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The development in Indian construction industry feature is almost equal to the construction industry development in other countries. It is founded by the government and gradually it was taken over by the enterprises. After self-government requirement for industrial and infrastructural developments in India, they established the stone of construction, architectural and engineering services.
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The stage from 1950 to mid 60’s witness the government in concert an energetic role in the expansion of these forces and most of construction performance during this period were carried out by state owned enterprises and supported by government departments.
The Indian construction industry is an essential part of the economy and a direct for a considerable part of its development involvement and is positioned for growth on account of urbanization, industrialization and profitable expansion and people’s rising potential for better quality of living (Indo Italian Chamber of Commerce and Industry, 2008).
IMPORTANCE OF CONSTRUCTION:
Construction is an important part of any country’s infrastructure and industrial growth. Construction industry, by means of its diffident and forward linkage with various additional industries like cement, steel bricks catalyses service generation in the country (Indian Construction Industry, 2008). Construction can be classified into 3 segments such as
3) Real Estate
FINANCIAL BACKGROUND OF CONSTRUCTION INDUSTRY:
In India, construction is the second main economic activity after agriculture. Construction financial records for nearly 65 % of the total investment in infrastructure and is probable to be the main recipient of the surge in infrastructure venture over the next five years. Investment in construction accounts for nearly 11 per cent of India’s Gross Domestic Product (GDP). â‚¬239.68 billion is likely to be invested in the infrastructure sector over the next five to ten years – in power, roads, bridges, city infrastructure, ports, airports, telecommunications, which would provide a huge enhancement to the construction industry as a whole.
Investment for residential, non residential and civil engineering construction as follows in given table:
invst in conc indus
Table 1.1 Investment in Construction Industry (Swarup and Mahajan, 2001)
Investment into this division could go up to â‚¬93.36 billion by FY2010. With such confident prospects in communications, associated industries. For the first time cement is one of the consumptive associated industries is set to exceed the 150-million tone mark. Considering the demand for the commodity, capacity utilization rose to over 100 per cent to touch 102 per cent in January 2007 with dispatches touching 14.10 million tones as against the production of 14 million tones. As opportunity in the sector continues to come to the forefront, foreign direct investment has been moving upwards. The real estate and construction sectors conventional FDI of â‚¬216.53 million in the first half of the current fiscal year (Swarup and Mahajan, 2001).
DIFFERENT TYPES OF CONSTRUCTION INDUSTRIES IN INDIA:
This industrial construction includes the building, renovating, preservation, repair, and destruction of industrial buildings such as (Compliance Information Portal, 2008):
medical waste disposal
oil and gas facilities
pulp and paper mills
Residential, it covers housing and Development
Industrial, it includes Industrial Parks, Factories, Plants
Corporate, it includes Office and research Centers
Commercial includes retail, shopping malls, Showrooms ,Hotels
India’s blooming communications sector is fuelling demand for all kinds of construction equipment. Earlier than the opportunity of the Indian economy, and the entry of worldwide majors, a great deal of infrastructure development and construction in the real estate sector was done manually. But with the infrastructure and construction sectors undergo spectacular changes with 60-storeyed sky-scrapers being built in cities like Mumbai, and thousands of kilometers of expressway and highways being laid across the subcontinent for builders and contractors are acquiring complicated equipment to execute the multi-million-dollar projects. For the construction equipment division, which has adapted rapidly to the distorted situation, this is really good news, as it pave the way for an exciting future.
Urban infrastructure (improved housing, water supply and sanitation, schools, universities, health and security, etc.)
CONSTUCTION INDUSTRY FOR ROAD AND RAIL NETWORK:
Mainly country’s economic growth and trade are based on transport.No production can take place unless and until such as raw materials, labor, and fuel can be moved to and from different locations. Without roads, rail, water, and air transport, manufactured products cannot be delivered to consumers. Mainly road transport because it is very cheaper in all of these transport (World Bank Group, 2010).
IMPORTANCE OF ROAD TRANSPORT IN CONSTRUCTION INDUSTRY:
India is the second largest road network in the world for road of 3.3 m km. Almost one billion people living in rural areas in rising countries do not have right to use to reliable roads. These roads are important to ensure that farmers get agricultural inputs in time and can get their harvested products to market with minimal cost, disruption, and loss. After 35 years the global population will grow to 2.5 billion. India is a developing country. So most of this expansion will be in urban areas. The number of cities more than one million population will reach to 358 by 2015. This development, coupled with ongoing globalization and trade liberalization, will increase exact for the transport of people and goods (World Bank Group, 2010).
The World Bank has delivered $36 billion in lending for the transport sector since 2000. In 2009, lending reached a peak of $6.5 billion, amounting to over 13 percent of the World Bank’s commitments for the year. The volume of lending anticipated for 2010 is strong and this growth in investment is expected to continue in subsequent years.
TRENDS AND ISSUES:
Facilitate for economic growth and regional integration through national and international trade.
And make the cities with better work for citizens not only for environment and also it develops economy growth.
Change economic opportunity and growth in rural areas.
Make available admission to health and education facilities.
FEATURES OF CONSTRUCTION INDUSTRY:
In this industry mainly we face difficulties with temporary structures and these are compounded by the detail structure that compared to most other industries, the construction industry is single in many ways, as follows
It is a large but diverse and split industry
Every job is exclusive with numerous and Complex tasks
It is labour concentrated work involving many materials and heavy loads
The work force is transient which is difficult to train, when mainly if there are more labours.
typical temp structures
Fig 1.1 Typical Temporary Structures (Krishnamurthy, 2010)
IMPORTANCE OF SAFETY IN CONSTRUCTION INDUSTRY:
Due to the following concerns, Safety is very important aspect in all types of industry
Professional, institutional, and social concerns.
Legal and regulatory concerns.
CONSTRUCTION INDUSTRY MOVING TOWARDS CONSOLIDATION
This industry is shifting towards a stage where large companies are well clear. L&T,Lapee etc are the big companies undertaken the major engineering and construction projects like power plants, construction of dams etc. this leads for huge demand between so many limited companies (Scribd, 2008).
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The cost of real estate in the urban India is very important which will need companies to have more resources so as to require new lands and develop them. The big companies can live and will be few in numbers with well clear territories of procedure. The demand in metro cities is completely inelastic with certain well distinct competition will make huge boom for operating companies. The industry is affecting towards consolidation the increase urbanization which leads the local players also have a great chance to serve the huge demands of people.
Change management is something relates to a process of controlling the changes that happens to the infrastructure or any kind of services, in a controlled way, facilitating changes with minimum distraction (Office of the City Auditor, 2010). Change is unavoidable and has become routine in life. Planning, applying and managing change in a dynamic environment is most common situation in which present organizations work. Change generally engrosses three features as represented diagrammatically below (JISC Infonet, 2009).
Change management has become a complex problem for most public sector organizations which are going to be affected by the daily ongoing changes due to the new requirements almost every day. Change needs managers to take right strategic decisions without which may lead to consume more time, money and reliability of the involved stakeholders (Capacity Building Programme, 2007). The change management system should make out all the variations from the specifications and drawings of the contract and should also present a method for the technical support and project approval. The recommended change should be implemented in a proper manner as excessive change may result in more cost and difficulty (The Construction Users Roundtable, 2004).
Kotter recommended an 8 step process where organizations can avoid failure and become expert at change (Kotter International, 2010).
Performing by necessity
Developing the Directing alliance
Establishing a change vision
Conversing the Vision Buy-in
Allowing Broad based action
Creating short term wins
Not to give up
Formulate Change stick
The literature review will commence by explaining how the construction industry in India has undergone changes in the recent past and how it managed change. According to Paton et al. (2008) “The management of change is a complex, dynamic and challenging process rather than a set of recipes and is never a choice between technological, organizational or people-oriented solutions, but involves combinations for best fit; integrated strategies designed to produce results”. This chapter will also highlights the concepts of change management, different approaches and technologies that aid change processes in any organisation.
Change has to be managed in any organisation and managers play a major role in change management as the most observed barrier to successful organisation is the lack of change management. Hiatt and Creasey (2003) quoted the importance of managing change in a broader sense as: “Things did not go exactly as planned and the unexpected happened, so managing the people side of change impacted their success and introduced risk into their projects”.
2.1 TYPOLOGIES OF CHANGE:
According to Luecke (2003), organisations generally face the challenges from new competitors, new technologies, and new markets for higher performance to come up with the obstacles and improve business performance. The changes fall into the following types.
Structural Change: During this type of change, senior management tries to rearrange the functional parts to attain better performance.
Cost Cutting: These mainly focus on the eradication of unimportant activities for compressing operations costs.
Process Change: These focus on changing how things can be done in a different way to make the process effective, faster and more reliable.
Cultural Change: These focus mainly on the relationship between employees and the senior management.
2.1.2 CHANGE MANAGEMENT:
Baca (2005) viewed that, change is unavoidable and change may either seen as a good or a bad sign for any project. According to him, change management can be defined as “the proactive identification and management of modifications to your project”. Managing change engages managing four difficult tasks which of these have to be completed efficiently to accomplish successful output and the four tasks are welcoming change, organizing support, performing change and constructing change potential (Nilakant and Ramnarayan, 2006).
Fig: Change Management Model (Adapted from Nilakant and Ramnarayan, 2006)
2.1.3 APPROACHES TO CHANGE MANAGEMENT:
Relationship maintenance strategies are significant in terms of the strategies followed in change management and relationship outcomes pertain to the result of the strategies. In organisation change management there are two types of approaches (Stroh, 2004).
1) Planned approach:
It is a first approach which represents a variety of models descending from the practice of organisation. The main characteristics of this approach is that it places emphasis on process and deals with change over a significant period of time and follows holistic approach and it encourages participations.
2) Emergent approach:
It is second approach in the change management which recognises that highly dynamic environments demand more contingent methods that are more situational and where change strategies can be modified to achieve maximum fit with the ever changing environment. With this approach organisation can rely less on complete plans and projections and build up instead an understanding of the complexities and the issues concerned.
2.2 ORGANISATIONAL STRATEGY AND ORGANISATIONAL CULTURE:
While managing a strategic change, there is too much dependency on the individuals at higher level in the organisation and the change agent may be a middle manager or a consultant who works along with the managers within an organisation (Johnson et al, 2008). According to Stranks(2005), change management has to take place in an organisation with a need to eradicate the stress caused at work because of change by maintaining effective communication of what is happening and this change should be well organised on a stage basis. Organisational culture seems to be more important while managing change. A cultural outlook on organisations offers insight into change barriers and how to overcome these barriers (Balogun and Hailey, 2004).
2.3 LITERATURE ON CONSTRUCTION INDUSTRY:
Indo Italian chamber of commerce and industry (2008) clearly gave an overview of construction industry in India. It clearly explained that construction industry is an integral part of the economy and a conduit for a significant part of its growth investment and it is poised for growth on report of industrialization economic development and rising people expectations for improved quality of living. This paper emphasizes on the financial criteria in Indian construction industry. This report told that construction is the second largest economic activity after the agriculture. This paper explains about what industry segments are and how many types of industrial segment are there. It also gave a clear idea of how about in all round development of Indian economy. Finally this paper concluded that India’s booming infrastructure sector is fuelling demand for all types of construction equipment before booming the infrastructure development and construction equipments in real estate sector done manually.
Swarup (2007) mainly gave a brief description about the overview of practices being used in Indian construction industry and he also gave an idea about political, legal and social frame work and also explains the economic overview of administrative and regulatory features improvement and development of Indian construction industry. He also told about the globalization of construction services with outlook of WTO and GATS. And he also notified the opportunity and activity in the construction areas where he relied on the usage of PPP models, type and extend use of international standard forms of contracts and its administration and certifications process. Generally, in this paper, he clearly explained about Indian economic surroundings and several systems and procedures and also focused on further boost in construction industry which would provide the basic infrastructure for the nation as well for different industries.
Manjrekar et al (n.d.) explained that in India, there are large numbers of buildings which are more than 40 to 50 years and which need to be renewed. They also explained about the old and new structures in constructions. They mainly focused on the constructions of old and new building and what are the rules applicable for that. They also told that construction chemicals have been used in large number of construction projects. They told that new construction projects market is also usual to enlarge the demand for construction chemicals. Within next few years, the construction market is expected to grow more than 30 percent. In most large scale construction, there is variety of construction chemicals that will be used for designing.
This paper also focused on the key issues and challenges this fledging industry faces and it also told about the desk research and field research. They explained about the construction industry turnover and rate of growth in construction industry from year 2002 to 2007. They emphasized on the outlook and potential of the Indian construction industry and also gave a light on the expenditure in construction structure and about different types of policies. They mainly focused on 2 main players in the market. They are Pidilite industries and Choksey chemicals and the growth strategies of these players have been evaluated. It mainly compares the development strategies engaged by these Indian firms in the current scenario and environment of operation. It also focused on analysis of the theoretical propositions in Indian context.
Siddique (n.d.) gave a detailed description about Indian cement industry and utilization of fly ash and construction waste in construction related activities. He also told that if there is development in materials, it will affect the design and construction of facilities. These facilities are very important for the significant growth of any nation. He also discussed about the topics like issues facing the technology of concrete materials, maintenance of construction facilities, quality, assurance, production, design. Finally, in this paper, he concluded that developments take place in construction industry India as well as potential advances anticipated in the next 10 years for the concrete construction industry through substantial use of supplementary cement materials.
Love et al (2000) presented a study on Total Quality Management (TQM) which is a means to any learning organisation. They felt that for the improvement of performance in construction industry there requires a cultural and behavioural transfer in the attitudes of the expert, academic and specialized organizations. They provided a theoretical model for any learning construction organisation. They notified that several organisations are looking for alternative means of supporting and allowing a learning society inside their organisations which allows the employees to make decisions and implement required changes. If construction organisations want to become learning organisation, then they should need to implement a change in culture and behaviour. They proposed a few number of dimensions that are to be taken into consideration for describing learning organisation as: a relation with the changed results and behaviour, difference between organisational and individual learning, identification of the environment, deutro learning and double loop learning.
Sattineni (2008) presented the recent changes in telecommunications sector for off-shoring structural design work in developing countries like India and china. He also mentioned in the paper that economic outsource is a key reason for this possibility to be realized and it is reasonable to be considered regarding the effects of outstanding in the design sector and its effect on the construction industry. He mainly explained about United States construction industry. The author conducted detailed interviews with principals in US structural design and then he travelled to Bangalore for a detailed interview with Indian counter parts. These results lead to the development of outsourcing construction activities. He also discussed about the topics such as training, economics and logistics and this document also identified three outsourcing models for constructions companies namely Joint Ventura outsourcing, individual project outsourcing and global delivery off sourcing.
Aouad et al (n.d.) explained about process map in construction sector where they told that construction industry has witnessed severe efforts in the last few years through the consideration of the implementation of new procurement systems and manufacturing philosophies. On the other hand, process maps which can help organisations map their processes into some important structure are still missing. The product (building) is still the majorly focused one in construction. In the developed industry, most large organisations have process maps which can help them in ensuring the delivery of products on time, within budget and to the right quality while capturing the best process practices. They also told that in construction industry, there are some labours to plan process maps such as the RIBA plan of work in the UK.
This paper delivered that the process map based on principles is used in the developed industry. Information was elicited from experts through a series of workshops and case studies. The results of few of these case studies, which have been used to assess the realism of implementing this process map on real life projects, are presented. Finally, they told that IT which needs to maintain and enable the effective implementation of the process map is clearly explained and also demonstrated the process and manufacturing of construction process. Finally they focused on more holistic picture of design and construction procedure that can be known through the organisation of process and it capabilities. They also spoke about the usage of case studies for testing the practical implementation and also also told about the problems occur during the implementation phase.
Bandhyopadhyay et al (2008) focused on the stems partly from GOI’s distress concerning the capacity of the road construction industry to deliver, and partly from the Bank’s growing need to recognize the impact of the expanded road investments on the industry’s capacity in South Asia. The study attempts to outline the entire gamut of problems and capacity constraints faced by India’s construction industry. It comes out with previous studies information and industry-wide stakeholder surveys and workshops and speaks about government initiatives and road development program.
This paper suggested and felt that there is a huge gap between supply and demand for improved roads. The domestic construction industry is not geared up to expectations demand. There is a need to bring new players into the field, both domestic and foreigner and they also suggested that present contract procedures and requirements need major modifications as they do not encourage incorporation of scientific, labour and major innovations .They also provided key issues and strategies of the road construction industry in the past and future. HIS global insight (2009) gave an information and detailed description about the recent progress and future trends in the key sector of infrastructure which leads to prevent various opportunities for private sector. It also told about some of the key facts about country’s overall economic environment as well as legal and tax systems.
This paper gave some important information about Indian construction industry. It clearly explained about how many other countries were spending on Indian construction and how much amount there are spending for non residential and residential construction in India. This paper also told that Indian companies have very limited contact with large markets such as Japan, United States and West Europe countries. This paper told one fact that Indian construction industry is highly uneven and this happened as there are no long term relations between contractors and clients in most of the projects.
2.4 LITERATURE ON CHANGE MANAGEMENT:
Woodward (1997) provided the importance of project management and also the main features of this approach. They delivered some methods that are applicable to change management in any industry. They concerned mainly on the applications in construction industry and they also highlighted the techniques that are appropriate to practically all other businesses where a change has to be executed and managed. They covered all the issues by including distinctive examples that would consist of: the instigation of a new product, penetrating into new market, installing a new production line, putting into practice a new business policy, starting a new branch office, setting up a modified accounting system, systematizing a sports or charitable trust occasion, recruiting and instructing staff for a new enterprise, the creation of a new product and the testing of it, a company surrender or reorganizing and setting up and initiating new legislation.
Office of the Deputy Prime Minister (2005) provided a report on the Local Government Pay and Workforce Strategy which mainly focused on the transforming of the authority to produce real and longing change. In order to adopt this change, England’s Local government should have imaginative leadership, organisational elasticity and resources facility to offer better services, higher efficiency and best customer focus. Organisations try to change the approach from organisational development to the change management, applying a strategy that effectively deal with development of skills and leadership, applying reviews of local pay having the same opinion of a salary form that bear improvement of service. Beer et al (1990) focused on the efficient corporate regeneration that initiates at the bottom through casual efforts to resolve business problems. They observed a situation where the change has to be incorporated to meet the challenges to which the bank’s conventional hierarchical organisations were ill-outfitted to act in response. There has to be extra care taken about who should direct the change attempt, what required changing, and how to go about implementing the change. Most of the companies are facing challenges with the changing marketplace and raised competition to develop their authority, recover market share and guarantee their endurance. Changes in approaches direct the changes in the individual attitude which results in the organisational changes. The most common problem with the most change programs is that they tackle only one or two of these three factors: coordination, commitment and competencies.
They provided six steps to the efficient change: Organize assurance to change through joint verdict of business issues, establish a distributed vision of how to systematize and manage for competition, promote agreement for the new vision, ability to perform it, and consistency to move it alongside, broaden regeneration to all the departments, establishment of revitalization through formal structures, policies and systems and observe and regulate strategies responding to the problems in the regeneration process. They gave priority to the top managers in making the change in the entire organisation by generating a market to change, utilizing successfully regenerated units as the organisational replicas for the entire organisation and establishing career paths that support the development of leadership. They laid emphasis on the particularity of the mind set for change management which is difficult to be maintained in an atmosphere that pushes down for periodical earnings.
2.5 LITERATURE ON CHANGE MANAGEMENT IN CONSTRUCTION INDUSTRY:
Walker (2007) relied on a fact that management of construction projects seems to be a continuing challenge as the environment around which the projects are built increases in complication. He focuses mainly on the project management theory. Most of the construction projects are planned and designed in agreement with the previously developed process. But the project team must also consider the fact that changes might be incorporated in the middle of the project according to clients’ requirements and the change has to be managed.
There should be a minimum knowledge in understanding the environment of client as flexibility needs to be maintained when there is a need to incorporate changes in the project. He clearly mentioned that this can be achieved only through the maintenance of up to date information about the clients’ requirements. Advancement in technology for any particular process can be taken as an example for this. He also stated that project team members should be aware of the changes that can be made and should be ready to explain them to the client consequently. Oracle (2009) mainly highlighted the best practices of identifying and managing the changes that may occur in any construction project and also provided a process to effectively manage changes in construction projects. It clearly explained about the different types of project changes in construction sector such as directed changes, constructive changes, cardinal changes.
It also explained in detail about the change management process and also explained that they are few steps to be followed in construction sector such as recognizing the contract requirements, identifying the possible change and creating a potential change order file and determining privilege, measuring the effect of the change, and analysing the cost of the change, negotiating and executing the change order, maintaining complete records of the executed change. Like this, it gave an explanation for each and every step.
It also explained different methods for resolving change related construction disputes to avoid costly arbitration and mainly focused on the dispute resolution boards (DRBs) which are nonaligned authority consisting of three members as one preferred method. Choosing the board members can be performed in a number of ways; however, it is critical that the individuals are neutral and both the owner and the contractor view each board member as individual balanced. Naturally, DRBs are empanelled at the project level and management of the DRB process is governed by the project’s contract. Other dispute resolution procedures could escalate the dispute from the project level to a higher governmental level between the owner’s organization and the contractor’s organization, before proceeding to an arbitration panel. The terms used and contract documents referenced in this paper are geared towards usual design-bid-build public development projects, even though the basic principles are applicable to almost any construction project. It must be well-known that any change management procedure is only as effective as the participants’ ability to communicate and
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