Economic Factors Influence Design Team and Contractor in Construction of a Project by tkv74755


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									                                     CHAPTER I


1.1    Introduction

       Construction and development involve numerous parties, various processes,
different phases and stages of work and a great deal of input from both the public
and private sectors, with the major aim being to bring the project to a successful
conclusion. The level of success in carrying out construction and development
activities will depend heavily on the quality of the managerial, financial, technical
and organizational performance of the respective parties, while taking into
consideration the associated risk management, the business environment, and
economic and political stability.

       A lot of studies pertaining to factors that influence project performance have
been carrying out since long time ago. A well-performed construction project may
define with the achievement of project objectives. The project objective cannot be
deviated from the triple objectives of quality, cost and time. A research done by
Stephen M. Rowlinson (1988) specified that client, project procedures, human
aspects and environment may affect project performance.

       These factors may be contributed from different parties who involved in
construction project, and each of them will play their individual roles in succeeding

a project. The team of construction project normally forms by client; design
professionals which consist of architect, civil and structural engineer, building
services engineer; construction professionals which formed by main contractors and
sub-contractors; supplier; surveyor and etc.

       Construction projects are born from ideas. For an idea to be realized, it must
be translated into graphic form, which in turn must be transformed into a finished
product. The idea is defined by the owner or client, developed by the designer and
produced by the constructor, who then turns it over to the owner. This circle defines
the construction project cycle by Gould (2002). Thus the relationship among the
project team players is very obvious and vital to assure good performance and
objective can be achieved at the end of a project.

       Friend (1974) highlighted client is where a construction project is born.
Obviously, how the client organizes and manages a project will directly give impact
upon the project performance. It has been acknowledged that client’s attributes in
particular and their general approach towards project management can have
significant effects upon the achievement of project objectives from the points of
view of all the parties involved in the project.

1.2    Problems of Statement

       The rapid development of the construction industry in recent years has
boosted our nation economic and creates wealth to people who have involved in the
industry. Thus the contribution of the industry is very important, and to achieve a
successful project performance are the responsibility of all parties who have taken
part in construction.
       Many people from different parties and organization will involve in a project
development. They are come from construction client who initiate a project
development, project consultant who provide professional services of designing,

surveying, testing and consultation, construction professional who will build and
materialize the project, and etc. A good relationship and interaction among all
parties in the construction industry is crucial, in order to achieve successful project
performance in any construction development.

       When a project performance is not achieved the expectation, the project
consultant, contractor and other team players will be blamed by client that they are
incapable to carry out their tasks and non-performing well. However the client in
most of the time, neglected to absorb any responsibility, as they are claiming those
professionals are employed to give consultation and manage the project. The British
Property Federation's 1997 survey showed major UK clients are dissatisfied with
contractors' performance in keeping to the quoted price and to time, resolving
defects, and delivering a final product to the required quality. They are dissatisfied
with project consultants' performance in coordinating teams, in design and
innovation, in providing a speedy and reliable service and in providing value for
money. The unequal divided of the risk and accountability always discourages the
construction professional to perform well in construction project. This consequently
will jeopardize the project performance.

       Some current clients are not fully aware of their control of important issue
that may cause great effect to the final project performance; else they are
intentionally being ignorant to it. The current industry players found that,
construction client would like to minimize the construction cost, and alter the
original design while the project is in progress. However some of the Chinese clients
believe in Feng Shui and need the change. These changes made will cause disruption
and increase the chance of construction problems occur in future, that affect the
project performance. From the interview with few consulting engineers, some clients
they are dealing with are inexperience in construction field. Thus the decision made
by them will seriously affect the project performance.

       Client is found more demanding as compared before. This is due to the
getting more competitors come into the market and offer more options to them. To
satisfy the client objective in minimizing the cost, consultants are required to come
out with more optimum design and contractors are asking for more economical

proposal to save more cost. Some ignorant client will just choose the cheapest offer
without accessing other important criteria. These will become the root cause of
unsuccessful project performance when someone incompetent is being chosen.

1.3    The Important of Study

       The importance of clients to the construction industry cannot be
overemphasized. With the ever-increasing competition in the construction business
environment, a good relationship among the project team player toward construction
client has become crucial. The attributes possessed by construction client will affect
them in their working performance. It is because client, as one of the major player,
who will give deep impact in alter of any decision made by the project consultant
and any work done by the contractor. In recent years, client expectation increasingly
higher toward the services that project consultant provide, and the quality of work
done by contractor. This higher demand may be caused by more exposures of client
in the industry. Besides, new technology invention and approach toward better
quality of living environment also contribute to higher client demand.

       Nahapiet (1983) has identified client’s experience of the construction
industry as affecting project performance. According to the Wood report (1975)
highlighted that a strong client was seen as a prerequisite for a successful project.
Wilson (1974) pointed out that a quarter of clients has either not clearly established
their building requirements when the building team was engaged or had set no
budget or timetable. These report and research have reinforced the writer opinion
that the client must pay more attention to the important issue of client control of the

       The construction client position in a project will be on top of everyone in the
project team. The simple reason is client as a project initiator and the person who

primarily set the project objective that wanted to be achieved. Besides, they play the
role as a paymaster who will responsible to finance the entirely project. Thus client
satisfaction toward a project will become one of the main factors to judge the
successfulness of a project performance. Inexperience client justification of work
done may always turn many disputes and conflicts among the team player,
especially with contractors.

        According to Egan report (1998), the direction and impetus from
construction client is needed to achieve the performance improvements.
Construction client leadership will be able to change the sky of construction industry
in future. The author believes that it is necessary to carry out a study on client’s
attributes, which may affect the project performance through the survey of opinion
from other project team player such as project consultant, contractor, supplier and
etc. The construction client may utilize it as a guide to strengthen their organization
in competitiveness, and optimizing project performance.

1.4     Aims and Objectives

        This study aims to provide information to the construction client, in order to
enhance their awareness of the important attributes, which may have consequential
influence to the project performance. They may use the result of the survey to know
how well they possess the necessary attributes by other local industry players. Hence
to improve and strengthen their organization, in order to increase the
competitiveness in today business market and achieve successful project
performance for every construction development carried out by them.

        This study formulates the importance of construction client's attributes which
will affect the project performance through out the entirely course of construction
life-cycle. Particular attention for this study required:-

      a) To identify factors affecting the construction project performance.

      b) To study on client organization and their role throughout the course of
         construction process.

      c) To identify various construction client's attributes and sub-attributes that
         may affect the construction project performance, according to
         construction industry players.

      d) To establish relative importance of the main and sub attribute of client
         organization, which may influence the project performance.

      e) To evaluate the current construction client in possessing the necessary
         important attributes.

1.5   Scope of Study

      a) The construction client for the study refers more on private client with
         moderate to big size corporation instead of public client or individual
         user, and have involved in substantial size of construction development
         (overall gross development cost > RM1 million per project) applying
         traditional procuring method and internal project management team.

      b) The data collection will be focused on construction team players such as
         project consultant (Architect, Engineer, Quantity Surveyor and etc), main
         contractor and specialist contractor in the local construction industry who
         are directly dealing with local construction client.

      c) All selected construction teams are actively involved in construction and
         have several contracts currently in progress (> 3 current project).

       d) Type of projects involved including building project in commercial,
           residential and industrial; infrastructure works such as road and drainage,
           earthwork and etc in local construction industry.

1.6    Methodology of Study

       A comprehensive literature review had been carried out through variety
information sources, which included library reference books, journal (e.g.
Construction management and economics), articles & researches papers and reports
from Internet. These reviews help the writer having more understanding in:

       a) Factors that will affect the project performance in local construction

       b) Clients’ roles and responsibility throughout the course of construction

       c) Main attributes and sub-attributes of client that can influence the project
           team members perform during the project life cycle and hence affect the
           final construction project performance.

       The second part of premier data source will be obtained from the respondents
of questionnaire which the sample of project team members will be selected, to give
their ideas and opinions on the topic discussed. To identify the main attributes and
sub-attributes that obtained from previous researchers are exactly what needed in our
local construction industry, a pilot study will be carried out to pretest all the
attributes and reaffirm some new attributes that are suited to our environment from
selected qualified local industry players. The pilot study will be in combination of
semi structure questionnaire together with short interview with the qualified
construction players from different parties such as consulting engineer, architect,

contractor and specialist contractor.

       In the following stage of data collection, a structure questionnaire will be
created subsequently modified of all the main attributes and sub-attributes that
gained from the pilot study. One hundred samples of local construction player will
be randomly selected, to give their ideas and opinions on the topic discussed. They
will be asked for descriptive information about their firms such as type of
organization, experiences in construction and number of current project on going, to
make sure that qualified respondents are being selected. Then, specific questions
about the importance level of all listed attributes and sub-attributes will be asked.
Respondents will be required to evaluate the current construction client that
possesses the necessary attributes.

       In distributing the questionnaire among one hundred respondents selected
randomly from local construction players, the questionnaire will be posted by mail
or by hand distribution and interview session to some qualified respondents to be
carried out. To maximize the number of respondent, an informal method involved
using personal networks and previously established relationship with senior
members of the consulting firms and construction companies will be used.

       All data collected from the questionnaire hereof will be analyzed. A
quantitative approach to determine the relative ranking of the attributes listed, which
will be based on formulae of relative importance index. All sub-attributes will then
be listed follow to the relationship with main attributes.

       Relative important index =       ∑µ

Where, µ is weighting given to each factor by respondents;
       A is the highest weight (based on Likert scale used i.e. 7);
       N is the total number of respondent.

       After established the ranking of each client attributes, writer will then discuss
each attribute based on the knowledge gain from early part of literature review,
answer given from respondents and self-experience in the field. Finally, a conclusion
will be drawn to give an overall idea from project team member towards the client
impact on their performance.

       There are total 4 stages of process to complete the study. In Figure 1.1 shows
the whole process of the study and the methodology adopted in each process.

            PROCESS OF STUDY                     METHOD OF STUDY


                                                                       Literature Review
        Identify problem of statement
                                                                       Interview with
        Importance of study
                                                                        consultants and
        Objectives
        Research scope

        Factors affecting project
                                                                   Literature review
        Construction client organization.

                                                               Literature review
        Identify construction client main
                                                               Pilot study with semi
         attributes and sub attributes
                                                                structure questionnaire
                                                               Interview


        Gain relative important index of
                                                                Questionnaire
                                                                Interview
        Client attributes evaluation.


        To rank the main attributes according
         to relative important index                                     Statistic method
        To evaluate client possession of                                Likert scaling
         necessary attribute


        Summary of findings                                           Questionnaire
        Explanation of findings                                       Interview
        Recommendation                                                Self – experience
                                                                       Literature review

Figure 1.1 Research Methodology

1.7    Organization of Dissertation

Chapter One of the dissertation has given introductory of the study background. It
included the problem of statement and importance of study for justification
purposes. Aims and objectives of study create the target of study to be achieved.
Scope of study drawn the limitation of this study and methodology highlight the
entirely path of study process to obtain the necessary information and knowledge

Chapter Two review the construction project performance, which will highlight the
common factors affecting a construction project performance and advance project
performance measuring method adopted in construction industry.

Chapter Three in study focused on client in construction industry. It included the
construction client background study, their important roles and responsibility, client
input throughout the construction stages and their important attributes which will
have significant effect on project performance.

Chapter Four elaborate on methodology used to obtain data for analysis purpose.
All data collected through pilot study and questionnaire survey will be computed
and presented in table or chart form.

Chapter Five in study focused on discussion of findings based on the data obtained
through literature review and industry survey in earlier chapter. All the discussion of
findings has been listed according to each objective set earlier. A final conclusion
has been draw and some recommendation has been listed in order to achieve the
aims of this study.

1.8    Summary

       In this chapter, discussion on the problem of statement and important of
study has been focused to justify the need of this study. The aims and objectives
have been set to give direction of study. This study is focused on the construction
client in local industry and their attributes which will affect the project team players
to carry out construction tasks during the construction period, and hence contribute a
significant effect to the overall project performance. It is important to know well of
the client because they are the main key person in a construction project who has
significant role in determining the project objectives, project financing, and
justification of a project performance. Through out the literature study and market
players’ survey, the information gained will contribute to practicing construction
client to enhance their awareness of important attributes and the project team
players’ opinions and expectation toward themselves. The organization of this
dissertation has highlighted the importance content for each of the chapter.

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