ASSIGNMENT NO: 08

[STRATEGIC RELATIONSHIP]

[CONSTRUCTION COMPANY]

MAHA RAFIQUE
SP16-EX-0165
maharafiq@msn.com

Building construction is a highly competitive and risky business. This competitiveness is

compounded where conflicting objectives amongst contracting and subcontracting firms set the
stage for an adversarial and potentially destructive business relationship. Clients, especially those
from the public sector, need broader tender evaluation criteria to complement the traditional
focus on bid price. There is also a need for change in the construction industry not only to a more
cooperative approach between the constructing parties but also from a confrontationist attitude to
a more harmonious relationship between all stakeholders in providing constructed facilities.
Construction Companies

Think and plan long-term

Meet local demand efficiently

Relentlessly search for improved performance year on year

R&D, testing and evaluation for big steps forward

ALLIANCES:
Strategically, construction companies may enter into alliances (a form of partnership) in order to
innovate, access new markets, overcome local market restrictions, raise entry barriers and share
risk for mutual benefit. Strategic alliances developed and propagated as formalized inter
organizational relationships. These cooperative arrangements represent new organizational
formation that seeks to achieve organizational objectives better through collaboration than
through competition.
COLLABORATION:
The term collaboration comes from the Latin words for work and with and refers to shared
effort or interests as well as work or activity by a group of people who individually contribute to
the efficiency of the whole project. Six important factors were found that lead to willingness to
collaborate among contractors in a construction company are; (i) collaboration encourages
teamwork; (ii) similar racial collaboration develops cooperation between team members; (iii)
stimulate information sharing; (iv) improves quality and timely project completion; (v) enhance
service quality; and (vi) better communication among project members.
Today, collaboration is a model based on equal sharing of risk and reward and the development
of a non adversarial relationship between all members of the construction project team. Ideally,
each organization on the project team such as architect, engineer, general contractor,
subcontractor or supplier makes an optimal contribution based on its knowledge and capabilities,
and then everyone commits to the timely resolution of problems and the completion of the
project according to the owners expectations.

PARTNERING:
The power of partnerships had important roles which were enumerated by the clear advantages
of a balanced partnership relationship: partnering provided the ability to leverage internal
investments; focus on core competencies; leverage core competencies of other organizations;
reduce capital needs; broaden product offerings; gain access or faster entry into new markets;
share scarce resources; spread risk and opportunity; improve quality and productivity; have
access to alternative technologies; provide competition to in-house developers; use a larger talent
pool; and satisfy the customer.
The concept of partnering has been practiced by building construction industry professionals
aiming to eliminate conflicts in the building construction industry by removing traditional
barriers between the client and contracting firm.

Internal relationship

Behavior is guided by teams perception that they are parts of a joint organization
JOINT VETURE

Appoint the project manager

Brief which fully describes the new facility and identifies the constraints

Identify key objectives in terms which allow performance to be measured

Key decision is use an established design or an original design.

Decide how far customer wants to be involved in decisions

Key decision is contract with a single construction company or multiple companies

Be prepared to invest in actions which reduce inherent difficulty

Define agreed objectives with construction companies being considered

Review and finalize agreed objectives

Agree fair contracts

Ensure controls are in place to ensure performance in terms of agreed objectives is measured
and action taken on any failures or problems

CONCLUSION:
Successful collaborative partnerships and strategic alliances needed to be developed as part of
the overall strategy of the construction organization such as identification of clear goals and
objectives, and significant attention to the choice and type of partner.