Market and Project Selection Decisions of Construction Companies: Evidence from Turkish Contractors

Globalization of the world economy has made borders between the countries lessimportant and thereby brought about unified markets. Construction industry is not differentfrom other industries when it comes to the globalization and unification of markets. Enteringinto new markets and undertaking international projects promise several benefits such asincrease in the business volume, profits, market share, etc. Turkish contractors have also beenactively operating in international markets since the 1970s. They have completed more than5,100 projects with a total value of USD 155 billion in 81 different countries until now.Undoubtedly, this success is highly subject to the extent to which they make sound decisionson market and project selection. This study aims to investigate the main attributes that mayaffect Turkish contractors' decisions on market and project selection. Review of the literature indicated that there are 57 attributes that may likely affect market and project selection decisions of contractors. These attributes were categorized into 4 main groups, namely;contractor-related attributes, country-related attributes, project-related attributes, and owner related attributes. A questionnaire consisting of 62 questions was designed and conducted among 71 Turkish contractors in order to identify the most contributing attributes. Reliability analysis was carried out to test the internal consistency of the questionnaire and factor analysis was conducted to identify the most contributing factors. Reliability analysis resultsindicated that seven attributes should be deleted to increase the internal consistency of thequestionnaire and factor analysis results revealed that the remaining 50 attributes could be described by 11 factors

Resource Leveling of an Industrial Building Using Genetic Algorithm Technique

Construction companies should schedule their projects in a manner that considers theefficient use of limited resources in order to complete a project within estimated budget, onschedule and in compliance with the specifications. In this context, the planning of resourcesbecomes crucial for a construction project, which can be accomplished by resource leveling.Resource leveling - also known as resource smoothing - is a method that attempts to reducethe fluctuations in resource usage in order to make the resource requirements as uniform aspossible while maintaining the original project duration. The studies dealing with resource leveling problems can be classified into two categories, which are; (1) analytical methods and(2) heuristic methods. Analytical methods may give optimal solutions on small-scaledproblems; however, they are inadequate in large-scaled problems. As a result of theweaknesses of analytical methods, many studies have been conducted in order to developmore efficient models by heuristic methods. Genetic algorithm-based resource leveling is oneof these models, which is developed to attain better solutions. The main objective of thisstudy is to handle the resource leveling problem of an industrial building using geneticalgorithms. In this context, a schedule for an industrial building is established using theCritical Path Method (CPM). The information about the logical constraints and the resourcesrequired to carry out activities were obtained through the interviews with civil engineers fromthe company, whose expertise is on industrial buildings. The proposed genetic algorithmbased resource leveling model attempts to improve the schedule. The developed modelprovided a decrease of 20% in the total resource-days required to complete the project. Thestudy is of benefit to participants of construction industry, because it makes them aware of the potential use of the combination of critical path method and genetic algorithms in order to solve the resource leveling problem

A Grading System-based Model for Detecting Unbalanced Bids during the Tendering Process

Unbalanced bidding is a common practice used in both unit price and lump sum contracts. Contractors may unbalance their bids in different forms for various reasons. The studies in the literature either focus on developing optimization models that assist contractors in winning contracts and maximizing profits of their bids through unbalancing or developing models that assist owners in detecting and/or preventing unbalanced bids during the bid evaluation stage. Unbalanced bidding is one of the most controversial subjects in the construction management literature and practice. Although there is no consensus on whether it is unethical or not, this practice is not usually for the benefit of owners. Therefore, owners have the right to reject the unbalanced bids and create a fair competition environment if they have a mechanism to detect it during the bid evaluation process. The main objective of this study is to propose a model, which consists of five different grading systems and helps owners in detecting unbalanced bids during the tendering process. In the proposed model, owners may either calculate the individual grades of each bidder or calculate the final score of each bidder by assigning different weights to these grading systems according to the project characteristics or their own needs. The final scores and bid prices of the contractors can be simultaneously evaluated. In order to demonstrate the applicability of the proposed model, an illustrative example is presented. It can be concluded that the proposed model can be effectively and easily used by owners for detecting unbalanced bids. This paper is the revised version of the paper that has been published in the proceedings of the Creative Construction Conference 2018 (Polat et al., 2018)

Subcontractor selection using the integration of the AHP and PROMRTHEE methods

On many construction projects, especially building projects, 80–90% of the tasks are performed by subcontractors. Since the success of the project highly depends on the performances of the subcontractors, selecting the right subcontractor for the right job is critical. Main contractors generally tend to select the subcontractors that offer the lowest bid price. However, working with unqualified and insufficiently financed subcontractors may result in inefficiencies and failures. Thus, a combination of several compromising and conflicting criteria underpinning financial capacity and competencies of the subcontractors should be considered during the subcontractor selection process. This paper proposes an integrated decision approach, which employs analytic hierarchy process (AHP) and preference ranking organization method for enrichment evaluations (PROMETHEE) together, for the subcontractor selection problem. In the proposed approach, AHP is used to analyze the structure of the subcontractor selection problem and to determine the weights of the criteria, and PROMETHEE is employed to obtain complete ranking and perform sensitivity analysis by changing the weights of criteria. The proposed approach is applied to a problem of selecting the most appropriate subcontractor to be worked with in an international construction project. Company management found the proposed decision approach satisfactory and implementable in future subcontractor selection problems. First published online: 29 Apr 201

Structural System Selection Using the Integration of Multi-Attribute-Decision-Making (MADM) Methods

A structural system carries all loads acting on the building and transfers them effectively to the soil through the foundation. Since it is the essential component of a building, selecting the most appropriate structural system is one of the critical decisions in the structural design. The design team, which consists of engineers and architects, is responsible for determining the structural system that will satisfy the owner's and end user's needs as well as the legal requirements. Due to the fact that a number of compromising and conflicting criteria may affect the structural system selection process, it is a difficult task and it should be considered as a multi-attribute-decision-making (MADM) problem. The main objective of this study is to provide the design teams with a MADM approach that will assist them in selecting the most appropriate structural system in a more objective and systematic manner. In the proposed approach, analytic hierarchy process (AHP) is used to compute the weights of the criteria and Vise Kriterijumska Optimizacija I Kompromisno Resenje (VIKOR) is employed to rank the structural system alternatives. In order to demonstrate how the proposed can be applied in a real life problem, the structural system of a housing project in Istanbul, Turkey is selected via this approach. The findings of the model were discussed with the decision making team in the studied project and they stated that the proposed approach could be easily employed as a guideline in selecting the most appropriate structural system from the managerial viewpoint. This paper is the revised version of the paper that has been published in the proceedings of the Creative Construction Conference 2018 (Polat et al., 2018)

Precast concrete systems in developing vs. industrialized countries

Precast concrete technology is recognized worldwide as offering significant advantages. Despite the advantages they offer, precast concrete building systems’ share in both Turkey and the U.S. is very low, especially when compared to many European countries. Since Turkey is a developing country that is technologically dependent on the developed world, low share of industrialized building systems is highly expected in that country. However, the U.S. is a developed and industrialized country, so it was very interesting to see that these systems are not extensively used in that country either. This study investigated the factors that prevent the extensive use of precast concrete systems in the U.S. and Turkey through an extensive questionnaire survey. The survey results revealed that the perceptions of the American vs. Turkish respondents on most of the factors that affect the use of precast concrete systems are significantly different from each other. While American respondents considered size and load restrictions on transportation, poor communication among parties, and lack of qualified contractors specialized in precast concrete systems as three most important barriers to the extensive use of precast concrete systems in the U.S. building construction market, Turkish respondents ranked lack of good communication among parties and lack of structural engineers and contractors specialized in precast concrete systems as the most important three factors that prevent the extensive use of these systems in Turkey. This study indicated that precast concrete users and manufacturers should recognize that the main reasons for low utilization of precast concrete systems predominantly depend on the prevailing conditions of the country in question. Santrauka Surenkamojo gelžbetonio technologija visame pasaulyje pripažistama del daugelio svarbiu pranašumu. Nepaisant ju, surenkamojo gelžbetonio statybos sistemu dalis Turkijoje ir JAV, palyginti su kitomis Europos šalimis, yra labai maža. Turkija yra besivystanti šalis, kurios technologiju pletote priklauso nuo išsivysčiusiu šaliu, tad maža surenkamosios statybos sistemos dalis yra pagrista. Tačiau JAV yra išsivysčiusi ir industrializuota šalis, bet šiu sistemu naudojimo mastas šalyje yra mažas. Remiantis išsamia apklausa straipsnyje atlikta maža surenkamuju betono sistemu naudojimo JAV ir Turkijoje apimti lemiančiu veiksniu analize. Apklausos rezultatai parode, kad JAV ir Turkijos respondentu nuomonL del daugelio veiksniu labai skyresi. JAV respondentai nurode, kad trys pagrindiniai veiksniai, ribojantys surenkamuju gelžbetonio sistemu naudojima JAV statybos rinkoje, yra: transportavimo apribojimai del dydžio ir svorio; silpnas ryšys tarp statybos proceso dalyviu; kvalifikuotu statybos rangovu, kuriu specializacija ‐ surenkamieji statybos elementai, trūkumas. Turkijos respondentai pagrindinLmis priežastimis laiko bendradarbiavimo tarp statybos proceso dalyviu stoka ir specializuotu statybos projektuotoju bei rangovu trūkuma. Atlikta studija parodL, kad surenkamojo gelžbetonio sistemu naudotojai ir gamintojai turetu pripažinti, jog menka surenkamuju gelžbetonio sistemu naudojimo apimtis pirmiausia priklauso nuo šalyje dominuojančiu statybos salygu. Published Published Online: 14 Oct 2010 Reikšminiai žodžiai: surenkamasis gelžbetonis, statiniu sistemos, besivystančios šalys, industrializuotos šalys, anketa, Turkija, JA

Motivation of civil engineers and architects in Turkey

Motivation is one of the key factors that stimulate individuals to improve their productivity. Therefore, motivation of construction workers has been debated with considerable interest by participants in the construction industry. However, motivating only construction workers, but ignoring the motivation of construction professionals, viz., architects and civil engineers, may not be enough to successfully complete a construction project. Although motivation of construction professionals may also enhance the performance of a construction project, this topic is mostly ignored in the motivation literature. This study attempts to fill this gap by (1) identifying the motivators that are of importance to architects and civil engineers and (2) exploring the statistical difference between architects’ and civil engineers’ motivators. For this purpose, a questionnaire survey was administered to Turkish architects and civil engineers to collect data on their perceptions of the importance of different motivators. The case of Turkey is investigated because several of the larger Turkish contractors undertake construction projects outside their home country. Statistical analysis was performed on the collected data to verify whether there are statistically significant differences in the perception of some motivators by architects and civil engineers. The study demonstrates the existence of a statistically significant difference between architects’ and civil engineers’ motivators. Identifying the architects’ and civil engineers’ motivators may help construction companies in motivating their architects and civil engineers more effectively, thus developing a quality workforce

Marketing management functions of construction companies: Evidence from Turkish contractors

Globalization, the restructuring of the world economy, changes experienced in project financing and delivery systems, the pervasive utilization of information and communication technologies (ICT), and the intensity of the competition prevailing in the market compel contractors to rethink the competitive forces and client expectations, which in turn necessitate a well planned marketing orientation for business planning. The Turkish construction industry is not different from the global construction industry in the context of intense competitiveness as Turkish contractors do not only undertake projects in the domestic market but also in foreign markets including the Commonwealth of Independent States, Africa, Middle East, Europe, Asia, etc. They also often face intense competition from local and foreign companies such as U.S., Chinese, Japanese, French, Spanish, German, U.K., and Korean contractors. Given the intense competition, effective marketing of their services is imperative for Turkish contractors in achieving competitive advantage. This study explores the marketing management functions of Turkish construction companies and the extent to which they carry out traditional marketing practices via a questionnaire survey of 71 Turkish contractors. The survey results revealed that Turkish contractors made use of marketing management functions to some extent, yet responding contractors did not attach adequate importance to differentiating their products/services from the products/services offered by their competitors. Since achieving client satisfaction by means of product and/or service differentiation is the ultimate goal, Turkish contractors should carry out all of the traditional marketing practices in order to differentiate themselves in the market, and thereby create competitive advantage. Santrauka Globalizacija, persitvarkanti pasaulio ekonomika, kvalifikacijos pokyčiai projektu finansavimo ir tiekimo sistemose, plačiai naudojamos informacines ir ryšiu technologijos bei konkurencijos rinkoje vyraujantis intensyvumas verčia rangovus persvarstyti konkurencines jegas ir vartotoju lūkesčius, o tam reikia gerai suplanuotos valdymo orientacijos verslui planuoti. Turkijos statybos pramone nesiskiria nuo pasaulines statybos pramones intensyvaus konkurencingumo kontekste. Turkijos rangovai ne vieni imasi projektu vidaus bei užsienio rinkose, iskaitant Nepriklausomu valstybiu sandrauga, Afrika, Vidurio Rytus, Europa, Azija ir t. t. Jie taip pat dažnai susiduria su didele vietiniu ir užsienio kompaniju konkurencija, tokiu kaip JAV, Kinijos, Japonijos, Prancūzijos, Ispanijos, Vokietijos, Didžiosios Britanijos ir Korejos rangovai. Atsižvelgiant i intensyvia konkurencija, efektyvu ju paslaugu valdyma, Turkijos rangovams būtina pasiekti konkurencini prana‐šuma. Šiuo tyrimu analizuojamos Turkijos statybos bendroviu rinkodaros valdymo funkcijos ir apimtys, taikant tradicine rinkodara. Apklausoje apžvelgta daugiau nei 70 Turkijos rangovu anketu. Apklausos rezultatai atskleide, kad Turkijos rangovai tam tikru mastu pasinaudojo rinkodaros valdymo funkcijomis, tačiau jie neskyre pakankamai svarbos išskirdami savo produktus ir paslaugas, konkurentus ir ju teikiamas paslaugas. Kadangi pagrindinis tikslas ‐ vartotoju, naudojančiu produkta, pasitenkinimas ir (arba) paslaugu išskirtinumas, Turkijos rangovai turetu ištirti visus tradicines rinkodaros ipročius, noredami išskirti save rinkoje ir taip sukurti konkurencini pranašuma. First Published Online: 24 Jun 2011 Reikšminiai žodžiai: rinkodaros valdymas, statybos imones, apklausa, Turkij

Impacts of different objective functions on resource leveling in construction projects: a case study

A review of the recent literature on the models that focus on resource leveling in Critical Path Method networks shows that different objective functions have been used to optimize resource utilization. The main objective of this study is to investigate the impacts of using different objective functions on resource utilization histograms in Critical Path Method networks. For this purpose, nine different resource leveling objective functions were optimized via a genetic algorithm-based model. The model was developed using actual data obtained from a steel framed industrial building construction project. It was found that each of these objective functions generates different resource utilization histograms. In order to determine the improvement levels achieved by resource leveling using nine different objective functions, the improvement percentage in each parameter and the average improvement percentage for each objective function were calculated. Even though the objective function that involves the minimization of the sum of the square of the deviations in daily resource usage provided the best average improvement percentage in the studied case, another objective function(s) may provide better average improvement percentage in different projects. The contractor should consider all objective functions for resource leveling and select the one(s) that provides the best average improvement percentage

Detecting unbalanced bids via an improved grading-based model

Unbalanced bidding, also known as skewed bidding, is the process of increasing and/or decreasing the prices of various bid items without altering the total offered bid price. Bids can be unbalanced either mathematically (front-end loading) or materially (quantity error exploitation). Owners should be very careful when evaluating the tenders as awarding a contract to an unbalanced bid may result in severe cost overruns because the prices of those items do not reflect their true costs and markup allocations. Unbalanced bidding is still a contentious issue in the construction industry. While some researchers consider it as a legal bidding strategy in such a fierce competitive business environment, others view it as an unethical practice and claim that unbalanced bids should be disqualified. Studies regarding unbalanced bidding can be categorized into two groups: (1) the ones focusing on detecting or preventing this practice to help owners; and 2) the ones focusing on optimizing unbalanced bidding to help contractors. This study aims to develop a model, which consists of eight grading systems, to assist owners in detecting materially unbalanced bids. The proposed model is the improved version of the previous model, which was composed of five grading systems. In order to demonstrate how this grading-based model can be used by owners, an illustrative example is presented. It was found that owners can easily and successfully detect unbalanced bids via the proposed mode