CONSTRUCTION INDUSTRY

Impact of Quality Management on Productivity

Abstract

Invariably, business strategies are methods used to make and sell products or perform services. Often strategies employed are determined by the company's reaction to events that are beyond its control. In the UK construction industry, consulting engineering firms are exposed to increasing marketplace competition. The rapid change from the traditional contract procurement route to the relatively new design and build, and management contracting towards the end of the 1980s in the UK, has also introduced many consulting firms to a new form of competition.

Table of Content

Introduction4

Quality management in the UK construction industry5

Quality10

Productivity10

Sample and methodology11

Assumptions made12

Theory of isoquants13

Method of the analysis of the bills of quantities15

The results16

Conclusion17

References19

Appendix22

Figure 1Diagram of the most productive isoquant22

Table IHierarchical cluster analysis23

Introduction

Quality management is a company-wide effort which involves everyone in the organization in order to improve performance. It permeates every aspect of a company and makes “quality” a strategic objective. Quality management provides the culture and climate essential for innovation and construction technology advancement.

Some would argue for and some against the applicability of the philosophy in the construction industry. The Japanese construction industry, however, began implementing the principles of total quality management (TQM) in the 1970s. Even though the construction process is a creative, one-off process, the Japanese construction companies embraced TQM concepts despite arguments that such concepts could only apply to mass production. Since the mid-1970s, three Japanese contractors have been awarded the Deming Prize for quality improvement. Moreover, recent research indicates that TQM is being effectively applied by both owner and contractor organizations in the US construction industry.

Quality management in the UK construction industry

In the UK construction industry the word quality has been the buzzword for the past decade. Under pressure from clients, particularly public sector clients such as the property services agencies, most construction organizations went down the route to quality either by choice or reluctantly. In preliminary visits made by one of the authors to construction organizations embarking on quality programmes in the UK, it was revealed that those construction organizations which adopted the philosophy of quality management for the strategic objective of continuous improvement developed the culture within their organization and educated their staff about the whole concept. Therefore, the shift to quality management systems evolved quite smoothly and was easily assimilated by the staff concerned. On the other hand, the other organizations which just wanted to “get the badge” of quality assurance, were pushing themselves down a route which resulted in certification but in most cases rarely changed management practices.

Cameron and Whetten[4, p. 1] asserted that:

Unfortunately, this plethora of writing and research has failed to produce a meaningful definition of organisational effectiveness, let alone a theory of effectiveness. The writing has been fragmented, noncumulative and frequently downright confusing.

This disarray and confusion led some researchers to advocate abandoning the construct of “effectiveness” altogether.

Goodman (1979, p. 4 cited in [4, p. 1]) said that:

There should be a moratorium on all studies of organisational effectiveness, books on organisational effectiveness, and chapters on organisational ...