Project-Based Market Competition and Policy Implications for Sustainable Developments in Building and Construction Sectors

Abstract

Building and construction sectors are significant contributors to the global economy, but their energy consumption necessitates greater commitment to sustainable developments. There is therefore a growing demand for green innovation in the form of cleaner production and policies to meet the modern requirements of sustainability. However, the nature in which public work is undertaken is in an environment of project-based market competition, whereby contractors routinely bid for contracts under specific project awarding systems, and variations are accompanied with the unique scope of individual projects before the final goods or services are delivered. A comprehensive understanding of the characteristics and contractors' behavior in systems could help to identify the leverage points of policies. This paper proposes a system dynamics model, with quantitative analysis and simulations, to demonstrate the problems of a system with different project awarding systems and ineffective market performance. The framework of market efficiency and performance measures has been proposed to evaluate the project-based competition mechanism. Managerial policy implications for market efficiency and sustainable developments can thus be systematically discussed and compared through iterative computer simulations and scenario analysis.

Sustainable Development in Project-Based Industries–Supporting the Realization of Explorative Innovation

“…However, these PBIs share several important characteristics, particularly the production of one-off solutions tailored to customers' requirements, in accordance with the increasing global importance of PBIs for effectively meeting rising demands for customized B2B products [14]. All three of the selected organizations rely strongly on production innovations to maintain competitiveness, and sites of their main R and D and production activities are in Sweden, although their products are sold in international markets.…”

“…These are also the projects that generate income for the supplying organization. A delivery usually consists of customized products or systems integrated in a business-to-business arrangement bounded by a contract between a customer and a supplier [14]. Due to the uniqueness of each delivery, the supplier has their (internal) production knowledge as main competitive asset [24], and development therefore traditionally occurs within specific business projects, where practitioners from a variety of organizations collaborate, to enable efficient delivery and adequate outcome of the customized solution(s) [25,26].…”

“…Nevertheless, further studies are needed to improve the understanding of effective strategies for organizations to address the highlighted aspects. The paper also contributes to the literature on innovation management, specifically within the context of PBIs, extending work by, for example [12,14,18]. We believe that this paper provides a step towards understanding the complex phenomenon of realizing explorative innovations in PBI settings, and hope that it stimulates further studies.…”

“…These short-term efforts leverage exploitative innovations, usually focused on improving performance or solving problems that occur in existing processes to deliver unique solutions efficiently to customers. However, it is often very difficult to realize more explorative innovations in individual business projects since such innovations frequently require coordinated changes by multiple stakeholders throughout the fragmented supply chain [13,14]. Thus, they require systemic changes for successful implementation.…”

Green Component Procurement Collaboration for Improving Supply Chain Management in the High Technology Industries: A Case Study from the Systems Perspective

“…Since the green component procurement collaboration is an improvement of the supply chain system, this paper conducted a System Dynamics (SD) modeling and a simulation analysis to demonstrate the rationale of green component procurement collaboration and how the collaborative system could reduce the risk in the supply line and eventually improve the supply chain performance. The SD modeling is to support the analysis of the research subject from a holistic viewpoint and functions as a virtual laboratory for policy experiments [46]. Statistical validations with empirical data will be presented in the follow up section that investigates the real results of a supply chain system with green component procurement collaboration.…”