Category: Construction

Introduction

It is doubtless that the construction industry plays a major in not only developed countries but in every part of the world. In other words, construction is a major economic pillar regardless of the development standards of a given country. It is estimated that the sector accounts for approximately eight trillion US Dollars annually, which is more than fifteen percent of the global output.

While this is the case, it is equally important to note that China and the United States are major players in the industry, as they are the leading markets (Boser and Merrill 3). China’s market share is estimated to be 15% ahead of the United States, which has 14%.

In understanding construction sector, it is worth noting the growth of the sector in every country varies widely. This is based on certain factors, which may hinder or promote the entire sector.

The construction practices in these countries also differ and have a significant impact on the growth of the industry. This paper compares construction in three countries, China, America and India. In order to achieve this goal, the paper will focus on certain aspect of the industry, like the background, economics, technology, laws and a general summary.

Background

China’s exponential economic growth has turned most of its urban centers into construction sites, attracting developers from all walks of life. This growth has also had impact on the global scale as most of the climbing cranes used in most parts of the world are believed to have worked in Shanghai in mid 1990s. While this is the case, it is worth noting that China’s construction sector has a long history, spanning centuries ago.

Advancement in technology has also transformed China’s construction industry, with modern approaches being adopted to meet the needs of the sector (Boser and Merrill 1). For instance, most high rising structures in major cities like Beijing and Shanghai are constructed using modern technology while mud bricks are widely used in rural areas in the country.

It is believed that China’s construction industry started to experience tremendous changes in 1980s after the government adopted economic reforms. Based on this, regulations were introduced to create a balanced environment for investors and other stakeholders in the market. The World Bank equally played a major role in introducing international contractors in China.

As a result, the quality and standards of most buildings was guaranteed (Boser and Merrill 1). Additionally, this strengthened competition within the industry as contractors focused on meeting the needs of the country, through cost effective and good technology. Some of these reforms, which were adopted in 1980s, are commonly applied across the country, especially in competitive bidding.

In order to propel the country to competitive levels of construction, the Ministry of Construction was opened towards the end of 1980s. Among other things, the ministry’s role to implement strategies aimed at augmenting development of the entire sector.

This ministry has continued to formulate polices, manage construction standards, and improve relevant technological practices in the industry. This ministry works with line ministries in ensuring that construction standards in China remain high.

Economics

As mentioned before, the construction industry has played a major role in the history of China, with regard to its economic contribution. This has been the case since 1978 when China adopted policies, which allow allowed easy connection with other countries (Boser and Merrill 2). As a result, China experience economic growth of up to 9% of the Gross Domestic Product, with a commendable increase in total investment in fixed assets.

It is worth noting that the China’s construction industry is widespread. In fact, some experts argue that the entire country could be considered to be a construction site because of its potential. The sector registers approximately $93 billion annually as output and provides employment opportunities to more than twenty million people in the country. This accounts to about five percent of the country’s labor force.

Additionally, the construction industry accounts to at least six percent of the total GDP (Boser and Merrill 3). Among other factors, it has been argued that the growth, which has been witnessed in the sector, has largely been augmented by insufficient infrastructure and building space.

The industry is mainly divided into three categories, which play a major role in supporting the country’s economy through job creation. These classes are: State Owned Enterprises, Urban and Collectives, and Rural Construction Teams. In general, these segments play crucial roles and provide millions of jobs to Chinese. The industry has also experienced an increase in the number of contractors, who are major stakeholders.

Between 2008 and 2009, China witnessed an increase of 27.6% in the number of contractors as the growth in design was estimated to be 22.6%. Additionally, China’s leading construction companies registered an annual growth of 31.5% (Boser and Merrill 4).

It is however important to note that domestic projects played a pivotal role in realizing this growth. This growth has also been linked to the construction of a modern rail city, post-earthquake reconstruction, and games among other factors.

Technology

China is known for its rich architectural value. As a result, the historic Great Wall was constructed, being of the two manmade structures, which can be seen from outer space. China also has structural wonders, which reveal high level of creativity and technology, including the Temple of Heaven and the Forbidden City Complex. It is however important to note that most of buildings in China were constructed using concrete and masonry techniques.

Nevertheless, China’s construction industry has undergone significant transformation. Its close links with the Soviet Union, equally shaped the country’s construction path in 1950s and 1960s (Campanella 120). For instance, those structures, which were constructed under the supervision of Russians, were mainly made of concrete.

Russians also preferred heavy constructions in order to support four to eight storey buildings, which were mainly commercial or residential. These structures were also cost effective, since they did not employ intensive architectural skills.

Even though some of the modern structures in China have been constructed using reinforced concrete, it is important to note that most contractors focus on architectural detail. This has gained attention in the industry across the world as it sets performance pace. Based on this, most Chinese new buildings resemble others around the world in terms of architectural design, even though Chinese builders integrate traditional techniques (Campanella 121).

It has been observed that construction practices in modern China resemble those observed in North America. In essence, it is possible to find a building in Beijing, Shanghai or Kunming, which almost resembles those in North America. Most of these structures are usually built of concrete frame, with a net, covering it to avoid causing injuries to people around during the construction exercise.

Most of the major cities in China also regulate construction in terms of architectural requirements, zoning regulations, and safety and product standards (Boser and Merrill 4). For instance, there is regulation in some parts of Beijing that limits the height of buildings to six stories.

Among other things, this regulation ensures that buildings are well-ventilated and receive sufficient sunshine. It also helps to prevent cases of fire accidents and preserves China’s traditional construction elements.

Furthermore, building sites in China are mostly self-contained as compared to those found in Western countries. As a result, concrete is usually mixed on the site to allow quick delivery of high quality concrete. On the other hand, American regulations require the concrete to be mixed and delivered on the site within ninety minutes. It is believed that the long traffic queues in China would not allow ninety-minutes regulation.

Scaffolding is also common in most construction in China (Boser and Merrill 4). It is however paramount to note that technology has significantly revolutionized the construction industry in China. Today, China prides of some of the tallest skyscrapers in the world, built with high class construction technology. It competes favorably with major players in the industry around the world.

Laws

China’s construction industry operates within Construction Law, which was adopted in the year 1997 to regulate the activities of the industry. Before the enactment of this law, construction activities were mainly regulated by bodies, which ensured that all the activities were within a given range.

It is therefore important to note that the Construction Law was formed on the principles of these bodies even though new regulations were also incorporated (Boser and Merrill 5). Nevertheless, the ministry of construction identified sections of the law, which proved to a hindrance to the growth of the industry and even their implementation.

Most of the areas that posed challenges were contract prices, unlawful sub-contracting and project supervision. As a result, amendments were made in 2004 to allow effective regulation of the industry.

For instance, the Construction Law emphasizes the need for all technical and professional personnel engaged in construction activities to have necessary skills and certificates. Additionally, architects, surveyors and engineers are allowed to perform their duties after certification. Importantly, this law applies to both Chinese and foreign personnel involved in the construction activities.

Besides individuals, the law also requires firms involved in activities like consultancy, tendering, design, inspection, and supervision to be accredited before being allowed to transact any business within the industry (Boser and Merrill 5). The law also requires certified personnel and construction firms to buy professional liability insurance. This requirement is not mandatory, even though the Chinese government encourages concerned parties to obey it.

On the hand, the law requires all activities pertaining tendering and bidding to be carried in a transparent manner, which upholds equality and fairness. This section of the law was incorporated in order to address related issues as they were not covered when the ministry of construction adopted the laws in 1997.

While this law applies to all construction contracts, emphasized is put on constructed activities that have been funded by the government. Such works are supposed to be conducted based on the regulations of the ministry of construction. Additionally, all contracts have to be clear in terms of the cost of the project, scope, quality, and the duration within which the project is likely to be completed.

Construction Industry in America

America’s construction industry has a long history dating back to the days of civilization. From carvings of skilled artisans, the history of the industry has significantly changed based on the current technology being employed. These changes were mainly initiated by the global increase in population and the Industrial Revolution. However, this growth has sometimes been hindered by global economic meltdown.

Due to the improvements that were early witnessed in the industry, more buildings sprout as less work was being done manually (Chapman and Butry 1). Additionally, architectural developments equally played a fundamental role in promoting construction of well-designed and standardized buildings. This has continued to influence the entire industry as new designs are frequently developed by architects.

Besides the advancement in technology, the creation of other construction materials like steel and concrete also altered the industry’s growth and trends. Concrete is considered to be cheap and strong, and can be used in almost all types of construction works.

On the other hand, the introduction of steel in the construction sector guaranteed interior strength especially for large scale structures. These developments were crucial as they helped to reduce construction cost that mainly emanated from the use of bricks.

It is also believed that the creation of the American interstate highway also contributed to the growth of the construction industry in America after WWII. In essence, the highway enhanced accessibility to other cities and created room for the sprouting of suburbs. This generated a high demand for housing as people and commercial centers concentrated in such place (Chapman and Butry 3).

Through use of basic architectural designs and affordable construction materials, the country witnessed an exponential growth in houses. This also created business for home builders across the country to meet the needs of people. However, the housing and construction sector has largely been affected by financial crises, which have been witnessed.

Economy

The construction industry plays a major role in the economic development of America. It heavily contributes to the country’s Gross Domestic Product annually. In fact, the sector has profoundly promoted impressive economic growth that has been witnessed since 1989. In general, the exemplary performance of the construction industry can largely be related to the overall economic growth witnessed in the country, represented by GDP (Rothbard 194).

Construction sector experienced significance growth between 1987 and 2006 before the financial crisis that deeply hit the housing industry. In 1987, the sector registered $35 billion as compared to $448 billion in 2006.

In general, construction is considered to be the engine of America’s economy. This is based on the fact that production of products and delivery of services can only be realized if there is proper investment in plant and facilities. Importantly, good infrastructure ensures that there is smooth flow of necessary goods and services to reach the consumers.

It also augments the movement of people from one point to another as they engage in development activities. Housing also accommodates new households and encourages others to expand their housing capacity. In other words, the economy of America is intertwined with the construction sector.

With regards to employment, more than eleven Americans are employed by the sector, translating to about 8% of the country’s workforce. It is however important to underscore the fact that the construction workforce differs largely because of private investors in the industry.

The number of self-employed workers in the sector is estimated to be 1.8 million (Chapman and Butry 5). This is mainly attributed to advancement in technology, which allows private investors to establish construction firms and hire people.

With regards to technology, the construction industry has adopted interoperability, which augments communication among various parties, including clients, contractors, designers, and legal units among others. This allows good flow of information, thus promoting better performance (Rothbard 194).

Construction Industry in India

India is one of the fasted growing economies in the world. This growth has been linked to an array of factors, including large population, better market connectivity with other nations and its domestic sectors of the economy. The construction industry is an integral part of the country’s economy and has contributed to the development of other sectors of the economy (Neeraj 8).

Importantly, construction is ranked second largest after agriculture. It accounts for approximately 65% of the total infrastructural development in the country. Up to 11% of India’s GDP is generated investments in the construction sector.

The demand for construction materials like cement has continuously gone up due to the exponential demand for housing and other structures. The country has also witnessed a rise in foreign direct investment as a result of the positive growth in construction.

India’s economy presents an array of opportunities, especially within the construction industry. This is based on the high need of infrastructure in the country. Economists project that the real estate industry is likely to realize €58 billion output by the year 2015 (Gahlot 144).

The increase is also attributed to the massive advancement in technology, high demand for residential housing and organized hospitality. Foreign direct investment is also expected to increase as a result of these advancements. Additionally, the need for roads, railways, airports, and power, equally present a wide range of opportunities for the county’s economy.

Furthermore, India has a large segment of young population, thus presenting the need for new housing. It has been estimated that the country is in need of more than forty one million housing units. As a result, retailing of houses has become a booming business in the recent years.

On the other hand, there is need for sanitation and water supply projects, which depend on the construction industry (Gahlot 144). These projects offer up to €4.27 billion annual investment. With regards to power, the government of India has formulated a blueprint, aimed at supplying electricity to all its households.

From this, it is evident that the Indian construction industry has an array of opportunities which are likely to propel its growth. Due to these opportunities, it is evident that India has created an environment that allows business opportunities.

Nevertheless, support from other ministries will also be instrumental in realizing this potential (Neeraj 8). The population of India equally presents opportunities as the country is experiencing high shortage of housing units.

Conclusion

Construction industry is a major sector in the world today. It presents a host of opportunities, which allow the growth of other related ministries. Importantly, construction is essential in every country, regardless of whether they are developed or not.

As seen in this research, China, America, and India have play a major role in the world’s construction industry. The three countries have a leading share in the market, which has been developed for a period of time.

Works Cited

Boser, Richard, and Chris Merrill. Building Construction in China: Spanning the Centuries. International Technology And Engineering Educators Association, 31 Mar. 2013. Web. 2000. .

Campanella, Thomas. The Concrete Dragon: China’s Urban Revolution and What it Means for the World. Shanghai: Princeton Architectural Press, 2008. Print.

Gahlot, Peter. Construction Planning And Management. New Delhi: New Age International, 2007. Print.

Neeraj, Kumar. Construction Project Management. New Delhi: Pearson Education India, 2010. Print.

Robert, Chapman, and David Butry. Measuring and Improving the Productivity of the U.S. Construction Industry: Issues, Challenges, and Opportunities. National Institute of Standards and Technology, 31 Mar. 2013. Web. 2008. .

Rothbard, Murray. America’s Great Depression. New York: Ludwig von Mises Institute, 2000. Print.

Strategies of Business Expansion

The primary strategy of growing a company is to expand its operations into other jurisdictions by opening new branches or outlets. Such a strategy allows the company to expand its consumer base and introduce its products or services in new regions. However, a company must ensure that it has enforced effective processes of identifying and managing the risks involved in expanding into new jurisdictions. Clapton Commercial Construction Company must ensure it has a qualified workforce capable of meeting the company’s objectives. The human resource department has the option of recruiting new employees in the new jurisdiction, relocating the company’s current employees, or relocating some employees and recruiting new ones. However, the most appropriate option for Clapton Commercial Construction is relocating some of its current staff and employing new employees in Arizona to fill in the remaining positions. The relocated employees will assume the top management positions in Clapton Commercial Construction’s new offices in its Arizona branch. The option is suitable because it allows the company to stabilize its operations quickly. However, the human resource department must the employment laws in Arizona.

Employment Laws in Arizona

The HR department is critical to the expansion of business operations into new jurisdictions. Some of the crucial activities of the human resource department during business expansion include recruiting new employees and consulting with the current employees on their relocation. However, the most crucial role of the human resource department is to understand and implement the employment laws in the new jurisdictions. Some of the common employment law issues include discipline and discharge, workplace safety, employment policies, employee discrimination, recruitment and hiring, trade secrets, and discipline and discharge among others. Understanding the employment laws in the new jurisdiction is important because it helps in avoiding the consequences of noncompliance with the laws.

Since Clapton Commercial Construction intends to expand its business activities into the state of Arizona, the company’s human resource managers must understand the employment matters in Arizona. Some of the major employment issues that the company must consider in Arizona include the following:

Wages and Hours

Following the approval of Proposition 202, the Arizona state passed a law that specifies the minimum wage offered to employees (Arizona State Senate, 2013). The law allows employees to file complaints against companies that violate the minimum wage laws. However, the Arizona employment law does not offer overtime regulations to private companies. Consequently, Clapton Commercial Construction has the freedom of determining its overtime payments and hours of service.

At-will Employment

The Arizona Employment Protection Act (1996) states that the relationship between the employer and employee is contractual and may end whenever the employer or employee deems necessary. The exception to this regulation is in situations where both parties write and sign the contractual agreements. The Employment Protection Act specifies the conditions that allow employees to sue their employers for breach of contract.

Discrimination

The Civil Rights Act forms part of the Arizona employment laws, and these laws prevent all forms of discrimination against employees (Arizona State Senate, 2013). Another legislation that forms an important component of Arizona’s employment laws is the Americans with Disabilities Act. These laws prevent all forms of discrimination against employees.

Right-to-Work

The right-to-work provision prohibits employers from denying employees job opportunities due to association with labor organizations. The regulation ensures that union and non-union members of the Arizona workforce can secure employment opportunities.

Consequences of Noncompliance

Companies that do not comply with the Arizona employment laws face several consequences that include lawsuits, fines, suspended or revoked licenses, and bad publicity. The Arizona employment law allows workers whose rights have been deprived to file lawsuits against the employers. The lawsuits may result in heavy fines against Clapton Commercial Construction Company, and this would reduce the company’s profit margins. In situations where violations are extreme, the state of Arizona may suspend or revoke the company’s license. Such situations would result in bad publicity for the company.

Recommendations on Compliance

We recommend the following strategies to help Clapton Commercial Construction avoid the negative consequences of not complying with the Arizona employment laws.

1. Creating appropriate working environments for the Arizona employees.
2. Employing managers who understand the Arizona employment laws.
3. Prohibiting discrimination in the recruitment of Arizona employees.

References

Arizona State Senate. (2013). Background brief: Labor employment laws. Web.

Executive Summary

The government of Saudi Arabia has strived to achieve economic success by investing heavily in infrastructural development, leadership, and creation of conducive environment for industries to thrive. Unsurprisingly, Saudi Arabia is one of the fastest rising economies in Middle East due to thriving industries such as tourism and real estate. Indeed, it is the home to two of the world’s most popular shrines, namely Mecca and Medina, which attract a lot of positive attention. In recent years, the real estate and construction industry has become the biggest booster of the economy, thanks to its fast growth. Importantly, the oil business is performing well in international markets, bringing revenues that are used to improve the living conditions of Saudis. As the economy becomes stable and population grows, demand for housing rises thus contributing to the increased investment in real estate and construction industry.

This assignment will seek to discuss how real estate and construction industry has risen in Saudi Arabia and the challenges it has faced in achieving this enviable success. The key areas that will be mentioned include the size and rate of growth of real estate and construction industry over the years. The paper will also look at the economic cycle to unravel the economic side of real estate and construction business. Ideally, in every business, there are competitors and this is no different in construction industry. The paper will highlight the main business rivals and compare the industry with construction industries in the world. This would be aided by a SWOT analysis, which will look at the strengths and weaknesses inherent in the industry as well as opportunities and threats available in the wider national and international market.

Description of the Real Estate & Construction Industry

The construction of real estate in Saudi has grown at a very high rate in recent years mainly due to the increasing number of tourists visiting the country and good returns from the oil sector. The government has introduced numerous economic expansion strategies that wish to divert the economy’s direction from oil to non-oil sectors (Ali, 2013). With rising rate of tourism and population, there is need for construction of more residential houses and hotels. As it stands now, the demand for housing in the upper and middle class category has exceeded supply, leading to increasing construction of the same (Hines, 2001).

Riyadh, Al Khobar, Muscat, and Dammam are some of the cities where business is ubiquitous and doing well. The country has attracted a number of investments from other countries and signed contracts that have helped in boosting economic growth over the years, especially in construction of hotels and accommodation facilities. Indeed, it has an estimated growth rate of 35% over the next three years, which will place it among the highest growing sectors. In 2013, a confounding amount of $76 billion was set aside from the national budget to aid in construction projects. Continuous growth estimates the figure to increase to $3 trillion come year 2020. Evidently, the government has allowed the building of skyscrapers in Riyadh in order to help in the transforming the skyline of the capital and create a healthy competition for the developers advertising their products (Al Zoumah, 2011)

The country has major business plans that are underway, which are set to begin with the funds set aside. These include $15 billion King Faisal University, $16 billion Jeddah Kingdom Tower, and their target being to make it the world’s tallest building. Others are the $40 billion Sudair Industrial City and six main economic cities, which will cost over $160 to complete.

A country with a GDP rise of 7.5 per year is bound to attract a number of investors from other countries who would want to partner with local investors and companies. With the real estate growing at a staggering rate, inputs such as stones, cements, and metal among others used in construction are also selling well in the market. Importantly, foreign investment has helped with the immense growth of the real estate and construction industry (Ali, 2013). The hospitality sector has also flourished, adding to the list of real estate constructions in the economy (Al Zoumah, 2011)

With growing commercial sector, the country has established some of the most active markets in the region where people come from different nations to conduct business. This has seen the real estate and construction industry stake progressive increase of about 42.4% and 24.2% respectively (Tadawul, 2014). Mecca, the holy city for Islam whose population is approximately 1.5 million is known for its high-rise buildings. The city has attracted religious tourists who visit every year, making land in the city to be among the most valuable commodity in the world (North & Tripp, 2012). In Mount of Omar district, developers have a plan of demolishing old buildings and pave way for 120 residential towers, each 20 stories high that can accommodate 100,000 people. Moreover, Mecca’s housing capacity is bound to increase by 50% if the developments are completed (North, Tripp, 2012).

The Economic Cycle of the Industry

The industry has evolved in the past few years and become very vibrant due to increased demand of housing. The real estate and construction in Saudi Arabia may be viewed as being in the cost or shakeout phase. In this phase of life cycle, companies are seen to have settled and economies of scale are realized especially for large firms. Due to intense competition, small players are obligated to leave the field, as they cannot cope with the huge investments in terms of capital and machinery used by large firms. In addition, firms engage in large-scale partnerships thus barricading entry of new players. Evidently, the situation on the ground shows some of the leading global construction companies setting base in Saudi Arabia to reap from this lucrative market.

The real estate and construction industry has grown and already made a name for itself within and outside Saudi Arabia. Currently, the country is working on expanding the industry further and coming up with sophisticated buildings that are unique compared to those built before. The industry is working towards improving the estate business through demolition of old buildings to build new ones that will help accommodate the increasing population (Al Zoumah, 2011).

Construction investment cycles should be considered by a government in order to make good investment decisions. When it comes to construction of real estate, time is needed for development of the plan and for stocks to respond to new market conditions. Ample gaps flanked by planning and completion segments cause construction to react cyclically to exogenous shocks. Investors, real estate marketers, and other people with vested interest in this industry have adapted construction cycle volatility to avoid losses and other long-term effects caused by casting a blind eye.

Constituents of the Real Estate & Construction Industry

Tadawul is the main and only stock exchange in Saudi Arabia. When looking at performance in the stock market, the real estate and construction industry has kept growing over the years. From 2002 to 2005, the price of houses rose significantly by 13.7% annually and land prices rose by 16.5% per year according to the National Commercial Bank Capital, which is the largest in the Middle East. These figures increased in 2006, with land price playing at 20-40% (Al Zoumah, 2011). Such economic surges can only be experienced if the rate of business in a country is increasing through investments and positive response from the world at large. At that time, due to the growing demand and limited supply of housing units, prices were bound to increase.

Data obtained from the ministry of economy and planning 8^th development plan (2005- 2009) showed that there was a shortage of 0.73 million housing units and an unmet demand of 0.27 million housing units by end of the 7^th development plan (Al Zoumah, 2011). This number is not expected to stagnate but to increase by 2015 due to the change of landscape and a favorable working policy. The robust growth has made it an attractive destination for many investors from all over the world, international suppliers, and other real estate business developers. According to some study done by Global Investment house, the real estates’ GDP was to rise to 7.2% in 2010 from 6.8% in 2004 ( Al Zoumah, 2011). Currently, the industry boasts of $36bn of Foreign Direct Investments and over $500bn of real estate projects already in progress. The FDI improves the local growth immensely and the government has tapped into this fully.

When looking at Tadawul, the real estate’s business value is at 6128.80, construction is at 3,897.87, while the hotel and tourism industry is at 18,870.44 (Tadawul, 2014). This shows that the tourism industry helps in the real estate and construction business tremendously.

Industry SWOT Analysis

Strength and Opportunities

The industry boasts of internal capabilities that have seen it take a prominent position in Middle East region, only second to UAE (Oxford Business Group, 2008). With the increasing population in the country, and the government striving to provide employment for youths through diversifying investment from the oil business, then the real estate will benefit through demand for housing by local people. The upper class and middle are looking for places to put up their families when they move to the commercial centers to work. With Mecca and Medina becoming robust, the tourism industry is bound to continue increasing and attracting more people to the country and thus more hotels and restaurants will need to be constructed (North & Tripp, 2012).

Due to the stability of the economy and government’s commitment to promote investment through accommodative trade policies, there is increased appetite for investment in construction and real estate industry. In addition, foreign investors are and contractors are finding it more attractive to collaborate with local investors who have better knowledge of the market (Hines, 2001). Liberalizing the property laws has also added a boost to potential growth of the industry. Moreover, the sophisticated technology has greatly assisted in blending the old ideas and the new ones in order to create great results for the benefit of all players in the industry.

Weaknesses and Threats

Even though the Nation is endorsing colossal developments in construction sector, the housing market still smarts from a huge demand-supply fissure as a result of prompt growth of the local community and briskly waning household sizes. The real estate also suffers from corruption in the country to an extent that brokers make deals, only to have them snatched by the moguls in the industry; thus, some of the rich owners in real estate and construction industry are there through dirty deals. They also need to improve on the delivery of capital projects, as this has been a challenge to them (Hines, 2001). They might also want to work on moving from only publicly financed projects to produce infrastructure of higher quality than the traditional ones. Lack of mortgage facilities has also been a challenge to potential owner of real estate; this should be reviewed in order to accommodate as many people as possible in this industry.

Competition Environment in the Industry

Capital requirements

Despite its growth in recent times, real estate and construction industry faces stiff competition from other industries like oil and gas in terms of capital requirements and access. The real state business normally demands a large capital in order to thrive, which may be a deterrent to most potential investors. Moreover, when the buildings have been constructed, there is the issue of how stable they are, or it is just a rush to have many skyscrapers that have been poorly constructed (Al Zoumah, 2011). Here, government faces a tough task trying to build partnerships with foreign investors who would provide funds needed to bring up quality and standard buildings in order to overcome stiff competition from other nations, especially in the Middle East and Japan.

Government Policy

How has the government policy helped in building positive competition in Saudi Arabia to help in building the growth of the business? This is a question one might ask in order to understand government’s relationship with foreign countries. Starting with technology, the country has adopted Western technology to replace some of the old ideas (North & Tripp, 2012). This means that they have given a chance to new development through technology in the country and have used it to their advantage. This is fostering relationships between the partnering countries as well as enhancing sharing of ideas. The government has also employed policies that allow foreigners full access to trade and partnership with local players to improve the business. These policies do not favor foreigners or locals, neither do they allow room for foreign investors to exploit local investors; this makes business easy, thus helping in attracting FDI.

Competition between the public and private sector

There is stiff competition between the private and public sectors in real estate investment, especially taking into account that the government has a keen interest in this booming industry. As a result, the government has imposed bans intended to the operations of private investors; for instance, ban on cement export limits the market for players in the cement industry. This will also affect the construction and real estate industry because the two industries are interdependent. These same interpositions are found in the labor industry where the government wants to take full control; however, this is impossible because both sectors have to exist and work together. The government therefore needs to create a lasting balance in order to tame this competition for the sake of the economy since both private and public sectors contribute to economic development (Ali, 2013).

Power of Buyers

Buyers always have the say in all industries based on their preferences and tastes. The same applies to real estate and construction industry where products have to be satisfactory to the needs of buyers. In Saudi Arabia, housing business has remained relevant amid competition by ensuring that the needs of individual consumers are satisfied, through both quality and pricing. Buildings have been built using great technologies and best architectural designs that make the industry remain competitive (Al Zoumah, 2011). This has been triggered by the realization that major competitors such as Dubai and Tokyo have great architecture and real estate technology that has been endearing to many global consumers.

Future Outlook of the Business

The globalization of trade has caught the eye of players in Saudi Arabia’s real estate and construction industry, who have been challenged to not only focus on internal market, but also on global market. As a result, the country has firms that are targeting other countries in order to lure them into construction business; one such firm is Al Oula, which has projects in major cities of UAE and Egypt.

Due to the high growing rate of Riyadh and the area surrounding Mecca, the government is working on the development of new units that will accommodate all people as well as hotels for tourists who visit the holy land each year. Land in Riyadh and Mecca is very expensive due to high demand; however, investors who will be working on this project will bring in good returns to the country. The high-rise buildings, apartments, and townhouses will be introduced to cater for people such as expatriates who would want such services (Al Zoumah, 2011). In addition to Jeddah Hills that will cost an upward of $11 billion, there will be an economic city to be built on the coast of Red Sea, north of Jeddah with three luxury residential districts that will house 75,000 residents (Al Zoumah, 2011).

One of the major factors influencing this competition is growth rate. With the population growth and a stable economy, people in the country have jobs that can sustain them. In addition, the government has worked and is still working on ensuring that the youth have stable jobs and general rate of unemployment is as little as possible, thus increasing the demand for estates these people can live. Apart from Riyadh, which has been a popular commercial center, other cities have come up and intensified competition in trade (North, Tripp, 2012).

With the rich Muslim culture in the Kingdom, many people go to Mecca and Medina to learn about the history (North, Tripp, 2012). The rate of tourism has been heightened by many visitors including schools from other countries who tour Mecca, thus contributing significantly to success of hotels around the area.

References

Al Zoumah, R. M. (2011). Real Estate Management. Aberdeen, Scotland: Aberdeen University Press Services. Web.

Ali, J. (2013). Saudi Arabia uses current budget surpluses for future. Web.

Hines, M. A. (2001). Investing in International Real Estate. United States of America: Portsmouth, England: Greenwood Publishing group Inc. Web.

North, P., & Tripp, H. (2012). CultureShock! Saudi Arabia: A Survival Guide to Customs and Etiquette. NY, USA: Times media PTE LTD. Web.

Oxford Business Group. (2008). The Report: Saudi Arabia 2008. London, England: Oxford Business Group. Web.

Tadawul. (2014). Saudi Stock Exchange. Web.

Appendix

Abstract

Corporate social responsibility (CSR) gained popularity in the 1970s as a policy function to encourage corporations to run their operations responsibly. Since then, it has continued to gain popularity in different regions, especially as governments embrace it as a way of obligating businesses to help in dealing with different social and development challenges that arise in different communities. This is achieved through laws and regulations, as well as training on CSR.

In the construction industry, CSR plays a significant role in ensuring that projects create employment for the locals, the environment is protected, energy is conserved, the land is utilized in an economically sound manner, construction projects are sustainable, and safety is observed, among many other areas where CSR is applicable. In Jordan, the construction industry is experiencing a vibrant growth, especially from the government’s support for less-energy intensive sectors.

This paper analyzes the role of CSR in the construction industry, using Jordan as a case study. Data and information are collected through interviews and the study of past academic resources. The findings support the dissertation’s hypothesis, which states that CSR programs play a significant role and can contribute to responsible business practices and sustainable development in communities where organizations operate. The paper, however, concludes that this is only possible if CSR programs and initiatives are implemented in the right way. Recommendations are focused on how corporations can achieve this.

Introduction

Corporate social responsibility

Different authors have presented different definitions for CSR. Among them is Banerjee (2007) who defines it as a “built-in, self-regulating mechanism, whereby business monitors and ensures its active compliance with the spirit of the law, ethical standards, and international norms”. CSR activities affect investors, management, employees, consumers, communities, the environment, and other stakeholders. All these stakeholders play different roles to ensure CSR initiatives benefit each of them equally.

The right CSR initiatives in different regions are ensured through laws and regulations, awareness and training corporations on how they can benefit from CSR. Benefits are spread across all stakeholders and include supported development in communities, allowing employees a chance to participate in beneficial activities to the communities, building a reputation for a business and its brands, as well as support for government-initiated development activities and plans. Major challenges for corporations in their efforts to implement CSR include lack of finances, resistance by communities, lack of support by governments, and legal challenges that arise as a result of being involved in different community activities.

CSR in Jordanian construction industry

“Construction contractors are beginning to include aspects of corporate social responsibility into their construction projects, but, arguably, the role of CSR is still not clear” (n.a., 2010). Every stakeholder has a role to play to enable the industry to mature in its implementation of CSR. Investors have to be willing to input more finances to support CSR initiatives. Communities play a significant role in helping construction companies identify social needs that need to be addressed. Clients play a role by putting pressure on construction companies to do business responsibly. “Construction clients are now asking contractors to embrace and deliver CSR as an integral component of construction activities” (Santorella, 2011).

“Real estate sector flourished in the middle east region till the recent global recession and the associated setbacks that affect the sector at varying degrees in different parts of the world” (Kokash, George and Salem, 2011). In Jordan, the construction industry is considered among the most successful in the region, mainly due to the level of support accorded by the government on less-energy intensive sectors, where construction falls. Nonetheless, several issues remain contentious and the role of the industry in promoting sustainable development in the surrounding communities remains a topic of heated debate among stakeholders.

Purpose of research

The research which forms the basis of the dissertation was inspired by the continuous debates that keep arising on the role of CSR in different industries. It was also inspired by the recent wave of pressure from governments in different regions on businesses to address the issue of CSR seriously. As a researcher, I believe that corporations should be responsible for the negative environmental and social impacts resulting from their day-to-day operations. Therefore, my recommendations will support the implementation of CSR initiatives in corporations, as well as laws that hold businesses accountable for any social and environmental irresponsibility.

Research design

“The concept of corporate social responsibility has been adopted by several companies in a variety of industries” (Hill, Alan, and Wendy, 2006). As Whellams (2007) continues to explain, “CSR programs address a wide array of social and environmental issues, from human rights and working conditions to climate change and greenhouse gas emissions”. For this dissertation, it would not have been possible to investigate CSR programs and implementation in all the industries. Instead, the dissertation focuses on the Jordanian construction industry as a case study.

As explained by Whellams (2007),” there are two types of case studies, the intrinsic case study in which the case is the focus of research due to its uniqueness, and the instrumental case study where the focus of research is specific issues that the case serves to illustrate”. This dissertation’s case study serves the purpose of an instrumental case study, shedding light on the role of CSR in the Jordanian construction industry. The case is then used as a reference point for other industries in different regions.

Aim

Discuss the role of CSR in the construction industry, using Jordan as a case study

Objectives

• Define CSR
• Understand the role of CSR in different business environments
• Discuss the role of CSR in the construction industry
• Discuss the role of CSR in the Jordanian construction industry

Hypothesis

CSR programs play a significant role and can contribute to responsible business practices and sustainable development in communities where organizations operate. However, this is only possible if CSR programs are implemented properly. This paper suggests that the success of CSR and its purposes are dependent on the chosen initiatives, how they are designed, their implementation, as well as the support of the beneficiary communities.

Methodology

As Hill, Alan, and Wendy (2006), “many aspects of local sustainable development cannot be quantified, and those which can, often only paint a partial picture of what is happening in a particular community”. To test my hypothesis, a variety of research methods were adopted for this dissertation. Primary data was gathered from five semi-structured interviews with people at a management level in the Jordanian construction industry. Secondary data was gathered through observation and studying academic resources such as books, online articles, journals, and past research projects by different individuals and organizations. Conclusion and recommendations were formed from the compilation and analysis of the gathered data and information.

Dissertation structure

The first chapter of the dissertation is the introduction, which briefly summarizes the rest of the dissertation, as well as highlighting the purpose, aim, and objectives to be met by the rest of the work. Chapter two is the literature review, which presents the theoretical aspects of the paper. These include definitions, various discussions by different authors and researchers, the application of CSR in different industries, the role of CSR in the construction industry, the background of the Jordanian construction industry, CSR obligations, and obstacles in the country. The third chapter presents the methodology, which is an explanation of how primary and secondary data is collected. The data analysis chapter presents the data and information collected in chapter three. Finally, chapter five and six are conclusions and recommendations chapters respectively. The last two chapters are formed from data and information collected and analyzed in chapters 3 and 4.

Summary

This paper analyzes the role of CSR in the Jordanian construction industry. The case study is designed to meet the objectives of the paper by studying the background of the topic, collecting data, and forming a conclusion and recommendations based on the results. The introduction chapter defines CSR and briefly highlights several factors that influence its implementation in the construction industry. It further outlines the purpose of the research, the research design, dissertation’s aim, objectives, and the hypothesis. The methodology and data analysis will all be designed to prove or disapprove the hypothesis of the paper, which states that CSR programs play a significant role and can contribute to responsible business practices and sustainable development in communities where organizations operate.

Reference list

Banerjee, S.B., 2007. Corporate social responsibility: The good, the bad and the ugly. Cheltenham [u.a]: Elgar.

Hill, J., Alan, T., and Wendy, W., 2006. Sustainable development: National aspirations, local implementation. Aldershot: Ashgate, Cop.

Kokash, H., George, T. and Salem,A., 2011. Motivations, obligations, and obstacles to corporate social responsibility in Jordanian real estate companies. International Research Journal of Management and Business Studies, 1(4): 107-118.

n.a., 2010. The role of corporate social responsibility in construction seminar. Web.

Santorella, G., 2011. Lean culture for the construction industry: Building responsible and committed project teams. New York: Productivity Press.

Whellams, Melissa., 2007. The role of CSR in development: A case study involving the mining industry in South America. Web.

Unions

Unions are organizations of people working together with a common goal to improve and protect their working conditions (Vitez 2012). They can be formed as reactive institutions which are formed to respond to a particular problem. However, other unions are proactive in that they are formed to develop and pursue a particular agenda. Both approaches are valid and acceptable in the formation of a union since both protect the integrity of the workers. Both reactive and proactive unions push for changes in the working environment and strive to make the workplace a better experience.

Construction unions

Construction unions are formed by workers in the construction industry to do just the same thing as in other unions. Pushing for fair working conditions and reasonable financial compensation is the agenda in most of the construction unions. This is owing to the fact that the construction industry bares risky working conditions (Smith, 2012). Workers in this industry are allowed to form unions to protect themselves from risky occurrences in the course of their work.

Managing construction unions

Trade unions are committed to protecting their members from exploitation and poor working conditions as deemed by the members. With the current laws protecting labour unions globally, it is very difficult to contain the effect of uncontended workers. When the situation goes out of hand, the workers may resolve to strike. Striking workers are protected by law, and it is within their rights to express their grievances through a strike. It is in the interest of construction management panels to consider a warm relationship between them and workers (Mayhew 2012).

Discriminating against workers is a very conspicuous problem within any working environment leave alone the construction industry (Edwards 2012). Top management must ensure zero tolerance to such disparities in order to ensure that workers are contended. Equal Employment Opportunity ‘EEO’ laws protect workers from discrimination. Discrimination is deemed to happen when people with the same characteristics such as race, skin colour, age or gender “protected class” are treated unfairly from others with different characteristic. In such an environment, it can be very difficult for people to harmoniously work together (Hall 2012).

Relating to unions

Management must make an extra effort to engage the union officials in talks and negotiations that would lead to a warm relationship between the two. Assigning a permanent liaison with the union is very important to create a gesture of goodwill. A liaison helps both parties understand each other’s goals and objectives hence reduce the possibility of misunderstanding each other. Creating a routine invitation of the union officials to keep the working progress on the check is crucial (Merritt 2012). Through this, a review of employment procedures and remunerations can be done and hence keep workers satisfaction in check. To avoid a problem from escalating, the management must always be fast to approach the union whenever a problem occurs.

The management must always be willing and ready to negotiate with workers regarding any issue that may impact both parties (Acevedo 2011). Unions must be provided with necessary data before any further actions are taken. Mediation policies must be created to mitigate disagreements between unions and management. This provides a solution during times where both parties have issues by creating mediations process to get through the challenge (Nicholas 2004).

References

Acevedo, L 2011, How to Build Relationships with Labor Unions. Web.

Edwards, T 2012, How Labor Unions Have an Effect on Compensation Read more: How Labor Unions Have an Effect on Compensation. Web.

Hall, S 2012, The Economic Impact of Labor Unions. Web.

Mayhew, R 2012, How to Be an Effective Union Representative. Web.

Merritt, C, 2012, How Does Bankruptcy Affect Union Agreements? Web.

Nicholas, M 2004, Project Management for Business and Engineering Principles and Practice, Burlington.

Smith, J 2012, The World’s Most Ethical Companies. Web.

Vitez, O 2012, Define Labor Unions. Web.

Rationale and First Screen of the Proposed Project

The targeted residential estate has four hundred homes enclosed in a gated community. Despite the relatively large family setting, there is no public recreation facility apart from a small center housing a bar, few shops, and a health facility. The residents of the estate do not have a Public Park that can support their physical exercise activities and recreational needs. Although the land was allocated for such facility, the estate project stalled in the third phase due to funding limitations. From the results of a random sampling on the views of the residents about their desires of a recreational facility, 70% voiced the need for a public park that can house at least football and basketball courts that could double up as jogging areas. They also proposed a public library that can host mini sports apparel and restrooms to take care of their needs every time they feel like exercising. These needs informed the development of a plan for the proposed project (Griffin and Moorhead 31). When asked if they are willing to pay between $300 and $400 per household to support the project, the residents interviewed agreed with the proposal.

Description

The proposed project is constructing a park that has football, basketball, and volleyball courts, with the football field covering half of the park. Basketball and volleyball courts will cover the other half and each will overlap. At the outer ring of the park, there will be a library with a mini sports apparel shop. The apparel shop will cover a third of the library space. Since the proposed project will be erected in a new residential estate, it is estimated that the size will be relatively small compared to standard parks because of limited space and budget. The park will be created for the residents of the new estate and will have an exclusive membership card for access. However, it may be opened to the public after clearance from the residence board upon payment of a small fee.

Requirement

In order to execute the proposed project, a comprehensive research was carried out to establish the potential materials and cost implication (Albers and Mazur 14). Specifically, the project team referred to an existing model within the same district hosting three hundred residential homes in an enclosed estate. Moreover, the team gathered data from secondary sources on design and quantitative survey in the planning and building of a public park. In addition, the research integrated views of engineers and other professionals who have carried out similar projects in the past. Before carrying out any work on the proposed project, the team sought for approval from the estate developer since the original plan of the new residential area had land allocated for the creation of a public utility facility.

From the research, land allocated for the project measures 80 meters by 80 meters. There is a stream cutting at the center and draining its waters into a small man-made lake, which acts as a fishing ground for the residents. The developer also informed the team that the residential estate project architecture and land surveyor had given the entire land a clean bill of health since it has stable bedrock just 4 feet below the red loam soil at the top. Fortunately, the allocated land is relatively flat, hence will not attract exorbitant cost in the rehabilitation. However, the stream cutting in the middle has to be dealt with since the football pit would overlap.

Upon consultation on the potential requirements in the construction of the park, the residential civic engineer, who developed the new estate, noted that successful project of our magnitude would cost about a hundred thousand dollars. The cost was divided into three major expenditure budgets. The first budget of forty five thousand dollars would go into the digging, filling, leveling, and terracing the football field and the two courts for basketball and volleyball. Specifically, it was estimated that the football field would cost about twenty five thousand dollars if the stream is rerouted or twenty four thousand dollars if it channeled through a pipe across the development land. Building the basketball and the volleyball courts would cost about twenty thousand dollars (see table 1), which is inclusive of erecting terraces and relevant equipment. The cost of doing a library was estimated at twenty thousand dollars, since it would also house a mini apparel shop, changing room, washrooms, and a mini gym. The rest of the budget was allocated to the general landscaping, construction of pitch terraces, a special stand, and restrooms in the eastern, western, northern, and southern ends of the park. In addition, a special turf was proposed for the football pitch to reduce the cost of constant maintenance. According to our plan, three hundred trees will be planted around the park as part of the landscaping requirement.

Table 1. Summary of the budgetary allocation

Scope Rapid Prototype

The proposed project requires further review to develop a cost effective prototype that falls within the project budget. In this case, the first alternative would be to implement the project as proposed. The second alternative would be to modify the basketball and volleyball courts into a single pitch that has movable posts to accommodate one activity at a time. This will reduce the cost implication by almost $10,000. Again, the stream cutting across the football pitch can be channeled into a pipe to save about $2,000 that was to be used to redirect it off the park. In addition, the washrooms could be done on just two sides of the park to cut the cost of construction by $5,000. However, these proposals have a direct impact on the quality of the project since they will limit the park’s usage at any given time (Elder and Krishna 998). For instance, it would be difficult to convince the residents that volleyball and basketball cannot be played at the same time.

Evaluate/Refine Ideas

In the interest of ensuring that the budget allocation is observed, the adjustments were passed through a litmus test for their relevance, applicability, and impacts on the primary intention of the project. The findings of this test revealed that it would be ideal to implement the project as initially proposed since the cost difference would only be $15,000, which could be recovered in less than a year after completion of the park from the user fees. As the project stands, it is feasible to carry out the actual construction since 400 households paying a $300 dollars subscription each would translate to $120,000. This is more than the estimated cost of the project. Even if only 80% of the residents commit to the project, it would be possible to raise $96,000, which is just $4,000 short of the initial budget. Using the Porter’s Five Forces Model, the project evaluation reviewed the bargaining power of the end users, existing of substitutes, bargaining power of the contractor and material suppliers, current and potential competition, and the possibility of a new entrant offering the same services (Markel 18). Apparently, the project will be based within a gated community and will be owned by the residents, who will also finance it. The project has a fixed cost and will not suffer from dynamics as a result of inflations in the costing (Bolman and Deal 55). There can never be any substitute as the project only targets residents and there is only a single plot allocated for the proposed facility. This means that the impact of any potential competition would be near zero (Kotler and Keller 29). The only constraint would be a rise in cost due to underestimation of the residents’ subscription. Thus, based on the Porter’s Five Forces Model, the project is viable as is proposed.

Works Cited

Albers, Michael, and Mary Mazur, editors. Content and Complexity: Information Design in Technical Communication. Routledge, 2014.

Markel, Mike. Technical Communication. 11^th ed., Bedford/St. Martin’s, 2014.

Kotler, Philip, and Kevin Keller. Marketing Management. 15th ed., Pearson Prentice Hall, 2016.

Griffin, Ricky, and Gully Moorhead. Organizational Behavior: Managing People and Organizations. 10th ed., South-Western Cengage Learning, 2012.

Elder, Ryan, and Aradhna Krishna. “The Visual Depiction Effect in Advertising: Facilitating Embodied Mental Simulation Through Product Orientation.” Journal of Consumer Research, vol. 38, no. 6, 2013, pp. 988-1003.

Bolman, Lee, and Terrence Deal. Reframing Organizations: Artistry, Choice, and Leadership. 3rd ed., John Wiley & Sons, 2013.

Introduction

A balanced scorecard is an advanced strategy that examines and uses performance management and compares results with benchmarks. It ensures flexibility and revision. Britain’s Terminal 5 construction required highly technical expertise. Therefore, the Balanced Scorecard became the best tool to use for all the major activities, including procurement and transactions. The building of the Airport applied the economic focus, internal focus, learning and growth focus, and the customer experience focus.

Heathrow T5’s Application of the BSC

The balanced scorecard is a strategic planning and management system that is relevant to business and industry. Governments and organizations come up with visions and align their strategies and activities with these scorecards (Customer Perspective, 2016). The BSC helps to improve both the internal and external needs of the business for both profitable and non-profitable organizations. The plan involves putting the vision into two primary focus points that the organization’s leadership will use to measure performance.

The Financial Focus

The construction of T5 terminus had been a result of various studies conducted by a team of experts. They discovered that air transportation worldwide was becoming very expensive because of the increased costs of managing airports. There was also the necessity to build a world-class airport with affordable charges to the customer. The Airport was also supposed to bring good income to the British Airports Authority. Due to the demands, the management had to find cost-effective means of putting up an airport with world standards.

The BSC financial focus requires that the financial department comes up with data. The data should have standards that each commercial activity should measure up to successfully (Basu, Little, & Millard, 2009). Finding private contractors that have proven records of success was not easy. It also involved costs. The government centralized and automated the process of construction and service bids, qualifications, and approvals. Therefore, the BAA outlined its objectives for the success of the project right from inception to completion.

Before the project started, the public had the opportunity to raise questions on whatever issue was relevant to the achievement of the goals. They would also advise the management through a systematic approach given by the management for the project. On the same project, the forecasted view was that the project would remain automated throughout its lifespan. There would be future adjustments that would help the Airport continuously grow to become world-class.

Internal Focus

T5 was supposed to increase efficiency in customer service. The project required that all payments should become automated. Customers would pay for services at the airport using any technological systems (Jones, 2011). The use of credit cards, debit cards, and any online methods was to ensure a quick delivery. Customers would get replies to the services they applied for from wherever they were operating and could reply in their chosen method. It was to include phone responses.

Another concept was to ensure that all transport mechanisms that would serve the port align themselves with this new way of doing work. The rail and bus transport had to adapt to the new techniques. They would pick and drop passengers at well-refurbished centers. They would also use specified means to pay the airport for the renewal of their contract to the utilization of the airport.

BAA had to consider a strategic contracting and procurement strategy. The process had to have the support of the performance management system and an audit process. The project also documented the best practices and learning points of the T5 Agreement and balanced scorecard-based performance management system. It also adopted best practices and learning points from the other constructs of project quality project excellence.

The process would save thousands of hours that had gone to waste in the previous years when people were seeking for the airport’s services. It would also enhance the security of information. Customers would be secure from any third party getting their information. It would lead to an increase in surveillance and hence safety improvement. Since there was the rise of terrorism all over the world, the Airport would be one of the safest in the European region. Therefore people traveling through the European continent would find it safe to use the airport facilities and services.

Learning and Growth Focus

Every corporate should seek ways to grow and improve its services to the customers. The best way to do this is through continuous learning. Learning can be in different forms. Sometimes the organizations can plan for workers to go back to school. It may be a college or a university for improving their professionalism (Sherwood & Sherwood, 2009). On another scale, they can go through rigorous training at the place of work. The training can be through a method of staggering the lessons to achieve a mission. New approaches and systems can also become useful to the company. When such things happen, the staffs have to undergo particular experiences.

Heathrow Airport had to train some of the teams that would be involved in the project. They would become the primary resource for the professionals who would undertake the job of construction of the terminal 5. Training had to happen again at the completion of the project. It was to include the staff who would work in the refurbished terminal and those who would be linking up to the new operations. It also had to include airport suppliers (Sherwood & Sherwood, 2009). A majority of them had to undergo a brief introduction seminar to the new ways of doing things at the airport.

The Airport authorities were also organizing for the research and technology to be a continuous process in the airport. The new developments that management would seek would have to undergo a study and verification procedure. The mechanism would enable the airport to be continuously on the growth pattern for service delivery to its clients. The management staff would need to undertake leadership training so that they can continue setting the organization on a growth strategy (Jones, 2011).

The future developments required that the team goes through continuous training so that they align their objectives with the organization’s vision (Sherwood & Sherwood, 2009). It will also help the firm to know the staff’s capability to grow within the system and later become great leaders (Raynus, 2011). First, the management has to set the right objectives for the training that will lead to the achievement of the company’s vision. Whenever there is a change in an organization, it causes discomfort if the workers do not understand the direction that the organization is undertaking.

Customer Perspective

Every organization exists because they serve the interest of the client. The primary reason for the continuous growth in every organization is customer satisfaction. If customers do get satisfaction in the company’s products, they will look for another firm or product that meets their needs. Therefore, the customer determines how far the organization should go regarding pursuing objectives.

Heathrow Airport is one of the busiest places in Europe and the world. The client’s flow was and has been growing as trade increases. Britain trades with European countries, the United States of America, Africa, and the Asian countries. As business transactions increase, there is continuous inflow and outflow of customers. It also serves tourists visiting and leaving for other nations. There is luggage that goes through the system (Magoon, 2011).

The construction would make it easy for customers to access the airport services. They would also give their suggestions and concerns about the development of the service at the facility. Movement within the airport was also of primary concern. Previously, some of the routes were not easy for customers to find, especially new ones. It was also not easy for them to access some services because of the difficulty in the search for the right places.

The construction also focused on people with disabilities. They had to have their climbing Rams and proper lifts that would ease their movement. The computerized systems that customers would use are available in tens of languages (Basu et al., 2009). It means that if someone is not an English speaking customer, he or she would still access the required services in the language that he or she understands.

Some instructional areas would guide the customers to find the services they needed without getting lost. Security measures were also of great concern (Magoon, 2011). The CCTV cameras would help to locate any suspicious activity and sort the matter in the shortest time possible.

The Terminal 5 construction was one of the major projects carried out in Europe. The management process linked the BSC fundamentals into the project in a very strategic manner. The application of this strategic method led to very successful completion of a world-class airport.

References

Basu, R., Little, C., & Millard, C. (2009). Case study: A fresh approach of the BalancedScorecard in the Heathrow Terminal 5 project. Measuring Business Excellence, 13(4), 22-33. Web.

Customer Perspective. (2016). Web.

Jones, P. (2011). Strategy mapping for learning organizations. Farnham, UK: Gower Pub.

Magoon, O. (2011). Coastal engineering practice. Reston, VA: American Society of Civil Engineers.

Raynus, J. (2011). Improving business process performance. Boca Raton, Florida: CRC Press.

Sherwood, P. & Sherwood, P. (2009). Heathrow. Stroud, UK: The History Press.

Executive Summary

This report is based on the case study of Construction Products, and the aim of this report is to analyze the existing problems of the company to find out effective measures for the future development of the company.

Problem Identification and Analysis

Communication Problems

The chain of command under the Operations and Purchasing Manager results in several troubles aside from communication disparity between the employees and the managers. Aaron Fernandez, who is a member of staff at the company, has put forward many problems within the firm that also stated the problem of communications – there are the irregular verbal communications of the supervisors with the forklift drivers, floor workers with the managers, or even supervisors with the managers.

Communication is the solution to a strong business relationship; this can be the relationship between business-customer, and internal-relationships amongst different workers within the business; communication can recover in every headquarters, no matter the industry or size; it is the only way for information to be spread throughout the firm so that everyone could be informed to the extent that they require to attaining objectives. Therefore, poor communications mean that the business will be in big trouble.

Organisation culture

The organisational culture of the Construction Products Company is extremely centralised, which creates a range of problems and dissatisfaction amongst workers. The firm possesses fragile organizational culture, and this is pure because of a centralized administration; such system of management consists individual teams that are not as autonomous – therefore the workers in this centralized company have an insignificant role in the direction of actions at different departments, and everything depends on units and between each unit and the central management office. Therefore, in this company, the talents of the workers are greatly deprived.

Leadership

The consultant had discussed with production worker Aaron Fernandez, sales dispatcher Sandra Mayson and sales manager, Vikram Bangara in order top, find out existing problems of the company those hampered success of the business, and he identified that Construction Products followed autocratic leadership style, which is the key problem of the company. Sandra is not quite happy with her job position as she has to deal with high work pressure, but she cannot manage her when she gets lower payment as a female employee of Construction Products. At the same time, she cannot tolerate false complaints against her and misconducts of the senior managers, discriminations between male and female, excessive workload, duration of the job, and attitude of leaders.

On the other hand, Vikram Bangara reported that he could not implement effective strategies to develop the company because this company is controlled the directors of the parent company who shows highly autocratic leadership style and enjoyed unlimited power to take action and to adopt recommended action plan.

Attitude and Commitment

The senior staff should change their attitude as Sandra stated that Vikram likes to talk rather than listen, and Vikram pointed out that top-management are reluctant with his performance and would not like to consider his suggestion though he is committed to controlling daily production, and disseminate information returned by representatives, communicate with the potential customers of the company. However, Griffin (2006) and Weihrich & Koontz (2005) noticed that productivity of the employees could reduce for lack of commitment.

Lack of motivation

Lack of motivation is immense difficulty in the Construction Products Company – Taylor’s approach in leadership means that the motivation of the workforce is unfavourably affected; conversely, not including Taylor’s approach, there are some other vital concerns, which cause this dearth of inspiration. According to Aaron Fernandez, low pay, poor working condition, highly repetitive and extremely monotonous tasks, and many other factors create a decline in motivation amongst workers.

As suggested by Sandra Mayson, Lack of motivation also results from an organisational practice that does not ensure equal opportunities – for example, women are not paid equally as men; this, in turn, means slower production process, poor quality production, more absenteeism, and high staff turnover, which results in rising operating costs.

Statement of Key Problems

Communication problems, fragile organizational culture purely because of a centralized administration, lack of motivation, low pay, poor working condition, monotonous job, poor quality production, more absenteeism, high staff turnover, poor operations management, a long chain of command, Taylor’s approach, lower engagement, inefficiencies, mistakes, and delays, loss of institutional memory are the key problems of the business. Moreover, not ensuring equal opportunities, loss of managerial, programmatic, and operational skill, and loss of aptitude, a poor delegation of authority and insufficient capacity utilisation also causes the Construction Products Company to undergo such great barriers in operating successfully.

Generation and Evaluation of a Range of Alternative Solutions

Alternative 1 – Participative and Transformational Leadership Style

Autocratic leadership approach of Metrivac Company is one of the main barriers for the success of the subsidiary Construction Products as employees of all departments pointed out this issue to the consultant David Schneider. As a result, this report suggests the president of Construction Products a suitable leadership style to reduce the existing management crisis, which will dramatically reduce the problem of productivity, increase annual profit margin, and help to expand the business in the global market.

However, it recommends the management to follow both participative and transformational leadership style considering the outcomes of the conversation of Vikram Bangara and Sandra Mayson, as they addressed the negative side of high autocratic leadership in the job satisfaction. However, Robbins & Judge (2008) and Vliert (2006) argued that participative leadership style is more relevant to the democratic leadership approach and the employees can participate in the decision-making process by sharing their valuable opinion, knowledge, skills, experience etc.

That indicates the top-management of Construction Products will take most of the decision based on the feedback of the employees. Hitt, Ireland & Hoskisson (2001) stated that transformational leadership inspire the subordinates to perform the required task and it is very motivating for the team members where they identify that the leader tries to build a vision in the mind of the subordinates to achieve the objectives of the business.

Alternative 2 – Considering Employee Retention Strategies and Applying Time Based Management

Several research report has appraised that employee turnover has been 1.5 times costly than the retention of the efficient employees; in case of reducing staff turnover, firstly it is better to pay attention on employee wage and remuneration management package as well as on compensation attributes. Alternatively, if the working atmosphere or the organizational culture were enjoyable and satisfying employee’s needs and demand would be more effective to retain an efficient employee.

In short, job satisfaction has the immense power to retain effective and efficient employees in an organization. In the following discussion, key strategies to avoid staff turnover has briefly discussed (Fox, 2010). In context, as the Construction Products Company undergoes inefficiency in production and operation management, together with poor quality products, these problems are very likely to be prevailed by adopting Time Based Management, just in time management, kaizen approach, and total quality management.

Here, employees should categorize into multi-skilled teams, and each team would be accountable for a specific part of production procedure comprising quality control and health and safety; moreover, each cell should be made up of numerous teams who send finished products on the next cell in production procedure; cell production will lead to efficiency development because of amplified motivation.

Additionally, by adopting Kaizen or “continuous-improvement” the general advancement of business would augment, and there will be improvements in productivity that comes from small-improvements by employees being made incessantly; conversely, by adopting just-in-time, the business could diminish the quantity of stock that has to be accumulated (reducing storage-costs); it would have many benefits as it is an obvious way to organized-production. Nevertheless, the application of these methods can be very costly – so the Construction Products Company will have to make massive investments.

It is arguable that when an employee gets a sound, easy-going, and friendly atmosphere to work in, where the employer is very watchful about ensuring workplace health and safety issues, providing equal opportunities for all disregard of their ethnic origin, it gets easier for the staff to cope up with the working environment of the organisation lowering chances of turnover. It is therefore essential for the Construction Products Company to build up a staff retention strategy keeping all these things in mind.

The organisation must be strictly managing some vulnerable concerns such as healthcare benefits, rising work pressure for nerve-racking responsibilities, increasing working hours, monotonous features of the occupation, deficiency of guidance, performance assessment for giving promotions, and accountable union privileges. Most essentially, it is imperative for the organisation to undertake a number of schemes and policies, for example, providing competitive and reasonable remuneration, reorganization of the worker maintenance plan, altering personnel traditions, delivering workstream composure, and observance of online recruitment opportunities constantly.

The firm should take into account some significant aspects in order to originate a recruitment policy to diminish turnover, which would focus on not only the motive behind turnover, organisational, political principles, or organisational culture but also on the overall positional strategy of the organisation (Careersatifds, 2010). It is important for the HR department of the firm to adopt a more smart approach in terms of employee retaining process. It should bring transformations in the total performing periods in order to make sure that the workers are getting enough freedom to spend a few hours with his/her family.

Together with the recruitment policy, the HR panel must be more cautious about assuring an accessible payment structure and appreciating the working expertise, innovative, and creative ideas of the workers as well. Moreover, it is important for the organisation to consider the consequence of the employee turnover as the main reason for its rising costs of recruitment, adversely affecting the organisational goodwill and depriving the annual targets.

Alternative 3 – Focusing on Better Motivational Theories and Practices to Reduce Turnover

It is clearly visible from the case that the employees in the company suffer from very poor motivation; therefore, the firm needs to emphasize sufficiently on these issues and consider some of the motivational practices as outlined in this alternative. The firm should consider developing motivation by Maslow’s hierarchy theory, which plays a significant role to motivate employees; it assumes that every employee has five levels of needs that require fulfilling chronologically and fulfilment of one raises the other; at the very bottom of the hierarchy is the basic needs that include food, shelter, and medical; at top-level is self-actualization. According to this hypothesis, every organisation needs to fulfil the demand of workers according to the level of needs to achieve the objectives by motivation:

The Construction Products Company should also consider David McClelland’s proposed Achievement-Power-Affiliation theory where he described that according to nature, people has three types of need-fulfilment of which motivate them to achieve objectives – the first need is an achievement, which indicates the need for performing better; second is the power need that indicates need to influence others; finally, affiliation need indicates the need for establishing-relationship.

The intensity of this need varies from person to person and organisation should try to assess the needs of the employees and then fulfil the need to motivate them to achieve the objectives. Moreover, the firm should accept theories provided by Herzberg, Maslow, and Mayo; managers must have to change the compensation formation by eliminating piece rates or piece related wages and concentrate on payments like fixed wages and revenue sharing, yearly dividends, periphery benefits, etc.

In addition, there should be more emphasize on superior workplace circumstance, extremely branched out, motivating, and swivelled jobs, a guarantee of equal opportunities, giving out of power, decentralisation job-design that comprise job rotation, job enrichment, empowerment, or team working, and most importantly, by treating them as McGregor’s Theory Y managers, and appreciating good ideas from them as well as good performances.

Recommendations

According to the case, management fault is the fundamental problem of the company, which is difficult to remove by formulating a new recruitment policy; therefore, it is essential to provide equal opportunity for all employees in order to remove their disappointment. The president of Construction Products should modify its regular working hours and ensure liberal working hour, which would not create any pressure on employee’s personal life, for instance, sales dispatcher Sandra Mayson was in serious workload, and she requested to recruit more employees to manage her department.

However, the strategy of teamwork should develop in the company because co-operative management technique is effective while each project will place in-group, and the management of Construction Products should handle some sensitive issues more carefully such as healthcare opportunities, Increasing workload, over stressful duties, increasing over time, repetitive nature of the job, lack of training and communication, a performance measure for promotion.

Implementation

The implement is one of the most important tasks for the Construction Products as Vikram Bangara had tried to take many development projects, but the top-management protected him from implementing his suggested strategies through seniors eventually followed his few recommendations. On the other hand, Sandra Mayson complained that she needed more workers, but senior executives have no headache in this issue, whereas there are many employees in this company who have no task. Considering these facts, this report recommends the following organizational structure for the improvement of Construction Products –

However, suggested organizational chart is not emphasis on the new employees rather it suggests to restructuring the existing organizational chart, for instance, Supervisors of fitters, loading and mechanics would be responsible for helping Sandra Mayson. However, new charts also remove the communication problems between managers and employees; therefore, all employees would be able to give highest efforts as a complaint against employees would reduce, and no one has to face severe workload.

Reference List

Careersatifds. (2010). Recruitment Policy. Web.

Fox, E. (2010). Meeting Employee Work Expectations: 4 Keys for Minimizing Turnover. Web.

Griffin, R. W. (2006) Management. (8^th ed.). New York: Houghton Mifflin Company.

Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2001). Strategic Management. (4^th ed.). South-Western Thomson Learning.

Robbins, P. S. & Judge, A. T. (2008). Essentials of Organizational Behavior. (8^th ed.). London: Pearson Prentice Hall.

Vliert, E. V. D. (2006) Autocratic Leadership Around The Globe Do Climate And Wealth Drive Leadership Culture? Journal of Cross-Cultural Psychology, 37(1): 42-59. Web.

Weihrich, H. & Koontz H. (2005). Management a Global Perspective. New Delhi: Tata McGraw-Hill.

Abstract

The construction industry is full of legal and ethical concerns. Although the government regulates most issues such as fair pricing, workers’ safety, and environmental concerns, professionals should rely on their ethical code to make the right decision. The ethical issue of using hazardous materials, for instance, should always be considered from various points of view. Most legal implications of one’s work are closely connected to the ethical ones, and the issues of these spheres are related to each other. Thus, prices can be negotiated in a legal setting, and various performance measurements regulate one’s safety and health.

Introduction

The construction industry is susceptible to unethical practices as it features high levels of competition and focuses on low prices. Therefore, it is essential for professionals in this business to remember the connection between their ethical and legal decisions and their effect on other aspects of the industry.

Ethical Implications

The issue of ethical behaviour of a professional includes not only fair pricing but also environmental protection, sustainability, and health of other people. For instance, the ethical considerations of cost manipulation should concern every specialist, who is interested in maintaining fair prices throughout the industry. According to Murray and Dainty (2013), a reasonable and fair price is one of the key elements of every business operation. Thus, contractors should remember that pricing should not be restricted to competitive aims and depict the real state of the market.

Other ethical concerns are connected to the process of working. The assessment of risks, for example, becomes a legal matter during the process of construction as poor management of possible risks linked to the inappropriate use of equipment, hazardous materials, and untrained staff can lead to health-related problems of workers and other involved individuals (Kelleher et al. 2014). Therefore, the health aspect of this business is also a part of one’s ethical considerations. As Lingard, Wakefield, and Blismas (2013) point out, construction professionals’ work should always consider public safety. Health and safety performance of professionals is a vital part of construction management.

Legal Implications

All issues mentioned above are regulated by the legal sphere as well (Table 3.1). Unfair pricing can be challenged in court, while various performance measures regulate the safety of workers. In this business, the ethical and legal implications are related to the same aspects of the profession. Thus, safety is a legal issue as well because it can be measured and standardised (Kibert 2016). The same can be said about the protection of the environment.

Table 3.1: Connection between Ethical and Environmental Aspects.

The problem of sustainably, while not as transparent as other aspects of construction, is also a subject of legal considerations. The operations of a company related to its environmental and social impact need to be transparent to become sustainable (Siew, Balatbat & Carmichael 2013). Moreover, sustainable construction is regulated by the government which strives to mitigate the negative impact of building activities on society and nature (Gan et al. 2015). Thus, construction professionals should pay attention to the outcomes of their operations not only regarding the stability and quality of their projects but also their influence on the surrounding environment.

Conclusion

Legal and ethical implications of construction are closely connected. The issues linked to these considerations go beyond the financial sphere of business operations and include environmental issues, sustainability, and people’s health and safety. The ethics of construction should be engrained in the work of every professional and encourage them to use strategies that do not harm the surrounding environment. Moreover, every worker should remember the scope of regulations that affect his or her work.

Reference List

Gan, X, Zuo, J, Ye, K, Skitmore, M & Xiong, B 2015, ‘Why sustainable construction? Why not? An owner’s perspective’, Habitat International, vol. 47, pp. 61-68.

Kelleher Jr, TJ, Mastin, JM, Robey, RG, Smith, C & Hancock, LLP 2014, Smith, Currie and Hancock’s common sense construction law: a practical guide for the construction professional, John Wiley & Sons, New York.

Kibert, CJ 2016, Sustainable construction: green building design and delivery, John Wiley & Sons, New York.

Lingard, H, Wakefield, R & Blismas, N 2013, ‘If you cannot measure it, you cannot improve it: Measuring health and safety performance in the construction industry’, in The 19th Triennial CIB World Building Congress, Queensland University of Technology, Brisbane, pp. 1-12.

Murray, M & Dainty, A (eds.) 2013, Corporate social responsibility in the construction industry, Routledge, New York.

Siew, RY, Balatbat, MC & Carmichael, DG 2013, ‘The relationship between sustainability practices and financial performance of construction companies’, Smart and Sustainable Built Environment, vol. 2, no. 1, pp. 6-27.

Analysis of the recruitment process

To improve its operational efficiency, Parsons Brinkerhoff is in the process of recruiting an experienced construction manager to oversee the construction of the Eglinton-Scarborough Cross-town LRT transit project. To attract a large number of applicants, the company will advertise the position in the newspaper. Additionally, the firm will also use the internet in advertising the position. The advertisement will stipulate the various requirements for the candidate.

For example, the selected candidate should have the capability to perform diverse tasks such as managing the personnel, ensuring on-site construction safety, and executing quality control tasks. In executing the managerial duties of issuing contracts, the candidate must adhere to the Ontario Human Rights Commission stipulations. Some of these stipulations relate to ensuring that contracts are issued competitively.

Additionally, he should act by the law by desisting from any form of discriminative acts such as based on age, gender, disability, age, race, and creed when issuing contracts. The manager must also be able to perform the necessary administrative tasks by the company’s client’s requirements. He or she should also possess good communication skills to relate well with the various parties.

Analysis of the selection process

To select the most qualified candidate, the construction manager will be sourced from the external labor market. To be effective in its recruitment, the company will tap into both the local and foreign labor markets. According to Mathis and Jackson (183), sourcing human capital from the foreign labor market can be very challenging. To be successful, the company will take into consideration the existing laws in the foreign labor market. In the foreign market, the company will seek approval from local labor authorities.

To be effective in its recruitment process, the firm will form a recruitment committee of 10 individuals. The members of the committee will be selected internally from the various departments. The committee will be composed of board members, an administrator, a chairperson, the recruiter, and a construction staff member. Their role will be to identify the sources of human resources, develop the interviewing process, evaluating the job applicants to identify the most suited candidate for the job, and to assign specific responsibilities. The selected recruiter will also develop a contacts and prospects list and evaluate the applicants’ credentials.

He or she will also be involved in the negotiation of contract agreements. The committee will decide on the appropriate date to conduct the interview and communicate appropriately. It is expected that the recruitment process will take 3 days.

For the recruitment process to be effective, a comprehensive selection process will be undertaken. Preliminary screening and interviews will be conducted. The screening will be aimed at determining whether the applicants fulfill the stipulated job qualifications. On the other hand, the preliminary interview will evaluate whether the applicant is mentally and physically fit to perform the job. A series of selection tests such as proficiency tests and psychological tests will be conducted. The psychological tests that the recruiter will emphasize include intelligence tests, aptitude tests, and personality tests. Some of the questions to be considered include;

1. What would you do in case of a conflict with the contractors that have the possibility of derailing the completion of the project?
2. How easily can you learn new skills and techniques and apply them in practical situations?
3. What are the most effective problem-solving techniques in the workplace that you possess?

About the proficiency test, the manager will develop a Special Trade Efficiency Test. Some of the questions that will be used in the interview about the candidates’ specialization include;

1. What measures is a manager required to undertake to ensure the successful completion of a construction project?
2. What would you consider to be the most important project management techniques that will be applied in this project?
3. What are the basic legal requirements that should be taken into consideration when undertaking a project of this nature?

After the successful completion of the tests, a final interview will be conducted whereby various qualities of the candidate will be evaluated. At this stage, the most appropriate candidate will be selected. The recruiter will concentrate on several skills which include managerial skills, communication skills, interpersonal skills, and administrative skills in the selection criteria. After the selection of the most appropriate candidate, the management team will conduct a background and reference check to gain a further understanding of the selected candidate. The candidate will then be subjected to a medical examination after which a job offer will be presented to the candidate. Upon acceptance of the job offer, the candidate will be required to sign the employment contract.

Works Cited

Mathis, Robert, and Jackson, John. Human resource management. Mason, OH: Southern- Western, 2011. Print.