Sustainable Strategic Planning in Construction Companies to Gain Competitive Advantage

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[Name of the Supervisor]TABLE OF CONTENTS

LITERATURE REVIEW1

Definitions of Strategy1

Rational Strategy1

Fatalistic Strategy2

Pragmatic Strategy3

Relativist Strategy4

Competitive Advantage in Construction: A Conceptual Model5

Industrial Organization Economics View of Competitive Advantage5

Resource-Based View of the Firm8

Conceptual Model for Competitive Advantage10

Implications of the Conceptual Competitive Advantage Model12

Competitive Advantage Model in the Construction Industry: Implementation14

The Construction Company and Its Relationships15

Construction Company-Client Exchange Relationships17

Reduction of Construction Waste22

Reuse through Salvage and Deconstruction23

REFERENCES27

BIBLIOGRAPHY37

LITERATURE REVIEW

Definitions of Strategy

Although there are a host of perspectives related to strategy, Scott-Young (2008 749) provides a succinct definition:

A strategy is the pattern or plan that integrates an organization's major goals, policies, and action sequences into a cohesive whole. A well-formulated strategy helps to marshal and allocate an organization's resources into a unique and viable posture based on its relative internal competencies and shortcomings, anticipated changes in the environment, and contingent moves by intelligent opponents.

Definitions of strategy can be divided into four different categories: rational, fatalistic, pragmatic, and relativist. Rational strategies are based on rational thought and usually incorporate specific processes; fatalistic strategies relate to periods of hardship or when resources are limited; pragmatic strategies are based on practical experience instead of theory; and finally, relativist strategies emphasize the importance of the situation. In other words, what work for one company might not work for a similar company and what may work now may not work later within the same company.

Rational Strategy

The once President of General Motors, Adam (2009 317) stated simply, “The strategic aim of a business is to earn a return on capital, and if in any particular case the return in the long run is not satisfactory, the deficiency should be corrected or the activity abandoned (p. 49).” This modern view of strategy is very sterile. A given strategy either delivers for the company or it is abandoned. Most rational strategy development is based on analysis of market, customer, and competitive data.

Companies that use systematic approaches to achieve business results employ rational strategy. According to Robins (2006 14), “Firms are more systematic in managing performance. They attempt to link behavior with strategic imperatives. So, they employ a performance measurement system called management by objectives (MBO) to control results (p. 14).” One might object to conceiving of a MBO approach as a strategy by observing that it is merely a means to achieve strategic or tactical results.

Fatalistic Strategy

An example of fatalistic strategy might be for the company to identify “survival” as their basic goal. Limited resources do not always allow firms to attack the market and defend strategic positions effectively. In some instances, companies may have to devote all their scarce resources to save the organization's mere existence. In this regard, Robèrt (2002 197) state:

Strategy has also become deeply problematic at the corporate level. In the 1980s, it turned out that corporations were often destroying value by owning the very divisions that might have seemed to fit so nicely in their growth/share matrices. Threatened by smaller, less hierarchical competitors, many corporate stalwarts either suffered devastating setbacks (IBM, Digital, ...