Learning organization principles and processes : UK construction organization experiences

Abstract

The study reported herein addresses the research question, "To what extent do excellent performing UK construction contracting organizations demonstrate and employ recognized Learning Organization processes?" It utilized a case-study based approach as that approach was seen as being most useful for exploring the processes that may or may not have been clearly defined by each participating organization. The study sought to move beyond the theories of knowledge created by the accepted seminal works on The Learning Organization model and the largely positivist works on construction contractor performance, which have focussed on ‘output’ measures only. The literature reviewed indicated minimal understanding of excellent contractor performance from the perspective of the customer within the construction industry and even less understanding of the practical application of Learning Organization processes within the industry. It suggested the need for research to address the issue by examining how construction customers viewed excellent contractor performance and what processes excellent performing contractors actually employed. The assumption behind this research is that the organization adapts and responds to its environment and takes action to survive and flourish dependent upon its understating of that environment. This is the same behaviour as a living organism in nature displays, and thus requires the researcher to view the organization as a sentient being. Such a view underscores the epistemological perspective, that is the assumption of what knowledge is and how it may be discovered, adopted in this thesis. The research herein reported therefore follows a post-positivist standpoint. The methodological position for the research sits within a functionalist paradigm, a paradigm that enables consideration of the participating organizations within the construction industry to be viewed as a ‘whole’ and as having interrelated parts. This position was considered to be the most useful for the research. The particular approach chosen was that of multiple case studies carried out on the same subject. Carrying out multiple case studies across different organizations provided case-based themes, which was seen to give the research a greater credibility. By definition, the method was therefore one of a collective case study (Creswell, 2007), where several cases were brought to bear on a single issue. It was intended to draw practical examples of Learning Organizations together so that the commonalities and differences between and among them could be integrated in a reformulated Learning Organization model for the construction industry. During the data collection phase, two elements of the research were abandoned as unnecessary and impractical respectively. The unnecessary element was the questionnaire element of the contractor case studies, which was abandoned due to the breadth and depth of data gathered through the other elements of the research (interviews, focus groups and field observation). The impractical element was the intended comparative study on poor performing contractors. This was abandoned as customers almost without fail noted that poor performing contractors were generally not retained on their programmes and therefore their supply chains tended only to range in performance from adequate to excellent. Secondly, it was realized following discussions with customers that poor performers were likely to be aware of their poor performing status and therefore be unlikely to want to participate in the research. The customer organizations identified a number of clear areas where they identified excellent contractor performance. The clear position was that the standard output performance indicators of project completion to time, cost, quality, and health and safety were no longer indicators of excellent performance in the industry. These indicators were now the minimum performance required to satisfy the customer and there was seen to be a further suite of more behavioural measures which were the indicators of excellent performance. These findings were drawn together in a single model for procurement and performance management. The contracting organizations nominated as excellent performers fell largely into the ‘medium sized’ bracket of the construction industry. Indeed, some of the participating customers noted that the larger contractors were actually poorer performers at behavioural aspects of service delivery. The nominated contractors’ processes were examined against the Learning Organization framework provided in Senge et al (1990, 1994) to establish the extent to which recognized Learning Organization processes were being employed. It was noted in the conclusions that whilst all of the organizations employed some Learning Organization processes, none could be said to be a model Learning Organization possessing all of the processes which Senge et al (1990, 1994) suggested. The fact that each organization possessed some Learning Organization processes was accepted against the critique of Ortenblad (2007) that Senge et al’s (1990, 1994) model is all-encompassing in terms of accepting processes into the Learning Organization model. Implications for industry practice were identified based upon the backdrop of procurement and performance management. It was argued that, based on what is noted as really important to construction customer organizations, the procurement and performance management functions should be better aligned to identify Learning Organization processes and their manifestation as excellent contractor performance from the perspective of the customer. For contractor organizations, there was identified a need to attend to developing Learning Organization processes. There also appeared to be a need for the customer to support the journey of their contractors towards becoming a Learning Organization. Senge et al’s (1990, 1994) model was then adapted for the construction industry to reflect this need for customer involvement if the contractor was to adopt Learning Organization processes. This adaptation was considered necessary due to the construction industry model of the customer being more involved in the design and construction phases of their product, coupled with the fact that a single construction customer can represent a large volume of their contractors’ turnover (up to 20% is not uncommon). Furthermore, the low contractor profit margins driven by a lowest price tendering culture (often 2-3%) leave little money for internal investment. The support of an informed customer which does not use a lowest price tendering process was therefore deemed necessary. A number of recommendations for further research may be seen to emerge from this study. Questions were raised as to the reason why larger organizations do not appear as able to provide behavioural excellent performance as medium sized contractors which was considered to be an area for further exploration. In addition, the concept of ‘family’ atmosphere (raised several times by participants during the contractor case studies) and its impact upon the ability for the organization to learn and provide excellent performance was seen to be worthy of further study. Finally, there was deemed to be the potential to examine the applicability of the extended Learning Organization model developed herein to other industries and/or organizational cultures.