below.
The procurement guidelines set by the donors with specified consultant, contractors and equipment supply are the main causes for the high initial investment cost of public projects. The decision making process is highly bureaucratic and centralized in public sector that is why all issues from local people are dealt at corporate level. Lack of determination and sense of belongings are the results of frequent transfer of staff. Lack of core technical personnel is apparent everywhere in public stations. Less attention to maintenance of existing plants and annual maintenance budget based on history without any initiation in schedule maintenance have made breakdown maintenance as the rule of work. The end result is, huge investment required to bring back the plant in operation, forced outages and hence low plant utilization, low productivity and higher generation cost. The researcher finds difficulties associated with operations of intake gate, trash rack, and other civil and hydro mechanical parts are caused due to lack of attention which do not require the especial expertise in the field.
Different financing structure is practiced but a joint venture with the vendors, contractors and power purchaser is in common practice in PPP projects. A proper mix-up of national and international design and construction team either through competitive bidding or direct negotiations have helped to lower the initial project cost in the context of PPP projects. A direct negotiation with the vendors establishing long term relationship in operation and maintenance are also in practice. A partially decentralized system is there for the operation and maintenance team and most of local peoples’ demands are assessed and addressed by the station management. PPP power stations are effective in retaining staff by implementing motivation schemes and developing sense of belongings of the individual to the company. The structures are intact and schedule maintenance is the maintenance approach carried out incorporating the hydrological cycle of the plant so as to optimize the generation. Higher plant utilization and higher productivity is the end result of the structured asset management practice in the PPP hydropower stations in Nepal.
Recommendations for the Improvements
Instead of taking into account long term structured asset management, tactical asset management is a common practice and measuring the success in terms of overcoming backlogs are the main pitfalls in the asset management of public hydropower power stations. While PPP better know the investment in strategic asset management of hydropower station is financially feasible and economically viable. Following recommendations for the improvements with intended objectives in asset management practices of hydropower stations in Nepal are summarized in the Table 1.
His thesis abstract is copied and posted
Abstract
The hydropower organizations in Nepal are constantly striving to ascertain the value addition to its stakeholders. Traditional delivery system alone has not been able to fulfill and sustain hydropower development. To overcome this limitation, public private partnership (PPP) has been introduced as an innovative public policy tool for the need of dynamism in traditional delivery approach. Despite the abundant hydropower potential in the country, the electricity generation is inadequate, unreliable and expensive. A part of these consequences can be attributed to hydropower asset management. In this connection, this study attempts to investigate the existing asset management practices in public and PPP hydropower stations in Nepal.
Based on the verified investigation criteria, each of two public and PPP hydropower stations are investigated through direct interview with station managers and site observations. The results are analyzed using explanation building as the specific analytic approach in the case study. The distinct features of asset management in public and PPP practices are identified, analyzed and highlighted.
The research findings reflect that both public and PPP practices are weak in managing hydropower assets in Nepal. The cross case synthesis implies that within public and PPP power stations, there are significant differences in asset management practices. However reduced cost of financing, though initial investment is higher by 35% than in PPP, maintaining minimum balance of spare parts and lower operation and maintenance cost are identified in the public practices. While, PPP practices have revealed better structured asset management in terms of project implementation, stakeholder relationship, organizational development, maintaining asset database, monitoring asset condition and carrying preventive maintenance for high reliability which has resulted maximum plant utilization and higher productivity.
Tuesday, 29 June 2010
Cultural Dimensions Of Construction Engineers In Thailand Related To On-Site Management
Each individual have their own national culture which is inherent to their life when they live in their home country. Hofstede (1980) argued that people carry “mental programs” that are developed and reinforced through their experience, and these “mental programs” contain a component of national culture.
Cultural aspect in construction industry is also important. Hofstede (2005) stated that culture is more often a source of conflict than of synergy and cultural are a nuisance at best and often a disaster. People in management level know that culture has impact on their work but they do not think that culture can cause huge problems. However, many conflicts and problems are caused by national culture.
Construction industries are multidimensional and complex. It involves not only technical and financial aspect but also social aspect. All social behavior is related to culturally-based. Mishandling and mismanaging in culture different can cause risks. Construction company that would like to complete or manage construction projects must understand culture clearly (Pheng et.al, 2000). It is important for the engineer to understand about national culture that has effects on construction operation. It is necessary to understand national culture which may lead to conflict among organization and is related to project performance and achievement. The researcher tried to investigate the effect of cultural dimensions on behaviors, base on national culture dimensions, in construction organization in Thailand.
Mr. Adithep Roobleak made a study which objectives were to: (1) identify national cultural dimensions of the construction engineers; (20 investigate the practical behavior base on the cultural dimensions of the engineers at construction sites; and (3) propose appropriate recommendations to improve the behavior of construction engineers concerning effective management of construction sites.
Conclusions
The conclusions were brought out based on data analysis to corroborate the objectives of this study. The first objective was achieved by distributing questionnaire to identify culture dimension of the construction engineer. Mean calculating was used for test the culture dimension different between Thai people and the construction engineer. The second objective was done by interviewing the construction engineer and site observation. The researcher investigates behavior of the construction engineer affected by Hofstede cultural dimensions. The third objective was achieved after interview the construction engineer.
The culture dimensions on the construction engineer
Power distance overall score on the construction engineer is 2.62 (52.4 out of hundred). The score is not different from Thai national index (64.0) by statistical testing. The construction engineers tend to not accepting the feedback from their subordinate. They always give the order to their subordinates by using command and by passing the boss command is insubordination. However, the decision making for them should be done by group more than taking the boss decision. This means that the construction engineers keep distance between them and their subordinates. According to the survey, the construction engineers who have higher age tend to have more power distance also.
Uncertainty avoidance overall score on the construction engineers is 3.34 (66.8 out of hundred). The score is not different from Thai national index (65.0) by statistical testing. The construction engineers always go to observe work progress because they do not want to eliminate all the risk that may happen. They do not delegate that much work to their subordinates because they do not want to take responsibility after their subordinates fail. They using the new innovation for construction sometime only because they think that it may not work in their projects.
However, they do not give much punishment to their subordinates who fail to do the work because they want to keep their relationship. This can indicate that the construction engineers have a bit on high uncertainty avoidance.
Collectivism overall score on the construction engineers is 3.97 (79.4 out of hundred). The score is not different from Thai national index (80.0) by statistical testing. The construction engineers extremely want to work in team. They do not want to work individually and they prefer to get group training. They think that the reward should be given to everybody not to personally. They feel that group meeting is very important for them. This can point out that the construction engineers have high collectivism.
Masculinity overall score on the construction engineers is 1.54 (30.8 out of hundred). The score is not different from Thai national index (34.0) by statistical testing. The construction engineers are not emphasizing on project’s achievement rather than maintain relationship among others. It is more important for them to have better connection. They give same treatment to different gender in the project and they are not assertive leader. There are not large amounts of challenging work that they give to their subordinates. These indicators reveal the construction engineers to be more on femininity.
Long term orientation overall score on the construction engineers is 2.03 (40.6 out of hundred). The score is different from Thai national index (56.0) by statistical testing. The engineers have little commitment when they do the work and they do not want to stay with the company for long time. Actually Thai are long term oriented but most of the respondents are young so they believe that they can go for new company. The respondent company at that time was not in stable condition. This is the main reason that leads them to be short term oriented.
Recommendation to improve On-site management
For achieving the final objective of this study, the last research objective is completed by proposing the recommendation for improving on site culture management that appropriate Thai construction.
Employing the new construction is affected by high uncertainty avoidance. Working in group and taking group decision can reduce uncertainty avoidance in person. Thus, the company should set committee for taking decision about the new technique together. It is not only engineer from site operation who takes decision. High power distance also effect to using the new technique. Power distance can be reduced by having social activity between engineer and worker. Every construction site should arrange trips for everybody. This method reduces distance between engineer and worker.
Monitoring work progress is affected by high power distance. The workers do not want to tell real progress which is delay to engineers who has high distance between them. Thus, high power distance should be reduced. It can be reduced by having social activity like previous topic also. Uncertainty avoidance affects monitoring also. It has positive impact. The construction engineer has high uncertainty avoidance which makes them always check and monitor work progress.
Instructing can be affected by high power distance. Engineers who have high power distance give order by command. They do not persuade their worker. Even though some worker get use to with being told to do the work. It is still better to give orders by persuade the worker. The best way to motivate worker is giving their need according to Maslow theory. However, good relationship is also important. The construction engineers are feminism so they concern about relationship. This is positive factor for on-site construction management.
High power distance has negative impact to site safety. Thus, safety training should be done in group. The engineer and worker should be together in safety training. This makes reduction the distance between them. Collectivism is positive factor for safety because the engineer working together can identify more hazards. The worker also when working in group can communicate more about safety issues.
Feminism also takes positive impact for safety. Either engineer or worker who are feminism when face with unsafe behaviors or condition, they tend to stop working rather than continue the work. They do not concern only getting the job done. However, Feminism makes the engineers or workers do not report to safety officers about unsafe behaviors that their friend did during the work. It is because they do not want to lose relationship. It is common in Thailand for giving punishment or blame to the person who did unsafe behaviors. Thus, safety officer themselves should not look for the person who did it for giving punishment. They should find solution of it.
His thesis abstract is copied and posted.
ABSTRACT
Many studies have shown that national culture varies with different management practice, such as strategic decision making, leadership style and human resource management. The differences between management practices and national culture would affect performance at the workplace. This study tried to investigate the effect of different cultures dimensions, based on national culture dimensions, on behaviors of construction engineers in Thailand and tried to propose appropriate recommendations for effective management of construction sites.
The study used questionnaire as a research instrument. The questionnaire explores the national culture in each dimension of construction engineers. Interviewing and site observation was conducted to gain more understanding about the construction engineers. Data analysis is conducted by using explanation which all important evidences were describe and statistic methods were used to analyze data from questionnaire surveys.
The result from the study showed that every dimension of national cultures have an impact on the construction engineers. High power distance of the engineer mainly causes many negative impacts for managing construction projects. Uncertainty avoidance, Femininity and individualism also take both negative and positive impact to the projects. Long term orientations of the engineers are different from national score. The engineers are shore term oriented which cause them to have short term carrier and low commitment with company. The culture dimensions cause the engineer do things different from others who have different score in the culture dimensions. Those behaviors have an impact on site operation. Employing new technique, planning and monitoring, Instructing and site safety are affected by those behaviors. Thus, on site operation are effected by national culture. Adjusting the national culture dimension either increase or decrease lead to effective on-site management.
Cultural aspect in construction industry is also important. Hofstede (2005) stated that culture is more often a source of conflict than of synergy and cultural are a nuisance at best and often a disaster. People in management level know that culture has impact on their work but they do not think that culture can cause huge problems. However, many conflicts and problems are caused by national culture.
Construction industries are multidimensional and complex. It involves not only technical and financial aspect but also social aspect. All social behavior is related to culturally-based. Mishandling and mismanaging in culture different can cause risks. Construction company that would like to complete or manage construction projects must understand culture clearly (Pheng et.al, 2000). It is important for the engineer to understand about national culture that has effects on construction operation. It is necessary to understand national culture which may lead to conflict among organization and is related to project performance and achievement. The researcher tried to investigate the effect of cultural dimensions on behaviors, base on national culture dimensions, in construction organization in Thailand.
Mr. Adithep Roobleak made a study which objectives were to: (1) identify national cultural dimensions of the construction engineers; (20 investigate the practical behavior base on the cultural dimensions of the engineers at construction sites; and (3) propose appropriate recommendations to improve the behavior of construction engineers concerning effective management of construction sites.
Conclusions
The conclusions were brought out based on data analysis to corroborate the objectives of this study. The first objective was achieved by distributing questionnaire to identify culture dimension of the construction engineer. Mean calculating was used for test the culture dimension different between Thai people and the construction engineer. The second objective was done by interviewing the construction engineer and site observation. The researcher investigates behavior of the construction engineer affected by Hofstede cultural dimensions. The third objective was achieved after interview the construction engineer.
The culture dimensions on the construction engineer
Power distance overall score on the construction engineer is 2.62 (52.4 out of hundred). The score is not different from Thai national index (64.0) by statistical testing. The construction engineers tend to not accepting the feedback from their subordinate. They always give the order to their subordinates by using command and by passing the boss command is insubordination. However, the decision making for them should be done by group more than taking the boss decision. This means that the construction engineers keep distance between them and their subordinates. According to the survey, the construction engineers who have higher age tend to have more power distance also.
Uncertainty avoidance overall score on the construction engineers is 3.34 (66.8 out of hundred). The score is not different from Thai national index (65.0) by statistical testing. The construction engineers always go to observe work progress because they do not want to eliminate all the risk that may happen. They do not delegate that much work to their subordinates because they do not want to take responsibility after their subordinates fail. They using the new innovation for construction sometime only because they think that it may not work in their projects.
However, they do not give much punishment to their subordinates who fail to do the work because they want to keep their relationship. This can indicate that the construction engineers have a bit on high uncertainty avoidance.
Collectivism overall score on the construction engineers is 3.97 (79.4 out of hundred). The score is not different from Thai national index (80.0) by statistical testing. The construction engineers extremely want to work in team. They do not want to work individually and they prefer to get group training. They think that the reward should be given to everybody not to personally. They feel that group meeting is very important for them. This can point out that the construction engineers have high collectivism.
Masculinity overall score on the construction engineers is 1.54 (30.8 out of hundred). The score is not different from Thai national index (34.0) by statistical testing. The construction engineers are not emphasizing on project’s achievement rather than maintain relationship among others. It is more important for them to have better connection. They give same treatment to different gender in the project and they are not assertive leader. There are not large amounts of challenging work that they give to their subordinates. These indicators reveal the construction engineers to be more on femininity.
Long term orientation overall score on the construction engineers is 2.03 (40.6 out of hundred). The score is different from Thai national index (56.0) by statistical testing. The engineers have little commitment when they do the work and they do not want to stay with the company for long time. Actually Thai are long term oriented but most of the respondents are young so they believe that they can go for new company. The respondent company at that time was not in stable condition. This is the main reason that leads them to be short term oriented.
Recommendation to improve On-site management
For achieving the final objective of this study, the last research objective is completed by proposing the recommendation for improving on site culture management that appropriate Thai construction.
Employing the new construction is affected by high uncertainty avoidance. Working in group and taking group decision can reduce uncertainty avoidance in person. Thus, the company should set committee for taking decision about the new technique together. It is not only engineer from site operation who takes decision. High power distance also effect to using the new technique. Power distance can be reduced by having social activity between engineer and worker. Every construction site should arrange trips for everybody. This method reduces distance between engineer and worker.
Monitoring work progress is affected by high power distance. The workers do not want to tell real progress which is delay to engineers who has high distance between them. Thus, high power distance should be reduced. It can be reduced by having social activity like previous topic also. Uncertainty avoidance affects monitoring also. It has positive impact. The construction engineer has high uncertainty avoidance which makes them always check and monitor work progress.
Instructing can be affected by high power distance. Engineers who have high power distance give order by command. They do not persuade their worker. Even though some worker get use to with being told to do the work. It is still better to give orders by persuade the worker. The best way to motivate worker is giving their need according to Maslow theory. However, good relationship is also important. The construction engineers are feminism so they concern about relationship. This is positive factor for on-site construction management.
High power distance has negative impact to site safety. Thus, safety training should be done in group. The engineer and worker should be together in safety training. This makes reduction the distance between them. Collectivism is positive factor for safety because the engineer working together can identify more hazards. The worker also when working in group can communicate more about safety issues.
Feminism also takes positive impact for safety. Either engineer or worker who are feminism when face with unsafe behaviors or condition, they tend to stop working rather than continue the work. They do not concern only getting the job done. However, Feminism makes the engineers or workers do not report to safety officers about unsafe behaviors that their friend did during the work. It is because they do not want to lose relationship. It is common in Thailand for giving punishment or blame to the person who did unsafe behaviors. Thus, safety officer themselves should not look for the person who did it for giving punishment. They should find solution of it.
His thesis abstract is copied and posted.
ABSTRACT
Many studies have shown that national culture varies with different management practice, such as strategic decision making, leadership style and human resource management. The differences between management practices and national culture would affect performance at the workplace. This study tried to investigate the effect of different cultures dimensions, based on national culture dimensions, on behaviors of construction engineers in Thailand and tried to propose appropriate recommendations for effective management of construction sites.
The study used questionnaire as a research instrument. The questionnaire explores the national culture in each dimension of construction engineers. Interviewing and site observation was conducted to gain more understanding about the construction engineers. Data analysis is conducted by using explanation which all important evidences were describe and statistic methods were used to analyze data from questionnaire surveys.
The result from the study showed that every dimension of national cultures have an impact on the construction engineers. High power distance of the engineer mainly causes many negative impacts for managing construction projects. Uncertainty avoidance, Femininity and individualism also take both negative and positive impact to the projects. Long term orientations of the engineers are different from national score. The engineers are shore term oriented which cause them to have short term carrier and low commitment with company. The culture dimensions cause the engineer do things different from others who have different score in the culture dimensions. Those behaviors have an impact on site operation. Employing new technique, planning and monitoring, Instructing and site safety are affected by those behaviors. Thus, on site operation are effected by national culture. Adjusting the national culture dimension either increase or decrease lead to effective on-site management.
Monday, 28 June 2010
Relationship Marketing In Thai SME Contractors: A Case Study Of Bangkok And Khonkaen SME Contractors
Nowadays, clients are more knowledgeable, more informed, more aware of, and more expecting about anything that is surrounding the construction environment. Clients have more choices because of more contractors are competing in the market as oppose to less clients’ investment in the projects. The client wants the best possible value from contractors to satisfactorily accomplish their project. The satisfaction that a client was provided by a contractor in terms of construction product and construction services was directly influencing the client’s willingness to select that contractor in forthcoming projects.
In Thailand, after the crisis, contractors also faced this situation similar to other countries. There are more players in the market compared with the decreasing of construction’s investment volume. Contractors must form themselves to outstanding among their competitors to maintain and gain their clients and market share. Moreover, the construction industry will be a key engine of economic stimulus as the Thai Government aims to use construction of large scale infrastructure projects to stir investment and create jobs, thus stimulating the economy in the short-term. These will be an optimal opportunity for contractors to catch up the clients as much as possible. Relationship marketing therefore became a tool for attracting clients who desired personalized service. Thus, using marketing as a source to identify clients’ need is becoming an important process and priority for success in Thai construction industry.
As describe previously, contractors have to be effectively evolved to handle a dynamic condition in this present market environment. Rather than aligning the organizations through the long-terms direction, contractors must aware of sensitive changes that will generate affects among their stakeholder; especially to clients whom control the volume of investments. Therefore, relationship marketing tends to be an organization’s capability to complete a missing puzzle that a few organizations point out as an important factor.
Mr. Amnarch Pirmsinthavee made a study which objectives were to investigate and identify relationship marketing activities of contractors that occur in Thai construction industry. The detailed objectives were to: (1) investigate the relationship marketing activities of SME contractors in Thai construction industry; (2) explore a perception and understanding of contractor’s relationship marketing and the significant key marketing activities those are driven by Thai SME contractors, Bangkok and Khonkaen organizations; and (3) propose a recommendation that guides the contractors to effectively implement marketing activities for competitiveness of the organization.
Results
In order to achieve the objectives of study, the analysis framework consists of 4 processes. In the first process, the researcher identifies the definition of factors influencing the Relationship Marketing (RM) that contribute to SME contractors in Thailand by reviewing the literature and interviewing the representative of construction companies. The researcher acquires 25 activities that influence the relationship marketing in Thai SME contractors from literature review and interviewing the representative of the organizations.
The first objective was achieved by implementing two statistical methods, Descriptive Analysis and Mann-Whitney U Test. The descriptive analysis is to classify the importance level of marketing activities into a mean and ranking. The hypothesis testing (Mann-Whitney U Test) is to test the perception difference between SME contractors located in Bangkok (BKK) and SME contractors located in Khonkaen (KK) by proving the hypothesis as following:
H0: There is no difference between the perception of SME contractors located in Bangkok and perception of SME contractors located in Khonkaen on marketing activities influencing the relationship marketing.
H1: There is a difference between the perception of SME contractors located in Bangkok and perception of SME contractors located in Khonkaen on marketing activities influencing the relationship marketing.
The descriptive analysis is shown in below, the marketing activities (the first top 10th) influencing the relationship marketing that affects the SME contractors located in Thailand are Adjusting the difficulty in working period, Network, Weekly meeting within the organization, Organization’s evaluating, Improving through the result of evaluating, Relationship with consultant, Commitment in working performance, Relationship with client after bidding period, Relationship with a client’s employee, Low price bidding, Relationship with competitors, and Hiring new employees.
Table: Analysis of Marketing Activities Influencing Relationship Marketing that affects SME contractors located in Thailand
All these top 10th activities are classified as a high importance level for influencing the relationship marketing. There are 5 activities from Performance Satisfaction, 4 activities from Cooperation and each 1 activity from Commitment, Trust and Mutual Goals. The groups of each category are shown below:
- Performance Satisfaction
- Commitment in working performance
- Low price bidding
- Organization’s evaluating
- Improving through the result of evaluating
- Hiring new employees
Cooperation
- Relationship with consultant
- Adjusting the difficulty in working period
- Weekly meeting within the organization
- Relationship with a client’s employee
Commitment
- Relationship with client after bidding period
Trust
- Network
Mutual goals (relational partnering)
- Relationship with competitors
To achieve the second and the third objective of this study, the researcher has to clarify the perception difference between SME contractors located in Bangkok (BKK) and SME contractors located in Khonkaen (KK) of Thailand. After that, the researcher attempt to propose the recommendations and strategic guideline that appropriate for SME contractors on each key activity that influencing the relationship marketing. Then, the result was explained and summarized in each category.
Recommendations for Improvement
In order to achieve the last objective of this study, the researcher proposes that Thai SME organizations should more concern on the relationship marketing activities regarding to the result. Because they could perform the organizations the competitive advantage beyond others. The major consequences of implementing the marketing activities are increasing the opportunities in repetitative purchasing the service and entrancing of new clients, and also gaining the client’s loyalty. According to the economic crisis during this day, the researcher believes that these activities could help the organization in increasing the volume of dealt projects. Anyway, the recommendations and benefits of the first top 10th activities are presented in table below.
His thesis abstract is copied and posted.
Abstract
Nowadays, a contractor has to survive in the severely competitive construction industry in Thailand. Unfortunately, many Thai SME contractors were bankrupted during an economic crisis. Survived contractors have to remain themselves by implementing many strategies. Marketing strategy is also being a competitive strategy that many SME contractors are neglected. Therefore, this study aims to investigate key activities that influencing the relationship marketing in Thai SME contractor and propose the recommendation that effectively implement to be a competitive advantage in the SME construction industry.
The researcher considered to use a quantitative research by implementing survey design. There are 2 statistical methodologies were implemented to analyze the data from questionnaire surveys: Descriptive Analysis and Mann-Whitney U Test. The descriptive analysis is to classify the importance level of marketing activities into a mean and ranking. The hypothesis testing (Mann-Whitney U Test) is to test the perception difference between SME contractors located in Bangkok (BKK) and SME contractors located in Khonkaen (KK).
The result were found that there are 10 key activities that influencing the relationship marketing as the high influence including of: Adjusting the difficulty in working period, Network, Weekly meeting within the organization, Organization’s evaluating, Improving through the result of evaluating, Relationship with consultant, Commitment in working performance, Relationship with client after bidding period, Relationship with a client’s employee, Low price bidding, Relationship with competitors, and Hiring new employees. The benefits and recommendations for improving the relationship marketing strategy of the first top 10th keys activities were discussed in this study.
In Thailand, after the crisis, contractors also faced this situation similar to other countries. There are more players in the market compared with the decreasing of construction’s investment volume. Contractors must form themselves to outstanding among their competitors to maintain and gain their clients and market share. Moreover, the construction industry will be a key engine of economic stimulus as the Thai Government aims to use construction of large scale infrastructure projects to stir investment and create jobs, thus stimulating the economy in the short-term. These will be an optimal opportunity for contractors to catch up the clients as much as possible. Relationship marketing therefore became a tool for attracting clients who desired personalized service. Thus, using marketing as a source to identify clients’ need is becoming an important process and priority for success in Thai construction industry.
As describe previously, contractors have to be effectively evolved to handle a dynamic condition in this present market environment. Rather than aligning the organizations through the long-terms direction, contractors must aware of sensitive changes that will generate affects among their stakeholder; especially to clients whom control the volume of investments. Therefore, relationship marketing tends to be an organization’s capability to complete a missing puzzle that a few organizations point out as an important factor.
Mr. Amnarch Pirmsinthavee made a study which objectives were to investigate and identify relationship marketing activities of contractors that occur in Thai construction industry. The detailed objectives were to: (1) investigate the relationship marketing activities of SME contractors in Thai construction industry; (2) explore a perception and understanding of contractor’s relationship marketing and the significant key marketing activities those are driven by Thai SME contractors, Bangkok and Khonkaen organizations; and (3) propose a recommendation that guides the contractors to effectively implement marketing activities for competitiveness of the organization.
Results
In order to achieve the objectives of study, the analysis framework consists of 4 processes. In the first process, the researcher identifies the definition of factors influencing the Relationship Marketing (RM) that contribute to SME contractors in Thailand by reviewing the literature and interviewing the representative of construction companies. The researcher acquires 25 activities that influence the relationship marketing in Thai SME contractors from literature review and interviewing the representative of the organizations.
The first objective was achieved by implementing two statistical methods, Descriptive Analysis and Mann-Whitney U Test. The descriptive analysis is to classify the importance level of marketing activities into a mean and ranking. The hypothesis testing (Mann-Whitney U Test) is to test the perception difference between SME contractors located in Bangkok (BKK) and SME contractors located in Khonkaen (KK) by proving the hypothesis as following:
H0: There is no difference between the perception of SME contractors located in Bangkok and perception of SME contractors located in Khonkaen on marketing activities influencing the relationship marketing.
H1: There is a difference between the perception of SME contractors located in Bangkok and perception of SME contractors located in Khonkaen on marketing activities influencing the relationship marketing.
The descriptive analysis is shown in below, the marketing activities (the first top 10th) influencing the relationship marketing that affects the SME contractors located in Thailand are Adjusting the difficulty in working period, Network, Weekly meeting within the organization, Organization’s evaluating, Improving through the result of evaluating, Relationship with consultant, Commitment in working performance, Relationship with client after bidding period, Relationship with a client’s employee, Low price bidding, Relationship with competitors, and Hiring new employees.
Table: Analysis of Marketing Activities Influencing Relationship Marketing that affects SME contractors located in Thailand
All these top 10th activities are classified as a high importance level for influencing the relationship marketing. There are 5 activities from Performance Satisfaction, 4 activities from Cooperation and each 1 activity from Commitment, Trust and Mutual Goals. The groups of each category are shown below:
- Performance Satisfaction
- Commitment in working performance
- Low price bidding
- Organization’s evaluating
- Improving through the result of evaluating
- Hiring new employees
Cooperation
- Relationship with consultant
- Adjusting the difficulty in working period
- Weekly meeting within the organization
- Relationship with a client’s employee
Commitment
- Relationship with client after bidding period
Trust
- Network
Mutual goals (relational partnering)
- Relationship with competitors
To achieve the second and the third objective of this study, the researcher has to clarify the perception difference between SME contractors located in Bangkok (BKK) and SME contractors located in Khonkaen (KK) of Thailand. After that, the researcher attempt to propose the recommendations and strategic guideline that appropriate for SME contractors on each key activity that influencing the relationship marketing. Then, the result was explained and summarized in each category.
Recommendations for Improvement
In order to achieve the last objective of this study, the researcher proposes that Thai SME organizations should more concern on the relationship marketing activities regarding to the result. Because they could perform the organizations the competitive advantage beyond others. The major consequences of implementing the marketing activities are increasing the opportunities in repetitative purchasing the service and entrancing of new clients, and also gaining the client’s loyalty. According to the economic crisis during this day, the researcher believes that these activities could help the organization in increasing the volume of dealt projects. Anyway, the recommendations and benefits of the first top 10th activities are presented in table below.
His thesis abstract is copied and posted.
Abstract
Nowadays, a contractor has to survive in the severely competitive construction industry in Thailand. Unfortunately, many Thai SME contractors were bankrupted during an economic crisis. Survived contractors have to remain themselves by implementing many strategies. Marketing strategy is also being a competitive strategy that many SME contractors are neglected. Therefore, this study aims to investigate key activities that influencing the relationship marketing in Thai SME contractor and propose the recommendation that effectively implement to be a competitive advantage in the SME construction industry.
The researcher considered to use a quantitative research by implementing survey design. There are 2 statistical methodologies were implemented to analyze the data from questionnaire surveys: Descriptive Analysis and Mann-Whitney U Test. The descriptive analysis is to classify the importance level of marketing activities into a mean and ranking. The hypothesis testing (Mann-Whitney U Test) is to test the perception difference between SME contractors located in Bangkok (BKK) and SME contractors located in Khonkaen (KK).
The result were found that there are 10 key activities that influencing the relationship marketing as the high influence including of: Adjusting the difficulty in working period, Network, Weekly meeting within the organization, Organization’s evaluating, Improving through the result of evaluating, Relationship with consultant, Commitment in working performance, Relationship with client after bidding period, Relationship with a client’s employee, Low price bidding, Relationship with competitors, and Hiring new employees. The benefits and recommendations for improving the relationship marketing strategy of the first top 10th keys activities were discussed in this study.
Wednesday, 23 June 2010
Application Of Project Management Functions In Small Construction Companies: Case Study Of Small Contractors In Hochiminh City
The organization of Small and Medium Enterprises in construction in Viet Nam is very simple, with a maximum of 10 office personnel including administrator, engineer, accountant or human resources. Some functions have no people to do it while some people have to do many jobs at the same time. The fact is that, SME could not hire good employees with low salary.
The boss of SME usually is engineer or foreman, they are very good in their job but they didn’t have enough knowledge about business. They do the project base on their experience and learn from their fault. They have no project management process or the process is not useful. After one project, there are no people collecting data for the improvement of the next project. Some of management concepts like quality concept are not documented and analyzed.
The small construction companies have limited resources, such as capital, labor, technical, experiences, etc, so they cannot run many projects at the same time or they cannot get big project.
Le Hoai Viet made a study which objectives were to: (1) develop the checklist to identify the project management in practice of small construction enterprise; (2) use the checklist to investigate the selected companies in order to analyze the strengths and the weaknesses of the management in practice; and (3) propose recommendation for project management improvement.
Conclusions:
The tables 1-3 below indicate the strengths and weaknesses of the three companies in project management.
Recommendation
Study suggests measures to improve the management process of the case study companies. Note that the proposal cannot be applied to other companies.
Proposed organizational structure: All three companies should apply matrix organizational chart as shown in Figure below.
Proposed costs management using WBS to divide and control costs. The company should focus to investment objectives to reduce indirect costs.
Proposed time management: using Gantt charts. The company should determine the cause of delay to take measures to resolve and avoid repeating mistakes. Doing closeout process when project finish that is the basis for the next projects.
Proposed quality management: to understand the definition of quality. Identify management is the key of quality control. Complete process of quality management and a commitment to comprehensive quality. Training for employees is the encourage solution.
Procurement management: improve management of procurement processes, which emphasizes factors response time, quality and price. Company should use retail stores and philosophy “just in time”.
In general, the management of construction projects not being narrow in scope of this study. Management of construction projects has many functions and to perform regularly throughout the life cycle of the project. A matrix project management proposes in the following detailed description below. Major difficulty is the small construction companies have too little labor, so one must do many things at once. This study gives a general picture of project management, it is as a target for the boss strives to achieve.
His thesis abstract is copied and posted.
ABSTRACT
Subject of this study is to apply project management process to small and medium construction business. These enterprises are construction contractors established in about 5 to 7 years. They all stay in Ho Chi Minh City. The bosses are those who have long experience in the construction industry. Important part of this study is to develop a checklist to identify the process of project management of small businesses in practice. Research method is to use a checklist to interview business owners directly. The results obtained in the interview can indicate the strengths and weaknesses in project management of the business. The main function is interested in schedule management, cost management, quality management and procurement management. Process of project management of enterprises have more advantages can be developed for the better. Process can apply to other companies or vice versa. For the project management process is not effective, the study recommended improvements and changes and can be replaced with a more complete process.
The boss of SME usually is engineer or foreman, they are very good in their job but they didn’t have enough knowledge about business. They do the project base on their experience and learn from their fault. They have no project management process or the process is not useful. After one project, there are no people collecting data for the improvement of the next project. Some of management concepts like quality concept are not documented and analyzed.
The small construction companies have limited resources, such as capital, labor, technical, experiences, etc, so they cannot run many projects at the same time or they cannot get big project.
Le Hoai Viet made a study which objectives were to: (1) develop the checklist to identify the project management in practice of small construction enterprise; (2) use the checklist to investigate the selected companies in order to analyze the strengths and the weaknesses of the management in practice; and (3) propose recommendation for project management improvement.
Conclusions:
The tables 1-3 below indicate the strengths and weaknesses of the three companies in project management.
Recommendation
Study suggests measures to improve the management process of the case study companies. Note that the proposal cannot be applied to other companies.
Proposed organizational structure: All three companies should apply matrix organizational chart as shown in Figure below.
Proposed costs management using WBS to divide and control costs. The company should focus to investment objectives to reduce indirect costs.
Proposed time management: using Gantt charts. The company should determine the cause of delay to take measures to resolve and avoid repeating mistakes. Doing closeout process when project finish that is the basis for the next projects.
Proposed quality management: to understand the definition of quality. Identify management is the key of quality control. Complete process of quality management and a commitment to comprehensive quality. Training for employees is the encourage solution.
Procurement management: improve management of procurement processes, which emphasizes factors response time, quality and price. Company should use retail stores and philosophy “just in time”.
In general, the management of construction projects not being narrow in scope of this study. Management of construction projects has many functions and to perform regularly throughout the life cycle of the project. A matrix project management proposes in the following detailed description below. Major difficulty is the small construction companies have too little labor, so one must do many things at once. This study gives a general picture of project management, it is as a target for the boss strives to achieve.
His thesis abstract is copied and posted.
ABSTRACT
Subject of this study is to apply project management process to small and medium construction business. These enterprises are construction contractors established in about 5 to 7 years. They all stay in Ho Chi Minh City. The bosses are those who have long experience in the construction industry. Important part of this study is to develop a checklist to identify the process of project management of small businesses in practice. Research method is to use a checklist to interview business owners directly. The results obtained in the interview can indicate the strengths and weaknesses in project management of the business. The main function is interested in schedule management, cost management, quality management and procurement management. Process of project management of enterprises have more advantages can be developed for the better. Process can apply to other companies or vice versa. For the project management process is not effective, the study recommended improvements and changes and can be replaced with a more complete process.
Tuesday, 22 June 2010
Customer-Driven Strategy and KPIs Using CRM Approach: A Case Study of Construction Enterprises in Vietnam
Marketing in general and Customer Relationship Management (CRM) have been developed for centuries. In most industries, marketing has been an important part of business. It spent a large part of the enterprises’ budget. It decides the design, function, and cost of the product, turnover, and profit of the enterprises.
In construction, due to its characteristics, the application of CRM needs the special adjustment and development.
Vietnam construction enterprises seem to be far behind other industries in application of marketing strategy, customer study and enterprises business strategy adaptation. Due to the limited number and the importance of customer, the CRM should be highly developed in construction. But a clear strategy is rarely defined and developed.
In fact, every bank, insurers, software manufacturer or electronics retailer develop the CRM in their business. But none of construction companies in Vietnam have developed up to now. They have no CRM strategy, no data warehouse, and no CRM assessment.
Construction industry should be the one that apply CRM the most. The value of a project is always very big; the number of projects and customer is very limited in comparison to any other industry. And because of the uniqueness and rarity, any customer is different from any other. They require special, customized care and service. So, throughout understanding each customer is critical to construction project marketing.
Besides, CRM in construction is different from CRM in other industries due to the characteristic of construction industry.
The most important and different characteristic of construction industry from other industries is project-based production. Any projects are unique. Construction projects are always executed on site which much influenced by many factors such as weather, technologies, culture, social, politic, etc conditions, much more than any kind of production in the factory. Projects are always constrained by resources available, time for completion and quality required by Client.
The characteristic of customers is also much different. The number of customer is very limited. And the demand of the customer is much different from consumer product customers. Those characteristics make the marketing in construction different from other industries, especially CRM.
Those conditions make the construction industry marketing different from others. So it requires changes and adaptation in application of marketing strategy and technique.
Mr. Tran Dang Manh made a study which took a deeper look into the CRM marketing technique and application in construction industry. He tried to answer the following questions:
What is Customer relationship management?
What is the characteristic of project-based construction industry?
How to adapt and apply CRM in construction industry, especially in Vietnam?
Based on real case of a construction enterprise in Vietnam, explore the actual conditions and level of CRM application. Identify any vacancy and adjustment applicable in CRM development to propose.
Conclusions:
CRM is new to Vietnam construction enterprises. But CRM is a must for the enterprises development.
CRM helps enterprises understanding its customer and its own performance, classifying its customers, satisfying its targeted customer, and creating values to its share holders by creating values to both its targeted customer and its own.
CRM requires the commitment of the whole organization- from top leaders to every employee, and all of its related supplier chain. Only with the commitment of the whole production chain, the final product and customer service shall be achieved.
CRM requires the construction of information system capable of gathering customer information from any sources, media, and channel, analyze to give instructions to the production and management system, and store all information.
CRM requires its KPIs definition and application to give feedback to CRM system, continually improve itself and the whole organization.
Besides common strategy for general business, project-based industry has special characteristics: Uniqueness, non-standard working conditions, limited number of customers. It makes the CRM in project-based industry different from others.
In construction, the values that are critical to both customer and enterprises are time, cost, quality, and safety. To be competitive, each enterprise needs a unique strategy to ensure the value to themselves and customer. For all of that, CRM shall be able to find all necessary information, analyze, and evaluate the performance.
Vietnam construction enterprises are applying CRM in a very preliminary level. They do not have strategic approach to develop. Their management system also does not incorporate CRM. They need to change from its business ideology, its organization and business culture, its management system, and its employees’ behavior.
The primary values in construction- time, cost, quality, and safety- are still far from requirement in Vietnam. The CRM also has not been written and developed as an official strategy for the enterprises.
Vietnam construction enterprises need to assess its own performance to decide its targeted customer segments, apply appropriate customer policy, media, and channel, information system to manage CRM system. The assessment shall be based on clear and quantifiable KPIs set at the start of the development of CRM system. The KPIs to be used should be at least three categories:
Enterprises general performance: profitability, operational criteria such as rate of inventory, liquidity ratio.
Project performance: time, cost, quality, safety, and number of customer claims
CRM performance: rate of customer retention, rate of referral.
CRM is a cross-functional activity. In order to develop CRM, enterprises need to change business ideology, organization and business culture, management system, and employees’ behavior. The improvement of CRM is part of an overall corporate restructuring
Only with the customized application of CRM, enterprises may understand their customer more, continually improvement of performance, and ensure its future development.
His thesis abstract is copied and posted.
ABSTRACT
Customer relationship management (CRM) has been developed for centuries. It decides the design, function, and cost of the product, turnover, and profit of the enterprises.
CRM is a cross-functional activity. In order to develop CRM, enterprises need to change business ideology, organization and business culture, management system, and employees’ behavior. The improvement of CRM is part of an overall corporate restructuring.
But it seems not to be in Vietnam construction enterprises. Construction industry should be the one that apply CRM the most. Throughout understanding each customer is critical to construction project marketing.
By this study, I would like to study Customer-driven strategy and KPIs using CRM approach- a case study of construction enterprises in Vietnam so that I can propose a framework for the application and development of CRM in Vietnam construction enterprises.
In construction, due to its characteristics, the application of CRM needs the special adjustment and development.
Vietnam construction enterprises seem to be far behind other industries in application of marketing strategy, customer study and enterprises business strategy adaptation. Due to the limited number and the importance of customer, the CRM should be highly developed in construction. But a clear strategy is rarely defined and developed.
In fact, every bank, insurers, software manufacturer or electronics retailer develop the CRM in their business. But none of construction companies in Vietnam have developed up to now. They have no CRM strategy, no data warehouse, and no CRM assessment.
Construction industry should be the one that apply CRM the most. The value of a project is always very big; the number of projects and customer is very limited in comparison to any other industry. And because of the uniqueness and rarity, any customer is different from any other. They require special, customized care and service. So, throughout understanding each customer is critical to construction project marketing.
Besides, CRM in construction is different from CRM in other industries due to the characteristic of construction industry.
The most important and different characteristic of construction industry from other industries is project-based production. Any projects are unique. Construction projects are always executed on site which much influenced by many factors such as weather, technologies, culture, social, politic, etc conditions, much more than any kind of production in the factory. Projects are always constrained by resources available, time for completion and quality required by Client.
The characteristic of customers is also much different. The number of customer is very limited. And the demand of the customer is much different from consumer product customers. Those characteristics make the marketing in construction different from other industries, especially CRM.
Those conditions make the construction industry marketing different from others. So it requires changes and adaptation in application of marketing strategy and technique.
Mr. Tran Dang Manh made a study which took a deeper look into the CRM marketing technique and application in construction industry. He tried to answer the following questions:
What is Customer relationship management?
What is the characteristic of project-based construction industry?
How to adapt and apply CRM in construction industry, especially in Vietnam?
Based on real case of a construction enterprise in Vietnam, explore the actual conditions and level of CRM application. Identify any vacancy and adjustment applicable in CRM development to propose.
Conclusions:
CRM is new to Vietnam construction enterprises. But CRM is a must for the enterprises development.
CRM helps enterprises understanding its customer and its own performance, classifying its customers, satisfying its targeted customer, and creating values to its share holders by creating values to both its targeted customer and its own.
CRM requires the commitment of the whole organization- from top leaders to every employee, and all of its related supplier chain. Only with the commitment of the whole production chain, the final product and customer service shall be achieved.
CRM requires the construction of information system capable of gathering customer information from any sources, media, and channel, analyze to give instructions to the production and management system, and store all information.
CRM requires its KPIs definition and application to give feedback to CRM system, continually improve itself and the whole organization.
Besides common strategy for general business, project-based industry has special characteristics: Uniqueness, non-standard working conditions, limited number of customers. It makes the CRM in project-based industry different from others.
In construction, the values that are critical to both customer and enterprises are time, cost, quality, and safety. To be competitive, each enterprise needs a unique strategy to ensure the value to themselves and customer. For all of that, CRM shall be able to find all necessary information, analyze, and evaluate the performance.
Vietnam construction enterprises are applying CRM in a very preliminary level. They do not have strategic approach to develop. Their management system also does not incorporate CRM. They need to change from its business ideology, its organization and business culture, its management system, and its employees’ behavior.
The primary values in construction- time, cost, quality, and safety- are still far from requirement in Vietnam. The CRM also has not been written and developed as an official strategy for the enterprises.
Vietnam construction enterprises need to assess its own performance to decide its targeted customer segments, apply appropriate customer policy, media, and channel, information system to manage CRM system. The assessment shall be based on clear and quantifiable KPIs set at the start of the development of CRM system. The KPIs to be used should be at least three categories:
Enterprises general performance: profitability, operational criteria such as rate of inventory, liquidity ratio.
Project performance: time, cost, quality, safety, and number of customer claims
CRM performance: rate of customer retention, rate of referral.
CRM is a cross-functional activity. In order to develop CRM, enterprises need to change business ideology, organization and business culture, management system, and employees’ behavior. The improvement of CRM is part of an overall corporate restructuring
Only with the customized application of CRM, enterprises may understand their customer more, continually improvement of performance, and ensure its future development.
His thesis abstract is copied and posted.
ABSTRACT
Customer relationship management (CRM) has been developed for centuries. It decides the design, function, and cost of the product, turnover, and profit of the enterprises.
CRM is a cross-functional activity. In order to develop CRM, enterprises need to change business ideology, organization and business culture, management system, and employees’ behavior. The improvement of CRM is part of an overall corporate restructuring.
But it seems not to be in Vietnam construction enterprises. Construction industry should be the one that apply CRM the most. Throughout understanding each customer is critical to construction project marketing.
By this study, I would like to study Customer-driven strategy and KPIs using CRM approach- a case study of construction enterprises in Vietnam so that I can propose a framework for the application and development of CRM in Vietnam construction enterprises.
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