ASSIGNMENT

Assessment point: Assessment point 1 (Week 6) Assessment task: Coursework

Ronald Muwonge Matovu

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Business Procurement and Contractual Practice

UEL-EG-7036

18 December 2022

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Table of Contents

ASSIGNEMENT OVERVIEW .............................................................................................. 1

1 CHAPTER ONE (QUESTION ONE) ................................................................................. 2
1.1 Introduction .................................................................................................................... 2
1.2 Discussions ...................................................................................................................... 2
1.3 Conclusion and recommendations ................................................................................ 4
2 CHAPTER TWO (QUESTION TWO)............................................................................... 6
2.1 Introduction .................................................................................................................... 6
2.2 Discussions ...................................................................................................................... 6
2.3 Conclusions and recommendations. ............................................................................. 9
3 CHAPTER THREE (QUESTION THREE) .................................................................... 10
3.1 Introduction .................................................................................................................. 10
3.2 Discussions .................................................................................................................... 10
3.2.1 Detailed analysis of some construction characteristics. ..................................... 12
3.3 Conclusion and recommendations. ............................................................................. 14
REFERENCES ....................................................................................................................... 15

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LIST OF TABLES
Table 1 Characteristics of the construction industry. ............................................................................ 11

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ASSIGNEMENT OVERVIEW

The essay generally discusses three sections/chapters in response to the assignment at the

assessment point 1. The assignment required response to three questions which include;

1. Discuss the concept and importance of systems thinking from the perspective of a

construction company based in South Africa considering going overseas to undertake

construction work.

2. Critically evaluate the role of innovation and creativity on construction organization

from a Change Management View. Rely your critical discussion on a business example

of your choice.

3. Analyse the characteristics that affect strategy in the construction industry from an

overview of the Global Market. Rely your critical discussion on a business example of

your choice.

The report responds to the assignment in three sections/chapters. Each chapter will be

responding to one of the questions. Every chapter will have an introduction, the main

body(discussions) and finally a conclusion with recommendations where necessary.

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1 CHAPTER ONE (QUESTION ONE)

1.1 Introduction

According to Senge (2006) “Systems thinking is a discipline for seeing wholes. It is a

framework for seeing interrelationships rather than things, for seeing patterns of change, rather

than static snapshots.

This essay will argue for the importance and relevance of adapting systems thinking to adapt

in new working environments by correlating the importance of systems thinking in relation to

a company going to take work overseas.

1.2 Discussions

Recent studies on project management indicate that managers more and more often tend to use

systems thinking in project management. (Kopczyński & Brzozowski,2015).

Take for example, Costco and Organics, who recognised that one of the most significant

impediments to meeting consumers' increased demand for organic food is the supply chain. As

a result, they began investing in organic growers. This improved their natural capital while also

increasing their relational capital with clients and suppliers. While it is now using financial

resources, the hope is that a guaranteed supply will provide a fair return on investment in the

future. It's almost like generating a new environmental balance sheet. Seeing the parts and how

they fit together. This strategy assists in making better decisions and explaining what the

organisation is doing to the people that matter: customers, employees, partners, and investors.

(Mary, 2017).

As part of this strategy, it is essential to be completely open and be aware of how each

component of the system affects the overall performance of the system. Here, the main

elements that strengthen a team's ability to discover erroneous solutions are the mechanisms

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and quality of thinking of the team members in issue solving, the amount of knowledge,

adaptive capacities, and openness.

Jackson (2009) presents a concise overview of the important breakthroughs in systems

thinking. In a nutshell, his research emphasises how the character of the system to be managed

is determined by the type of system and the interactions between the many stakeholders.

Because of this, underlying complexity may be comprehended, allowing for more efficient

planning, implementation, and control.

For the purpose of this assignment, we assume that the South African company is going to

implement the construction works overseas as a project. Therefore, in this context, a project

will be defined as “a purposeful, adaptive, learning system of intervention intended to improve

the achievement and further development of the agreed purpose(s) of a functioning system in

an ethical and sustainable manner.” (Taylor, 2010).

Analysing from Senge’s (2006) point of view, the systems that an organisation employs to

effect its projects in a particular and unique environment should ideally be integrated, speaking

and communicating to each other to ensure efficiency and proficiency in the quest for achieving

the project’s and the organisation’s objectives which are usually within the time, scope, quality

budget constraints.

For the construction company to effectively run its construction business, it must put systems

in place that facilitate its performance. These systems could be internal which the company

designs, implements and also has control over, for example; the organisational structures, cost

control structures and systems software used among others. Then there are those systems that

are purely dictated by the external environment by the virtue of the political, economic, social,
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legal and environmental dynamics of a country/environment. Systems thinking may be used to

ease and simplify complex projects especially in the new environment overseas. Since the

company will be moving to a new environment, there will be need to develop a new system

lifecycle tailored to the new environment overseas. There will be need to apply systems

thinking in some phases like; concept, implementation and evaluation too.

Once system thinking is used in administration and operations, it ensures that the relevant and

spot-on corporate decisions are made. Generally speaking, each commercial resolution is

examined in accordance to the systematic concerns it could have. If the company ever desired

to purchase a novel industrial instrument for example, the systems thinking type of thought

would ensure that it possible to scrutinize the budget for worker training, infrastructure, and

the delay that the business will accrue in relation to the tool of interest.

Systems thinking would aid the organisation to get better insight on how workers relate and

how the system functions, it would be impossible to optimize the business processes unless its

ascertained how the two interact. There is need to appreciate the system as a whole so that

modifications can be made hence simplifying the stages involved. By employing a systems

viewpoint, it is possible to eliminate redundant phases and hence discovering efficient

alternatives that are able to save the organisation’s resources.

1.3 Conclusion and recommendations

Taking a systems perspective helps the company to see how actively interconnected all of the

concepts are. Additionally, to succeed in the new workplace environment, the employees will

greatly need the support of their peers. The systems way of thinking helps to equip the company

and its employees with the resources to boost collaboration, innovation, and output in the new

workplace environment.

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By considering the interdependence of a problem's constituent elements, systems thinking

facilitates the elimination of silos. It considers how modifying one part of a system could have

unintended consequences elsewhere. Teams can be coached by their leaders and sponsors to

use systems thinking in their day-to-day operations and in pilot projects aimed at bringing about

change.

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2 CHAPTER TWO (QUESTION TWO)

2.1 Introduction

According to Moran and Brightman (2001), change management is the process of organising

and leading an organisation through a period of transition.

Mumford (2003), defines creativity as the act of conceiving something new and helpful.

On the other hand, innovation was defined by Carr and Johansson (1995) as that positive

change and improvement that can only occur when ideas (solutions) and alternative ideas

(solutions) are transformed into useful implementations.

This essay will argue for the importance and relevance of emphasising innovation and

creativity to help in smoothly facilitating changes in an organisation, through exploring the

relationship between innovation, creativity and change management.

2.2 Discussions

Moran and Brightman (2001) defined change management as “the process of continually

renewing an organization's direction, structure, and capabilities to serve the ever-changing

needs of external and internal customers.”

Change should follow creative innovation and should be thoroughly premeditated. In order to

achieve innovation and change successfully and resourcefully, endorsement should be sought

from stakeholders by convincing them to back up the variations. Analysing the major concerns

and areas of attention, as well as the issues that are attributable to the many stakeholders, it is

necessary both before and during every shift. (Covey, 1989).

In relation to construction innovation, Ling (2003) defined construction innovation as putting

new concepts into practise with the goal of generating additional advantages despite project

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risks and uncertainties. These novel ideas may include a project's utilisation of innovative

technologies, designs, components of material, or building techniques. (Asad et al.,2005).

With the innovation of construction firms, creativity is exhibited thus remaining competitive

(Loosemore, 2015), advance project and company efficiency (Ozorhon, 2013), increase

margins on operation (Owusu and Manuet al.,2015), improve company publicity alongside

customer satisfaction. (Xue et al.,2014).

In the construction industry, innovations can be broken down into two categories: technical

and organisational. Product innovations (such as novel products or services) and process

innovations (such as novel techniques for manufacturing or new forms of organisation) are

both forms that technical innovation can take on. (Asad et al.,2005). Introducing new company

strategy orientation, management practises, or even a completely new organisational structure

can all lead to organisational innovative results. (Anderson and Manseau, 1999)

The Egan Report (1998) criticized the construction industry in the UK for investing too little

in Research and Development(R&D). This low R&D in a way hinders innovation which is the

most important outcome of Research and Development.

As highlighted above, organisations are always experiencing change due to various reasons for

example; due to political change, economical change, customer priority change and legislative

changes among others. These changes would eventually require the organisation to continually

renew and adapt its structure, capabilities and objectives among others in order to align to both

the needs of its internal and external clients. This effort should be undertaken scientifically and

systematically while anchored on certain theories.

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For example, Lewin (1951) fronted the innovation and change theory in three necessary steps:

“1. Unfreezing the organisation, getting rid of the attitude that individuals have against the

change, creating a vision of a better future by delivering information and establishing the

urgency to change. 2. Shaping, moving through the change process by getting the people

engaged, creating equilibrium among the driving and restraining forces inside the organisation.

3. Refreezing: creating and maintaining a new condition.”

For this change to effectively and efficiently adapt to the new circumstances, creativity coupled

with innovation goes a long way to come up with novel and new solutions that can help in

addressing and adapting to the impending change in an organisation. The style in which

companies conduct their business and the manner in which customers interact with the goods

and services produced by those organisations can both undergo abrupt and significant

transformations as a result of innovations. Innovation through thorough research and

development, continuous creativity will all go a long way to get novel solutions that can help

in managing change in organisations.

For example, consider a company whose services include the designing, mixing, transporting

and placing of concrete. Assuming the organisation is faced with the new problem of having

to manufacture more cubic metres of concrete in the same time frame without compromising

the quality, the organisation will have to invest in research and development in order to come

up with novel and creative ways to address the new problem and tackle the new task outlined.

New design mixes and the adaptation of machines with high pumpability rates are two possible

outcomes of this innovation. It's also possible that a reorganisation of human resources will be

necessary to accommodate the new kinds of workers who will be needed to operate these

innovative technologies. All of these options depict change management in response to the

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need to produce higher-quality concrete while incorporating innovations achieved through

R&D and creativity.

2.3 Conclusions and recommendations.

A conclusion can be drawn that for one to be creative, one must harbour new ideas to solve

imminent challenges. The process of putting these ideas in fruition is what constitutes

innovation. Many sectors including the construction sector now look to innovation as the

means via which they might boost their performance. (Maghsoudi et al., 2016).

In conclusion, if companies wish to change their organisational structures and their strategy,

they must innovate frequently. Innovation harbours the prospective to drastically alter both

how end users interact with the goods and services that organisations provide as well as how

corporate operations are carried out.

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3 CHAPTER THREE (QUESTION THREE)

3.1 Introduction

The marketing strategy is a broad approach of ensuring that an organization guides clients,

together with concentrating on definite client segments, the choice for marketing tools,

marketing mix and the marketing communication. (Zelenka, 2007). A company's marketing

strategy lays out its plans for achieving those goals.

The construction industry usually implements its works in a projectized manner. (Vrijhoef and

Koskela, 2005). This factor makes the construction projects unique, in return, this creates

characteristics which are unique to every construction project. This further cascades into

different dynamics that affect the marketing strategy of the construction industry products.

The section of this essay will highlight and discuss some common problems caused by the

construction project characteristics, the relevant marketing solutions and how they affect the

marketing of the project globally.

3.2 Discussions

The construction environment is characterized by a high level of competition, complex

operations, high-risk conditions, and well-informed clients. (Tarawneh,2014). This is mostly

due to the fact that clients usually consider the least bidder to procure contractors coupled with

the fact that construction firms can’t induce demand for their own services. (Polat, 2010). These

constraints leave firms with marketing as one of the most viable solution that can help them

survive and remain in the business. The ability to win bids and negotiate better may be the

result of a sustained competitive advantage made possible by marketing. (Polat, 2010).

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According to the American Marketing Association Board of Directors, marketing is “the

activity, set of institutions, and processes for creating, communicating, delivering, and

exchanging offerings that have value for customers, clients, partners, and society at large.”

Surveys done in some countries like the USA and the UK suggest that their level of marketing

in construction is relatively low compared to some other countries. (Yisa, Ndekugri and

Ambrose, 1995). It is argued by some researchers that the cause for this trend are the unique

features possessed by the construction industry rendering it difficult to use the conventional

marketing theories and approaches. (Jaafar, Aziz & Wai, 2008).

Different scholars have identified different characteristics for the industry of construction that

affect marketing of construction projects as highlighted below;

Table 1 Characteristics of the construction industry.

CHARACTERISTICS

1. Immovability, intricacy, permanency, costliness, and extraordinary levels of societal

accountability. (Nam & Tatum, 1988)

2. Kangari (1988) highlights competitiveness, fragmentation and sensitivity to economic

changes;

3. Capital intensive, intricate long procurement process and very dependent on location

and weather. (Arditi, Polat& Makinde, 2008)

4 In situ production, multiple industry players and unique one-off projects.( Vrijhoef &

Koskela, 2005)

5 Difficulty in tapping into previous projects’ experiences. (Kärnä, 2004)

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The characteristics highlighted above to a greater extent affect the marketing strategies and

principles that the different construction firms may employ. (Mokhtariani, Sebt & Davoudpour,

2017).

3.2.1 Detailed analysis of some construction characteristics.

1. Intricate long procurement process.

The majority of construction companies are still chosen through a competitive bidding process

based on the lowest bids. (Ballesteros et al., 2016). Some contractors may ignore marketing

management in this case if they assume that price is the only essential marketing strategy. Also,

in a processes where the lowest bidder wins, a contractor's close relationship with the client

and the client's past successes don’t assure the contractor of getting more work from the client.

The detrimental side of this system could be averted since marketing factors are reflected in

pre-qualification and contractor choice keeps increasingly shifting in the direction of

qualifications and values, this stresses different marketing-related factors like references

alongside trust-based relationships as well as price. (Ballesteros et al., 2016).

2. Sector fragmentation and sensitivity to economic changes.

Many short-lived teams, with personnel from various disciplines and various companies,

contribute in every building venture. Due to the unique nature of each project, the teams and

structures involved in each are likewise different. As a result, the construction industry is highly

decentralised, with several temporary multi-organisations (TMOs) used for different projects.

The various principles and significances of every subcontractor and main contractor lead to

challenges in delivering value to customers and establishing integrated customer satisfaction

initiatives.

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Considering this situation, one of the unique advertising jobs and duties of the major contractor

remains to engage subcontractors to produce extra value for customers. Additionally, the

transient nature of project teams makes it difficult to sustain and transfer customer relationships

beyond the life of a single project.

3. In-situ production.

The final result of a building venture is usually something that can't be moved, so most of the

work is done at the site. Marketing challenges include in-situ manufacturing and immobility of

the final product from construction. Universal marketing and construction success variables

with the corresponding techniques are unique. Thus, worldwide building marketing research is

needed. Place is the second marketing-mix strategy issue. With marketing of construction, the

ultimate product is delivered at the final location and hence a physical delivery route is not

needed to offer the product with accompanying amenities (Smyth, 2000). In construction, this

notion may relate to the "site" where the structure is built, but clients choose facility locations,

save for speculative constructions (Smyth, 2000). Third, "location" is how project resources

are provided and supplied. Project supply chain management, not marketing, defines this

function. Smyth, (2000) criticises the alternative explanation that relates "location" to the

procurement process and kind of contract, arguing that these factors reflect the contractor's

organisational structure rather than its strategy of marketing which is unable to be tailored to

the employers' needs and is usually dictated by customers and not contractors at the project

level. Lastly, Arditi et al. (2008) defined "location" as the geographic development strategy

while noting that branch offices near potential markets benefit the most. However, the market

extension choice is more linked to segmentation plus target market tactic rather than market

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mixing. Even though having a branch office close to a project site has its benefits, the

contractor's biggest geographical advantage is how well-connected it is with local stakeholders,

especially key staff of potential customers, suppliers, consultants, and others.

In construction marketing, "place" is less relevant. This supports Smyth’s (2000) argument that

in construction marketing, "location" is constrained and cannot be adjusted to satisfy client

needs.

3.3 Conclusion and recommendations.

This chapter highlighted the different characteristics that the construction industry exhibits.

Characteristics like; Immovability, intricacy, permanency, costliness, capital intensive,

intricate long procurement process and dependence on location and weather are among the

many characteristics that affect the marketing strategies of the construction industry.

The aforementioned literature analysis points to the recommendation which suggests that

construction firms should analyse the characteristics of their business that are unique to them

and within their control, with the goal of developing marketing strategies that make use of these

aspects.

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