Analyzing coordination function within a governance structure: evidence from case studies of selected housing projects in Malaysia / Suraya Ismail

Suraya, Ismail (2013) Analyzing coordination function within a governance structure: evidence from case studies of selected housing projects in Malaysia / Suraya Ismail. PhD thesis, University of Malaya.

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Abstract

The production of goods and services in the Malaysian construction industry are predominantly based on the contracting systems, whereby contracts form the basis of alliances for companies that come together during the construction of the built environment. These alliances are situated within the operating environment of the national business systems whereby the procurement route of traditional general contracting is the most frequently used. This study examines the underlying reasons for the coordination of resources from the market and within the alliances or temporary multi-organizations. The study adopts a transaction-cost perspective because this approach confronts the conceptual problem of coordination posed by heterogeneous sets of arrangements, ranging from hierarchy, hybrid to market. The research method adopted is a multiple case survey method whereby it is focused on the articulation of new insights and pattern recognition across cases. The unit of analysis is the production units of the projects, which are defined as transactions that are responsible for architectural design, project management and construction of the houses. The basic fieldwork approach is the case study, and the objective is a meta-analysis of existing cases and lines of enquiry follow replication logic in its formulation. From the case studies explored, four out of five firms had contractual functional substitutes for hierarchy such as authority systems, standard operating procedures, dispute resolution and administered pricing. Incentives, which are one of the main attributes that should exist within a hierarchy through contracts framework, were not found in the majority of the case studies. The project management function was clearly depicted as the critical function for internal coordination and was internalized in all four case studies. The fifth case project showed that all functions (project management, design and construction) were internalized. In terms of instilling good workable order, the case studies showed that the references point is the entire relationship between the Client and the Architect/Contractor as it has developed during the contract duration of approximately two years. Within this period, the authority system cultivated by the Client's organization does not necessarily limit itself to the terms of the Standard Form of Contracts. This authority is 'present' even through the initial coordination from the market, where they close individuals that have the critical traits of adaptation and flexibility in the course of implementing their professional service. This authority system is reinforced with the presence of a 'formal government' - whereby the client has clear directions on decision-making, disciplining partners and solving conflicts. In conclusion, the underlying framework of governance is the standard form of contracts, whereby the contracts act as hierarchical documents under the traditional general contracting governance structure. This governance structure is supported with the existence of 'formal government' and durable relationship that are crucial in the ex-ante and ex-post administration of alliances. Therefore, based on the evidence gathered from the study, it can be concluded that the majority of the case studies are operating within a hybrid governance structure.

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