Leadership In The Construction Industry Management Essay

Among the many variables that have an effect on an organization such as economic condition and competition, leadership is considered to be one of the most important factors that directly impacts the level of success an organization may experience (Goleman, 2000). The construction industry is no exception to these popular beliefs as described in the research reviewed for this paper. Within the construction industry, leaders are exposed to fast-pace, complex, and constantly evolving environments (Riley, Horman & Messner, 2008). The styles and skills of a leader are directly related to generating a positive working environment which is crucial to positive performance. The purpose of this paper is to: (1) discuss the classifications of leadership and associated styles; (2) identify the skills that are associated with construction leadership including the aspect of emotional intelligence; and (3) analyze leadership factors that impact the working environment. It is the author’s intention that this literature review and its findings may be used to assist individuals and organizations in their efforts to evaluate past, present, and future leaders.

Leadership in the Construction Industry

Throughout the construction and engineering industry, there is a growing recognition of the importance and need for improved leadership skills within organizations (Skipper & Bell, 2006). Developments such as the growing volume of activity, advancement in technology, intense global competition, increasing number of active stakeholders, and the demand for fast track completion, have generated many distinct challenges for the construction industry (Toor & Ofori, 2008). According to Giritli and Oraz (2004), the construction industry demonstrates distinct characteristics that separate it from all other industries. Some of the unique characteristics that have an impact on leadership styles include: project characteristics, contractual arrangements, project life-cycle, and environmental factors.

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Giritli and Oraz (2004) explain how construction projects are composed of a multitude of organizations or contractors, and typically all of these entities contribute to the project in different ways. These organizations are drawn together for a short time to work on a specific project and then disbanded upon the completion of the project. The temporary or short-term nature of projects in the construction industry, combined with its multi-organizational framework, will almost certainly have an impact on the style of leadership construction professionals choose to follow (Giritli & Oraz, 2004).

The fact is construction professionals in leadership roles are faced with constant change throughout the different phases of a project’s lifecycle. This combined with the responsibility of leading or directing a multitude of different sub-contractors and personnel for short periods of time creates many challenges and gives leadership in construction its distinction (Giritli & Oraz, 2004). The necessary tools to be an effective leader in the construction industry include both technical and soft skills.

Technical and Soft Leadership Skills

Construction leaders often assume the role of design managers, construction managers, procurement managers, contract managers, or project managers (Toor & Ofori, 2008). Regardless of the title, leaders in the construction industry are considered facilitators and the focal point of communication (Riley et al., 2008). Approximately 88% of project managers spend more than half of their working time interacting with others (Sunundijo, Hadikusumo & Ogunlana, 2007). This leadership requires a set of competencies and traits such as vision, communication, honesty, integrity, continuous learning, courage, tolerance for ambiguity, and creativity. These competencies and traits are considered to be soft skills (Riley et al., 2008). Toor and Ofori (2008) label these traits as general management and leadership skills similarly described in many industries. Technical or hard skills are considered to be more complex and describe traits related to a specific industry. In the construction industry, technical skills may include intimate knowledge of the scheduling, installation processes, day to day operation of specific job related activities, and overall knowledge of all sub-contractors/tradesman operating on the project. In short, a leader who possesses technical skills in the construction industry understands the terminology and has extensive knowledge regarding all construction related activities.

Process Development and Emotional Intelligence

Both technical and soft leadership skills are learned and developed over time. Maxwell’s (2007) law of process explains how leaders, either natural born with greater natural gifts, or those who become leaders through a collection of skills, have the ability to improve. These skills are not developed overnight, because leadership is complicated and has many facets including: respect, experience, emotional strength, people skills, discipline, vision, momentum, timing, etc. Butler and Chinowsky (2006), report that the level of emotional intelligence of a leader is as important as classical traits of intelligence and experience in developing the leaders of tomorrow’s construction organizations. “According to Goleman (1998), emotional intelligence is the capacity to recognize our own feelings and those of others, for motivating ourselves, and for managing emotions well in us and in our relationships.” (Sunindijo et al., 2007, p.166).

Leaders with higher emotional intelligence tend to display the traits of transformational leadership found in open communication and proactive leadership styles. Emotional intelligence has been found to assist in generating delegation, opening lines of communication, and improvement of proactive behavior, which can bring positive outcomes to organizations (Sunindijo et al., 2007). Butler and Chinowsky (2006), list fifteen multi-factors which fall within five specific components of emotional intelligence that are related to transformational leadership behavior at a convincing level of statistical significance. The factors are:

Interpersonal Skills

Self-regard, Emotional self-awareness, Assertiveness, Independence, Self-Actualization

Intrapersonal Skills

Empathy, Social Responsibility, Interpersonal Relationship

Adaptability

Reality Testing, Flexibility, Problem Solving

Stress Management

Stress Tolerance, Impulse Control

General Moods

Optimism, Happiness

The research by Butler and Chinowsky (2006) proves that the relationship between emotional intelligence and the factors listed above have a significant potential impact on construction organizations and the success of its leaders.

Leadership Classification and Styles

Leadership styles, behaviors, and techniques are typical topics of discussion in the search for what or who constitutes a true and effective leader. Countless research articles examine the preferred methods of developing or identifying the traits of a quality leader. Among the many articles reviewed for this paper, there has been no evidence that clearly shows a particular style of leadership as optimal; hence, it may be concluded that no single leadership style is best for all managerial situations (Giritli & Oraz, 2004). Research indicates that most successful leaders in any industry are those who possess the skills to employ a range of styles based on the situation, flexibility is key (Giritli & Oraz, 2004).

Goleman (2000) reports research performed by the consulting firm Hay/Mcber, draws a random sample of 3,871 executives selected from a database of more than 20,000 executives worldwide. This research reveals six distinct leadership styles, each derived from different aspects of emotional intelligence, and possibly more important, the research indicates that leaders who produced the best results do not rely on only one style of leadership (Goleman, 2000). Giritli and Oraz (2004) explain how different approaches to this subject have led to various classifications of leadership styles. Despite similar labeling of leadership categories, two types of leadership are commonly discussed, accompanied by the six styles that assist in explaining the traits of the two classifications (Giritli & Oraz, 2004). Giritli and Oraz (2004), list the classifications and styles which include:

Classification 1: Transactional leadership

This classification of leadership is defined as an exchange of rewards with subordinates for services rendered. Transactional leaders typically seek to motivate followers through intrinsic rewards. Transactional leadership includes the following styles:

Style # 1: Coercive (do what I tell you)

Considered to be the least flexible and effective style because leaders manage by controlling subordinates tightly, and motivate by using discipline. Some may refer to this as micro-management.

Style # 2: Authoritative (come with me)

This style describes a leader who maximizes commitment to goals and strategy; defines standards and provides flexibility in completing tasks. This form of leadership provides a clear vision in the attempt to motivate subordinates to be creative. In the presence of experts and peers, this style of leadership can be received as overbearing.

Classification 2: Transformational leadership

This classification of leadership is defined as the process of influencing and empowering subordinates. Researchers commonly refer to transformational leadership as a feminine leadership style or approach. However, some view transformational leadership as a gender balanced style. Transformational leadership includes the following styles:

Style # 3: Affiliative (people come first)

This style is considered to be flexible, which creates emotional bonds and harmony between leaders and subordinates; improves communications; and increases the morale of subordinates. This style displays the importance of people and how they come first, as opposed to tasks which are ranked second. The success of this style typically depends on the level of development of the subordinates, if subordinates require a high level of direction, this style of leadership cannot be successful.

Style # 4: Democratic (what do you think)

This style generates ideas, builds consensus through participation, but requires highly developed and competent subordinates to generate ideas and take part in the decision making process. This style is typical of leaders who are looking to develop and build trust among subordinates and peers. Negative side effects include conflict, and endless meetings with no consensus. This style is not recommended during crisis mode when subordinates are in need of direction rather than support from a leader.

Style # 5: Pacesetting (do as I do, now)

A style which characterizes a leader as someone who expects excellence and self-direction, sets high standards, and demands more from poor performers. This style of leadership has little concern for interpersonal relationships, that is, they tend to concentrate on the achievement of tasks. Best suited for highly competent, self-motivated, professional employees, this style is recommended to be used in conjunction with other styles.

Style # 6: Coaching (try this)

This style of leadership develops people for the future, creates dialogue and flexibility, and establishes long-term goals and plans. Also, this style assists employees in identifying their strengths and weaknesses to help improve their performance. This style is least effective when employees are hesitant to learning or change.

Leadership Adaptation and Intuition

Goleman (2000) suggests that leaders who are capable of utilizing different styles seamlessly and in different measure, depending on the situation, are typically more successful. Goleman (2000) goes on to compare this type of flexible leader to a professional golfer. The pro golfer over the course of a round is required to pick and choose clubs based on the demands of the shot. Sometimes he may ponder his selection, but quite often, the decision is automatic. Ultimately, the pro assesses the challenge, chooses his tool of choice/makes a decision, and effortlessly goes to work. High impact and effective leaders operate in a similar fashion (Goleman, 2000).

The ability of a leader to make quick and accurate decisions while effortlessly adapting to different styles to address continuously changing situations, can be attributed to his/her level of leadership intuition. Maxwell (2007) discusses the law of intuition and explains how intuition is based on facts, instinct, and other intangible factors, such as employee morale, organizational momentum, and relational dynamics. Maxwell (2007) goes on to say that intuition comes from two things: natural ability, which comes in a person’s area of strength, coupled with their learned skills (2007). The principles of leadership are constant, but a leader’s application must change and adapt to every situation. Without the intuition and ability to adapt, leaders are blindsided, which is one of the worst things that can happen to a leader who wishes to stay at the top (Maxwell, 2007).

Giritli and Oraz (2004) explain how the style of leadership changes as the project progresses through its lifecycle. For example, during the design phase, styles may need to allow for more debates, fine-tuning, and deliberation. Conversely, during the complex construction phases, a leader may need to be more structured and dominant. In summary, a leader may need to switch styles to conform to particular situations throughout a project to create the right balance between concern for tasks and concern for people (Giritli & Oraz, 2004).

Impact of Leadership on Organizational Climate

Research shows that committed employees are the most valuable assets of any organization (Rehman, Shareef, Mahmood & Ishaque, 2012). However, leadership within an organization impacts the climate, perceptions, and effectiveness of the working environment (Otara, 2011). The leadership role provides the motivating force that may ultimately determine an organization’s success or failure. For this reason, many organizations place great emphasis on choosing the ideal candidate to assume the leadership role. Part of this decision can be based on dominant traits demonstrated by a candidate. Goleman (2000) lists six key factors that influence an organizations working environment or climate. These factors can be useful in determining a leader’s impact prior to hiring him/her. The six factors spring from different components of emotional intelligence and include:

Flexibility: how free employees feel to innovate unencumbered by red tape

Responsibility: to the organization

Standards: set by the people

Rewards: the sense of accuracy about performance feedback and aptness of rewards

Clarity: the clarity people have about the mission and values

Commitment: to a common purpose

Goleman (2000) presents the following table to demonstrate how each leadership style affected the six drivers of climate or working environment:

Coercive

Authoritative

Affiliative

Democratic

Pacesetting

Coaching

Flexibility

-.28

.32

.27

.28

-.07

.17

Responsibility

-.37

.21

.16

.23

.04

.08

Standards

.02

.38

.31

.22

-.27

.39

Rewards

-.18

.54

.48

.42

-.29

.43

Clarity

-.11

.44

.37

.35

-.28

.38

Commitment

-.13

.35

.34

.26

-.20

.27

Overall impact on climate

-.26

.54

.46

.43

-.25

.42

(p.81)

The Data provided by Goleman (2000) reveals the authoritative leadership style has the greatest positive impact on climate, with affiliative, democratic, and coaching styles following closely. This data also indicates that no style should be relied on exclusively, and all have potential, depending on the situation (Goleman, 2000). Of course very few leaders if any possess the ability to change roles and function in all categories. Fortunately, the remedy is quite simple. Good leaders will hire and surround themselves with team members who employ the skills or styles they lack (Goleman, 2000).

Maxwell’s (2007) description of the inner circle confirms Goleman’s statement and informs his readers of the importance of a support system in regards to a leader’s success:

When we see an incredibly gifted person, it’s always tempting to believe that talent alone made him successful. To think that is to buy into a lie. Nobody does anything great alone. Leaders do not succeed alone. A leader’s potential is determined by those closest to him. What makes the difference is the leader’s inner circle. (p. #127)

A true leader displays many traits, one of which is a high level of self-confidence. This individual is not afraid or threatened by the success of others and embraces the fact that the people/team he/she has assembled, possess skills that the particular leader lacks. A good leader will apply the skills of others to improve or progress an organization’s performance. All of this is done without worry of his or her competencies.

Recommendations

After completing a review of literature addressing leadership in the construction industry, it is recommended that further research is needed to address the level of emotional intelligence that a potential leader should possess. The consensus of numerous researchers is that many universities fall short or don’t address the multitude of important factors that help in developing potential leaders in the industry. Emphasis needs to be placed on real life situations faced in the construction industry and played out in the classroom environment. It is important to know if an individual has the right level of emotional intelligence to succeed as a leader in the complex industry of construction.

Conclusion

Although economic factors and competitive dynamics have a tremendous impact, leadership and the working environment created by a leader has been reported to account for one-third of an organizations performance (Goleman, 2000). The conclusions of this research suggest that the construction industry boast a number of factors that separate it from other industries. The construction industry is unique due to its short-term project life cycles, sub-contractor involvement, project characteristics, environmental factors, and contractual arrangements (Giritli & Oraz, 2004). All of which affect the style of leadership and its impact on an organization. Due to these distinct characteristics, research has revealed that no one leadership style is optimal for every situation. Leaders who have the intuition and ability to demonstrate multiple styles and possess a high level of emotional intelligence will have greater influence and success.