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Al-Hussein, M, Kumar, J, Sharma, V and Mah, D (2006) A knowledge-based automated development permit approval process in the housing industry. Engineering, Construction and Architectural Management, 13(03), 290–306.

Arboleda, C A and Abraham, D M (2006) Evaluation of flexibility in capital investments of infrastructure systems. Engineering, Construction and Architectural Management, 13(03), 254–74.

Ford, D N and Bhargav, S (2006) Project management quality and the value of flexible strategies. Engineering, Construction and Architectural Management, 13(03), 275–89.

  • Type: Journal Article
  • Keywords: Management strategy; project management; quality; risk management
  • ISBN/ISSN: 0969-9988
  • URL: http://www.emeraldinsight.com/10.1108/09699980610669697
  • Abstract:
    Purpose – Construction strategies for competitive bidding and operations are used to avoid the consequences of poor schedule performance such as delay penalties. Flexible strategies in the form of options can increase project value if uncertain conditions cannot be adequately forecast before operations begin. However, project management purposefully manipulates the project performance that drives the use of options and thereby the value added by options. Therefore project management quality may influence option values. Seeks to address this question. Design/methodology/approach – This research investigates the interaction of project management and option value by operationalizing a common use of real options in construction and valuing the option with different levels of project management quality. A simple but realistic dynamic simulation model of a project is described and exercised to reveal some impacts of project management on option value. Findings – The results support a hypothesis that increased project management quality decreases option value and that real options in managing construction projects can be explained with real options theory. The model structure suggests causal explanations that are consistent with real options theory. Originality/value – The results suggest that practising managers can significantly increase project value by structuring managerial flexibility and thereby improving their evaluation, development, and use of flexibility. However, ignoring the multiple means of managing uncertainty that are often available can distort valuation. Results also suggest that researchers of strategic flexibility in projects should consider multiple forms of uncertainty in modeling options. Increasing the number of available options or the effectiveness of options in a multiple-option environment can decrease individual option values.

Forsythe, P (2006) Consumer-perceived appearance tolerances in construction quality management. Engineering, Construction and Architectural Management, 13(03), 307–18.

Li, J, Moselhi, O and Alkass, S (2006) Internet-based database management system for project control. Engineering, Construction and Architectural Management, 13(03), 242–53.

Muya, M, Price, A D F and Edum-Fotwe, F T (2006) Construction craft skills requirements in sub-Saharan Africa: a focus on Zambia. Engineering, Construction and Architectural Management, 13(03), 223–41.