Exploring construction challenges of the public client: a dynamic capabilities approach

Doktorsavhandling, 2019

Construction clients in the public sector face a large number of challenges in designing, procuring and managing construction projects in a manner that is conducive to the organization’s overall goals. In particular, clients have faced challenges in delivering projects that satisfied the projects’ goals with respect to cost and time overruns. The role of the client in managing these challenges has more recently been emphasized, with a growing number of studies and governmental reports calling for the development of the client’s capabilities with respect to delivering projects.

This thesis examines the capabilities of the construction client with respect to the dynamic capabilities concept. The two research questions that guided this research are, RQ1: What are the underlying mechanisms of dynamic capabilities? and RQ2: How can dynamic capabilities be understood and used by public clients to address construction-specific challenges? The viability of the dynamic capabilities approach is also discussed, particularly with respect to construction-related challenges faced by the client, focusing on the aforementioned cost and time overruns.

The main beneficiaries of this thesis, to which the contributions of the thesis are most relevant, are construction client organizations that operate in the public sphere. Most notably, the type of clients that are targeted are those that undertake the commissioning and managing of construction projects that require organizations that possess the capabilities needed to deliver cost and time efficient projects. Objectives crucial to all projects but especially to publicly funded and publicly scrutinized projects. The secondary beneficiaries of this thesis are researchers who study and develop the dynamic capabilities concept, a concept which has constituted the theoretical frame of reference that has been used in this thesis. The thesis is based primarily on a case study of a large public construction client located in Sweden (PubClient) and a study of an association made up of 16 client organizations/divisions from the Swedish counties. Findings are presented in four appended papers. The thesis concludes with a discussion on the viability of using a dynamic capabilities framework in the specific cases described in this thesis and what implications this have for practice and further research.

It is argued that the concept of dynamic capabilities needs to be contextualized to capture the specific environment in which public client organizations operate. Suggestions for alternative approaches to understanding the management and development of capabilities are then discussed. Findings indicate the need for a segmented approach for understanding how dynamic capabilities are managed in client organizations, based not only on the level of stability in the environment but also taking into account the resources that are utilized. The thesis explores alternative frameworks of dynamic capabilities, beginning with the general framework proposed by Teece et al. (1997) which examined the activities of dynamic capabilities, and Zollo and Winter (2002) that examined the learning mechanisms of dynamic capabilities. Additionally, more recent frameworks of dynamic capabilities that are tailored to the context of the construction client are explored, particularly, Davies and Brady (2016) who introduced the concept of ‘project capabilities’ to conceptualize dynamic capabilities in a project-based context. It is further argued that there is a need for a more granular research approach for studying the development of dynamic capabilities in a case-based setting. This would imply an approach that more specifically links the development of dynamic capabilities with the precise antecedent actions that preceded them, or, put more straightforward, which action in an organization develop which specific dynamic capability.