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A Study On The Cooperative Strategy Choice And Management Mechanism Of Partnering In Construction Industry Of China

Posted on:2014-08-15Degree:DoctorType:Dissertation
Country:ChinaCandidate:M LiFull Text:PDF
GTID:1269330425992256Subject:Management Science and Engineering
Abstract/Summary:PDF Full Text Request
An investigation based on ENR (1998) indicated that the portion of the increased output value of building industry to GDP in both underdeveloped and developing countries has been more than that of developed country and their output value of building industry has also exceed the increased rate of GDP in each countries.Along its urbanization has been speed up and its people living level both in urban and rural areas has been enhanced, China,as a developing country has steadily increased its investment in the infrastructure such as railway, highway, airport, irrigation, electricity, house and so on. The building industry has become one of the four major pillar industries in current economic development in China, and has been a major carrier for the investment in infrastructure of China. The building industry has made the greater contribution in stimulate the domestic demand, increasing employment, promoting economic growth, improving people’s living level, speeding up the transfer of the rural labor forces and achieving the aim of planning the development of urban and rural as a whole.However, we should also see that behind the fast progress of China’s building industry, still exist such facts as disorderly competition, resource is wasted terribly, and productive efficiency is quite low and so on. Although the output value and the increased value of China’s building industry have reached a scale in term of trillions at very early and have still kept a steady progress, however the profit level of building industry has not been satisfactory. It has been on a quite low level comparing with the other sectors.According a traditional development economics theory, the technical progress and capital accumulation are able to promote economic development. However, Professor Yang thinks that the total change in whole system that is just the original power to promote the economic development. The change of the system can save productive cost significantly, therefore improving the running rate of the industry. Mr. Mao also point out that making a right choice for a management model of the engineering project is the key factor to success or failure for the project.Under the Chinese traditional building project management model there are too many levels and a lot of interfaces of management and process which lead increasing the coordination quality, adding the difficulty for control, slowing down the decision-making in the process of management. Meanwhile in traditional building project management there are phenomena in term of information Isolate Island which leads information distorted, delay and shortage. Under such organization model, only order and control are running, lacking necessary coordination and cooperation. While all of the participants come out just from their own interests, and ignoring, even damaging the other interests, the final aim of the project will be jeopardized.Under the background of global economic integration and commerce convergence, promoting development by cooperation is the efficient way to enhance the total strength for the industry. The long-term and sustainable development of the building industry is also not able to away from this macro economic environment.The Partnering management was born at the time required. The model is the way that is able to transfer a traditional antagonistic business culture into a new way that based in trust, sharing and win-win model. Since1988the new model was put forward officially by the army of United States, it has successfully been applied large civil construction project in European, Japan, Korea, Australia and Hong Kong. The partnering management model has played important role in upgrading productive efficiency and quality of building industry which has been backward for years, improving the traditional hostile relationship within the sector. Wood and Ellis (2005) highly praised in their essays that the Partnering management is the most valuable management method in improving project performance so far. Many empirical studies abroad also fully demonstrate that implanting the partnering management model can efficiently overcome malicious competition, low efficiency, construction delay and budget overruns and so on.The research of Chinese construction project started later, its related theory and applying is also in exploring phase, comparing with the mature and system management model of the other developed countries, there is a large gap. In the case of the Partnering management, from the current collected literatures and data so far, I have not yet found any successful case of applying the Partnering management in Chinese construction project. There are few essays which use the quasi-Partnering management are just borrowing the part of procedure and cooperation theory. Can the cooperation strategy be applied Chinese construction industry? How to successfully transplant the Partnering model into Chinese construction project? How to set up scientific and reasonable management mechanism in implanting the Partnering model? So, I think a research and understanding for the problems put forward above will have very important theoretical and practice value.By the research and reading to relevant literatures we can see that while there are many domestic and international literatures which are focus on management mechanism, basic concepts, work flow and achievement evaluation, there are few studies which are focus on if the Partnering management can be adapt to construction sector. As the research methods to the Partnering model mainly focus on such mainstream direction as conceptual description, qualitative analysis and empirical studies, the method of applying mathematical and game theory to the Partnering model is rare. A constructional engineering often involve many enterprises. As any rational decision-maker who joins the Partnering management makes any decision, he or she must not only refer to the strategies that the rival makes, but also consider the impact of decision made by himself or herself, therefore it is a typical game process.Considering above reasons of this theis, based on the Transaction Cost Theory, Resource Dependence Theory, the Game Theory, Evolutionary Game Theory and so on, apply the method of blending the theory analysis with mathematical mode, and conducts a system research around above-mentioned several issues which need to be solved urgently as to implanting the Partnering management in China. I believe that the results of the thesis will supply ample theory evidences in upgrading management level and operation efficiency, improving the operation mechanism in Chinese project management, promoting the reform and innovation in Chinese construction industry.The innovation points of this thesis are as follows:1. With the perspective of the repeated game theory and the evolutionary stable stratety, this paper trys to solve the "prisoner’s dilemma" problem in the construction industry and then explore wheather the cooperation strategies is the best choice for all of participants in Partnering. This paper puts forward that the strength comparability construction enterprises are suited to cooperate only under the circumstance of less similarities. This conclusion provides a solid theoretical basis for choosing coorperation strategy between construction enterprises with competitive relationship.Through the further analysis on the model, this paper researches the relationship between the essential natures of enterprise, such as resource complementarity, strength Comparability, production technology level and so on, and the external natures, such as willingness to cooperate, effort level for cooperate, production efficiency and so on, under the premise of cooperative behavior being evolutionary stable. This study can provide theoretical guidance for implementation Partnering management in the engineering.2. With an analysis to such environment factors as current economic structure, law system and culture background and to other factors as the cooperation strategies taken by the constructive enterprises implementing partnering model, and a study on the partnering management mechanism according to above of all, I put forward the strategies and suggestions to the concrete measures taken by Chinese constructive sector implementing partnering model. Through quantitative analysis, this paper can build relatively fair and reasonable principles of profit distribution and supervisory mechanism which is suited to china’s national conditions in Partnering management.The main conclusions of this thesis are as follows:1. There exist the cooperative preferences of evolutionary stability for the type of resources complementary construction enterprises and strength comparability construction enterprises under circumstance of the same and the different production technology level. That is, cooperative behavior can become the best strategic decision. For the resources complementary construction enterprises, in any case, cooperative behavior is better than the non-cooperative behavior. Cooperative behavior is evolutionary stable. But for the strength Comparability construction enterprises, only under the condition that all of these construction enterprises in this engineering project have less similarities or more willingness to cooperate, these enterprises are suited to cooperate. Only this time their cooperative behavior is evolutionary stable. If comparability of cooperative enterprises is bigger, that is the similar degree is higher, Cooperative behavior of two construction enterprises is not evolutionary stable, betrayal will occur. But in any case, the non-cooperative behavior is not evolutionary stable. By this way, we can solve lose-lose strategic decision in the model of Prisoner’s Dilemma, meanwhile, prove that cooperative behavior is the best strategic decision among construction enterprises, and this behavior also can win more benefits of cooperation for cooperative enterprises.2. As the cooperative behavior is evolutionary stable, the two construction enterprises under circumstance of the same and the similar production technology level, they will have more willing to cooperate, to give more efforts for cooperation, therefore to achieve more production efficiency, to gain more cooperation profit if they have higher technological level, greater resources complementary, smaller strength comparability.For any type of construction enterprises of different production technology level, compared with them of low technology level, the construction enterprises of high technology level have more cooperative intention, more efforts of willing to cooperate, more production efficiency and more cooperation profit.3. The income distribution principle of construction enterprises in Partnering should be guided by the principle of increase income for cooperation, the principle of optimization allocation, the principle of matching income to cost, risk, effort, strength, technology level and so on. That is, the construction enterprises with more important place, more risk, greater effort, more strength should be appropriately increased cooperation profit distribution proportion. However, the profit distribution proportion should not have too big gap between the enterprises of similar production technology level. Otherwise, it will reduce the trust, communication and sharing level for cooperation. At a result, the cooperation will fail. The study also showed that the Nash equilibrium income value of higher technology level is negative correlation with profit rate. But the Nash equilibrium income value of lower technology level is positive correlation with profit rate. This phenomenon can be explained by "boxed pigs game" model, that is, for the construction projects of higher technology level and risk, they have higher cooperation intention because of more profit. In order to stimulate construction enterprises of lower technology level willing to cooperate, the enterprises of higher technology level should reduce income ratio. On the contrary, in the project of lower technology level, the enterprises of lower technology level should reduce the income in order to achieve the cooperation opportunities with enterprises of higher technology level which having more choice for partner.4. Through improving owner’s ability to speculative behavior in the project, and increasing penalties to opportunistic practice of contrctors and building enterprises in Partnering management, the contrctors may improved effort to fulfil their duty, therefore reducing their fraud posibility in certian extent. Moreover, the contrctors and building enterprises will do more fraud in project together, when the cost of supervision and inspection for owner gets higher, and the income by fraud of contrctors and building enterprises gets more. meanwhile, the study also disvovered that the professional degree of contrctors will be reduced with increasing the peanalties of building enterprises. This phenomenon can be explained that the more profits of contrctors come from building enterprises. in fact, contrctors have more common interests with building enterprises, but not with owner.
Keywords/Search Tags:Partnering management, Cooperative Strategy, game theory, evolutionary game theory, management mechanism
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