Organisational actors’ motivations and building performance traps:
Evidence from case studies and modelling on interactions of
reputation, identity and collaboration
Valerio Cappuccio™, Nici Zimmermann’, Catherine Willan®, Esfandiar Burman’, Michael Davies*
* UCL Institute for Environmental Design and Engineering, Central House, 14 Upper Wobum Place, WC1H ONN, London, UK
>uCL Energy Institute, Central House, 14 Upper Woburn Place, WC1H ONN, London, UK
* Corresponding author: v.cappuccio@ ucl.ac.uk
Keywords: building performance, construction project, energy, client, contractor, collaboration,
motivations
Buildings are estimated to be responsible for 37% of GHG emissions in the UK (CCC, 2014, p. 153; IEA
& OECD, 2015). Despite recent innovations in design, materials, techniques and technologies, the UK’s
construction industry consistently fails to deliver energy efficient buildings (Palmer, Terry, & Armitage,
2016). There is ample evidence of a gap between performance estimated during design and the actual
performance in operation (Zero Carbon Hub, 2014; Palmer et al., 2016). A performance gap is observed
also for occupant well-being and indoor environmental quality (IEQ), as these often suffer from unintended
consequences of narrowly focused energy policy (Davies & Oreszczyn, 2012; De Wilde, 2014; Shrubsole,
Macmillan, Davies, & May, 2014). reviewed many Barriers to building performance acts at different steps
of the building delivery, from briefing, to construction and operationalisation, and varying in nature from
skills to communication and responsibilities (Zero Carbon Hub 2014). Y et, the root causes of these barriers
and how they emerge from the wider social, economic and regulatory context of the building industry are
unclear (Ryghaug & Sorensen, 2008). For policy formulation it is paramount to account for these emerging
barriers and to avoid the siloed approach leading to unintended consequences, disjointed efforts and policy
resistances (Davies & Oreszczyn, 2012; Shrubsole et al., 2014), and look at the built environment as a
complex socio-technical system (Macmillan et al., 2014; Shrubsole et al., 2018).
Sorrell (2003) reviewed the main barriers to energy efficiency in the light of market failures, stressing the
importance of bounded rationality of the actors involved in projects characterised by numerous
stakeholders, complex interactions, problematic collaboration and integration (Bresnen & Marshall, 2000;
Cole, 2011; Egan, 1998; Fedoruk, Cole, Robinson, & Cayuela, 2015; HM Government, 2011; Killip, 2013;
Latham, 1994; Pryke, 2017; Sorrell, 2003; Wolstenholme, 2009; Zero Carbon Hub, 2014). Many
collaboration-shaping factors, such as alignment of incentives, mutual trust and commitment strongly
depend on the organisations involved in the project, their motivations and approaches (Akintoye & Main,
2011; Hillebrandt, 2003; Robertson & Mumovic, 2013). These motivations are generally triggered
externally, for example through contractual arrangements, or are deeply rooted in the organisational actors’
identity and mental models (Clark, Gioia, Ketchen, & Thomas, 2010; Corley & Gioia, 2004; Klein & Sorra,
1996; Zimmermann, 2011). As yet though, the role of these organisational factors in the performance gaps
in construction has received little attention (Boyd & Schweber, 2012; Brown & Phua, 2011; Gluch, 2009;
Hietajarvi & Aaltonen, 2017).
In summary, despite ample evidence about the existence of a building performance gap, we need a deeper
and systemic understanding of the drivers of this gap and how it is rooted in the motivations of the main
stakeholders. Thus, the research explores, through case study interviews, how actor motivations in
construction teams can shape collaboration processes and influence building performance outcomes. The
study applied a System Dynamics approach focusing on building projects as a fundamental unit of analysis
of the building stock performances, as it has been widely used in project management for generic industrial
and production processes (Cooper, 1980; Ford & Sterman, 1998; Lyneis & Ford, 2007; Rahmandad & Hu,
2010; Rodrigues & Bowers, 1996) as well as in the construction industry (Lee, Pefia-Mora, & Park, 2005;
Lyneis & Ford, 2007; Parvan, Rahmandad, & Haghani, 2015; Wan & Kumaraswamy, 2014). Specifically,
we used system dynamics modelling to identify performance traps, defined here as feedback mechanisms
that can hinder project outcomes and building performance, and relate them to stakeholders’ motivations
and decision making.
The data set comprises 12 interviews of main actors (architects, engineering and commissioning
consultants, contractors, clients, facility managers) involved in the delivery of 3 case study public building
projects (office, hospital, school) with contract values varying between £ 35 and 80 million. The common
characteristic of the cases is the stakeholders’ commitment to performance quality, evidenced by the
presence, in one of the case studies, of energy targets for the building in operation. Unlike design targets,
these targets require a commitment to the building in use, reflecting the research focus on challenges and
dynamics involved in the delivery of high performance buildings. Interviews were open and semi-structured
to allow participants to recount their own stories and opinions drawn both from the specific project and
their whole experience in the field. Information on organizational and management aspects was crossed
with hard data about energy consumption and pollutants concentration collected by another part of the wider
research team (Shrubsole et al., 2018).
Interview transcripts were first analysed through a thematic coding in NVivo and then through causal
mapping in Vensim, where variables and connections were identified directly from the text and reported in
the documentation of the variable (Luna-Reyes & Andersen, 2003; Tumer, Kim, & Andersen, 2013). Asa
result, an articulated causal loop diagram (CLD) was produced from each interview, where feedback loops
were identified, labelled, documented and counted in their recurrence across interviews and cases. A
simplification process followed with a re-organisation by theme. A two-way comparison between themes
identified in NVivo and those in the CLDs was performed, by different team members, to assess their
general overlap. Differences or ambiguities were discussed and used to adjust the final CLDs. Finally, to
explore some scenarios and test hypotheses, a simulation model was built and calibrated on the office case
study, selected because of the unusual 3-year delay in contract sign-off. Quantification was based on
extracts from the transcripts, consultation of construction industry experts, and information from the
monitoring part of the research project (A maratunga, Baldry, Sarshar, & Newton, 2002). Figure 1 shows the
selected feedback loops used in the model to explain the observed behaviour.
The dynamics identified in the research explain: 1) how and why building quality declines in the first place:
the contractor’s rapacity loop drives the contractor to cut corners to adjust its margin profits, thus
generating a cascade effect that reinforces downstream defects and delays; 2) how client and contractor can
behave in relation to quality control: as the contractor compromises with quality, the moral hazard loop
drives it to reduce the information shared with the client in fear of claims, whereas the client’s acquiescence
to avoid delays lessens its commitment to quality, thus tolerating flaws that would have been resolved more
quickly if addressed earlier (therefore increasing the actual delay); 3) how client and contractor can
collaborate for quality adjustments and project smoothing: when deliveries start to lag behind expectations,
the blaming vortex loop exacerbates problems, which become harder to solve in an adversarial relationship;
4) the role of the client’s performance targets to assess the delivered quality: as long as the client remains
committed to performance targets, averting the target erosion trap, delays and defect fixes to meet targets
create extra efforts and costs to the contractor (cost boomerang); 5) how contractors can deal with the
performance gaps spotted by the client: the sunk costs derived by rework delays increase tension and reduce
profitability, disincentivizing the contractor to fix problems (contractor's indolence).
Concerning stakeholders’ motivations and decision making, CLDs and simulations highlighted the
relevance of transparency and open dialogue for quality control and collaboration since an honest
management of expectations and timely collaborative actions, such as resources and deadlines extensions,
can significantly change project outcomes (Figure 2). Another insight is the trade-off between priorities in
organisations, whereby the contractor’s predictable opportunistic behaviour is sometimes overlooked by
the client due to time and cost constraints, neglect of targets and internal disarray. The case studies showed
that, although explicit energy operational targets can improve performance, they also increase the scrutiny
of the overall quality, thus aggravating the usual challenge of meeting project targets and deadlines. In this
sense, if it is true that general actors’ economic drivers are generally predictable (Sorrell, 2003), there are
relevant differences on how organisations approach projects, their perceived value in specific outcomes and
the market image they pursue. The paper contributes to the literature by providing an initial step of
integration between project and building performance and their underlying causes as emerging from actors’
motivations, contractual incentives, organisational identities, and reputation (Brown & Phua, 2011;
Zimmermann, 2011).
information sharing
by contractor
contractor's
B
transparency A moral
hazard performance
= - target
negative feedback
by client -
contractor's 7
intended quality ~
" contract
+ actual sign-off delay
completion contractor
ef: indolence
i * qual . :
quality quality of _ _ predicted cost of *
adjustment construction work rework
contractor's
building B profit
- performance contractor
rapacity
work/ progress
performance
adjustment
contractor's
blaming
adversarial attitude
commissioning vortex
+
performance —_re-work™ ~
adjustment
’ client trust/
collaboration
re-work feasibility/
effectiveness
Figure 1: CLD of the simulation model for the office case study.
Actual completion
Py
en a
75
Dmnl
.25
0 10 20 30 40 50 60 70
Time (Month)
actual baseline
handover deadline : open dialogue 2—2—2—2—2—2—2—
actual pen dialog
Figure 2: Run comparison between the actual completion progress of baseline scenario (line1, blue) and the open dialogue
scenario (line 3, green). Line 3 is the handover deadline that in the ‘open dialogue’ scenario is postponed by 6 months.
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