Organizing to Increase Innovation in Construction Firms

TLDR

Construction industry’s need for innovation is driven by changing owner demands and increasingly complex facilities, and unlike manufacturing, its institutional framework, products, and technology require new organizational approaches. This study aims to identify and describe organizational structure and culture elements that foster innovation in construction firms, drawing on successful examples. The authors analyze supportive policies, flexible unit sizing, coordination mechanisms, and specialized staffing as key organizational elements, illustrated with case examples. The paper provides recommendations for managers to organize for increased innovation and outlines research insights and future needs.

Abstract

Driving forces in the construction industry indicate that the ability to innovate is quickly becoming a competitive necessity. Changes in owners' demands and more complex facilities require new approaches in both design and construction. Investigations of other industries reveal organizational characteristics of innovative firms, but construction's institutional framework, products, and technology differ significantly from manufacturing. Based on investigations of successful examples, this paper describes elements of organizational structure and culture that appear to foster construction innovation. These common elements include supportive policies and priorities, flexibility in unit size and grouping, intra‐ and interorganizational coordination, and staffing to satisfy specific requirements for key positions. This paper describes each of these elements and gives examples from a study of innovations. The descriptions of these elements include recommendations for managers seeking to organize for increased innovation, and the conclusions include research insights and needs.