Welcome to the fourth issue of Management, Procurement and Law of 2022. Here we see three papers which together consider issues surrounding construction from an international perspective, with studies from Australia and New Zealand together with a Malaysian study considering construction firms from a very wide range of countries from Asia, Australasia and Europe. Together these articles explore major issues affecting how the business of international construction is done against a current backdrop of low global economic confidence. It is pleasing to see this international perspective – it not only reflects the international reach of this journal but shows how the issues explored are common to all regions. The focus of these studies – pre-construction contractual relationships, foreign project procurement and industrial relationships – are both richly descriptive of local practices and also generally insightful to contractors and clients who will reflect on the findings from within their own local contexts.
In introducing these three research papers it is useful to view them sitting on a typical timeline of construction operations. Progressing through such a timeline we start with Finnie et al. (2022), who consider early contractor involvement whereby contractors engage with a client’s design team during a pre-construction stage. They observe a lack of research into how such activities are governed through service agreements and, through a two-stage research design, attempt to understand the optimal ingredients for a pre-construction service agreement. They initially analyse four different contract forms to understand what these agreements should contain and then follow this up with interviews with 21 construction participants across New Zealand to understand industry preferences. The contribution here is the findings that time obligations, scope of services, design obligations, intellectual property issues, price formation, key personnel, communication and co-operation are all considered to be the optimal ingredients of such pre-construction agreements. While this study was undertaken in New Zealand, a focus on two UK-based contract forms provides the reader with assurance the findings are internationally relevant.
The next paper (Loo et al., 2022) considers the issues that a contractor faces ‘having made a globalisation decision’ (Loo et al., 2022: p. 151) to enter an international construction market. Such contractors need to decide which projects they will engage with. Against a backdrop of other similar studies, they produce a decision-support tool that considers in a highly quantitative manner the risk exposure from different projects, the probability of winning bids and the expected profitability. Their tool is partially based on the theoretical foundations of a resource-based view, dynamic capabilities and Porter’s generic value chain, but is also uses a questionnaire survey to hone their theoretical model to the preferences and experiences of international contractors. While the study was conducted from Malaysia and is dominated by Malaysian contractors working internationally, Loo et al. also obtain insights from foreign contractors working in Malaysia from Japan, China, Korea, Australia, Singapore, the UK, Italy, Spain and France. The decision-support tool developed is highly detailed and substantial and is the clear contribution from this paper. The tool provides nuanced outcomes that allow a contractor to not just take a go/no-go decision but allows them to understand how their capabilities must be developed to lower their exposure to certain risks.
Our last paper, from Loosemore et al. (2022), is an Australian-based paper that considers the relationship between industrial relations (IR) and productivity. Specifically, it aims to investigate how those working in the construction industry interpret this relationship, particularly within a context of perceived low productivity and highly unionised workforces. It commences by defining productivity and then introduces IR to the mix, pointing out that there are often observed to be negative impacts from IR on construction project productivity. The authors acknowledge that the IR environment in construction varies from country to country and highlight that their study is undertaken within a context of high union activity and presence in the Australian construction industry, an industry which is also facing severe criticism for its low productivity record. While this may then be perceived to be a localised study, its impact is broader and more general – many countries face intense IR and many suffer from low-productivity concerns, often both. In Australia they observe that unions act as a major impediment to reform by resisting innovation, institutionalising restrictive trade practices and forcing up wages without commensurate increases in productivity. They investigated the perceptions of how IR impact on productivity using a survey of construction managers and operatives working on 14 major construction projects in Sydney, Australia. While respondents very strongly agreed that there was an association between union activities and productivity, there is a much lower level of agreement, consensus and understanding about ‘how’ union activities influence productivity. The contribution here is for those wishing to improve IR, with the results suggesting that this is a long-term process that will require the building of new positive stories of constructive collaboration and consigning past stories of corruption from defunct organisations to another distant era.
Thank you, reader, for your continued interest and support of this journal. As ever, the journal welcomes feedback and discussions on its content. I would also like to encourage readers who feel they can contribute to the journal – either through article submission or joining the editorial panel – to get in touch.
