 A Systems and Contingency Analysis Applied to Construction Projects of Exceptional Architectural Design |
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| Table of Contents
Chapter 2
Chapter 3
Chapter 4
Chapter 5
Chapter 6
Chapter 7
Chapter 8
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Chapter 7 - External
Environment Summary / The Effects of Uncertainty in the External Environment / The Effects of Society's Values / The Effects of Competition / Standardization Imposed by Society / Return to Index Page Projects of exceptional design will often operate within a more uncertain external environment, due in part to the difference of values and objectives between the project organization and various external special interest groups. The more dynamic the external environment, the more organic and decentralized the project organization becomes. The values of society will have a significant influence on the project organization. It was argued that our capitalist society had developed the capacity for purposive-rational action to an unsurpassed degree, but at the cost of universalizing the forms of action and the standards of discourse and knowledge corresponding to the action. Also, in a capitalist economy, commercial objectives become dominant in a firm's activities. These societal values are diametrically opposed to the essence of projects of exceptional design. The more that a project has to interface with the external environment, the more unlikely that a project of exceptional design can be produced. Special interest groups opposed to a project are able to exert a great deal of pressure on the project organization, and can induce a great deal of compromise which the project organization needs to accept if the project is to survive in the environment. Competition on the basis of price for selection of key groups on a project of exceptional design is counter-productive to the overall project goals. Price competition induces a low trust/low discretion relationship, whereas a project of exceptional design necessitates relationships of high trust/high discretion. In addition, the idiosyncrasies of the transactions for these specialized services render the marketplace ineffectual due to the high transaction costs and the likely variance of interests between the contracting parties. Chapter 7 - External Environment This chapter will study some of the aspects of the external environment and how this affects the project organization. The effects of an uncertain and dynamic external environment will be discussed. The values of society and their effects are studied, as well as the theory of interest groups. The effects of competition and standardization imposed by society are also briefly covered. The Effects of Uncertainty in the External Environment Generally speaking, projects of exceptional design will interact with a more uncertain external environment than will projects of standard design. More so on larger projects, I believe this is because of the difference of values and objectives between the project organization and various interest groups in the external environment, in addition to the tendency to employ a more innovative technological system. Of course, many projects of standard design will also share these attributes, for example the various proposals [701] for London motorways after World War II, and the particularly heavy opposition they received from the more affluent neighborhood groups. Mintzberg [702] has observed that the more dynamic the external environment, the more that the structure of the organization tends to be organic. In addition [703], the more complex the environment becomes, the more the tendency for the structure to become decentralized, however, extreme hostility in the environment [704] will drive an organization to centralize its structure temporarily. On a project of exceptional design, it has been argued in previous chapters that the goal and value system as well as the technological system tends to influence the project organization towards an organic structure. Applying Mintzberg's postulates from above, the external environment also influences the project organization towards an organic structure, with the trend towards decentralized authority. Udy [705] has noted the greater the breadth and diffuseness of external pressure on the organization, the more decentralized becomes the decision apparatus, the greater the amount of internal communication and group interaction, and the higher the commitment of members. The Effects of Society's Values The structure of society, and its values, will have a significant effect upon a project organization. Daniel Hallin [706] in a discourse on the philosophy of Jurgen Habermas applied to political dialogue in liberal capitalist societies notes:
J. K. Galbraith [707] argues that social truths tend to be agreeable with the significant economic interests. Arguably, this would imply that our current society is a society that has become homogeneous in its values to the significant economic interests. The construction industry is very interdependent on the external environment. In applying economic theory to the construction industry Hillebrandt [708] has noted three characteristics of the construction industry that give it economic importance: 1) The large size of the industry. 2) It provides predominantly investment goods. 3) Government is a client for a large portion of all construction work. In a study of architectural practice, Blau [709] notes that:
I believe these values of society will tend to work against the successful execution of a project of exceptional design. If one accepts the postulates of Hallin and Habermas that our society frames all questions in terms of technical or strategic questions, I would argue that this social conception is diametrically opposed to the essence of projects of exceptional architectural design. It was argued in the initial two chapters that the essence of exceptional projects lay in their concretization of higher objects or values (Norberg-Schultz), their manifestation of spirit through a sensuous medium (Hegel), and the unmeasureable which is the psychic spirit (Kahn). It is my observation that projects that are built for commercial purposes to society at large, or that require significant proportions of funding relative to the capital value of the project, will rarely be projects of exceptional design. Projects of exceptional design, in my observation, tend to be built not for a direct quantifiable financial return, or if so, will tend to be built for an internal use where the additional capital cost is credited to goodwill and publicity. The Lloyds of London headquarters, designed by Richard Rogers and Partners, is a good example of this, in that Lloyds strove to present an image to the world at large that they were a major progressive insurance group that was prepared for the twenty first century, and a company whose business was not tied to their maritime background. Funding institutions have commercial objectives in their provision of capital. They therefore tend to be conservative, and will generally only finance those projects whose returns are fairly certain, and whose financial return brings at least a market rate of return relative to the risk involved. As a result, it is usually exceedingly difficult to obtain substantial financing for a project of exceptional design on the basis of that project alone, excluding whatever collateral the client organization might be able to provide. I propose that the diametrically held value conceptions between society and the project organization generates an added degree of uncertainty to the project, as the majority of individuals or groups involved either internally or externally to the project organization will be operating on the basis of the commercial and technical/strategic values of society. It was in the resolution of this uncertainty, i.e. in transforming the "unmeasureable" to the "measurable", that I have previously argued that the lead designer had more influence over the project organization than would normally be the case on a project of standard design. Linked to the above argument is the proposition that the more the project is required to interface with the external environment, the more unlikely that a project of exceptional design can succeed. A higher level of interface with the external environment could be due to the project's size, thereby involving more groups in the project organization, or could be due to the political sensitivity of the issues involved in the project. In addition to the greater influence on the project organization of the social value structure brought about by a increased number of groups, these additional groups can function as special interest groups with a particular ability to thwart the project organization's objectives. Hall [710] makes note of Dahrendorf's theory of interest groups as social classes. Dahrendorf proposes that in order for a group to effect change they must be successful in three areas: 1) The issue must be recognized and accepted. 2) A decision must be made to accept the change. This involves the group in the political or bureaucratic arena. 3) The decision, once made, needs to be implemented. An interest group that opposes the change need only block the proposed change in only one of the above three areas in order for this interest group to defeat the change. Applying this concept to projects of exceptional design, a larger dependence with the external environment, with increased interaction among special interest groups, leaves the project organization vulnerable on the three points noted above, while groups opposed to the project organization are in a better position to thwart the project. Because of this power, these outside interest groups are able to exert a great deal of pressure upon the project organization to the point where the project organization must compromise its basic goals and values if it desires to function in the environment. The more that competition is used as the basis for the selection of goods and services, the less innovative the solution. In a study of the firm, Hawkins [711] observes that perfect competition relies on a homogenous product, which is rare in practice. In addition, Hawkins goes on to note that some freedom from competition must exist to allow for research and development. Applied to the context of a project of exceptional design, the selection of individuals or groups that constitute the core of the project on the primary basis of price would be counter productive to the intentions of producing a project of exceptional design. Applying a postulate of Fox's [712], the more that competition is used as the basis of selection, the more that the exchange approaches a short term economic exchange with little trust, as opposed to a longer term social exchange with a higher degree of trust. On a project of exceptional design, I have previously argued that one of the key areas of the project is the translation of the "unmeasureable" to the "measurable". Fox [713] has also noted the correlation between low trust and low discretion, and high trust and high discretion. I believe a situation of low trust / low discretion is incompatible with the above note requirement, which I believe requires both a high degree of trust and a high degree of discretion. Standardization Imposed by Society Earlier in this chapter reference was made to the theory of Habermas that liberal capitalism has tended to universalize purposive-rational action and the standards of discourse and knowledge that correspond to it. One example of this is noted by Trebilcock and Dewees [714] who have observed that one aspect of standardized contracts is the reduction of transaction costs. This use of standardization of contracts, however, implies a standardization of inputs and outputs in the transaction process. Williamson [715] has noted, using a transaction cost approach, that highly idiosyncratic transactions (as could be said to apply on projects of exceptional design) have no obvious scale economies to be realized through vertical integration. This then requires a procurement procedure that is effected across the market. Williamson further notes that the idiosyncrasies of this particular type of transaction are often either impossible or prohibitively expensive to identify in the procurement contract, and therefore, the interest of the different parties will be a variance when adaptation proposals are made. In practical terms applying this theory to a project of exceptional design, implies that the idiosyncratic nature of the project makes it difficult to use the market, with its standardized approaches, and that by attempting to use the market for these transactions will result in a project organization with a higher level of conflict, due to the greater difference of interests that each of the groups has. |
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