The Need For Construction Firms Commerce Essay

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The current construction practices have resulted in social, economic and environmental problems and thus the behaviour and actions of construction organisation in realtion to sustainability has become an significant issue. The quest for construction firms to manage their sustainability performance has never been greater especially in changing business environments, hosted by many interrelated factors such as: fluctuating construction demand (Gruneberg, 2009); changing procurement trend (Cartlidge, 2004); changing government priorities toward sustainability (Shen and Tam,2002); and increasing clients' expectations and demands on sustainable solutions. Sustainability management is thus one of the key approaches for firms to remain viable in changing business environment (Zhang et al., 2000). However, managing organisational sustainability is not an easy process as it may require organisations to adopt an open mind set, analyse their business environment and change their strategic endeavour and behaviour, towards adopting sustainable ideas and practices for improved competitiveness. It is therefore important for construction organisations to understand the key factors driving sustainability management.

Sustainability management is a relatively new filed which makes it possible for organisations to measure, manage and report their sustainability performance in a rigours way (Mc Elroy and Van Engelen, 2012). Although the concept of sustainability management is well-documented in the general business literature, it appears that little is done to empirically investigate or model the sustainability management of construction firms.


The literature review attests to the need for construction firms to place greater emphasis on managing their sustainability performance in order to remain competitive. Although many studies have focused on the sustainability agenda of construction firms in different countries (e.g. Myers, 2005; Mills and Glass, 2009; Jones et al., 2010), it appears that no or little emphasis has been place to empirically model the sustainable management of construction organisations in a changing business environment. Previous studies have mainly focused on the applicability of EMS, CSR and the barriers and drivers for sustainability in construction. They do not consider: (1) the constituents of sustainability and (2) the collective dependence effect of external environmental forces, organisational attitudes, resources, capabilities and strategies on contractors' sustainable performance, as what manufacture-related studies do. It is therefore not known what are the key organisational resources, capabilities and strategies that drive construction organisations' sustainable performance and hence their competitiveness.


Recognising the gaps in the knowledge, this research aims to investigate the sustainability management of construction organisations. Under this aim; the specific objectives are set out as follows:

Objective 1: Identify the key determinants of sustainability management in construction organisations.

Objective 2: Develop a framework for sustainability management in construction.

Objective 3: Testing of framework

Objective 4: Develop strategies to improve current situation.


None of the previous conceptual frameworks allowed for an examination of the relationship between possible determinants of CSM,



The construction industry is a significant part of many economies, both in terms of GDP and employment (Hampson and Brandon, 2004).It contributes for approximately 6.2 percent to GDP annually and accounts for 7 percent of employment within Australia (ABU).The satisfactory growth of the industry is essential for the welfare of any economy as its growth is related to the growth of many other sectors such as services and manufacturing (Hillebrandt, 2000).

Ofori (1990) proposed nine features specific to the construction industry. These are: (i) large size; (ii) influence of government as a client; (iii) high production cost; (iv) unique nature of demand; (v) unattractive nature of work; (vi) wide range of technologies; (vii) temporary and multi-disciplinary collaborative nature of organizations; (viii) lengthy production process; and (ix) complex structure of the industry. Another important feature of the industry as noted by Hampson and Brandon (2004) is that it mainly consists of small and medium enterprises (SMEs), for example 94 per cent of Australian construction businesses are SMEs employing less than 5 people. This large proportion of smaller businesses indicates that on the whole, the industry is likely to be fragmented.


Shirazi et al., (1996) recognized that the industry has complex-dynamic environment, which signifies the greatest amount of uncertainty in decision-making. This means that construction organisations are likely to deal with rapid changes and unanticipated decision situations in their business activities According to Betts and Ofori (1994), the environmental dynamism in construction is growing at an increasing fast pace and while posing significant threats it is offering proportionately greater strategic opportunities with time. In this study, environmental dynamism refers to the rate of change, absence of pattern and unpredictability of the environment, following the definition of Dess and Beard (1984).

According to Hillebrandt et al., (1995) the behaviour of construction firms is strongly influenced by the environment within which they operate. He also identified five environmental factors shaping the competitiveness of the construction industry as: economic and industrial factors, government policies, social and technological changes, external influences and the industry's evolution. This is in line with Betts and Ofori (1994) who observed that the environment in which construction firms operate is increasingly influenced by: economic factors, technological factors, social factors and the industry's development towards the information age.

Sustainability is becoming an important crucial point from a global construction perspective. This is highlighted, for example, by the significant impact of construction activities on waste, energy use and greenhouse gas (GHG) emissions (Wallance, 2005). The severe impacts of construction on the environment have led to a growing emphasis on sustainability management. This, in turn, is reflected by the mounting pressure exerted by clients, government and other stakeholders with respect to the construction organisations becoming more accountable for their social and environmental impacts. Sustainability has now become more salient in the contract selection process due to the incorporation of sustainability into contract selection criteria.

The above review shows that behaviour of construction organisation is influenced by several external environmental factors and that, with the increasing social awareness about environmental issues and strict government policies to enforce environmental sustainability there is an increased demand on the construction organisations to make buildings more 'green' and deliver infrastructure projects that have lower carbon emissions. Sustainable management and practices have been touted as the next strategic weapon in the battlefield of competition (Zhang et al., 2000). It is important for construction organisations to understand the types of change in their business environment and how these changes could affect their business operations.


Changes in the current economy in the past decades have been presenting new challenges to the construction industry (Wang and Yang, 2006). Drivers that impact the construction industry include globalization of the business environment, construction demand, environmental sustainability and climate change, new materials and technologies, and governance and regulation.


Thorpe and Ryan (2007) pointed out that globalisation has twofold meaning for the construction organisations. First, construction is becoming an increasingly global business, characterised by a trend towards large firms. Second, globalised market provides access to construction organisations to go global. Sillars and Kangari (1997) noted that availability of economical transportation and effective telecommunication systems have virtually removed the barriers to access of information and markets and this has transformed the traditional geographically dependent construction industry into one in which borders between competitors are almost removed.

According to Raftery et al., (1998), the intensity of competition has been intensified with the increased participation of more foreign contractors in domestic construction markets, especially in less developed countries due to governments' economic and infrastructure development initiatives. They also added that globalisation means opportunities and threats coexist or are in juxtaposition for construction companies.

2.3.2- Construction Demand

Gruneberg (2009) pointed out that changes in construction demand could be due to major changes in its economic, political, demographic, technological and environmental conditions. According to Loosemore et al., (2003), the cycles of peaks and troughs in construction demand is a main reason of human resource management related problems for contractors. For example, due to the cyclical nature it is difficult to make long -term investment in core staff. This is shared with Ive and Gruneberg (2000) and Hillebrandt and Cannon (1990) who recognized that the fluctuation in construction demand is one of the main difficulties faced by contractors in their strategic planning for resource utilization and investment.

Expectations of society and population growth also influence the level of construction demand. Gruneberg (2009) explained that, societal expectation changes with economic growth and this results in the demand for improved residential, non-residential and infrastructure buildings in terms of comfort, convenience and appearance. Similarly, Hillebrandt (2000) indicated that, as population increases, the demand for housing and educational facilities also increase. This increase in demand increases the price of accommodation and this in turn increases houses and land prices; all these eventually shape the demand of construction activity (Gruneberg, 2009).

Gruneberg (2009) also identified that, as sustainability have become a important feature in current global politics, governments' especially in developed nations are putting more pressure towards creating a more sustainable environment. This has resulted in changes in demand for construction with clients want more energy saving.


The construction industry is major consumer of world's energy and resources. It consumes 30 to 40 percent of global energy production and 40 percent of extracted resources. It relies heavily on natural environment for the supply of raw material such as timber, sand and aggregate for the building process. This extraction of natural resources impacts the environment both from an ecological and scenic point of view (Langford et al. 1999). Extraction of raw material and construction activities themselves also contribute to the emissions and accumulation of pollutants in the environment, which includes some of the toxic substances such as nitrogen and sulphur di oxide. These are released during extraction and transportation of materials as well as site works (Ofori and Chan 1998). About half of the total chlorofluorocarbons (CFC) emission is produced in the building industry (Moughtin 1996).

Pollutants released into biosphere due to on-site negligence also cause water and land contamination. According to Langford et al., (1999) about one third of world's land is degraded and pollutants are depleting environmental quality. Because of the enormous volume and intensity of energy and resource use, the construction industry exerts enormous pressure on the whole ecosystem.

The construction industry also produces a large amount of waste. Teo and Loosemore (2001) claimed that construction activities produce approximately 29% of waste in USA, more than 50% in UK and 20-30% in Australia. According to Chiveralls (2011) in 2006-2007, the construction and demolition sector accounted for more than a third of Australia's 43.8 million tons of waste. Approximately 43 per cent of construction and demolition waste (81 per cent of which is building rubble) went to landfill. Most of the waste could be for re construction but the industry has not acknowledged the waste recycling to its potential.

Though it is true that built environments provide abundant opportunities to achieve economic growth and social development it is clear that exploitation and mismanagement of built environment has a huge contribution towards today's environmental problems. Du Plessis (2007) stated that the challenge for the construction sector is not just to respond to the need for adequate housing and rapid urbanization, but to do it in a way that is socially and ecologically responsible.



Sustainability by definition, addresses the impacts of economic development and industrial growth on the existing physical, institutional and intellectual structure of society and its natural systems by defining and formulating the relationship between dynamic human economic systems and slower-changing ecological system (Khalili, 2011). Because natural, economic and social systems are all interdependent, it is logical that they all must be addressed when creating a sustainable solution. Due to its integrated nature sustainability has three dimensions that include economy, environment and society; traditionally these dimensions are reviewed in isolation as presented in Fig 1 (Peet and Watts, 1996).




Fig 1: The three dimensions of sustainable development

This piece meal approach has the following negative side effects;

Solution for one problem can make other problem worse; for example building houses for society on forest land has an adverse affect on the environmental health of planet.

A tendency to focus on short term goals without the consideration of long term results.

A tendency to create opposite groups, for example businesses claims that incorporation of environment and society restrict their economic growth.

Mc Elroy and Van Engelen (2012), presented a definition of sustainability based on the capital theory as "Sustainability is the subject of a social science or management discipline that measures and/or manages the impact of human activities on the carrying capacities of vital capitals in the world, relative to standards or norms for what such capacities need to be in order to ensure human well-being". They argue that without context sustainability is meaningless, further they described context which could be used in sustainability management and reporting as a three step procedure as follows:

1.Carrying Capacities of Capital: First the vital capitals(stock) and their carrying capacities(flow) an organisation is having impact on in ways that can affect stakeholder well being, as well as capitals it should be having impact on in order to ensure stakeholder well being must be identified.

2. Responsible Population: Next it must be determined who the responsible populations are for ensuring the quality and sufficiency of such stocks and flows.

3. Organisational Allocation: and last, based on the first two steps proportionate shares of available stocks and flows and/or burden shares for producing and/or maintaining them to individual organisations must be allocated.


The concept of sustainable development is a result of the growing awareness of the increasing environmental problems and socio-economic issues to do with poverty and inequality and concerns about a healthy future for humanity (Hopwood et al., 2006). The term was first use in 1980 in the World Conservation Strategy (IUCN et al., 1980), since then sustainable development has become an important international agenda, and many conferences have held such as the UN Conference on Environment and Development in Rio de Janeiro (1992), Kyoto conference on global warming (1997), Johannesburg Earth Summit (2002) and Washington Earth Observation Summit (2003). These have promoted positive action plans from many countries to absorb and implement the philosophy into their Industrial sector.

Brundtland Report defines sustainable development as meeting 'the needs of the present without compromising the ability of future generations to meet their needs' (WECD 1987 pg.43). The IUCN publication Caring for the Earth (1991) provided an alternative definition of sustainable development that is also often quoted: to improve the quality of life while living within the carrying capacity of living ecosystems.

Sustainable development requires the integration of the three traditionally separate domains, i.e. the interconnections between the three dimensions as described in Fig. 2 need to be taken into account. Au (1996) states that, these three dimensions are objectives to be met, not just conditions to be fulfilled or manipulated. If any development strategy or path or pattern cannot meet either one of these goals, it cannot be regarded as sustainable. It is crucial that a balance of the three dimensions is maintained in order to achieve sustainable development.

Sustainable development

Fig 2: The integrated approach towards the three dimensions of Sustainability

On the other side Adam (2006) claims that the conventional understanding of sustainable development, based on the 'three pillars' model is flawed because it implies that trade-offs can always be made between environmental, social and economic dimensions of sustainability. In response to this flaw, a distinction is often drawn between 'strong' sustainability (where such trade-offs are not allowed or are restricted) and 'weak' sustainability (where they are permissible). He also argued that however, in practice, development decisions by governments, businesses and other actors do allow trade-offs and put greatest emphasis on the economy above other dimensions of sustainability, this is a major reason why the environment continues to be degraded and development does not achieve desirable equity goals.

Moffat (1993, pg 109) argued that "despite the different definitions of sustainable development, it is clear that if discussions of sustainable development are to be translated into actual practice then an appropriate methodology must be developed". This methodology should incorporate the following four properties.

The methodology must be dynamic rather than static.

The time horizon should be sufficiently long to permit ecological and economic processes to be captured in the model.

Policies embedded in the model can be turned on so that their impact on paths of sustainable development can be examined.

Any consideration of sustainable development must operate at the national level so that policies arising from research and application are actually politically accountable to the population most affected by them.

Hai et al., (2010) investigated influencing factors towards sustainable development and have listed poverty, lack of information and education are the main barriers in the success of sustainable development. They have also found a positive relationship between knowledge, attitude and practice in sustainable development programmes.


Myers (2005) examined the attitudes of UK construction companies towards sustainability on the basis of their public-disclosure information, and found that very few large-sized companies positively responded toward the urge of managing their sustainable performance. He found that some of the exceptionally large construction firms are beginning to acknowledge sustainability but the small unlisted firms will be slow towards embracing a positive attitude to sustainability. In view of this, Mills and Glass (2009) explained that the slow implementation of sustainable initiatives in UK companies is mainly due to the skill deficit of construction professions about sustainable practices and technologies.

In context of Singapore's construction industry, Oo and Lim (2011) studied the attitudes and behaviour of 34 contractors towards environmental sustainability, and found that the contractors are increasingly recognising sustainable management as a tool for competitive advantages. Also, they ascertained that: (1) firm size and type of ownership are key factors moderating the contractors' attitudes towards embracing sustainable practices; and (2) improved materials efficiency and increased government financial incentives are the key drivers for contractors to adopt environmental practices. Similarly, Ofori et al. (2000) surveyed 53 Singaporean construction firms on their attitudes towards implementing ISO14000 environmental management system (EMS), and found that: (1) most of the firms adopted a wait-and-see attitude towards EMS implementation; (2) there is a lack of knowledge of ISO14001 standards within the industry; and (3) shortage of qualified personnel and the fragmented nature of the industry (which leads to material wastage and safety problems) are key hurdles faced by construction companies. In view of the latter, Ofori (2000) studied the possibility of using supply chain management (SCM) to improve the sustainable performance of Singapore construction firms. He suggested that effective SCM could help greening the construction supply chain, and recommended green initiatives for the Singapore construction industry such as presenting best practices award and educating construction practitioner. This finding is shared by Lam et al. (2010), who pointed out that the use of information and communication technologies, with proper training and development, toward improving business efficiency and productivity could lead to improved sustainable performance.

Focusing on Hong Kong contractors, Shen and Tam (2002) and Tam et al. (2002) found that the contractors are not receptive to sustainability because: (1) their clients do not support sustainable initiative; (2) cost and time are still the main performance criteria; and (3) they do not have sufficient capacity to implement environmental management system (EMS). This is consistent with the findings of Christini et al. (2004) that few construction companies have adopted EMS in their business operation due to limited organisational resources and lack of mutual commitment from the industry partners.

Zainul Abidin (2010) investigated the awareness and application of sustainable construction in Malaysia and found that the concept of sustainability is not widely received in the industry as many developers, especially small and medium companies, are still reserving themselves. He also pointed out that sustainability implementation is low because of several factors such as lack of knowledge, poor enforcement of legislation and passive culture of construction organisations. A similar study done by Sakr et al., (2009), discovered that there is low dissemination of information about ISO 14001/EMS among the top contractors due to the absence of the role of local institutions in promoting these systems.

In Australia, Hampson and Brandon (2004) emphasised the importance of construction organisations to recognise sustainable management as a key strategy for improved competitiveness, and suggested that life cycle assessment is an environmental management tool to begin with. They, however, identified that organisational inertia, lack of information and lack of capacity and government incentives are possible barriers to sustainable management. Petrovic-Lazarevic (2008) interviewed 17 large Australian construction firms about their attitudes to sustainability via the application of ISO14001 EMS as part of their firms' CSR. They found that the majority of the firms interviewed have ISO14001 EMS certification in place, and the reasons for applying EMS include competition, quality improvement, community requirements, increased public awareness and clients' requirements

Hill and Bowen (1997) and Sev (2008) pointed out that for construction firms to manage their sustainable performance, they must first change their behaviour and attitudes towards being sustainable. Likewise, Carmichael (2009) and Ngowi (2001) found that positive behaviour towards sustainable performance could lead to competitive advantage over others especially in the era when most governments and public communities are giving attention to environmental issues.


There are a number of frameworks developed by researcher to help organisations become sustainable. The following section discusses them in detail and the summary is presented in table1.

1- Environmental Management Systems (EMS):

An EMS is a set of processes and practice that enables an organisation to reduce its emissions and environmental impacts via increasing process and operation efficiency. EMSs are designed based on a Plan-Do-Check- Act (PDCA) methodology (Khalili and Melarango, 2011). The first EMS standard (BS 7750) appeared in 1992, in the UK, and then it was followed by appearance of other local and regional standards (such EMAS: European Union's Eco-management and Audit Scheme, etc) (Hillary, 1997). The International Organization for Standardization published the first edition of the Environmental Management Systems standard as ISO 14001, in September 1996. Then an updated version for it was published in year 2004. ). However many researchers (e.g. Tam et al., (2002); Kollman et al., (2002)) argue that EMS are just management systems and they may not guarantee any improvement in environmental performance of construction organisations. This is shared by Freimann and Walters (2002), they presented an empirical study on the implementation of standardised environmental management systems in companies and concluded that EMSs are mostly considered economically profitable investments by managers of the participating companies and though the systems lead to numerous additional valuable, but difficult to quantify the improvement of corporate environmental care.

2- Corporate Social Responsibility (CSR):

The world business council for sustainable development refers CSR as a continuing commitment by businesses to contribute to economic development while improving the quality of life of the workforce and their families as well as of the community and society. This definition is similar to Petrovic-Lazarevic (2005), who defined CSR as a set of principles established by an organisation to meet societal expectations of appropriate business behaviour and achieve best practice through social benefits and sustained competitive advantage.

3- Corporate Social Performance (CPS):

Corporate social performance is seen as a configuration of drivers, processes and outcomes, rather than as an outcome only. Wood (1991, p. 693) defined corporate social performance as "company's configuration of principles of social responsibility, processes of social responsiveness, and policies, programs, and observable outcomes as they relate to the firm's societal relationship".

Table 1: Strategic frameworks and their potential application to achieve sustainability. (Adopted from Khalili and Melaragno, 2011)


Operational Boundary

Potential application

Environmental Management system (EMS)


Reduce an organisation's emissions and environmental impacts

Corporate Social Responsibility (CSR)


Provide a framework to guide the management through business strategies

Occupational health and Safety Management System (OHSMS)


Eliminates the possibility of accidents, illness or injury in the workplace by ensuring that hazards are eliminated or controlled systematically.

Life cycle Analysis (LCA)


Identify potential environmental aspects and impacts of a product during its life cycle

SEA Framework

Project Assessment


Provide a global framework capable of integrating three constituents of sustainability in the course of planning actions needed to ensure business sustainability and economic viability

Corporate Social Performance


Provide a framework for company's social performance


The review of the available frameworks revealed that corporate social responsibility is conceptualized as a principle to motivate corporate behaviour. Furthermore, it is very narrow and less strongly focused on environmental (more strongly on social) effects of corporate activities than corporate sustainability (Marrewijk et al., 2003). In contrast, corporate social performance is a lot broader: Alongside motivating principles, i.e. drivers of corporate behaviour, they include corporate behaviour as such (processes of social responsiveness) and its outcome. These models also fall short to differentiate between social and environmental issues. Furthermore the available frameworks do not analyse how external and internal determinants influence companies' strategic disposition of sustainability management (Salzmann, 2006). Another major setback is that these models do not account for company-specific determinants or internal drivers such as organisational culture, employee skill and attitudes, organisational structure, tools and processes. They do not present a business case for sustainability.



Conceptually, sustainability management addresses the problem of organisation's contributions to sustainability in an integrative way. It presumes that organisations could only contribute to sustainable development if organisational performance improves in all three dimensions of sustainability - economic, environmental and social - simultaneously (Figge et al., 2001). While conflicts between the three performance categories of sustainability (social, ecological and economic goals) may occur, from a realistic business viewpoint corporate sustainability management should first identify and realize opportunities for simultaneous improvements in all three dimensions in order to achieve strong corporate contributions to sustainability (Figge et al., 2002).

According to Figge et al., (2001) the Integration of the three pillars of sustainability into general business management by a pragmatic approach offers the following advantages.

(i) Sustainability management that is economically sound is not endangered by economic crisis because it is not only carried out as long as the organisation is successful. Usually, if organisations find themselves under financial distress, those costs that are perceived as not contributing to the economic success are cut down first.

(ii) Sustainability management that also contributes to competitiveness, as the organisation serves as an appropriate role model for other businesses.

Thus, from the viewpoint of sustainability, it is most desirable if a business improves performance with regard to all the three dimensions of sustainability simultaneously. Salzmann (2006, p: 17) defined sustainability management as "The strategic and profit-driven corporate response to environmental and social issues that are caused through the organization's primary and secondary activities. It incorporates a certain level of strategic disposition to respond, is based on a more or less elaborated economic rationale and implemented through tools, structures and initiatives". This definition by Salzmann incorporates three important sub-concepts.

Strategic disposition refers to companies' willingness to integrate social and environmental issues systematically and persistently into their business strategies.

Economic rationale refers to the business case for sustainability. Bansal et al., (2000) argued that the business case (e.g. improved processes and reputation) the greater will be the motivation for the sustainability management.

Implementation needs strong collaboration between general management and sustainability experts to embed sustainability in long term goal settings.

More recently McElroy and Engelen (2012, p: 90) defined Corporate sustainability management or sustainability management as "a management discipline that seeks to manage or control the impacts of organisations on vital (non-monetary) capitals in the world, such that they (i.e., the impacts and the activities that produce them) are sustainable". They further explained that in order to be sustainable an organisation must systematically manage its impacts on vital capitals such that its impacts are fair and proportionate and that its impact would not put human well being at risk.


Epstein and Roy (2003) argued the mangers can truly integrate social and environmental aspects into their business strategies only by making the business case for social and environmental performance. The main reason for not adopting sustainable business practices is the inability to present a clear business case for such practices (Sustainability survey report PricewaterhouseCoopers, 2002). Theoretical and empirical research indicates that most organisations have potential for one or several business cases for sustainability, however it is not recognised due to complex management systems (Schaltegger and Wagner, 2006).

Schaltegger (2008) outlined that the business case for sustainability is characterised by creating economic success through (and not just along with) a certain environmental and/ or social activity. He further explained that business case for sustainability is not an automatic relationship with general practices it has to be created actively through an intelligent sustainability management approach.


Many researchers have linked sustainability to competitive advantage. Madu (2004) argues that environmental management is a key to achieve competitiveness in today's market he has given examples of Xerox and Kodak; both companies have gained millions through re-manufacturing of products. According to Davidson (1987), the ability for firms to generate added value for their customers, and opportunities to benefit from environmental good practices are keys towards gaining competitive advantages. This agrees with Porter (1985) and Barney (1991) that firms will gain competitive advantages only if they are able to implement value-creating strategies that are not easily imitated by their competitors in a changing business environment.

The relationships between organisations' competitive advantage and sustainability management are well-established in the management literature, which mainly focused on the manufacturing industry (e.g. Ansoft, 1965; Porter, 1980; Rodrigues et al., 2002). According to Davidson (1987), the ability for firms to generate added value for their customers, and opportunities to benefit from environmental good practices are keys towards gaining competitive advantages. This agrees with Porter (1985) and Barney (1991) that firms will gain competitive advantages only if they are able to implement value-creating strategies that are not easily imitated by their competitors in a changing business environment.

Bansal and Roth (2000) operationalized the drivers of corporate ecological responses: increased environmental regulation; increased stakeholders' pressure and awareness; increased economic opportunities; and increased self-awareness of environmental values and ethics. Rodriguez et al. (2002) pointed out that these changes, fuelled into the competitive landscape by sustainable development, have influenced the way in which firms operate and function. Welford and Gouldson (1993) studied the relationships among firms' strategy, sustainability and competitiveness, and found that the main constituent of competitive advantages for firms are derived from sustainable practices and processes such as improved product quality, improved materials efficiency and waste reduction. Likewise, Wagner (2005) examined the sustainability and competitive advantages of manufacturers across United Kingdom (UK), Italy and Netherlands, and found that there is a positive relationship between the manufacturers' economic and sustainability performance. Marchi et al. (2012) empirically modelled the environmental performance and strategies of Italy manufacturers, and found that firms develop green strategies to reduce environmental impacts while achieving economic benefits and competitiveness through effective supply chain management. This is consistent with the findings of Lee and Kim (2011) that the ability of Korean manufacturers to integrate their key suppliers in their green new product development using technological innovation is the key towards achieving competitive advantages in an ecologically-driven market.


The following section discusses the possible constituents of sustainability management as identified in literature review.

4.4.1- Stakeholder pressure

According to Freeman (1984) Stakeholders are individuals and groups which can affect the company's performance or who are affected by a firm's actions. Clarksson (1995) distinguished stakeholders into two groups as primary stakeholders, without whose participation and support the organization cannot survive (e.g. customers, suppliers, governments), and secondary stakeholders, which affect and are affected by the organization but are not engaged in transactions with it and are not essential for its survival (e.g. media, non-governmental organizations). The empirical study done by Elijido-Ten (2007) indicates that stakeholder theory can contribute to understand how organisations behave under rapidly changing business environment where sustainability issues are increasingly becoming important.

4.4.2- Economic opportunities and threats

Chen (2006) have outlined that the environmental factors, such as economic and competitive conditions, market turbulence and government interference are important predictors to an organization's performance.

4.4.3- Legislation

Regulations in the most countries plays a vital role to promote corporate adoption of broader sustainability elements such as redesign of products and processes to reduce environmental and social impacts, product stewardship, protection of habitats, operation within a region's environmental carrying capacity, protection of the interests of future generations, as well as the equitable balancing of the interests of all segments of society (Gladwin et al., 1995; Hart, 1995, 1997; Starik and Rands, 1995)

4.4.4- Organisational culture:

According to Schein (1990), culture is something that a group learns over a period of time as it tries to solve its problems of survival in an external environment and its problems of internal integration. Such learning is simultaneously a behavioural, cognitive and emotional process. Thus, culture can be understood as (a) a pattern of basic assumptions, (b) invented, discovered or developed by a given group, (c) as it learns to cope with its problem of external adaptation and internal integration, (d) that has worked well enough to be considered valid and therefore, (e) is to be taught to new members as the correct way to perceive, think, and feel in relation to these problems (Tripathi et al., 2000).

Brown (1998, pg 9) defined organizational culture as "the patterns of beliefs, values and learned ways to cope with experiences that have developed during the course of an organization's history, and which tend to be manifested in its material arrangement and in the behaviours of its members". Senge et al., (1999) highlighted that sustainable development and management cannot be achieved without innovation, and innovation is best achieved in a culture that embraces and fosters learning and change. It is therefore importance for firms to adopt a learning organizational culture, which encourages innovative behaviour and no-blame attitudes, so as to foster their organisational members' commitment towards achieving sustainable performance (Hartman, 2006).

4.4.5- Organisational structure:

Tomer (1996) stated that organizational structure is the internal pattern of relationship, authority, and communication among positions in an organization and among members of the organization. Organisations structure could also contribute towards sustainable performance, Burton et al., (2006) outlined that organisational structure could influence the choice of business strategy. Top management commitment is another important feature as noticed by Cumming (2008) towards sustainable performance

4.4.6- Employee skills and attitudes:

Studies done by Ángel Del Brío et al., (2007) and Pringle and Kroll (1997) emphasized that intangible knowledge-based (e.g., people) resources may generally lead to a sustainable management and competitive advantage when the environment changes quickly. This view is also supported by Chaminda et al., (2007) who insisted that tacit knowledge of workers is very valuable towards organisational performance in construction due to intrinsic characteristics of the industry.

4.4.7- Supply chain capabilities:

Krause et al. (2009) quoted that a company can be only as sustainable as the organisations that supply it, therefore sustainability management entail both internal operations and activities of external supply chain members. Ofori (2000) studied the possibility of using supply chain management (SCM) to improve the sustainable performance of Singapore construction firms. He suggested that effective greening the construction supply chain could help the overall sustainability performance of organisations. This is in line with Ho et al. (2009) who examined the contrasts between traditional and green supply chains. They discussed several opportunities in green supply chain management in depth, including those in manufacturing, bio-waste, construction and packaging. The authors argue that some operations have discovered the cost saving benefits after adopting more environmentally friendly practices.

4.4.8-Technological capabilities:

Shrivastava (1995) examined the relationship between environmental technologies and competitive advantages, and argued that environmental technologies which could offer firms new substantive orientation and management process towards minimising ecological impacts of economic production while enhancing their competitiveness. He however added that, for effective implementation of environmental technologies, firms should place greater emphasis on their company's vision, resources, production processes and products. Thrope et al., (2007) have also outlined that use of ICT to improve efficiency and productivity along with training and development could lead to better sustainable performance. This view is supported by Lam et al., (2010) who listed technology as a driver for sustainability.

4.4.9- Business strategies:

Robinson (1996, 1998), pointed out that business resources, process innovation and company values are the three key constituents influencing a firm's ability to attain corporate environmental sustainability.


Figure 1 show the conceptual framework for sustainable management in construction firms. In this study, the framework is underpinned by: (1) the theory of planned behaviour; (2) the dynamic contingency theory; and (3) the resource-based theory of competitive advantage. Of these, the resource based theory presumes an organisation as a collection of unique resources and capabilities that provides the basis for its strategy and the primary source of its return and competitiveness (Grant, 1991). As for the dynamic contingency theory, it postulates that organisations and their environment are interrelated (Miles and Snow, 1978). Lastly, the theory of planned behaviour theorizes that individuals' intentions to perform or not to perform a certain kind of behaviour are influenced by three variables (following those variables of Ajzen, 1993): (i) attitudes; (ii) the subjective norm; and (iii) perceived behavioural control.

External Environmental factors

Stakeholder pressure

Economic opportunities and threats

Legislation conditions

Sustainability Behaviour

Sustainability Performance

Competitive Advantage

Organisational culture

Organisational culture structure

Employee skills and attitude

Supply chain capabilities

Technological capabilities

Business strategies

From the resource-based perspective, this study postulates that construction organisations should be analysed as a single entity that is heavily linked with organisational resources, capabilities and strategies for competitiveness. As shown in Figure 1, contractors' sustainable behaviour and performance could be determined by their: (1) organisational culture; (2) organisational structure; (3) employee skills and attitudes; (4) supply chain capabilities; (5) technological capabilities; and (6) business strategies. Within this framework, the dynamic contingency theory puts forward that strategic choice is the fundamental linkage between construction organisations and their environments, whereby managers integrate, build and reconfigure their firms' resources and capabilities into different strategies that enable them to adapt and respond to changes within their business environment, which are fuelled by increased stakeholder pressure, economic opportunities and legislation conditions. Of these, the external factors are further associated to the subjective norms of the planned behaviour theory which can be defined as the opinion and influence of important people on others. According to Azjen (1993), subjective norms play an important role towards shaping up the role of individuals' attitude and behaviour.


5.1.1-The Theory of Reasoned Action/ Planned behaviour

A number of theory's have emerged to explain the relationship between attitudes and behaviours but most prominent within environmental research are: norm-activation theory (Schwartz, 1977), the ipsative theory of behaviour (Frey, 1988) and the theory of planned behaviour (Ajzen, 1993). Schwartz' norm- activation theory does not take industry culture into account. On the other side Frey's (1988) theory has been widely criticized for ignoring social influences in environmental behaviour, and has had remained largely untested in the environmental research.

Azjen and Fishbein's (1993) "Theory of planned behaviour" is one of the most prevailing models for illustrating the relationship between attitude and decision making behaviour. In this model, attitudes and subjective norms (the opinion and influence of important people) about a behaviour as well as perceived behavioral control (to what extent someone think they are capable of performing certain behaviour) influence behavioral intentions which, in turn, determine the likelihood of the behaviour occurring. Fig 4 represents the model developed by them. It is important to note that attitude and subjective norms are interlinked in this model this recognizes that personal attitudes are linked with the important social referents and perceived behavioral control.

Attitude towards behaviour


Behavioral Intention

Subjective norms

Perceived behavioral control

Fig 4: Theory of planned behaviour by Azjen

This theory is widely tested to measure attitudes and behaviours in several areas e.g. to determine behaviour towards leisure choice (Ajzen & Driver, 1990), to measure the importance of self-efficacy in blood donation (Gilles and Cairns, 1995) and Smoking cessation (Bledsoe, 2005) it has also been used to predict people' behaviour in the context of environmental research (e.g.; Hamid and Cheng, 1995 and Harland et al., 1999). In the domain of construction this theory is been used and modified by researchers like Teo and Loosemore (2001) for understanding the waste behaviour in construction industry and Wang and Yuan (2011) to measure risk attitude of construction work force. There are three major components of this theory; they will be discussed here in detail;

1- Attitude about Behaviour

The first component of this theory is concept of attitude towards behaviour. Azjen (1993) described attitude as the "psychological tendency to evaluate a particular object or situation in a favourable or unfavourable way, which causes people to behave in a certain way". Fisher and Ajzen (1975) has pointed out that appropriately measuring the attitude is a major issue in the first place. They argued that one reason why there is a conflict between expressed attitudes and actual behaviour is that people are not very good at changing scales or moving conceptually from general attitude to specific behaviour. Jones (1996) argues that the connection between attitudes and behaviours is very unclear in terms of environmental sustainability. For example most people would show overwhelming support to reduce global warming and CO2 emissions but far fewer people actually do something practically about it. The most common concept of attitude behaviour relationship is that people form attitudes based on the knowledge obtained from exposure to information and then adopt behaviours that are consistent with the attitude they hold.

Fishbein and Azjen (1993) have identified four discrete elements of every behaviour as action, target, context and time. They argue that these elements must be considered if prediction of behaviour is required from attitude.

2- Subjective Norms

The second major component of the theory is subjective norms or the perception of individuals of how others what them to act. It is essential to note that it is not how others want an individual to behave is as important as the individual's perception of how others want them to behave.

Barr (2003) suggested that a wide variety of factors influence the environmental action they are categorized as:

Environmental and social values.

Situational factors.

Psychological variables.

3- Perceived Behavioral Control

The last component of the theory is the perception of behavioral control or to what extend individuals think they are capable of performing certain behaviour. The theory shows that perceived behavioral control is interlinked with the other two components and it has a direct affect on behaviour as well as on behavioral intension.


Resource-based theory has been developed to understand how organisations achieve sustainable competitive advantages. Edith Penrose developed this theory, who originally named it as 'the theory of the growth of the firm' (Penrose, 1959). Subsequently this theory is widely termed as 'the resource based view of firms' (RBV), following Wernerfelt (1984).

According to Penrose (1995), a firm is an entity that possesses unique collections of resources and capabilities bounded together in its administrative framework, and that 'ownerships' of these collections of resources and capabilities provide the basis for its strategy formulation. It is argued that performance differentials between firms within the same arena depend on having uniqueness of resources and capabilities (Barney, 1991; Conner, 1991)

The resource based theory assumes that: (i) firms are essentially heterogeneous in terms of their unique resources and internal capabilities underlying the production, and (ii) resources may not be perfectly mobile across firms, and thus the resources differences persist over time (Wernerfelt, 1984; Peteraf, 1993). According to Barney (1991) and Peteraf (1993), an organization can achieve competitive advantages over its closest competitors if its resources and capabilities are scarce and superior in use. Barney (1991) also argues that in order to provide competitive advantage resources and capabilities must fulfil the following four criteria:

1. Valuable: the resource must have strategic value to the firm (for example, by exploiting opportunities or neutralising threats);

2. Rare: the resource must be unique or rare to find amongst the current and potential competitors of the firm;

3. Inimitable: It must not be possible to perfectly imitate or copy the resource (because it is difficult to acquire; because the link between the capability and or the achieved sustained competitive advantage is ambiguous; or because it is socially complex);

4. Non-substitutability: competitors cannot substitute the resource by another alternative resource to achieve the same results.


The basic proposition of stakeholder theory is that the firm's success is dependent upon the successful management of firm's relationships with its stakeholders. The term stakeholder was originally introduced by Stanford Research Institute to refer to "those groups without whose support the organization would cease to exist" (Freeman, 1984, p. 33).

According to Searcy (2012) stakeholder theory implies that corporations have obligations to individuals and groups both inside and outside of the corporation, including shareholders, employees, customers, and the wider community. The importance of stakeholders in driving corporate sustainability management depends on two factors: (1) their power to revoke a company's license to operate and (2) their demand for sustainability management. The latter factor is influenced by the legitimacy and the urgency of the demand (Agle et al., 1999, p. 508).


Contingency theory gained popularity in the 1960s (Woodward 1965; Lawrence and Lorsch, 1967).It states that "management and organizational life are situational and subject to contingencies". The theory has a wide range of applications in organization design as well as leadership and behaviour (Luthans et al., 1977, p. 183).

The contingency theory implies that the strategies, structures and practices of an organization depend on the way in which environmental variables become relevant to it (Longenecker & Pringle, 1978). Luthans and Stewart (1977) also developed a general contingency theory of management and defined the contingency approach as "identifying and developing functional relationships between environmental (e.g. technology, raw materials, culture), management (e.g. planning, leadership) and performance variables". They also offered a detailed classification of the variables they incorporated. However, according to Longenecker et al., (1978) their theory has several shortcomings. Most importantly it is very complex and lacks a description of the functional relationships between the variables. Hence it is not a general theory in a strict sense (Luthans & Todd, 1978).

Mill and snow (1978) characterised the contingency theory as follows (i) strategic choice is the fundamental linkage between an organization and its environment; (ii) managerial competency in creating, filtering and reshaping environmental influences is vital towards organizational survival; and (iii) mutual adaptation between organizations and their environments can happen in multiple ways depending on organizations' choice of domains.

It is evident that contingency theory is also been applied to the domain of corporate social responsibility and performance. Early empirical studies in that area pointed to the need to examine corporate social performance and responsiveness contingently upon factors such as organizational size, relevance of issues and industry characteristics (Arlow et al., 1982; Buehler et al., 1979; Shetty, 1979). Later, Greening and Gray (1994) presented a model based on their empirical analysis that incorporates institutional pressure, managerial discretion and firm size as the key determinants of corporate issues management structures. Husted (2000) presented an issue-contingent model, arguing that a better fit of corporate strategies and structures with social issues increases social performance.


According to Yin (1994), research strategy should be selected as a function of the research situation. Each research strategy has its own specific approach to collect and analyse empirical data, and therefore each strategy has its own advantages and disadvantages. Qualitative research involves the collection and studies of a variety of empirical material which may include case study; personal experience; life story and interviews. Denzin & Lincoln (2008) suggested that the result collected from this method may need a wide range of interconnected and interpretative analysis. Qualitative approach crosscuts discipline, field and subject. On the other side the quantitative research involves an inquiry into an identified problem, based on a testing a theory composed of variables, measured with numbers and analysed using statistical techniques (Creswell, 2009). This research design use statistical design and mathematical analysis (Kayrooz and Trevitt, 2005)

The study will feature a mixed method design, i.e. it uses both qualitative and quantitative data collection and analysis techniques. Teddlie and Tashakkori (2003) illustrate, mixed methods research is superior to single approach design in the following three ways:

Scope: mixed methods offers a broader scope, mainly because it enables the researcher to simultaneously answer confirmatory and exploratory questions, and therefore verify and generate theory in the same study. Through mixed method research it is possible to reveal or detect a relationship between two variables and to explain why the relationship exists. In the present study, relationships will be detected through quantitative methods (correlation and regression analysis). The process by which the relationships occur will be explored in more detail through qualitative methods (interviews and content-analysis).

Better inference: Better inference results from mixing methods in a way that their strengths are complementary and their weaknesses do not overlap .In the case of the present study, qualitative component (interviews) will ensure sufficient depth, and quantitative component (mail, fax and online questionnaire) adequate breadth.

Opportunity to detect divergent views: Qualitative and quantitative components do not necessarily guide to the same conclusions. When they do converge, this indicates their validity. However according to Erzberger & Prein (1997, p. 146-147) they can also generate "a new comprehension of the phenomenon by forming complementary parts of a jigsaw puzzle or produce unexplainable divergence leading to a falsification of previous theoretical assumptions" (This advantage is particular significant in a study that takes a rather explanatory approach.