STRUCTURAL EQUATION MODELS OF SERVICE QUALITY,

CUSTOMER SATISFACTION, AND BEHAVIORAL INTENTION

IN SMALL AND MEDIUM CONSTRUCTION PROJECTS

IN THAILAND

By

Thanawat Phangchunun

Abstract

             

The research focuses on structural equation models of service quality, customer satisfaction, and behavioral intentions in small and medium construction projects in Thailand. The main objective is to recommend service provider (considered as contractor) how to improve service quality in order to achieve higher customer satisfaction and behavioral intentions such a word-of-mouth recommendation, repurchase intention, and willingness to pay more. The design for this research is quantitative approach. At initial stage, the measurement items of service quality in small and medium construction project are developed from SERVQUAL and verified by experts who are familiar in construction business with owner perspective. Twenty-three measurement items were remained in order to assess service quality. The questionnaire was developed based on these items. A total of one hundred and thirty-nine respondents completed the questionnaire. Then, exploratory factor analysis (EFA) used to assess validity and reliability construct. Confirm factor analysis (CFA) is used to explain the relationship between service quality, customer satisfaction, and behavioral intentions. The findings presented that there are four dimensions of service quality construct in small and medium construction projects in Thailand which are Reliability, Responsiveness, Assurance, and Tangibles. Further results indicate that the direct effect of service quality on behavioral intentions is not significant. However, its indirect effect seems to be stronger driver for behavioral intentions as customer satisfaction acting a mediating role. Contractor in small and medium construction projects are recommended to focus on dominant of service quality dimensions in order to improve customer satisfaction and acquire positive behavioral intentions.

Executive summary

Rationale of research

This research has been conducted to provide a Model for contractors to meet customer satisfaction.

Objectives of study

To study Service quality factor in construction business and its measurement, Client satisfaction factor in construction business and its measurement and behavior intentions factor in construction business and their measurement.

To develop Structural Equation Modeling (SEM) model which explain the behavior of factors affecting to those latent variables (service quality, client satisfaction, and behavior intentions).

Recommendation on how to improve service quality. In order to achieve customer satisfaction and behavioral intention in small and medium construction projects in Thailand.

Methodology  

In order to accomplish the objectives of this study, it is considered into three main sections; input, process, and output. This study begins with identifying the criteria for measuring service quality, customer satisfaction, and behavioral intentions.

All of them have been obtained from the literature review. Moreover, the basic concept for structural equation modeling was reviewed as well. All of these processes are considered in input stage for this research.

Findings and conclusion

Customer satisfaction is the one criterion for company success in construction business. It can lead the behavior of customer especially repurchase intention. In this study, post behavior of a customer were focused by word-of-mouth recommendation, repurchase intention, and willingness to pay more. Interestingly, customer satisfaction is significantly in order to gain market advantages and survive in the competitive environment. The level of client satisfaction is quite low according to construction industry seems to be high and increasing conflicts and disputes. Consequently, the researcher attempt to discover the factor affecting customer satisfaction and behavioral intention in construction business. One of criteria in customer satisfaction is service quality. However, it is difficult to measure service quality directly because of its characteristics such as intangibility, heterogeneity, and inseparability. Therefore, it is necessary to study how to provide high level of client satisfaction, and develop positive behavior intention by focusing factor affecting service quality. The purpose of this study was conducted to: study service quality, customer satisfaction, and behavioral intention factor as well as their measurement, develop Structural Equation Modeling (SEM) model which explain the behavior of factors affecting to those latent variables (service quality, client satisfaction, and behavior intention), and recommend how to improve service quality in order to achieve customer satisfaction and behavioral intention. 

In order to achieve the objectives of this study, the researcher conducted exploratory factor analysis (EFA) and confirm factor analysis (CFA). The measurement items for assessing service quality were gathered in literature reviews and interviewed the experts. There are 23 measurement items that will be applied in statistical analysis. The service quality scale was done by reliability test as well as factor analysis. According to the results, there are four dimensions for service quality measurement which are Reliability, Responsiveness, and Assurance. Notably, Empathy dimension fail to demonstrate a dominant role in service quality for small and medium construction project in Thailand. Subsequently, a CFA was implemented to confirm the dimensionality of the first order service quality factors (Model A: Measurement model for service quality). As a result, the objective 1 “To study service quality factors and its measurement” has been achieved. Moreover, the study of measurement in customer satisfaction and behavioral intention was disclosed by literature review and experts’ verification. The statistical test was employed in order to attain reliability and validity of the construct. Therefore, the objective 2 and 3 “To study customer satisfaction and behavioural intention factor and their measurement” have been accomplished. By implemented SEM analysis, all models in this study have achieved in model fit. In structural model (Model C) is presented the relationship among service quality gap, customer satisfaction, and behavioral intention. The results prove our hypothesis that service quality gap has negative effect to customer satisfaction. 

 VARIATION CLAIMS IN HIGH - RISE BUILDING PROJECT

By

 Krisana Juanwanpen

Abstract

             

This paper presents a study made on causes, effects and controls of variation orders in high-rise building project in Thailand. To achieve the study objective, the researcher carried a literature review of the subject previous research studies and books written on the subject of variation orders. In light of the literature study the researcher developed a survey case study.

The big challenge for Thai Construction industry is to advance the management styles to cope up with challenges faced in a project. Procedures in managing contract and variation orders are viewed to know the effectiveness and liability ensuing steps observed. Disruptions in cash flow and program when mitigated and handled correctly may create confidence in handling changes that transpire in any project.

However, knowledge and skill in managing this challenging changes and observing effective procedures may eventually create a norm in Project Management system in the industry where tradition of strong relationship among Owner and Contract still prevails.

Literature relative to the research area was extensively reviewed. The data gathering approaches included an exploratory study on costs of variation orders on high-rise building project, interviews with three managers and seven engineers in construction site, and the audit of site instructions with regard to waste and their value-addends and self-administered questionnaires. A purposive sampling method was followed to identify participants into the study.

The study also concluded that responses from contractors and consultants agree about the causes, effects and controls of variation orders and recommended to include the owner in future studies to verify the reasons behind changes made by the owners.

Executive summary

Rationale of research

This research has been conducted to study variation claim issues in high rise building  projects

Objectives of study

To identify types and causes of variation claims in high-rise building project in Thailand, how to prove claim in different types of work in terms Analysis for additional cost and to propose an effective negotiation on the accepted price and time for both contractor and owner.

 Methodology

The exploratory research method is used to study variation claims, and with extensive literature review about variation claims and analysis of additional costs.

Findings and conclusion

The research set up to analyze the leading cause of variation orders on high – rise building project, to identify project characteristics correlated with frequency of construction variation orders, to develop variation order reference that identify the structured methodology for pricing variation orders. After completing these objectives, it was determined the causes of variation orders on this project.

Project characteristics were also examined. The breakdown of the project into five categories such as:

·         New work – are the additional item in the some part of building for more suitable and aesthetic of the building. Frequently, this category is initiated by owner

·         Modified work – are the existing of buildings becomes unsuitable for their present use, and then improvement, repair and maintenance are often required to keep them in usable condition.

·         Change work – are covered amend in some parts or whole scope of work that is stipulate in the contract

·         Move work – are Moving things without creating any damage to those items including storage of those items, they assume a duty to be included in this section.

·         Demolishing work – are move the existing part out and would not be reused. And the occupancy of debris that comes from the demolishing process will be agreed before starting work.

From analyzing the different methods used in these examples, a standardized pricing flowchart was developed for use. The flowchart was designed to be a one page quick reference that could be used for most situations involved in preparing an estimated price for comparison to the contractor’s submission. The flowchart still allows for the consultant to use some professional judgment but gives enough pricing options to take away some of the uncertainty in producing a price. A standardized pricing procedure implanted across the state will improve variation order pricing consistency among districts. This tool can be used also in training new engineer to allow them to progress in their decision making process.

Finally, based on the findings, it can be concluded that each of the condition of contracts has stipulated clearly the rules for method of valuing the claims of variation works. However, the adequacy and appropriateness of the mechanism are different based on the different types of contracts. The selection of the type of contracts to be used for a particular project may influence the project implementation in terms of contractual administration related to claims for variation works. By selecting an appropriate type of contracts for a project to be implemented may reduce the tendency of disputes arising from valuation of variation claims. Disputes related to claims of variation works can be avoided by overcoming the problems of the disputes. This may only be achieved through the proper selection of type of contracts which contain the most effective methods of valuing the variation claims. Despite the fact that BQ rates/Contract rates is the most instant method and agreeable among the contracting parties, it is recommended that this method should be improved by rationalization of the rates accordingly depend on the nature of the work of similar character executed under similar conditions. In other words, the BQ rates/Contract rates despite being the most agreeable rates they should be adjusted accordingly so that the rates for varied works will be fair to both contracting parties.

Recommendation

·         Out-Source Information - for variations that need price comparison, outsource information must be obtained such as price indices from the government, quotations from suppliers and price information from consultants.

·         Data collection – is to collect the correct information to support the validity of the any variation order. It can be Site Records such as site diaries, weather charts, site instructions, inspection reports, shop drawings and materials approval, RFIs, NCRs and other forms of communication like emails, transmittals, minutes of meeting and project reports.

·         Investigation - For variation order due to differing site conditions, sit investigation is imperative. It is essential in determining the actual site situations and for observing if the proposed change were feasible to the site. It is also done to verify quantities, type of material applied by the contractor and to confirm the methods proposed for application for use.

·         Know your references - reference materials would be the basis for evaluation first, entitlement of the contractor to a variation order, validity of the change, and determination of quantities either additive or deductive. Reference may include Construction Contract, Drawings, Specifications and other forms of site communications.

Asian Institute of Technology in Bangkok

Construction Engineering & Infrastructure Management

BIM – Will it transform the industry,or will it be business as usual?

by

Dr. Henrik Linderoth

Associate Professor

School of Technology and Society

University of Skövde

ORGANIZATIONAL FACTORS AFFECTING BEHAVIOR BASED SAFETY PROGRAM AND PERFORMANCE: A STUDY IN OIL AND GAS CONSTRUCTION PROJECTS IN THAILAND

By

Jittanun Phuangphay

Abstract

             

The construction industry is a dangerous job when compared with other sectors because the nature of construction projects is very complicated. Many of the activities within the construction industry are associated with accidents and diseases. Safety Management System is one of the key things that the project should be concerned with especially in Oil and Gas Projects in Thailand. In depth, the project looks at the safety behavior of individuals to solve the safety related issues in the workplace. Therefore, this study was carried out to identify the factors that affect the behavior based safety and to study effective behavior based safety concentrating upon methods and practices by performance of the worker behavior.

To achieve the objective of the study, 8 main factors for the study were identified affecting behavior based safety. In addition, there are 10 factors under implementation for behavior based safety methods and practices which help to measure the safety behavior of worker. The study was conducted through Quantitative Research. Statistical hypothesis was done using the correlation model with SPSS program to find out the factors affecting behavior based safety and to find out the effectiveness of behavior based safety methods and practices in Oil and Gas Project in Thailand. For this purpose, the questionnaire intends to seek answers from the Director, Safety manager, Safety engineer, Safety officer of the project.

Moreover, to achieve another objective of the study, the organizational factor is very effective on worker’s safety behavior because all of the factors inside the organizational factors come from the vision, mission and perspective of top management level. However, the behavior based safety is less effective on worker safety behavior when it is compared with the organizational factors because all of factors inside behavior based safety implementations methods and practices come from the management of operation level.

Furthermore, the findings also suggest important factors needed for the implementation of the project to understand the strengths as well as the weaknesses of the behavior based safety methods as well as to talk about the important factors impact on behavior based safety. Therefore, the Safety officer will carefully understand the impact of their worker’s safety behavior. In addition, recommendations for further studies are suggested.

Executive summary

Rationale of research

This research has been conducted to understand the behavior based safety in oil and gas construction industry of Thailand.

Objectives of study

To study effective methods and efficient practices in behavior base safety implementation and to identify the organizational factors affect to behavior based safety. To examine the influence of factors and implementation (methods and practices) on worker safety behavior

Methodology  

Using questionnaire to collect data and interview the expert in the project at least the medium construction company in Thailand. The respondent of this study are the safety managers and project manager on Construction Company.

This study consists of conceptual stage, conceptual framework, hypothesis development questionnaire, data collection, data analysis and conclusion.

Findings and conclusion

This study is considered about the safety issue in construction industry especially in Oil and Gas sector. Because the construction industry involves dangerous work because the construction job is very complicated and involved many different parties, each activity is always participating with accident and injuries. Therefore, in construction industry, they always the company have to concern about safety as everybody safely. Therefore, this study tries to find which organizational factors affect to implementation methods and lead to worker behavior base safety. The main objective of this research is “to study factor that affects behavior base safety. Second objective is to study effective behavior based safety implementation (method and practices). In addition, to finding the factors, this study was reviewing discussing from many research, and theories, those who emphasis on effective safety system. Also, this study has been interviewing with the expert person.

Although the data collection requires many projects for corporation, most of them are busy with their job. Therefore, some projects did not attend, interview, and support to answer the questionnaire. Only the projects that realize the importance of academic research have paid attention in this study and allow collecting the data. There are 15 companies with 36 projects and 36 respondents in data collection. Most of the project locations are in Rayong province. The research was collect in contractor of oil & gas Construction Company. The framework of this research is tries to find the factor affect to the implementation methods and practices. In addition, this factors leads to improve the behavior of safety worker. There are 8 factors to study in this research; safety policy, top management commitment, company strategy, leadership, accident cost reduction, total quality management and quality improvement, customer requirement, and corporate social responsibility. Moreover, The behavior based safety implementation method and practice are including 10 items in this research; setting safety goal, assessment, training, coaching, observation data collection, rewarding, warning, safety communication and feedback, safety talk and tool box meeting. As showed all factors in this research, these factors were found from determining previous research and many theories.

A RISK MANAGEMENT FRAMEWORK FOR HIGHWAY

CONSTRUCTION COMPANIES IN VIETNAM

By

Pham Quang Cuong

Abstract

             

Highway construction industry is long known to contain more risks than many other industries because of the effect of a variety of uncontrollable factors and the severe competition degree. However currently in Vietnam the understanding of highway construction companies about risk management is very poor, lacking of a clear identification of risks and the methods to deal with these risks systematically. The purpose of this study is to identify and rank the risks facing the highway construction companies as well as to determine the risk responses that effectively help the contractors to handle them.

This research is based on quantitative method, using questionnaire for data collection and utilizing SPSS software to analyze the data.

The respondents in this research are directors and experienced project managers from sixty different contractors. The respondents are asked to assess the risks and the degree of the application of risk responses in their company as well as to provide the information related to the corporate performance. The risks afterwards are ranked in terms of probability of occurrence, severity and impact and then the risk responses with strong correlation with corporate performance are pointed out.

The outcome of data analysis is the ranking of risks that will help increase the attention of the Vietnamese contractors to the critical ones which might threaten their project success.

The effective risk responses with strong correlation with project performance are listed and are put into the relevant stages of project life cycle to form the risk response framework.

This framework can be considered as an action guide that the highway construction companies should apply as strong as they can to make their projects more secured against the risks.

Executive summary

Rationale of research

This research has been conducted to develop frame work for risk management in high way construction projects in Vietnam.

Objectives of study

To identify major risks & emerging risk to highways contractors, risk responses and its relation with company’s corporate performance and to develop a framework for highway contractors.

Methodology  

The exploratory research method is used to study risk management in highway construction companies, through literature review, case study from Vietnam.

Findings and conclusion

The first objective is to assess the risks in terms of probability of occurrence; severity and impact, afterwards the ranking of risks are made in order to increase the contractors’ awareness towards critical ones. The second objective is to examine the application of risk responses which are developed through a deep literature review and interviews with Vietnamese experts. The risk responses will be evaluated based on the belief that the contractors with good performance will have better responses to risks and in turn, the good risk responses will enhance the performance of the contractors at both project level and corporate level.

As a result the correlation between the application of risk responses and the corporate performance is analyzed and the ones with the correlation coefficient larger than 0.7 are pointed out. The final objective is to put the effective risk responses into the relevant stages of project cycle to form the risk response frame work that can be applied by highway contractors to their projects.

Critical risks

The analysis result reveals the fact that the unstable economic conditions and the macroeconomic factors such as high inflation (rank 1), high interest rate (rank 2) are putting a lot of difficulties upon the highway contractors. Other big concerns come from the owners including Delay in delivering the site (rank 3), delay in progress payment (rank 4) and financial difficulties (rank 5). In top 15 of critical risks, there are some risks resulted from the poor management of the contractors themselves including Shortage of cash flow (rank 6), Too low bidding price under competition (rank 7), Inappropriate construction methods (rank 9), Poor performance of sub-contractors and suppliers (rank 10) and Poor quality and rework (rank 11). Consultants are an important party in projects and they contribute some significant risks to the work of contractors namely Site condition discrepancy (rank8) and Delay in testing and acceptance procedure of supervisors (rank 13).

Effective risk responses and risk response framework

The risk responses that can be applied to deal with every single risk are discussed in depth and the effective one which have the strong correlation with the corporate performance are pointed out. These risk responses are grouped into action categories and are put into the relevant stages of project lifecycle with the hope to provide a more systematic approach to these risks. The data analysis and the interview with experienced experts during data collection reveal many weaknesses of the contractors that make them vulnerable to risks. The cost estimate is the first thing that requires the more careful consideration and preparation of the contractors because it directly relates to the chance of winning the contract and the profitability of their work.

The contract content is another problem to the contractors because if the contractual clauses are provided poor and unclear they will become the source of many risks in the next stages. In the opinions of many respondents the contract in highway projects are still in a very low level in comparison with the contractual form suggested by FIDIC. The quality of construction planning and the tight construction control play the important role to mitigate or even eliminate the impact of many risks especially the on-site risks. 

INVITATION FOR SEMINAR           @

Asian Institute of Technology in Vietnam (AITVN)

Master Program in Project Management in Construction (MPM)

BIM – Will it transform the industry,or will it be business as usual?

by

Dr. Henrik Linderoth

Associate Professor

School of Technology and Society

University of Skövde

Date: Friday, 13 July 2012

Time: 09.00 - 12.00 hrs.

Venue: Room A1.1, 45 Đinh Tien Hoang, Ben Nghe Ward, Dist. 1, HCMC (Opposite to HTV broadcast station)

Vietnam 

Abstract

The emergence of new technologies has always triggered visionary ideas of changes of the state of art in organizations, industries and society. However, what we know from research is that changes do emerge, but often not as fast as expected and not in the directions predicted in the visionary ideas. In this sense BIM – Building information models – is no exception. The transformative capacity of BIM and its potential benefits has been discussed for two decades, but it is only during the last few years a more encompassing deployment of BIM can be witnessed. However, challenges still exist for management before any deeper impacts on the industry will be achieved. The challenges to solve can be viewed as layers of challenges in at least four categories: technical, legal, organizational and managerial. During the seminar these challenges will be discussed and I will draw parallels with a similar process in the health care sectors that I have studied for ten years. It appears that at the bottom line is the issue: Who are the beneficiaries and who has the power to shape the process?

All interested persons are cordially invited. For further details, please contact Ms. Nguyen Le Tuong at (+84) 01 265 285 168 or (+84) 08 39107423 (117) - email: ngletuong@aitcv.ac.vn. 

LEAN CONSTRUCTION: DEVELOPMENT OF ASSESSMENT CRITERIA & IMPLEMENTATION STRATEGY FOR INDIAN CONTRACTOR COMPANIES

By

Ranjeet Sandeep Pundlik

Abstract

             

The construction industry in India is one of the highest contributors to the national economy for over the past five decades and is one if the biggest in terms of generating employment in the nation after agriculture industry. This industry is a victim of low productivity, poor performance, lack of mechanization & sophistication, lack of skilled labors, shortage of professionally qualifies employees, cost over runs and delays. Lean construction is a recent development in the field of construction which aims for waste reduction and value generation for the client by increasing the efficiency of the construction processes by improving the processes and flows in the construction activities. Lean construction is successfully implemented by various companies the western countries and is also an important topic for researchers across many universities in the west. So this study aims to develop a system for the construction contractors in India to be able to use and incorporate the techniques of this domain of construction. The research has broadly identified 12 lean principles applicable to construction, especially in India. Development of a Generic model for the lean functioning of the departments of a construction contractor companies was done and lead to the identification of 33 lean practices in the five departments of the contractor companies. This lead to the development of assessment criteria for the lean compliance of the departments of the contractor companies in India. This model and criteria, after being verified and validated by 3 academic and 2 professional experts in India, was used for collection of data of compliance from 4 Indian Contractor companies, functioning in Central India. Detailed analysis of the working of each department of each company has been done to determine the strength & weakness of each department and also determine the reasons of non-compliances of the practices.

After the detailed analysis process, a strategy for the implementation of these lean practices in the departments of the contractor firms in India has been developed. The three stage strategy, along with the weaknesses and non-compliance reasons can be used together to combat the problems for implementation and hence the lean practices can be successfully implemented by Indian Contractor Companies.

Executive summary

Rationale of research

This research has been conducted to develop assessment criteria and implementation strategy of lean construction for Indian contractor companies

Objectives of study

To develop a model for assessment of departmental functioning of contractor companies and perform detailed analysis to find strengths and weakness, to propose implementation of lean practices in contractor companies.

Methodology  

The exploratory research method is used to study lean practices in Indian construction industry, through literature review, expert verification and by studying four cases from Indian construction industry..

Findings and conclusion

Development of the generic model and assessment criteria for the lean functioning of the departments of a construction contractor company

The first objective of the study was to develop a model and assessment criteria with the use of the lean principles for the lean functioning of the departments of a contractor construction company. The research started with the investigation and identification of the lean principles and their selection and segregation as per the applicability to the field of construction, primarily to the construction contractor companies. 12 lean principles were identified along with their lean features & effects. After that, a model of general functioning was made for contractor companies. Now, for the purpose of incorporating the lean practices into the model, the features & effects of the lean principles were converted as the objectives for the general practices so as to make them lean and after this the lean practices were incorporated to generate the final lean functioning model for a construction contractor company. This completed the development of a generic lean functioning model for construction Contractor Company. The practices identified in the model were then incorporated into a tabular form to generate the checklist or the assessment criteria with few more additions for the purpose of assessment of the contractor companies as the second objective of the study.

Assessment and detailed analysis of the functioning of the departments of the contractor companies

This developed model and criteria was verified and validated by a panel of 5 experts in India to check the relevance and applicability of the practices as per the Indian construction industry and scenario. This process generated a final model and criteria to be used for the assessment of the companies in India. A case study protocol was developed in this process and 6 companies were contacted for data collection. Finally, 4 companies out of them were selected and proceeded for data collection based on the criteria of company selection, as explained in chapter 3. Primary and secondary data collection was done in India and then the data analysis was started after coming back to Thailand. A detailed analysis of all the practices was done as per the compliance status of the practices. All the practices for each of the case was described and synthesized to obtain the strengths and weaknesses of the practices of each department of each company. During summarizing the lean practices for the four cases, it was observed that there were 8 practices which were compiled in all the four companies, whereas 10 practices out of 33 which were not compiled in any of the four companies. Reasons of non-compliance were primarily determined for the practices which were not complied in any of the four companies and were analyzed in depth. This also lead to tabulate the department wise reasons of non-compliance as per the four cases considered and are as the last part of chapter

Recommendations

·         The initiation and support for the top management level for the improvement of the basic processes including the ones which do not require much of the expertise training etc. Some academic-industry knowledge exchange programs can be organized. The top management should establish a system of involving the operational staff in problem solving, decision making, planning etc. Some permanent and trusted staffs are to be chosen who can be trained to be the last planners etc. The procurement department also has to make a database of trusted suppliers for the long term relationships ad partnering in the next stages.

·         The second or the preparatory stage is for the preparation of the company’s staff and systems for the implementation of the lean practices. Development of formats, guidelines have to be done in this stage. The companies can use and modify the formats proposed by the researcher as per their needs. Skill development sessions, knowledge exchange sessions, professional training sessions, preparation of related contractual arrangements etc should be organized for the trusted employees selected in the above stage for the capacity building of the company.

·         Application of the systems developed in the above stages. Trained staff should be in touch with the professionals for continuous improvements. Incentive based system can be practiced for some site practices like hygiene & housekeeping, safety compliance, adherence to the guidelines laid, performance etc.