Contractors and Developers in the Building Industry: A dog in a leash or...?

Susse Laustsen, Ester Jensen, COWI A/S

andPer Langaa Jensen, Technical

University of Denmark

Dominating theoretical position in studying SME’s:

• SME’s = ’simple structures’– Direct interventions as the

dominating coordinating mechanism.

• Emphasis on development of competencies– to qualify the owners to include

aspects concerning occupational health and safety in their decision making

Focuses in studying SME’s

Simple structur Direct intervention:Competencies of the owner

Accountants

Labour inspection

Clients

Labour Markets

Organisations

Vocationaltraining centres

Our theoretical point of departure;A contextual approach

• Main focus on the context in which the small building contractor works

• Only marginally on the processes within the enterprise.

• We delimit our focus to the contractual relation between the client and the small building contractors

Basic questions behind the research

• How does an ’up-stream’ strategy in OHS regulation actually function in successful cases involving small enterprises?

• ‘Up-stream’ strategy:– Formulate demands on other units in the

value chain Developer

Subcontrator1 Subcontrator2 Subcontrator3

6

A strategy for improving OHS at building sites

• The building trade in DK aspire to create better OHS at the building site by formulating demands concerning OHS to all actors involved in the building process

• The labour market parties within the building trade agreed (in 2005) on a proposal to attain higher working condition standards at building sites.

• Putting demands on:• The client• The advisor employed by the client• The planers• The building enterprises

(subcontractors)

• The employees

The aim of the study

• What are the impact of the clients' demands to occupational health and safety in small building enterprises. – What are the restraints for the client in formulating these demands?– How are the demands perceived by the small building contractors, and how do the demands

affect the tendering process and the execution phase?– Are there special constraints for the small building contractors, which could cause severe

problems? – Can these barriers be minimised by reformulating the demands?

Demands to the client

Draw up an OHS policy, comprising:• The OHS standard aimed at. • How the client intend to reach these aims.• How the client intend to fulfill his duties according to law.• The demands to be fulfilled by the others involved.• How the client intend to control that they fulfill the duties.

Where relevant these aims have to bee taken into consideration when

selecting subcontractors including their ability to fulfill these demands.

Demands to the enterprises

Has a policy on OHS assuring that all levels of the enterprise:

• Fulfill their duties according to law• Have the necessary qualifications within

OHS• Participates actively in maintaining and

improving a high OHS standard• Presents the same demands to

subcontractors.

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Design of the study

Case studies - in total 20 cases

Analyse experiences on working with demands on OHS

formulated in tenders :• 10 developers formulating demands • Min. 15 smaller construction firms (<50 employees)

Analyse barriers to developers for formulating demands• 10 developers not formulating demands to OHS in tenders

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The sample 1

Developer Type Number

Formulating OHS-demands

Private 2

State institution 4

Municipality 2

Private, partly owned by the state 1

Joint venture state and municipality 1

No OHS-demands

Private chain of shops 3

Developer 2

Non-profit housing association 1

Municipality 1

Developer within an independent organisation 1

Private real-estate company 1

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The sample 2

Type - trade Number of employed

Master builder

2,5 – 10

2,5

Master painter 5

Carpenter 7

Carpenter and construction manager

9

Carpenter 10

Demolition

11 – 20

15

Sunlight protection and windows 15-20

Earth and landscape 15-20

Master carpenter 20

Scaffolding 20

Electrician

21 – 30

24

Equipment 25

Landscape 25-30

Asbestos removal 31 - 50 43

Analysis: Three ideal types

Ideal type Abbriviation

1 The interested and Engaged Developer IED

2 The Compliant Developer CD

3 Developers believing that Other Know Best

OKB

Results

1. Motives behind clients engagement

Motives behind clients engagement

• The agreement• Legislation and inspection• Production philosophy• Risk reduction

Legitimacy

Economy

Effects in the small enterprise

• Non• Better planning• Better risk assessment• Better pratice

Results

1. Motives behind clients engagement

2. Understanding the relation

Results

• Recommendations on how to work with the clients' demands.– Clients:

• How to formulate demands• Strategies to follow

– Small enterprises:• How to make a tender• Activities to be taken

Understanding the relation

• Principal – agent:– No explicit monitoring and no reprisal

Basic principles behind the ’demand model’

• Principal – agent – theory• The principal:

– Is interested in having a task conducted • The agent:

– Is willing and able to conduct the task• How does the principal ensure that the

agent adjust to the interests of the principal?

• The Contract:– Defines the relation between contribution and reward

• Contract-types– Output-contract– Behavioural-contract

• Control pivotal for compliance • Occupational health and safety is typically

related to behavioural contracts • Assumes a symmetry in competencies

Control is neglected

Limited OHS-competence at the agents organisation

Reparation

Principal Agent

AM-agent

Bygherren må sikre en netværks-organisering, hvis det skal lykkes

Form for organisering

Marked Hieraki Netværk

Basis Kontrakt Ansættelse Supl. styrker

Kommunikation Pris Rutiner Relationer

Konfliktbeh. Jura Ordre Omdømme

Fleksibilitet Høj Lav Middel

Forpligtigelse Lav → Høj Middel

Tone Præcision Formel Åben og gensidig

Kobling Uafh. Afhængig Gensidig

Konsekvenser for bygherren

• Ressourcer til pædagogisk arbejde• Mere vedvarende relation

Hvad sker der i samspillet

Isomorfisme (’efterligner’)

1) Tvangsmæssigt Man gør hvad de siger for at slippe for sanktioner

2) Efterligning Man gør som de gode, fordi så er man selv god

3) Normativt Man gør det, fordi det er godt

Overvejelser hos bygherren

Struktur

Opgaver

Procedurer, hjælpemidler og værktøjer

Aktører

Kompetencer hos bygherrens sikkerhedskoordinator

• Viden om byggeprocessen og relaterede regler mm.

• Synlighed• Identificere og fastholde god adfærd• Forandre uhensigtsmæssig adfærd

• Indlevelse• Politiske spil også internt i egen org.• Pædagogik

Konklusion

• Modellen med bygherre krav om arbejdsmiljø kan fungere

• Men den sætter specielle krav til bygherren:– Forståelser – Ressourcer

Understanding the relation

• Principal – agent:– No explicit monitoring and no reprisal

• Network relation– Complementary competencies– Trust relations

Conclusions

• Contractual demands (might) have an impact• But the basic frame used in rhetoric (principal – agent)

is not acted out in practice.• A net-work based understanding a better frame for

development of actions:– Complementary competencies– Trust relation

• Recommendations:– The client: extra resources, new relations– The small: new competencies, possibilities for learning

Results

1. Motives behind clients engagement

2. Understanding the relation

3. Recommendations for practice

Thank you