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ISSN 1816-9554

Vol. 17 Issue 1 June 2006S U

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Vol. 17 Issue 1 June 2006

Volume 17 Issue 1 June 2006 ISSN 1816-9554

CONTENTS

Journal Objective

Articles

Ka-hung Ng, Chi-ming Tam and Vivian Wing-yan Tam

Deformation and Sorptivity of Recycled Aggregate Concrete Produced by

Two Stage Mixing Approach 7

Kun-hou Fung and Steve Rowlinson

The Adoption of Advanced Technologies in the Hong Kong Construction Industry 15

Lai-san Kwok and Eileen Mary Hastings

Hong Kong Real Estate Agency Industry: Survey on Important Marketing Factors

and Branding Attributes in light of Service Intangibility 27

Eric Wai-ming Lee

Preliminary Study on the Application of Computational Fluid Dynamics to Building

Drainage System Design 35

Trevor Lo, Peter Shek-pui Wong and Sai-on Cheung

Using Balanced Scorecard (BSC) Approach to Measure Performance of

Partnering Projects 45

Submission Guidelines 58

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Editorial Board

Honorary EditorFrancis LeungHonorary SecretaryHong Kong Institute of SurveyorsHong Kong SAR, People’s Republic of China

Chairman and Editor-in-ChiefProfessor Kwong-wing ChauDepartment of Real Estate and ConstructionThe University of Hong KongHong Kong SAR, People’s Republic of China

Editor Vol 17 Issue 1Dr Franco CheungDepartment of Building and ConstructionThe City University of Hong KongHong Kong SAR, People’s Republic of China

MembersProfessor Seaton Baxter OBEEmeritus ProfessorThe Scott Sutherland SchoolThe Robert Gordon UniversityUnited Kingdom

Professor Terry BoydSchool of Construction Management & PropertyThe Queensland University of TechnologyAustralia

Dr Man-wai ChanEstates OfficeHong Kong Baptist UniversityHong Kong SAR, People’s Republic of China

Professor Yong-qi ChenDepartment of Land Surveying and Geo-InformaticsThe Hong Kong Polytechnic UniversityHong Kong SAR, People’s Republic of China

Dr Sai-on CheungDepartment of Building and ConstructionThe City University of Hong KongHong Kong SAR, People’s Republic of China

Professor Zhen-ming GeDepartment of Construction Management andReal EstateThe Tongji UniversityPeople’s Republic of China

Professor Cliff HardcastleSchool of the Built and Natural EnvironmentThe Glasgow Caledonian UniversityUnited Kingdom

Professor Bo-sen HeSchool of ManagementThe University of TianjinPeople’s Republic of China

Professor Patric H HendershottSchool of BusinessThe University of AberdeenUnited Kingdom

Dr Daniel HoDepartment of Real Estate and ConstructionThe University of Hong KongHong Kong SAR, People’s Republic of China

Professor Malcolm HollisDepartment of Construction Management andEngineeringUniversity of ReadingUnited Kingdom

Professor Eddie HuiDepartment of Building and Real EstateThe Hong Kong Polytechnic UniversityHong Kong SAR, People’s Republic of China

Professor Per-Erik JosephsonDepartment of Building Economics andManagement/COMESAThe Chalmers University of TechnologySweden

Professor Masahiko KunishimaDepartment of Civil EngineeringThe University of TokyoJapan

Professor Andrew YT LeungDepartment of Building and ConstructionThe City University of Hong KongHong Kong SAR, People’s Republic of China

Dr Anita LiuDepartment of Real Estate and ConstructionThe University of Hong KongHong Kong SAR, People’s Republic of China

Professor Hong-yu LiuDepartment of Construction ManagementThe Tsinghua UniversityPeople’s Republic of China

Mr KK LoDepartment of Building and Real EstateThe Hong Kong Polytechnic UniversityHong Kong SAR, People’s Republic of China

Mr KF ManDepartment of Building and Real EstateThe Hong Kong Polytechnic UniversityHong Kong SAR, People’s Republic of China

Dr Esmond MokDepartment of Land Surveying andGeo-InformaticsThe Hong Kong Polytechnic UniversityHong Kong SAR, People’s Republic of China

Professor Graeme NewellSchool of Construction, Property and PlanningThe University of Western SydneyAustralia

Professor Stephen O OgunlanaSchool of Civil EngineeringThe Asian Institute of TechnologyThailand

Professor Li-yin ShenDepartment of Building and Real EstateThe Hong Kong Polytechnic UniversityHong Kong SAR, People’s Republic of China

Professor Martin SkitmoreSchool of Construction Management &PropertyThe Queensland University of TechnologyAustralia

Dr Conrad TangDepartment of Land Surveying andGeo-InformaticsThe Hong Kong Polytechnic UniversityHong Kong SAR, People’s Republic of China

SecretaryLinda ChanHong Kong Institute of Surveyors801 Jardine House1 Connaught PlaceCentral, Hong KongTel (852) 2526 3679Fax (852) 2868 4612Email: [email protected]

Journal Objectives

Surveying and Built Environment is an international peerreviewed journal that aims to develop, elucidate, and explore theknowledge of surveying and the built environment; to keep practitionersand researchers informed on current issues and best practices, as wellas serving as a platform for the exchange of ideas, knowledge, andopinions among surveyors and related disciplines.

Surveying and Built Environment publishes originalcontributions in English on all aspects of surveying and surveying relateddisciplines. Original articles are considered for publication on thecondition that they have not been published, accepted or submittedfor publication elsewhere. The Editor reserves the right to editmanuscripts to fit articles within the space available and to ensureconciseness, clarity, and stylistic consistency. All articles submittedfor publication are subject to a double-blind review procedure.

Topics

All branches of surveying, built environment, and commercialmanagement including, but not limited to, the following areas:

• Agency and brokerage;• Asset valuation;• Bidding and forecasting;• Building control;• Building economics;• Building performance;• Building renovation and maintenance;• Business valuation;• Cadastral survey;• Commercial management;• Concurrent engineering;• Construction law: claims and dispute resolution;• Construction management and economics;• Construction technology;• Corporate real estate;• Education and training;• Engineering and hydrographic survey;• Facilities management and intelligent building;• Geodetic Survey;

• Geographical Information System (GIS);• Health and safety;• Heritage conservation;• Housing markets and policy;• Information technology;• International construction;• Land law;• Lean construction;• Mortgage;• Organization, scheduling and planning;• Photogrammetry and remote sensing;• Portfolio management;• Procurement and contracting;• Professional ethics;• Project financing;• Project management;• Property development;• Property finance;• Property investment;• Property management;• Property market dynamics;• Property valuation;• Space planning;• Sustainability;• Securitized real estate;• Town planning and land use;• Urban economics;• Value engineering.

For Submission Guidelines or enquiries, please contact the Secretaryof the Surveying and Built Environment Editorial Board, LindaChan, at 801 Jardine House, 1 Connaught Place, Central, HongKong; e-mail: [email protected], telephone (852) 2526 3679 orfax (852) 2868 4612. For information on the Hong Kong Instituteof Surveyors, please visit: www.hkis.org.hk.

From the EditorThere are five reviewed papers in the second issue of the Surveying andBuilt Environment. Major issues investigated in these papers deal with thescience, technology and management aspects of the built environment whichinclude waste recycling, advanced technology adoption, marketing andbranding, drainage behaviour and performance measure for partnering.

The first three papers are extracted from the outstanding dissertations of theyear 2005 awarded by the Research Committee of the Hong Kong Instituteof Surveyors. First, Ng, Tam and Tam demonstrates with empirical results onhow the proposed two-stage mixing for recycled aggregate concreteoutperforms that of normal mixing. The second paper by Fung and Rowlinsonexamines the feasibility of using advanced construction technologies toimprove productivity and the like problems associated with the labour-intensivenature of the Hong Kong construction industry. Kwok and Hastings in thethird paper investigate the attitude of real estate agencies in Hong Kongtowards marketing and branding. With referral being identified as the majorsource of business, the authors suggest that a corporate brand built withpersonalized service and service quality would help strengthening the marketposition of the business.

Addressing to the community’s concern about virus spreading after the outbreakof the Severe Acute Respiratory Syndrome, Lee in the fourth paper investigatesthe hydraulic flow behavior inside the drainage system. The air and waterflow patterns inside the drainage system are simulated using computationalfluid dynamics. The simulated results from numerical computation helpdesigning pipeworks objectively which is an advancement in drainage design.Finally, Lo, Wong and Cheung use the Balanced Scorecard approach tomeasure the partnering project performance in a holistic manner. The resultsof their survey support the use of the identified strategic objectives. Theseobjectives are categorized into four perspectives: benefits (of adoptingpartnering), attitudes of project stakeholders, attitudes enhancement processand strategic learning and growth.

As an international peer-reviewed journal, gaining recognition worldwide isimportant. We look forward to publishing good quality research papersfrom our overseas contributors in order to integrate an international dimensioninto the journal. It is very encouraging to report that we have received quitea number of manuscripts from overseas since launching the Surveying andBuilt Environment (in place of the former Hong Kong Surveyors) last December.All of them, except those were rejected unfortunately, are in the middle ofthe reviewing process and thus, are yet to appear in this issue.

Prompt response is essential to the reviewing process. May I express mythanks to the editorial board members as well as the invited reviewers fortheir support.

Dr Franco KT CheungEditor Vol 17 Issue 1

ELECTRONIC SUBMISSION

Full paper submission should consist of a file inMicrosoft Word format attached to an e-mailmessage.

FORMAT OF FULL PAPERLanguage:

English

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Full Paper should include title of paper, authordetai ls, ABSTRACT, KEYWORDS, andREFERENCES.

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Drop 2 line spaces and type KEYWORDS inbold, full caps, 12-point size, and left justified.Type the keywords in the next line and indent3cm on both margins, left and right justified.Suggest approximately 5-10 keywords spacedby commas.

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Journals

Last name and initials of author(s), (year ofpublication), paper title, journal title (italics),journal volume: issue, page numbers, forexample:

Stewart R. (2001), the Spatial Data Infrastructure:Concept, Prototype Development and FutureDirection, GIS - Today and Tomorrow, 28:2,155-177.

Books

Last name and initials of author(s), (year ofpublication), book title (italics), edition (if any),publisher, for example:

Blachut CD (1979), Urban Surveying andMapping, Springer-Verlag, New York.

Chapters in books

Last name and initials of author(s), (year ofpublication), paper/chapter title, book title(italics), - last name and initials of book editor(s)(eds.), name of publisher, for example:

Wofford, L. E. (1999), Ethical Choice in RealEstate: Selected Perspectives from Economics,

Psychology, and Sociology, Ethics in Real Estate,Roulac, S. (ed.), Kluwer Academic Publishers,Massachusetts, 39-70.

The reference should be cited in the article bytyping the last names of the authors (without anytitle) and year (in brackets), e.g. Steward (2001)and Fellows and Liu (1999), or Lai, et. al. (2005)in case of more than 3 authors. References tothe same author(s) in the same year should bedifferentiated by using 2005a, and 2005b etc.

COPYRIGHT TRANSFER

Submission of an article for publication impliesthe transfer of the copyright from the authors tothe Hong Kong Institute of Surveyors uponacceptance, and all authors are required to signa Transfer of Copyright Form. The final decisionof acceptance rests with the Editorial board.Authors are responsible for all statements madein their articles.

FINANCIAL DISCLOSURE ANDDISCLAIMERS

Any affiliation with or involvement in anyorganization or entity with a direct financialinterest in the subject matter or materials discussedin the manuscript should be disclosed in anattachment. Any financial or material supportshould be identified in the manuscript.

FOR ENQUIRIES

Please contact [email protected] or call theSecretary of the Surveying and Built EnvironmentEditorial Board on (852) 2526 3679. Fullpapers are to be sent by email to the Editor at:[email protected].

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Surveying and Built Environment Vol 17(1), 7-14 June 2006 ISSN 1816-9554

Deformation and Sorptivity ofRecycled Aggregate ConcreteProduced by Two Stage Mixing ApproachKa-hung Ng1, Chi-ming Tam2* and Vivian Wing-yan Tam3

INTRODUCTION

Construction and Demolition (C&D) waste hasconsumed a large portion of landfill areas inHong Kong. Among various types of C&D waste,

concrete occupies more than seventy percent ofthe total C&D waste generated. The potentialsfor recycling concrete are thus extremely high.To encourage recycling of concrete waste, theHong Kong SAR Government had set up aconcrete recycling plant in Area 38 at Tuen Mun.

However, Recycled Aggregate (RA) is wellacknowledged having a poor quality due to itshigher porosity resulted from cement mortarremains attaching to the RA surface that hampersthe potential to recycle concrete waste. Manyprevious research works recorded reduction instrength for concrete made with RA; thus the use

1 Graduate, Department of Building & Construction, City University

of Hong Kong, Hong Kong.2* Corresponding Author, Professor, Department of Building &

Construction, City University of Hong Kong, 83 Tat Chee Avenue,

Kowloon, Hong Kong.

Email: [email protected], Tel: (852) 2788-7620, Fax: (852) 2788-

76123 Lecturer, Griffith School of Engineering, Griffith University, PMB

50 Gold Coast Mail Centre, QLD 9726, Australia.

ABSTRACT

The amount of construction and demolition (C&D) waste has grown to such an extent that it hasaroused much public concerns. Among them, concrete occupies more than seventy percent of thetotal C&D waste. As a result, landfill areas will soon be exhausted in the coming few years. However,owing to the uncertainty in using Recycled Aggregate (RA), practitioners are skeptical in using theseas a natural aggregate substitute. Poor performance of RA is well acknowledged to be resulted fromits higher porosity due to cement mortar remains attaching to the RA surface. Deformation and watersorptivity are of particular concern, which will affect the long term durability of building structures. Toimprove the quality of Recycled Aggregate Concrete (RAC), Two-Stage Mixing Approach (TSMA) isproposed, attempting to form a layer of cement slurry to fill the cracks and voids in the RA, leadingto improvement at the interfacial zone of aggregate. In this study, the drying shrinkage, creeping,and water sorptivity of concrete made from the normal mixing approach and TSMA are compared.The results show that concrete from TSMA performs better than that from Normal Mixing Approach(NMA), which can be explained by the improved Interfacial Transition Zone (ITZ) around the RA.Moreover, the concrete mix that contains 20% RA substitution has performed the best.

KEYWORDS

C&D Waste, Recycled Aggregate Concrete, Two-stage Mixing Approach, Shrinkage, Water Sorptivity,and Creeping

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Deformation and Sorptivity of Recycled Aggregate Concrete Produced by Two Stage Mixing Approach

PREVIOUS WORKS

Many researchers have studied the propertiesof RAC. Tables 1 and 2 summarize the findingsof drying shrinkage, creeping, and watersorptivity on recycled aggregate concrete.

Table 1: Previous Study Results of Drying Shrinkage and Creep of RAC

Studies Properties Resultsof RAC

Hong Kong Housing Authority Drying Shrinkage[HKHA, 2004]

Katz, 2002 Drying Shrinkage

Sakata et al., 2000 Drying Shrinkageand Creep

Hansen, 1992 Creep Creep of RAC might be up to 40% greater than that ofconventional concrete made with natural aggregates. Thecreep of RAC made with coarse recycled aggregates andnatural sand was in order of 20-30% higher than that ofconventionally control concrete.

Table 2: Previous Study Results on Water Sorptivity

Studies Properties Resultsof RAC

Gomez-Seberon, 2002 Water Sorptivity The water absorption of RAC was about 5.8-8.1% and thatof natural aggregate concrete was just 0.88%-1.49%.

Katz, 2002 Water Sorptivity The total water absorption of RAC was about 6.9-7.6%,which was greater than absorption of the reference concreteof about 3.8-3.9%.

Olorunsogo and Water Sorptivity The water sorptivity increased as the proportion of RA inPadayachee, 2001 the concrete mixes increased. The percentage increment of

the water absorption of the concrete mixes with 100% RAwas about 47.3%, 43.6%, 38.5% and 28.8% for curing daysat 3, 7, 28, and 56, respectively.

The drying shrinkage of RAC is 7% greater than that ofnatural aggregate concrete. A similar result was found forRAC with 20% RA substitution.

The drying shrinkage at the age of 90 days was 0.7-0.8 mm/mfor the ordinary Portland cement and 0.55-0.65 mm/m forthe white Portland cement concrete with RA. The shrinkagein the reference concrete samples at the same age was 0.27and 0.32 mm/m, respectively.

The drying shrinkage of RAC was higher than the concretewith other types of aggregates. The creep coefficient of theconcrete with the fine recycled concrete aggregate was higherthan that of other concrete.

of RA is mainly confined to low-gradeapplications.

To improve the quality of RA and thus its recyclingrate, Tam et al. (2005) proposed the Two StageMixing Approach (TSMA) for improving thestrength of Recycled Aggregate Concrete (RAC).This paper attempts to compare some of theproperties of RAC made from TSMA and thenormal mixing approach.

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The above studies have found that RAC performspoorer in both drying shrinkage, creeping andwater sorptivity when compared with naturalaggregate concrete under the same curingconditions.

RESEARCH METHODOLOGY

TSMA aims to improve the compressive strengthof RAC and lower its strength variability. Tam etal., 2005 have demonstrated that the use ofTSMA does improve the strength of RAC thatcompensates for the lower strength resulted fromthe porous nature of RA. The premixing processof forming a layer of cement slurry on RA can fillup the voids and cracks and result in a denserconcrete. In this study, properties of RAC madefrom TSMA is compared with the normal mixingapproach (NMA) to ascertain any benefit orimprovement that TSMA might have on RA. Theprocedures of the two mixing approaches areas follows:

• Normal Mixing Approach (NMA)Cement, coarse and fine aggregates, andwater are added into the mixer at the sametime and mixed for 120 seconds.

• Two-stage Mixing Approach (TSMA)Step 1: Coarse and fine aggregates areadded into the mixer and mixed for 60seconds.

Step 2: The first half of water is then addedto the mixed aggregate, and mixed foranother 60 seconds.

Step 3: All cement is added to the mixer andmixed for another 30 seconds.

Step 4: The remaining half of water is addedto the mixer and mixed for 120 seconds.

In this study, three tests are conducted (dryingshrinkage, creeping, and water sorptivity) withsix concrete mixes, namely, RAC with 0% (normal

aggregate concrete), 20%, and 100% RAsubstitution using both NMA and TSMA. Theslumps of these concrete mixes are controlled to75 mm, and the controlled temperature andhumidity for the experiments are set at 25oC and65% respectively.

1. Drying Shrinkage

The definition of drying shrinkage (BS1881: Part5: 1970) is the difference between the lengthof a prism of matured concrete after immersionin water and its length after subsequent dryingunder specified conditions. In this study, threeprisms of 300 mm (l) x 75 mm (w) x 75 mm (d)were cast and cured for each mixing method(NMA and TSMA) with 0%, 20%, and 100%RA substitution. The test lasts for 210 days. Themeasuring apparatus is a micrometer gauge thatis rigidly mounted (in a vertical direction) on ameasuring frame and is adjustable for prisms ofdifferent lengths. The end of the gauge and theseating at the opposite end of the measuringframe have a conical recess with a 90-degreeinternal angle and a face diameter of 5.5-6.5mm, which is located upon a 6-mm diameterstainless steel ball that is cemented in the prism.

Drying shrinkage percentage:

= (I.R. x 0.002 – F.R. x 0.002) /I.R. x 0.002 x 100%

= (I.R. – F.R.) / I.R. x 100%,where I.R. means initial reading at day 1 andF.R. means final reading at day t.

2. Creep Test

The creep test (Standard: ASTM C 512 -02)examines molded concrete cylinders that aresubjected to a sustained longitudinal compressiveload, and measures the load-induced time-dependent compressive strain at selected agesfor concrete under an arbitrary set of controlledenvironmental conditions. In this test, the diameterof each sample should be 150 mm and thelength should be at least 292 mm. The ends ofthe sample are placed in contact with steel

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bearing plates, and the sample length shouldbe at least equal to the gauge length of the strain-measuring apparatus plus the diameter of thesample. When the ends of the sample are incontact with other concrete samples similar tothe test sample, the sample length shall be atleast equal to the gauge length of the strain-measuring apparatus plus 38 mm. Between thetest sample and the steel bearing plate at eachend of the stack, a supplementary non-instrumented cylinder with a diameter that is equalto that of the test cylinders and a length that is atleast half its diameter is installed.

The results were calculated using the followingequations:

�==

where� the total strain, is the initial elasticstrain, F(K) is the creep rate, and t is the timeafter loading (in days).

CSt = �t – – St ,

where CSt is the creep strain at time t, �t isthe measured strain at time t, and St is theshrinkage at time t.

CCt = ,

where CCt is the creep coefficient at time t.

3. Water Sorption

Sorption means water ingress into pores underunsaturated conditions due to capillary suction.The sorptivity test (ASTM Designation: C642)measures the ability of concrete to absorb water,where sorptivity (S) means the volume of waterthat is absorbed per unit of cross-section (i) inabsorption time (t). Three cubes of 150 mm x150 mm x 150 mm concrete samples were castand cu red fo r each mix ing me thod.Measurements were made at a 14-day intervaluntil the 182nd day.

To present the results, the sorptivity (S) was derivedfrom the relationship between the volume of waterabsorbed per unit of cross-section (i) and thesquare root of time (t ) using the followingequation:

S = i / t ,

where i = mm3/mm2

where Wt is the weight at different timeintervals, A is the cross-sectional area, and tis the time interval in minutes

TESTING RESULTS

1. Drying Shrinkage

Table 3 shows the comparative results of dryingshrinkage for the various concrete mixes usingNMA and TSMA. On the 182nd day, thedifference in shrinkage is not significant for allmixes. When the concrete samples are re-wettedfor 28 days (soaking the samples in water for28 days) to determine the permanentdeformation, the rewetting process decreases thepercentage of shrinkage of the concrete samplesbecause the water molecules filled up the voidsinside the concrete, making the cubes to expand.After 28-days of rewetting, the concrete samplesmade with NMA with 0%, 20%, and 100% RAsubstitution show values of 4.04%, 3.83%, and4.33% of permanent drying shrinkagerespectively. However, concrete cubes madewith TSMA with 0%, 20% and 100% RAsubstitution give an improved shrinkageperformance on the 210th day after the re-wetting process with values of 3.92%, 3.82%and 4.10% of permanent drying shrinkagerespectively.

1( (E + F(K)In(t +1) ,

E1

E1

E1

CSt

1/2

1/2

(Wt – Wd ) x 103

A

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2. Creep Test

Table 4 shows a comparison of the creepingrates for the various concrete mixes. On the182nd day, the concrete mixes made with NMAhave a larger creep strain than those made withTSMA. This finding confirms that TSMA canimprove the creep strain, and the improvementis more significant when the samples areunloaded (the sample rebounds to recover someof the creeping) to obtain the permanent creepstrain.

Table 3: Comparison of Drying Shrinkage for NMA and TSMA

NMA TSMA NMA TSMAConcrete 182nd day (normal drying 210th day (28 days forsample shrinkage process) rewetting following 182 days)

0% 5.59% 5.60% 4.04% 3.92% 20% 5.47% 5.48% 3.83% 3.82% 100% 5.74% 5.75% 4.33% 4.10%

Table 4: Comparison of Creep for NMA and TSMA

NMA TSMA NMA TSMAConcrete 182nd day (normal creeping 210th day (28 days forsample process) unloading following 182 days)

0% 0.000563 0.000530 0.000015 0.000012 20% 0.000754 0.000633 0.000129 0.000024 100% 0.001517 0.001176 0.000743 0.000575

Concrete Samples on Samples on Recovery of Creep Percentage ofsample 182nd day 210th day after Unloading Recovery

0% TSMA 0.000530 0.000012 0.000518 98% 20% TSMA 0.000633 0.000024 0.000609 96% 100% TSMA 0.001176 0.000575 0.000601 51%

Although there is no significant improvement forthe mix with 20% RA substitution using TSMA incomparing with that using NMA, the lowestdrying shrinkage figure is achieved, inferring theoptimum percentage of RA substitution at thatlevel. The mix with 20% RA substitution givesthe strongest and densest concrete structure andtherefore the lowest value of permanentshrinkage.

Table 5 shows the recovery in creep strain formixes made with TSMA. A comparison of themixes on the 182nd and the 210th day showsthat the samples with 0% RA achieves the greatestrecovery in creep strain, 98%. However, theconcrete mixes with 20% and 100% RAsubstitution can only recover 96% and 51%respectively. Therefore, the mix with 0% RAsubstitution gives the best performance amongall of the samples, which is quite understandable

as higher percentages of RA will decrease thequality of RAC. A comparison of the creep strainsshows that the performance of the mix with 20%RA substitution is close to that of 0% RAsubstitution. At the same time, the 20% RA mixperforms much better on recovery of creep strainin comparing with that of 100% RA mix. Thisalso confirms that the optimal percentage of RAreplacement is at 20%.

Table 5: Improvement in Creep Strain by TSMA

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The above table and figure show that TSMA can improve the water sorptivity of the mixes with 20%and 100% RA substitution but less significant for the mix with 0% RA substitution when compared withNMA. TSMA leads to the formation of a thin layer of cement slurry on the surface of RA, giving adenser concrete. For the mixes with 0% RA substitution, TSMA contributes little improvement becausethe natural aggregate did not have many cracks or voids. On the other hand, it is found that the mixwith 20% RA substitution gives the lowest rate of sorptivity when TSMA is adopted.

Figures 2 and 3 show the microstructure of RAC made with NMA and the TSMA, respectively. Figure2 shows that the cracks and voids are not filled up with the cement slurry using NMA and thus the ITZis weaker. Figure 3 shows that the cracks and voids are filled up with the cement mortar using TSMA,and the new ITZ gives a stronger structure. These can be revealed from the testing results on shrinkage,creeping and water sorptivity.

Figure 1: Water Sorptivity Behavior of Concrete Mixes at 7,200 Seconds

3. Water Sorption

Table 6 shows the comparison of water sorptivityof the various concrete mixes. Figure 1 show the

water sorptivity behavior of all concrete mixesmeasured for 7,200 seconds during each test.

Table 6: Comparison of Water Sorptivity for NMA and TSMA

Average water 0% 20% 100% 0% 20% 100%sorptivity rate (mm/s)

Time NMA TSMA300s 0.0158 0.0109 0.0264 0.0132 0.0080 0.0130600s 0.0154 0.0109 0.0269 0.0132 0.0080 0.01301800s 0.0138 0.0099 0.0255 0.0124 0.0080 0.01263600s 0.0133 0.0096 0.0250 0.0122 0.0081 0.01287200s 0.0129 0.0097 0.0243 0.0118 0.0085 0.0132

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Figure 2: RA Microstructure Using NMA Figure 3: RA Microstructure Using TSMA

The findings of the above three tests show thatthe concrete mix at 20% RA substitution performsthe best when TSMA is adopted.

CONCLUSION

The above experiments confirm that the use ofthe Two Stage Mixing Approach (TSMA), canimprove the quality of recycled aggregateconcrete, which can compensate for the poorperformance of RAC made with recycledaggregate. This enables in a wider scope ofapplication of recycled aggregate, facilitatinghigher utilization levels of recycled aggregatein the industry. As the amount of constructiondemolition waste generation in Hong Kong isincreasing, the adoption of recycled aggregatefor new construction works can therefore reducethe burden on the landfill areas that can extendthe servicing life of the landfills. The importantaims of using recycling aggregate for concretestructures is to safeguard human life, protect ourenvironment, and enhance the durability ofconcrete structures.

The use of TSMA can improve the properties ofRA and RAC in comparing with NMA. This newmixing approach helps to form a thin layer ofcement slurry on the surface of RA, whichpermeates into the porous old cement mortar andeventually fills up the old cracks and voids toreduce the porosity of RA. The adoption of TSMA

can create an Interfacial Transition Zone (ITZ)with a greater surface area to which the cementmortar can attach, and thus an increased strengthof concrete structure. Therefore, in this study, theconcrete mixes made using TSMA give a betterperformance in the deformation and watersorptivity. The study also identifies that the optimalRA substitution is at 20%, which gives the optimalperformance in creeping, shrinkage and watersorptivity.

SBE14


REFERENCES

Gomez-Soberon, J. M. V. (2002), “Porosity ofrecycled concrete with substitution of recycledconcrete aggregate – An experimental study”,Cement and Concrete Research, 32(8), 1301-1311.

Hansen, T. C. (1992), Recycling of DemolishedConcrete and Masonry, E & FN Spon.

HKHA (Hong Kong Housing Authori ty),Homepage, available at ht tp://www.housingauthority.gov.hk/en/, (2004).

Katz A., (2002), “Properties of concrete madewith recycled aggregate from partially hydratedold concrete”, Cement and Concrete Research,33(5), 703-711.

Olorunsogo F. T., Padayachee N. (2002),“Performance of recycled aggregate concretemonitored by durability indexes”, Cement andConcrete Research, 32(2), 179-185.

Tam, V. W. Y., Gao, X. F., Tam, C. M. (2005),“Micro-structural analysis of recycled aggregateconcrete produced from two-stage mixingapproach”, Cement and Concrete Research, 35(6), 1195-1203.

Sakata K., Ayano T. (2000), “Improvement ofconcrete with recycled Aggregate”, in FifthCanmet/ACI International Conference onDurabili ty of Concrete - Volume 2, ACIInternational, 1089-1108.

SBE15


The Adoption ofAdvanced Technologies inthe Hong Kong Construction IndustryKun-hou Fung and Steve Rowlinson1

ABSTRACT

This study addresses the problems of Hong Kong construction industry’s labour-intensive nature, examinesthe possibility of using advanced construction technologies to solve these problems and identifies thebarriers to the use of these technologies.

The Hong Kong construction industry is often cited as a labour-intensive industry and it has beenunderachieving in terms of productivity (RCCI, 2001) but little empirical research has been done tovalidate this statement. Therefore, researchers used a Cobb-Douglas Production Function to investigatethe ratio of labour input to capital input so as to determine the factor intensity of the local constructionindustry. The result affirms the labour-intensive nature of the industry. This Production Function wasalso used to calculate the value added total factor productivity (VATFP) growths of the constructionindustry. It was observed that the VATFPs of the industry sustained positive growth in the period 1985-2002. The above two findings imply that even though there have been technical changes, theconstruction industry still relies primarily on labour resources to increase productivity.

Four advanced construction technologies were studied and economic analyses showed that they canoffer users tangible benefits such as enhancements in productivity and cost reductions as well as lesstangible benefits including improvements in quality and a safer work environment. Contractors havenot thus far shown great interest in these technologies because they have no guarantee of being ableto utilise them frequently, thus implying a negative return on investment. Other obstacles to the use ofadvanced technologies were identified, they are: lack of client motivation, financial constraints, tightproject timeframe, low labour capability and lack of knowledge sharing in the industry. As a result,the paper recommends that Hong Kong government should allocate more resources to both trainingand research and development (R&D) to engender a climate conducive to development and adoptionof advanced technologies.

KEYWORDS

advanced technology adoption, productivity improvement, Hong Kong, construction industry

1Department of Real Estate and Construction, The University of

Hong Kong

SBE16

The Adoption of Advanced Technologies in the Hong Kong Construction Industry

INTRODUCTION

Despite the boom in the run up to the “Handover”,the completion of the Hong Kong InternationalAirport and its related facilities and the AsianFinancial Crisis in 1997 had a serious negativeimpact on the construction industry in Hong Kong.The total value of construction works has followeda continuous, downward trend since then. Interms of construction spending per capita, HongKong ranked 9th in 1998 and 4th in 2003behind Japan, Korea and Singapore within Asia,with Japan leading at US$3,648 (AsiaConstructTeam, 2004).

However, although the construction sectoraccounted for only 3.2% of the Gross DomesticProduct (GDP) of Hong Kong in 2004, downfrom 4.9% in 2000 (Census and StatisticsDepartment, 2005), practically all other sectorsof the economy, such as the tourist industry,manufacturing industry, finance and real estateservices, community services, etc. rely on theconstruction sector to accommodate their needsfor growth and expansion (Voon and Ho, 1998).The construction industry plays an important rolein Hong Kong’s economy and its significancecannot be neglected despite its relatively smallshare of GDP.

However, there are many shortcomings in theindustry’s operations and in the quality of itsproducts. The Construction Industry ReviewCommittee (CIRC, 2001) identified localconstruction activities as labour-intensive,dangerous and polluting; built products as oftendefective; construction costs as high; practitionersas lacking a long-term view of businessdevelopment and the industry reluctant to adoptnew technologies to cope with new challenges.In addition, the productivity of the constructionindustry has been on the decline. As a result,one of the CIRC’s recommendations to theindustry was to use more modern constructionmethods and techniques as well as deploymentof information and communication technology(ICT) so as to enhance efficiency and productivity.

OBJECTIVES

This research addresses the problem of the slowuptake of new technologies and practices. Arethey too costly to adopt? Are their advantagesoverestimated? The authors start from thepropositions that the Hong Kong constructionindustry is labour-intensive and the decline inproductivity in the construction industry is due tothe low capability of labour and poor levels ofuptake of new technologies and automation. Itis postulated that one of the reasons for this isthat, given the current structure of the industry,the benefits brought by advanced constructiontechnologies and practices are not cost effectiveas far as contractors are concerned. Thus, theresearch has the following aims:

1. To use a scientific approach to determine thelabour-intensity of the Hong Kong constructionindustry.

2. To calculate productivity growth in the localconstruction industry.

3. To analyse new construction practices andtechnologies to ascertain their economicfeasibility and benefits to users.

4. To investigate and explain the phenomenonof the slow uptake of new constructionpractices and technologies in the industry.

5. To propose methods to accelerate theadoption of new construction practices andtechnologies in the industry.

BACKGROUND TO THE STUDY

THE SIGNIFICANCE OF LABOUR COST INA CONSTRUCTION PROJECT

Ganesan et al (1996, p49) estimate that thebreakdown of total construction expenditure isapproximately 35% materials, 45% labour andplant, and 20% overheads and profit. Totalexpenditure in this context covers building and

SBE17


civil engineering projects, and these percentagesmay vary significantly from one project toanother, especially in the civil engineering sector.Voon and Ho (1998) indicate that a typicalbuilding contract has 40% labour content whilea typical civil engineering contract has 20%.CIRC’s (2001) benchmark study on theconstruction cost of building projects in HongKong reveals that the average labour componentcosts in normal building projects are 25% of thetotal construction costs in Hong Kong while theyare 20% in Singapore making Hong Kong lesscompetitive than its neighbour and competitor.

THE CONCEPT OF CAPITAL

Capital refers to all man-made resources usedfor further production, which includes buildings,plant and equipment, and stocks of materials.The quality and quantity of capital influences notonly the productivity of capital but also that oflabour and total output (Kulshreshtha andMalhotra, 1998). When we talk aboutproductivity in construction, capital often refersto the technologies adopted in the constructionprocess because other elements such as buildingsor stocks of materials owned by contractors donot have a direct impact on constructionproductivity on site.

Unlike labour, capital will depreciate over time.Depreciation measures the loss in value of acapital good as it ages. A capital good willalso experience efficiency decline, which reflectsthe loss of productive services that can be drawnfrom it (Schreyer, 2001, p53).

THE DEMAND FOR CAPITAL IN THECONSTRUCTION INDUSTRY

The demand for construction plant is derived fromthe demand for the products and services itultimately provides. In addition, spending oncapital goods like construction plant oftenrequires large monetary outlays with profitsdependent on the flow of future revenues andcosts. Because of the magnitude of the fundsrequired, investment spending tends to be

influenced by interest rates (Bumas 1999, p421)and the financial capacity of the investors.

Contractors in Hong Kong are reluctant topurchase sporadically used plant since it isdifficult to amortise the investment so there is atendency to hire. On the other hand, plant thatare frequently specified in contracts, such as aircompressors and concrete pumps, have highutilization rates and justify direct purchases bylocal contractors (Ganesan et al, 1996, p52).The nature and volume of work dictates the typeand capacity of plant purchased by a firm.

THE SUPPLY OF CAPITAL IN THECONSTRUCTION INDUSTRY

Most construction plant and technologies in HongKong are acquired from overseas (Chau andWalker 1988; Ganesan et al, 1996;AsiaConstruct Team, 2003). These plant andtechnologies are either directly owned by thecontractors or on short term hire (Ganesan et al,1996, p53). In most cases, local contractorsown only the most commonly-used plant, suchas tower cranes and hoists, in order to increaseutilisation rates and reduce unit costs.

Contractors may also invest in R&D activities tolook for new technologies. However, as reportedby both CIRC (2001) and AsiaConstruct Team(2003), Hong Kong construction industry’sexpenditure on R&D is low, leading to a dearthof invent ions or improved construct iontechnologies.

FACTOR INTENSITY

Factor intensity is the proportion of a factor usedin the production of any one final good. Ineconomics, the concept of factor intensity tellsus that in order to rank commodities, what isimportant is the proportion in which labour andcapital are used, not their absolute quantities(Chacholiades 1990, p67). Therefore, it isnecessary to investigate the labour to capital ratio

SBE18


before drawing any conclusion on factor intensitymatters, eg labour intensity of an industry.

LABOUR UTILIZATION AND CAPITALUTILIZATION IN THE LOCALCONSTRUCTION INDUSTRY

Many construction activities still depend heavilyon skilled and unskilled labour. Ganesan et al(1996, p42) and Chiang et al (1998) identifyseveral labour-intensive construction activitiessuch as concreting, steel fixing, carpentry,rendering, planting, acoustical ceiling work andpipe work. In addition, various kinds of labourare employed; usually referred to as buildingtrades, eg concreter, steel bender, plumber,painter, electrical and mechanical (E&M) workersand various managerial, administrative andprofessional workers, such as project managersand surveyors.

Hong Kong’s civil engineering industry is moremechanized than its building constructioncounterpart as the large-scale nature and specialrequirements of civil engineering projects favourthe use of construction machinery. According toChau and Lai (1994), the use of plant andmachinery has become more common andlabour productivity has been improved throughsubstitution of capital for labour, though theprocess is slow.

IS HONG KONG’S CONSTRUCTIONINDUSTRY REALLY LABOUR-INTENSIVE?

The construction industry in Hong Kong isconsidered labour-intensive by many researchers(Rowlinson and Walker, 1995; Ganesan et al,1996; Chiang et al, 1998; Voon and Ho,1998; CIRC 2001; AsiaConstruct Team, 2003)but few of these authors provide empiricalverification of the industry’s labour intensity.Chacholiades (1990, p67) provides a meaningfor “labour-intensive” when explaining theHeckscher-Ohlin Model in macroeconomics.Take labour-capital ratio as an example. Thelabour-capital ratio is the quantity of labourrequired to produce one commodity divided by

the quantity of capital required to produce thatcommodity. A larger labour-capital ratio indicatesmore labour-intensive industry, and vice versa.Thus, this research addresses factor productivityissues to investigate this aspect.

PRODUCTIVITY

When we discuss how “advanced” an industryis, we usually refer to its productivity. Productivityplays a crucial role in determining the level andrate of profitability (Savidis and Mills, 2001).Economists calculate the productivity of anindustry with the aid of production functions toexamine the technological change in thatindustry. A production function can also serveas a means to reflect the factor intensity of anindustry. Edison (1999) defines productivity asan all embracing term which refers to the overallnet yield of goods and services during a specifiedperiod, achieved with a given volume ofresources. Ive and Gruneberg (2000, p61)define productivity as the quantity of output perunit of labour in a given period of work and theoutput can be measured in terms of the physicalunits produced. Schwartzkopf (2004, p5)defines it as the units of work accomplished forthe units of labour expended. There are manydefinitions of productivity; however, theunderlying concept is the same, i.e. the ratio ofoutput to critical input, holding other inputsconstant. Olomolaiye et al (1998, p3) suggestthat no matter which definition is used, it shouldbring out three distinct concepts which are:

(i) the capacity to produce,(ii) effectiveness of productive effort, and(iii) the production per unit of effort.

Single factor productivitySingle factor productivity is a measure of outputto a single measure of input (Schreyer 2001,p12). It can be calculated as labour or capitalproductivity, that is, net or gross output per unitof the respective input.

SBE19


Multifactor productivity (MFP)MFP relates a measure of output to a bundle ofinputs. It helps disentangle the direct growthcontributions of labour, capital, intermediateinputs and technology (Schreyer 2001, p20).Total factor productivity (TFP) is a type of MultiFactor Productivity (MFP). The distinction betweenthe two is that the latter includes the jointproductivity of labour, capital and intermediateinputs, and the former considers the jointproductivi ty of labour and capital only(Mahadevan 2004, p6). Chau and Walker(1990) no te t ha t MFP i s o f t en usedinterchangeably with TFP.

MEASURING TOTAL FACTORPRODUCTIVITY

According to Mahadevan (2004, p5), TFP canbe calculated as:

Q/(aL+bK) [1]

Q is value added output, L is labour input, K iscapital input and a and b are weights given byinput shares. Chau and Walker (1988) measureTFP of the Hong Kong construction industryindirectly through construction cost, price indicesand other statistics, including value share ofindividual inputs, labour cost index, material costindex, public sector tender price index, privatesector price index and average book profitmargin of the construction industry. This approachcan be applied to calculate value added TFP(VATFP) by the same set of data used to calculateTFP. According to Chau (1993), the differencebetween VATFP and TFP is that in the formerapproach, intermediate inputs are subtracted fromboth the input and output side.

DEFINITION OF THE PRODUCTIONFUNCTION

Bumas (1999, p119) defines the productionfunction as a function which relates the maximumrate of production, Q, to the employment of thefactors of production – labour, L, and capital, K– at a given level of technology, T:

Q = f (T; L, K) [2]

A production function indicates the outputs thatcan be obtained from various amounts andcombinations of factor inputs. In particular itshows the maximum possible amount of outputthat can be produced per unit of time with allcombinations of factor inputs, given current factorendowments and the state of availabletechnology.

COBB-DOUGLAS PRODUCTIONFUNCTION

The most common production function used inempirical research is the Cobb-DouglasProduction Function because it is simple toestimate and is consistent with the economictheory of production (Lin, 2002). It was firstdeveloped by Cobb and Douglas (1928). Theproduction function is of the basic form:

Q = A L� K� [3]

Q is the real production and L and K are theamounts of labour and capital employed inproducing it. The exponents � and � areparameters representing the elasticity of outputdue to labour and the elasticity of output due tocapital respectively. According to Bairam ed(1998, p18), A is a time dependent ‘scaleparameter’ which denotes a technologicalprogress variable. One important characteristicof a Cobb-Douglas Production Function is itsability to reflect factor intensity of a firm or anindustry. Mahadevan (2004) estimates thecapital and labour shares of Hong Kong’smanufacturing industry by means of a Cobb-Douglas Production Function. The coefficients(i.e. the exponents � and � in [3]) of theindependent variables can show whichproduction factor is more intensive. For example,if the coefficient of labour is larger than that ofcapital, according to the definition of factorintensity, the firm or the industry is labour intensiveas labour is utilized in a larger proportion thancapital.

SBE20


TFP can help in formulating strategies becauseit reflects information like efficiency and technicalchange, so it is used in this study rather thanLabour productivity which is too narrowly definedto be of use. Therefore, for the purposes of thisstudy, which are the determination of labour-intensiveness of Hong Kong’s constructionindustry and the evaluation of the industry’sproductivity, the Cobb-Douglas ProductionFunction will be good enough.

ESTIMATION OF THE PRODUCTIONFUNCTION

The production function was calculated fromgovernment data on construction output and theadjusted coefficient of determination was 0.92indicating that 92% of the variations inconstruction output can be explained by theindependent variables in the production function;thus this functional form is a good fit. The F andt-statistics indicate that all the empirical resultsare significant, the independent variables’coefficients are statistically significant at the 95%confidence level. Thus, Hong Kong constructionindustry’s production function can be written as:

ln Q = 0 + 0.17 ln K + 1.27 ln L [4]

Taking the antilogarithms of Equation [4] to revertto the original form of the Cobb-Douglasproduction function gives:

Q = K0.17 L1.27 [5]

Thus to increase construction output it is necessaryto increase inputs of capital resources andlabour, holding the technological level of theindustry constant. Therefore, the variables ln K(capital) and ln L (labour) have positivecoefficients (thus positive indices for K and L inthe production function), which means whencapital inputs and/or labour inputs increase,construction output will increase too.

The magnitudes of the coefficients also indicatethe significance of the inputs in the industry. Fromthe industry’s production function, labour input

has a larger coefficient than that of capital input,which means labour has a higher input shareand the larger magnitude implies labour inputshave greater influence on construction output.This confirms that the construction industry inHong Kong is labour-intensive as the equationindicates that varying the amount of labour tocontrol the output, rather than varying the amountof capital stock, will have the largest effect.

When both capital input and labour input areincreased by m, then output will become:

Q’ = (Km)0.17(Lm)1.27 = m(0.17+1.27)K0.17L1.27 = m1.44Qwhere m>1 [6]

Obviously, an increase in inputs will lead to amore than proportionate increase in output. Thesum of elasticity of inputs (�+�) is greater than1. For a normal Cobb-Douglas ProductionFunction, the sum of elasticity of inputs shouldbe equal to 1 with constant returns to scale.Hence, the production function obtained exhibitsincreasing returns of scale. In this case, if fewerthan h units are constructed, the unit price willbe higher than that of exactly h units. Thiscoincides with the current situation at firm-levelthat construction companies, including consultantsand contractors, tend to pursue more jobs andproduce more products (outputs), in order toachieve lower average cost per unit product.This can be done by sharing resources such asplant and machinery, personnel and materials,as well as spreading overheads over a largenumber of projects. Of course, another purposeof such action is to maintain cash flow for thecompany.

PARAMETRIC ESTIMATIONS OF VALUEADDED GROWTH AND VATFP

If the construction industry is really labour-intensive, then is its productivity declining aspostulated by researchers? Value addedconstruction output grew from 1985-1996reflecting the boom in the run up to handover ofsovereignty, but it dropped after 1997(particularly after the Asian Financial Crisis). This

SBE21


fall can be explained by two reasons: (i) in theprivate sector, Hong Kong was facing recessionand the property market hit a trough, so lessbuilding and construction works were carriedout and (ii) major infrastructure projects like theHong Kong International Airport and Tsing MaBridge had been completed. As a result, bothcapital and labour input growth fell in this period.

Except for the period 1985-1987, VATFP growthhas remained positive over time. Since VATFPgrowth reflects the combined ef fects ofdisembodied technical change, economies ofscale, efficiency change, variations in capacityutilization and measurement errors (Schreyer2001, p16), this indicates that the constructionindustry has been able to sustain a degree ofproductivity improvement through improvementsin the performance of labour, better managementand organizational change (which are classedas disembodied technical changes by Schreyer(2001, p20)), as well as gaining in technicalefficiency. Thus, the proposition: low productivityin the construction industry is due to poorly skilledlabour and poor project management, can berebutted.

It is interesting to observe a downtrend of VATFPgrowth in the period 1994-1996, when theindustry was booming. It might be expected thatcontractors would increase their productivity sothey could build faster and build more in orderto maximize their profits but, contrary to this view,VATFP growth reduced in this period. Thisdowntrend during the construction industry boomcan be explained as follows:

(i) The speed of construction was increasedat the expense of a decrease in productivity,as there were overloading problems ofworkers on sites, lack of control of materialwastage and efficient use of resources dueto poor project management.

(ii) The capacity of the construction industry wasnot sufficient to cope with the sudden extrademand for services and products, so less

productive resources were attracted to theindustry.

Overall, VATFP growth shows that there havebeen some improvements in productivity resultingfrom disembodied technical changes; however,it has proved difficult to substitute capital forlabour in the Hong Kong construction industry.Therefore, the labour-intensive nature of theindustry is confirmed.

MEASURING THE VALUE OFINNOVATION ANDTECHNOLOGY INVESTMENTS

An economic evaluation model proposed byWarszawski (1999) is adopted in this study.For simplicity, the term “robot” in this sectionmeans any new construction technologies whichare more advanced and productive (but whichmay not be a pure robot in the everyday senseof the word).

Ganesan et al (1996) identify several labour-intensive construction activities and suggest theycould be replaced by more advancedconstruction methods. Warszawski and Navon(1998) investigate the applications of robots indifferent areas of construction. Four constructionactivities with robot applications which arecurrently employed in other countries are selectedfor this study:

A. Concrete placing,B. Pile driving,C. Painting, andD. Placement of boards.

These four types of construction work wereexamined in order to determine the break-evenvalue for capital investments compared with theuse of conventional methods. Based on theseresults it was determined that all of thetechnological investments could improveproductivity but, surprisingly, there was not

SBE22


necessarily a reduction in the need for labour inall instances. The results of the analyses areshown in Table 1.

It can be seen that for each of the four types ofconstruction work there is a minimum number ofhours per job necessary to break even comparedto conventional, labour intensive methods. It canalso be seen that other tangible benefits as wellas cost savings can accrue. For instance, theconc re te pumping sys tem can b r ingimprovements in safety but there are concomitantchanges which have to be made in concretemix design. The use of SGPD improvesproduction rates by up to seven times that ofconventional methods and so is a major bonus,so to speak, for the investor. In addition, thesystem is much more accurate when driving pilesand so this adds benefits and value to the project.The painting systems require extensive amountsof work in order to be viable in terms of breakeven and it was found that the HVLP system wasin fact better than the LVHP system in that therewas far less wastage. Hence, technologicalinnovations must be assessed not solely in termsof labour-saving but also in terms of quality, costand wastage. The manipulator must work for aminimum of 900 and hours per annum in orderto accrue benefits but it should be able to improvethe safety environment on the site enormously.

Saving in terms of the insurance premiums anddirect and indirect accident costs, which are amajor component of site costs, have beenaccounted for. These somewhat intangiblebenefits have not been included in this particularanalysis but it is obvious that the largercontractors are more able to take advantage ofsuch systems in that their investments areamortised in a different way and their cashflowrequirements are different.

SBE23


Con

stru

ctio

n w

ork

(A) C

oncr

ete

pla

cing

(B) S

heet

pile

driv

ing

(C) P

aint

ing

(D) B

oard

pla

cing

Con

vent

iona

l – c

rane

Ad

vanc

ed -

pum

pin

gC

onve

ntio

nal –

Ad

vanc

ed -

SG

PD

Con

vent

iona

l - b

rush

ing

Ad

vanc

ed –

Con

vent

iona

l –A

dva

nced

– li

ght

& s

kip

vib

rato

ry h

amm

er(a

) pai

ntin

g ro

bot

&m

anua

lw

eigh

t m

anip

ulat

or(b

) HV

LP

Pric

e or

ren

t of

/H

KD

516.

6/hr

/H

KD

486.

3/hr

/(a

) H

KD

661,

300

/H

KD

523,

320

adva

nced

eq

uip

men

t(b

) H

KD

23.7

/hr

Min

imum

rob

ot/

14hr

/job

/4h

r/jo

b/

(a)

700h

r/yr

/50

0hr/

yrw

orki

ng h

our

to(b

) N

ot a

pplic

able

achi

eve

bre

akev

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rice

or r

ent

to u

ser

Con

stru

ctio

n co

st43

8,42

2.1

425,

249.

981

1,60

4.6

571,

392.

65,

257.

3(a

) 4,

925.

66,

959.

8 (c

eilin

g5,

803.

1 (c

eilin

g(H

KD

)(b

) 2,

516.

3he

ight

3m

)he

ight

3m

)

Cos

t p

er u

nit

wor

k87

6.8/

m3

850.

5/m

31,

746.

3/m

21,

229.

9/m

226

.3/m

2(a

) 24

.6/m

234

8.0/

m2

290.

2/m

2

(in H

KD

)(b

) 12

.58/

m2

Cos

t re

duc

tion

0%3.

0%0%

29.6

% (

in t

otal

0%(a

) 6.

3%0%

16.6

%co

mp

ared

with

labo

ur a

nd p

lant

cos

t)(b

) 48

.9%

conv

entio

nal m

etho

d(%

)

Ad

vant

ages

of u

sing

adva

nced

met

hod

s:

Red

uce

lab

our

use

/N

o/

Ye s

/(a

) Yes

/Y

es(b

) N

o

Incr

ease

pro

duc

tivity

/Y

e s/

Yes

/(a

) Yes

/Y

es(b

) Yes

Red

uce

was

tage

/N

o/

Yes

. Les

s w

aste

/(a

)W

orse

tha

n/

No

crea

ted

due

to e

rror

sco

nven

tion

alm

etho

d(b

) Wor

se t

han

conv

enti

onal

met

hod

Enh

ance

saf

ety

/Y

e s/

No

/(a

) Yes

/Y

es(b

) N

o

Imp

rove

qua

lity

/N

o/

Yes

/(a

) N

o/

No

(b)

No

Table

1: Th

e im

pact

s of

adva

nced

tec

hnolo

gie

s on

dif

fere

nt t

ypes

of

cons

truc

tion

work

SBE24


CONCLUSIONS

In the Phase I analysis, VATFP growth shows thatconstruction productivity has been enhanced bydisembodied technical changes. Nevertheless,the Hong Kong construction industry is still labour-intensive and labour is not readily replaced bycapital investment in technology, in fact quitethe reverse it is often substituted itself for capitalsuch as plant and machinery in order to controlproduction and costs. Considering the results fromthe Phase II analysis together with those fromPhase I, it is observed that even though newtechnologies can provide cost reduction andmany additional benefits, few companies adoptthem. In fact, construction company owners stillprefer to use labour to control output. Why arethey reluctant to use new technologies? Thebreakeven values of advanced constructionmethods from the Phase II analysis gives someclues. Although the results show that the advancedmethods (except concrete pumping) do notrequire very extensive employment for the userto attain a positive return, this is only an analysisbased on existing data and market prices; nomacroeconomic and financial managementfactors have been considered.

Hong Kong’s construction industry is currently inrecession and there is a shortage of large-scaleconstruction projects and programmes of projects.The breakeven prices of the construction robotsare in the order of hundreds of thousands ofdollars and so, even though robots areeconomically feasible, investing in such robotswill greatly reduce the liquidity of manyconstruction firms. If they borrow money for suchinvestments there is a high risk involved, and somany small and medium sized construction firmsrefuse to invest in robots. Obviously, only thosefirms with strong financial backing and otherresources can make such technology investments.Large firms can enjoy economies of scale byintroducing advanced technologies as they canlower the average cost of products by producingmore with productive machines or methods. Infact, there are only a few large construction firmsin Hong Kong, and most local construction firms

are only medium or small sized and so unableto afford the transaction costs associated indeveloping advanced construction methods. Thenormal way for these medium and small sizedconstruction firms to control output is to regulatethe utilization of labour because redeploymentof labour carries lower transaction costs in HongKong. When market demand for constructionproducts increases, they employ more labour;they simply employ less people when demandis low. However, if these firms own plant andmachinery, they will not be able to enjoy suchflexibility. Thus, problems arise when the marketis in recession, when firms have difficulties inmaintaining cash flow. It will be difficult to selljob-specific plant and machinery and they willdepreciate even whilst they are idling.

Renting plant and machinery from specialistsuppliers or larger contractors seems to be afeasible way for medium or small sized firms tomake use of such technologies as this avoidsheavy capital investment. However, specialtraining has to be provided to professionals andsite workers to equip them with the necessaryknowledge to use the machines. It takessignificant time and effort to learn a new type oftechnology, especially when the technology iscomplicated; this learning is another transactioncost. Most decision-makers in medium or smallsized firms are risk-averse because of limitationson capital and human resources so spendingmoney and time on training their employees isrisky, not least because of the transient nature ofemployment in the industry. There is no guaranteethat employees will be more productive with firstadoption of new technologies. This learning costis just too large for many of the decision makersto bear.

Therefore, the spread of new technologies inthe Hong Kong construction industry is drivenby large construction firms. Smaller firms haveless interest in developing or using newtechnologies because of their limitations in termsof capital and human resources and the inherentneed to be able to manage their workforceflexibly and so still prefer to use labour as their

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major input. As a consequence, new technologyadoption has to be driven by other forces, suchas the government. Incentives need to beprovided for the industry to invest in suchtechnologies and there needs to be some formof guarantee of continuing workload to ensurethat such changes are permanent, and not just atemporary move to enjoy the incentives offered.

REFERENCES

AsiaConstruct Team (2004), An Annual Reportof the Construction Industry of China Hong Kong,The 10th AsiaConstruct Conference, November2004.http://www.asiaconst.com/ accessed April2006

AsiaConstruct Team (2003), An Annual Reportof the Construction Industry of China Hong Kong,The 9th AsiaConstruct Conference, 8-9December 2003, Sydney, Australia. HongKong: Research Centre for Construction and RealEstate Economics, The Hong Kong PolytechnicUniversity.

Bairam, E.I. ed (1998), Production and CostFunctions: Specification, Measurement andApplications, Aldershot, Hants: Ashgate.

B uma s , L .O . ( 1999 ) , I n t e rmed i a t eMicroeconomics: Neoclassical and Factually-oriented Models, Armonk, N.Y.: M.E. Sharpe.

Census and Statistics Department (2004a),Frequently Asked Statistics – Average DailyWages of Workers Engaged in Public SectorConstruction Projects (on-line). Available fromhttp://www.info.gov.hk/censtatd/eng/hkstat/fas/wages/construction/construction_index.html [Accessed on 24 December 2004]

Census and Statistics Department (2004b),Frequently Asked Statistics – Concepts andMethods [on-line]. Available from http://www.i n f o . g o v . h k / c e n s t a t d / e n g / h k s t a t /concepts_methods/cm_labour_index.html [Accessed on 25 October 2004]

Census and Statistics Department (2004c), GrossDomestic Product (GDP) by Economic Activity atCurrent Prices Percentage Contribution to GDPat Factor Cost (on-line), Available from http://www.info.gov.hk/censtatd/eng/hkstat/fas/nat_account/gdp/gdp6_index.html [Accessed 10 February 2005]

Census and Statistics Department (2004d),Gross Value of Construction Work Performed byMain Contractors at Construction Sites Analysedby Broadend-use Group (at Constant (2000)Market Prices) [on-line]. Available from http://www.info.gov.hk/censtatd/eng/hkstat/fas/building/bc2_yoy_index.html [Accessed 22October 2004]

Chacholiades, M. (1990), Internationaleconomics, NY: McGraw Hill.

Chau, K.W. (1993), Estimating Industry-levelProductivity Trends in the Building Industry fromBuilding Cost and Price Data, ConstructionManagement and Economics, 11, 370-383.

Chau, K.W. and Lai, L.W.C. (1994), AComparison between Growth in LabourProductivity in the Construction Industry and theEconomy, Construction Management andEconomics, 12, 183-185.

Chau, K.W. and Walker, A. (1988), TheMeasurement of Total Factor Productivity of theHong Kong Construction Industry, ConstructionManagement and Economics, 6, 209-224.

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Chiang, Y.H., Ganesan, S. and Hall, G.(1998), Can We Increase Labour ProductivityFurther in Hong Kong? Hong Kong Papers inDesign and Development, 1, 95-102.

Cobb, C.W. and Douglas, P.H. (1928), ATheory of Production, The American EconomicReview, 18, 1, 139-165.

Construction Industry Review Committee (CIRC)(2001), Construct for excellence: Report of theConstruction Industry Review Committee, HongKong: Construction Industry Review Committee.

Edison, J.C. (1999), Labour Productivity: ATheoretical Construct, Journal of ConstructionManagement, National Institute of ConstructionManagement and Research, XIV, IV, October/December, 315-328.

Ganesan, S., Hall, G., and Chiang, Y.H.(1996), Construction in Hong Kong: Issues inLabour Supply and Technology Transfer.Aldershot, Hants, England: Avebury.

Ive, G.J. and Gruneberg, S.L. (2000), TheEconomics of the Modern Construction Sector.Basingstoke: Macmillan Press.

Kulshreshtha, A.C. and Malhotra, V.K. (1998),Estimation of Capital Stock and Consumption ofFixed Capital in the Indian National Accounts,Statistics Directorate, National Accounts Division,OECD: Second Meeting of the Canberra Groupon Capital Stock Statistics, 29 September - 1October, Château de la Muette, Paris.

Lin, C.P. (2002), The Application of Cobb-Douglas Product ion Cost Funct ions toConstruction Firms in Japan and Taiwan, Reviewof Pacific Basin Financial Markets and Policies,5, 1, 111-128.

L ink, A.N. and Siegel , D.S. (2003),Technological Change and EconomicPerformance. London; N.Y.: Routledge.

Mahadevan, R. (2004), The Economics ofProductivity in Asia and Australia, Cheltenham;Northampton, Mass.: Edward Elgar.

Olomolaiye, P.O., Jayawardane, A.K.W. andHarris, F.C. (1998), Construction ProductivityManagement. Harlow, Essex: Longman co-published with the Chartered Institute of Building.

Rowlinson, S.M. and Walker, A. (1995), TheConstruction Industry in Hong Kong, Hong Kong:Longman.

Savidis, A. and Mills, A. (2001), LabourProductivity in the Construction Industry, Journalof Construction Management, National Instituteof Construction Management and Research, XVI,I, January/March, 39-49.

Schreyer, P. (2001), Measuring Productivity:Measurement of Aggregate and Industry-levelProductivity Growth: OECD Manual, Paris:OECD.

Schwartzkopf, W. (2004) Calculating LostLabour Productivity in Construction Claims, 2nded, New York: Aspen Publishers.

Voon, T.J. and Ho, L.S. (1998), Socio-economicImpacts of Labour Shortage in Hong Kong’sConstruct ion Industr y, Research Repor tCommissioned by the Hong Kong ConstructionAssociation, May 1997.

Warszawski, A. (1999), Industrialized andAutomated Building Systems, London: E&FNSpon.

Warszawski, A. and Navon, R. (1998),Implementation of Robots in Building: CurrentStatus and Future Prospects, Journal ofConstruction Engineering and Management,124, 1, January/February, 31-41.

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Hong Kong Real Estate Agency Industry:Survey on Important Marketing Factorsand Branding Attributes in light ofService IntangibilityLai-san Kwok and Eileen Mary Hastings1

ABSTRACTThe aim of the study is to investigate the attitude of real estate agency companies in Hong Kongtowards marketing factors which drive the customers’ service employment decision and attitudetowards branding in light of service intangibility. Due to the nature of the real estate agency industryand service intangibility, it is found that personnel is one of the crucial factors which drive thecustomers’ willingness to buy the service. Branding, on the other hand, being an indicator of servicequality, can be a way of marketing real estate agency services. In establishment of a service brand,personalized service and service quality play an important role.

KEYWORDSMarketing Factors, Branding Attributes

BACKGROUND OF THE STUDY

Real estate agency companies serve asmiddlemen between parties. They help the buyersand lessees to identify potential properties whichsuit their demand. On the other hand, they assistthe developers, property owners or leasers tosearch for interested parties. The estate agentswill perform all sorts of tasks including introducinga client, arranging viewing of a property,negotiating terms, arranging signing of Sales andPurchase Agreement and explaining the termsin the agreement etc. When transaction is closed,the estate agent is ent i t led to receivecommissions. The commission is a kind of servicecharge.

The real estate agency companies serve to

reduce transaction cost involved in propertytransaction, like finding interested parties,ident i fying potent ial proper ty, conductnegotiation etc. They act as a bridge betweensupply and demand which facilitates thetransaction. In January 2005, there were a totalof 3166 registered estate agency shops and8827 registered estate agents according to thestatistic of Estate Agents Authority. Real estateagency is a highly competitive industry. In orderto stand out in the market, one has to use variousstrategies so as to enjoy part of the market share.Marketing is one of the choices.

Appropriate marketing strategy enables thecustomers to know the competitive advantagesof the real estate agency companies. It shouldbe clarified that marketing is not purelyadvertisements and promotions. It is a processinvolves perception, understanding, stimulationand satisfaction of the target markets’ demand.

1Department of Real Estate and Construction, The University of

Hong Kong

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Hong Kong Real Estate Agency Industry:Survey on Important Marketing Factors and Branding Attributes in light of Service Intangibility

It channels the companies’ resources to meet thedemand. Therefore, marketing of real estateagency companies are not purely advertisingthe property available and persuade thecustomers to buy.

Marketing can channel the real estate agencyservices to meet the demand of the customers.However real estate agency is a service provisionindustry. It differs from goods like can of drinkand set of computer. Real estate agency serviceis intangible in nature. It is difficult to comparethe quality and price like what the customers didwhen they buy goods. It is hard for the customersto evaluate and compare something which isintangible. It is difficult to tell which real estateagency is better. This is not just the challengesfaced by the customers, but the real estateagency themselves.

In this competitive industry, the real estate agencycompanies have to seek ways to attractcustomers. They have to make the customersknow and “feel” that their services are betterthan that of their competitors. But intangibility ofservice makes marketing more difficult. Thecompany, therefore, has to rely on some othertangible cues such as personnel, price, andfacilities etc. to make service quality more easilyassessable. By utilizing tangible cues, it will beeasier to channel information to the customersand more importantly, to persuade the customersin service employment. As a result marketingbecomes important for the real estate agencycompanies.

In marketing real estate agency service, benefitsshould be conferred to the customers. Benefitsshall be conferred by some attributes whichwould affect the customers’ choice.

Furthermore, branding exists in goods industry,for example there are popular fashion brand andfood brand. Service brand is not new in otherindustry like banking and finance. In real estateagency industry, service brands do exist. Whenthe customers heard of a service brand, they

will immediately have a perception on thecompany and on the service as well. Servicebrand in fact serves to make intangible servicetangible. It offers the real estate agency a marketposition. There are lots of factors contributing toa brand. All the branding attributes contribute todifferent extent in a brand. Branding attributeslike expertise, company reputation and price etc.channel the benefits to the customers. Thesebenefits drive the customers’ decision. A brandgives meaning to an intangible service.Marketing tells the customers how customersshould read the brand.

SUMMARY OF FINDINGS

Literature search, questionnaires and interviewswere used as the methodology for the study.Background information on marketing andbranding was found from literature search.Questionnaires and interviews formed the sourceof information for the empirical study. Data onthe ranking of set of attributes on marketing andbranding were collected to achieve the aim ofthe study. Decimal scale point and weightingfrom Analytical Hierarchy Process would be usedfor analysis of data.

Two questionnaires were set. For the first set ofquestionnaire, 150 sets had been sent and 67were returned. 26 respondents of the firstquestionnaire fell into the target group of thesecond questionnaire. Therefore, 26 invitationletters were sent to invite them for an interview.13 respondents agreed to participate in theinterview, but 5 interviews stopped aftercompleting the first few questions.

Among respondents of Questionnaire 1, 33%and 39% of the respondents have specializedpeople responsible for marketing and a companylogo respectively. The first three most importantfactors perceived by the respondents in affectingthe customers’ choice of service are “Personnel”,“Location” and “Service quality”. The three majorsources of business of respondents are “Referral

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business”, “cold calling or mailing” and “existingclient”. The three most frequently adoptedcommunication channels are “advertisement inshops”, “advertisement in newspaper” and“brochures”.

Among interviewees of questionnaire 2,marketing and branding strategy is perceived tobe very important to real estate agencycompanies. It is agreed among respondents thatbranding is a better indicator of service qualitythan price. The five most important brandingattributes perceived by the practitioners are“personalized service”, “quality level”, “price”,“expertise” and “reputation”.

DISCUSSION OF RESULT

Marketing is a process starting from the internalof company and then expands to reach theexternal market. Marketing is aiming atdifferentiating and communicating the servicewith the customers. Ultimately, it persuades thecustomer to buy the product. In the process, oneneed to identify the nature of product supplied,nature of the industry and competitive advantagesof the company.

Marketing is important for all the real estateagency companies as it assists in matching thedemand of customer with the supply ofcompanies. By attaining equilibrium in demandand supply, the company can run in an efficientway. Marketing also assists in varying thedemand curve and hence more of the service isdemanded. Eventually, the company’s turnoverwould increase. It helps in sustaining thedevelopment of the real estate agencycompanies at the same time. The importance ofmarketing is demonstrated in the Questionnaire2. The average importance of marketing is8.75 (maximum score = 10). Therefore the realestate companies believed marketing is essentialfor the success of company.

Real estate agency industry is highly competitive.

In order to stand out in the market, marketing isrequired to build a market position. The marketposition assists in differentiating service suppliedby one company from its competitors. It is stronglyagreed among respondents that a clear marketposition allows more effective marketing. In orderto establish a market position, attributes areneeded. But before attributes are examined, it isnecessary to consider the nature of the real estateagency industry.

It is argued by some scholars (like Lovelock,Patterson and Walker (2001)) that “People” of7Ps is the most important attributes. This argumentagreed with the findings. In the Questionnaire1, “personnel” is regarded as the most importantfactors that the respondents perceived to affectthe customer’s choice on service employment. Itis because real estate agency industry involvesa great contact between people. The interactionsbetween the agency personnel and customer arehigh. This nature of business further exaggeratesthe importance of personnel on business. Nowonder Lovelock, Patterson and Walker (2001)write“It has been said that the person delivering theservice is the services - that is, customerassessment of quality are often based largely onhow they assess the person with whom they aredealing.”

Apart from “people”, “place” in 7Ps is alsoimportant for marketing. The study agreed withthe statement as “location” is ranked the secondby the respondents. But it is found that theinterpretation of the word is not the same betweenthe large scale company with more than 100staffs and that small scale with less than 20 staffsthough both companies perceive convenientlocation is of advantage to the business.However, for large scale company, convenientscale is aiming at serving customers all aroundthe city or even the world. They are usuallylocated in the central business district. On thecontrary, due to the constraint of small scalecompanies, “location” is part of the channelstrategy. It is aiming at serving the peoples

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around that area. Therefore, they are usuallylocated in the shopping mall of residential areaor industrial area.

“Physical evidence” is one of the important factorin 7Ps as it has a profound effect on theimpressions customers form about the quality ofthe service they received. However, it is foundin this study that “technology and facilities” as akind of physical evidence is not very importantas compare to other factors. It shows that“physical evidence” is not as important as otherPs and reputation in the Hong Kong real estateagency industry.

Apart from 7Ps, Zeithaml suggests in Dodds,Monroe and Grewal (1991)“External cues of price, brand name and storename are three cues that influence perceptionsof product quality and value, and hencewillingness to buy.”

Yet it is found in this study that brand name ismore important than price. In Questionnaire 1,“reputation” has a higher ranking than “price”and in the Questionnaire 2, respondentperceived “brand name” as a better indicatorof service quality than “price”.

It is found that 39% of the respondents havecompany logos which fulfill the basic requirementbranding. Branding is utilized in the real estateagency industry especially for some large scalecompany. Branded real estate agency companyperceived branding strategy to be very importantto their business marketing. It agreed with Carsonand Ruston (1989)“A service has no physical appearance... It isusually base on creating an appropriate imagefor provider of service... This image can beviewed as brand image of the company.”

Real estate industry is a service provision industry.Therefore branding can assist in reducing theintangibility of service. This is generally agreedamong respondents.

Customers are not buying a service brand. Theybuy benefits instead. Therefore branding mustserve to communicate the benefits provided bythe service to the customers. It is strongly agreedamong respondents that a brand name cantranslates attributes into functional or emotionalbenefits. Therefore a real estate agency servicebrand should give a collected perception ofbenefits to the customer. Keller (1998) suggeststhat“Brands provide a shorthand device or meansof simplification for their product decision.”

The respondents in this study strongly agreedthis statement. Consumers simplify informationprocess by forming subjective judgment or beliefsabout brands. A brand’s subjective judgmentsare the perceived positions of the brand in theperceptual product attributes space. Therefore,evaluation on the service benefits is based onthe branding attributes communicated to thecustomers.

An effective way to make branding tangible isto use as many physical elements as possiblee.g. employees, buildings, physical facilities etc.However it is found from the study that it is notthe case for the Hong Kong real estate agencyindustry. Branding attributes which is physical innature such as “technology” and “good customerservice” are ranked lower than those intangiblein nature like “quality” and “reputation”.“Technology” and “good customer service” areserved to support the service instead of beingthe core of branding. Respondents also agreedon this point as they perceived “service” as themost important marketing factor category. Thecore of the branding is “service”. Therefore theservice itself has to be of high quality and suitthe need of customers. Otherwise marketingcannot achieve anything no matter how well theplan is. It is true for the real estate agencyindustry. Agency has to provide tailor made andhigh quality service to customers. Without thesetwo branding attributes, a brand cannot last long.Additional premium can never be charged andreputation can never be built.

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The resulted ranking of branding attributes canbe read from another angle. The brandingattributes which have higher ranks are, in reality,those having direct and easily observablebenefits to the company, for example turnoverand volume of transaction to the company.Moreover, these benefits can be identified bythe customer and affecting their choice of serviceeasily. For example, people would like to buy“expertise” service instead of “responsive” staff.High quality service is an important benefit tothe customer which increase willingness to buywith no doubt. “Reputation” attract customerinstead of long company history. As a result,high rank branding attributes is worth promoted.Even so it is built on top of low ranked attributes.High branding attributes are just like the building,while low ranked branding attributes are actingas a foundation which supports the building.

Promotion is another important step in marketing.Apart from advertisement in various media, largescale “branded” real estate agency companiesadopted public relation as another importantcommunication channels. The reason is of coursedue to resources constraint for agency of smallerscale. Public relation is a long term investmentwhich helps to develop a long term relationswith customer by reinforcing the company’s brandin their mind.

After discussing about the attributes andcommunication channels, source of business forthe real estate agency companies are to bediscussed. From the study, it is found that “referralbusiness” is the major source of business for realestate agency companies of different scale. Thischaracteristic of the real estate agency industryimplies that relationship between the companyand the customers is very important. One canimagine if the serving process is not satisfactory,the customers will certainly not employ the serviceagain. They, of course, will not recommend thecompany to others. Therefore, it is crucial to makethe existing clients satisfied. But it is not enough.A relationship has to be built in order to get thereferral business or repeated buying.

As mentioned by Lovelock, Patterson and Walker(2001)“Person delivering the service becomesinseparable from service as a trusting relationshipbetween the client and service providersometimes develops a large extent. The trustingrelationship developed is essential in gainingcustomer satisfaction and loyalty.”

Therefore, the key for trusting relationship is“personnel”. Referral business being the majorsource of business implies the importance ofpersonnel in the real estate agency industry.Fur thermore, i t also implies the use ofcommunication channels to promote the servicemay not be put in a very important position,especially for small scale company establishedfor a long time.

CONCLUSION

Hong Kong real estate agency is a highlycompetitive industry. One cannot deny theimportance of marketing in this industry. Somereal estate agency may have a marketingdepartment, while some may have no knowledgeon this area. But it is not arguable that they allhave implemented marketing, though to differentextent.

Further to previous discussion, there are a fewpoints that the author would like to reiterate. First,real estate agency is a typical service provision.It encountered the same challenges as otherservice provision industry. Intangibility has to besolved in service marketing. In a service industrylike real estate agency where high interactionsbetween company personnel and the customeris required, personnel become the most importantasset of the company. Moreover, it is found thatreferral business is the major source of business.It enlarges the effect of personnel on companybusiness. The key to referral business is buildinga good relationship between the customers andpersonnel. Personnel reflect the service qualityand are one of the crucial factors in driving

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customers’ choice of service.

Second, it is found that “branded real estateagency” (as defined in this study) perceivedbranding strategy to be very important inmarketing business. Branding simplify thecustomers’ decision making process bytranslating the attributes into functional oremotional benefits. It is found in this study thatbranding is perceived to be a better indicator ofservice quality than price. Brands serve toindicate the service quality and more importantly,it enables the real estate agency to change ahigher premium on the service as compare toother competitors. Therefore, branding is worthadopting marketing strategy for larger scale realestate agency companies. Branding can be away to reduce the service intangibility inmarketing.

Third, concerning the branding attributes. It isfound that the branding attributes which occupieda higher rank is related directly to the core of thebrand: service. For example, service quality isthe attribute which directly driven the customers’decision making, while expertise are people whorepresent the service. Supporting attributes liketechnology are found to be less important.Therefore, in establishing a service brand, it isnecessary to ensure the service itself meets thedemand of the markets and with the support ofnon-core branding attributes. Furthermore,branding attributes which have high ranks areattributes which will have direct and easilyobservable benefits to the real estate agencycompanies.

Fourth, business operation and services offer tothe customers are more or less of same nature inthe real estate agency industry. It makesdifferentiation of intangible service provision evenmore difficult. Therefore, the focus of marketingreal estate agency is not purely on the serviceitself, but on the corporate image. Marketing ofreal estate agency companies has an option ofestablishing a corporate brand. The corporatebrand in fact serves the purpose of gaining a

market position in the customers’ mind. It tries todifferentiate the companies from its competitors.The corporate brand can somehow provide an“understanding” or “guarantee” on the servicequality.

Marketing is a process which matches thecompany resources with the customers’ needs.Although it is found in this study that somemarketing factors or branding attributes areimportant, however, it is noted that a companyor a service brand cannot be successful withoutthe support of non-core attributes. But of course,resources availability of the companies has tobe considered.

In light of service intangibility, marketing is worthadopting for the real estate agency industry.Branding can actually be a way out in thecompetitive real estate agency services in lightof service intangibility.

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Preliminary Study on the Application ofComputational Fluid Dynamics toBuilding Drainage System DesignEric Wai-ming Lee1

INTRODUCTION

The building drainage system design is the oldestin building services engineering. It is a basicsystem that is required for all occupied buildings.The controlled water and sanitation systems canbe traced back 10,000 years (Swaffield andGalowin, 1992). Before the outbreak of SARSin March 2003, the drainage system wasdesigned according to statutory requirements(Cap123I, 1997) and relevant designguidebooks (e.g. IoP (1988) and BSEN12056

(2000)). These guides generally govern thehydraulic performance of the drainage systems.However, the practical guides do not addressthe possible infection that is caused bycontaminated droplets inside the buildingdrainage system that are transported to theinteriors of the lavatories via the dry water trapsof the floor drains. Before 2003, the majority ofpeople ignored the importance of filling thedrainage system U-trap with water. In fact, floordrains may have only been filled with wateroverflow from other sanitary fitments (such aswater closet cisterns and wash basins), whichseldom occurred. People were unlikely to cleanlavatory floors by pouring a bucket of water ontothem. Floors were usually mopped and dried by

1 Fire Safety and Disaster Prevention Research Group, Department ofBuilding and Construction, City University of Hong Kong, Tat CheeAvenue, Kowloon Tong, Hong Kong (SAR), People’s Republic of China,Email: [email protected].

ABSTRACT

The building drainage system is the oldest building service system. It conveys waste and soil waterfrom an occupied building to an external disposal system and has a direct effect on the hygienicenvironment of a building. The improper design of the building drainage system may also cause pipeclogging, leakage, or the overflow of waste water. Traditionally, the drainage system is designedaccording to the most probable usage concept, which was developed from probability and steadyhydraulic flow theories. These approaches have been used all over the world for more than 80years. Since the outbreak of severe acute respiratory syndrome [SARS] in 2003, the community is nolonger concerned only with the effectiveness of the drainage system but also with the possibility of itspreading viruses. A detailed investigation into the hydraulic flow behavior inside the drainagesystem has become a new trend of study in the field. This paper introduces a novel approach to theinvestigation of air and water flow patterns inside the drainage system by using the computationalfluid dynamics (CFD) approach. The CFD simulation results can provide useful information for adetailed study of the fluid behavior of the building drainage system.

KEYWORDS

Building Drainage, Computational Fluid Dynamics, Foam Flooding, Floor Drain, Multiphase Flow

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Preliminary Study on the Application of Computational Fluid Dynamics to Building Drainage System Design

natural ventilation. It was unlikely that the floordrain’s U-trap was filled by people cleaning theirhomes.

SARS was first reported in November 2002,and appeared in Hong Kong in late February2003. Initially, hospitals were the main sites ofinfection with health care workers and patientssuccumbing to SARS. Doctors at this stage saidthe virus could only be spread by coughing andsneezing. However, a cluster of SARS cases laterbroke out in March 2003 among residents whowere living in Block E of Amoy Gardens, whichwas a large residential estate. Amoy Gardenshoused approximately 20,000 residents in 1933-storey towers. A detailed environmental studyof Amoy Gardens was subsequently carried outby the Department of Health of the Hong KongSpecial Administrative Region (HKSAR). It wasreported that SARS may have been transmittedthrough the building sewage system to the indoorenvironment DoH (2003), which was confirmedby the environmental investigation team of theWorld Health Organization in May 2003

(WHO, 2003). Based on the pattern of infectionat Amoy Gardens, it was determined that anasymptomatic SARS infection inside one domesticpremise had spread to another premise via acommon vertical drainage stack that wasconnected to the floor drains of the bathroomsor kitchens of the premises. The drying out of thewater traps of the floor drains provided a freepassage for the spread of SARS from one premiseto another.

The drying of the water traps of the floor drainswas not uncommon as the water traps may onlyhave been filled by water from floor washing orthe overflow from washbasins or sinks. Floorflushing was uncommon as most households werein the habit of cleaning their floors by mopping.The schematic diagram in Figure 1 illustrates theproposed transmission of the virus through thedry water traps of the floor drains. Fine waterdroplets are first created inside Bathroom Aduring the taking of a hot shower. The dropletsbecome contaminated if the person who is takingthe shower is infected with the virus. If the water

Figure 1 The schematic diagram shows the transmission of the virus through the dried water traps ofthe floor drains inside the bathroom.

Dried Trap

Contaminated droplets entered into the drainage stack

Expeller fan creates negative pressure inside the bathroom

Door closed

Bathroom B

Dried Trap

Bathroom A contains contaminated droplets

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Figure 2 The configuration of the proposed drainage connection. The ambient air is drawn by thefree surface of the water that is flowing into the trap. As the air cannot penetrate through the waterseal of the water trap, the entrained air can only escape from the trap into the atmosphere via thefloor drain grating which pushes out the foam that is created at the interface of the water thatmerges with the water inside the water trap.

traps of the floor drains of Bathroom A and Bare dry, then the expeller fan of Bathroom Bdraws the contaminated droplets from the floorbelow to the interior of Bathroom B via the verticaldrainage system. Occupants inside Bathroom Bare subsequently infected. The infection mayspread to other bathrooms if the water traps ofthe floor drains are dry.

CURRENT RESEARCH

The possible cause of the infection via a verticaldrainage stack has attracted the attention of thebuilding industry to improve the existing designpractice of the building drainage system. Sincethe SARS outbreak, the Buildings Department ofthe HKSAR has released a PNAP277 (2003) toall building professionals to guide the design ofthe drainage configuration that connects the floor

drains and the vertical drainage stack. It focuseson preventing floor drain water traps from dryingout and proposes that the waste water which isdischarged from either washbasins or kitchensinks be discharged into the inlet of the watertraps of floor drains prior to its being disposedinto the vertical drainage stack. The water sealof the floor drain’s trap can then be replenishedautomatically by any operation of the wastefitment. This approach can effectively preventthe drying out of the water traps of the floordrains. Different designs of the drainageconfigurations have been developed by thebuilding industry in Hong Kong. The Hong KongInstitution of Engineers and the Hong KongInstitute of Vocational Education have successfullydeveloped an effective drainage configurationto prevent the drying out of the water trap (HKIE,2003). The configuration is illustrated in Figure2.

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Figure 3 A full-scale drainage test rig. The drainage configuration that was proposed by the HKIE(2003) is shown at the upper storey of the setup. The Back-filling drainage configuration as proposedby Yuen et al. (2003) was installed at the lower storey of the test rig.

In view of the foam flooding problem, a drainageconfiguration was proposed by Yuen et al.(2003). The configuration is shown in Figure 4.In this design, the discharge pipe that conveys

wastewater that is being discharged from thewash basin is proposed to be connected at thetail pipe of the floor drain’s water trap.

It is shown that the water being discharged fromthe wash basin drives the air flow above thefree surface of the water that is running in thehorizontal drain. The air being driven into theinlet of the water trap is released into theatmosphere via the grating of the floor drain asit cannot pass through the water seal of the watertrap. The blooming foam bubbles are pushedby the air flow out of the floor drain grating and

flood onto the floor. This was verified by a seriesof full-scale drainage tests that were conductedby Yuen et al. (2003), of which the setup of thefull-scale test rig is shown in Figure 3.

When draining detergent-dosed water, the foamflooded from the grating of the floor drain backonto the floor of the lavatory. This caused aslipping risk to occupants inside the bathroom.

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Due to the tail pipe’s gradient fall of the floordrain’s water trap, the majority of the waste waterthat is discharged from the wash basin flowsdownstream towards the outlet pipe of the watertrap. However, a minor flow in an upstreamdirection remains, which is employed to top upthe water seal to prevent the water trap fromdrying out. However, the distance between theconnection to the wash basin and the trap outletis limited to not more than 450 mm when theoutlet pipe of the water trap is laid to a 1:40gradient fall. This restricts the flexibility of thedrainage configuration in an actual installation.In addition, any sediment that is carried by theupstream minor flow to the water trap will settleinside the trap. Additional effort is required toclean the trap regularly and a wire mesh isrecommended at the outlet of the wash basin.

MOTIVATION

Over 20 different drainage configurations wereproposed by different professionals in thebuilding industry and were tested in thelaboratory of the Department of Building andConstruction at the City University of Hong Kong.The qualitative results of the experiments providedinformation for the modification of the drainageconfiguration so that the water trap of the floortrap can be replenished when using theconnected waste fitment and the design of theconfiguration can include the prevention of foamflooding in the case of draining the detergent-dosed waste water. However, every change ofdesign parameter (such as the length of the pipe,pipe inclination, and the design of the watertrap) requires substantial demolition and

Figure 4 The detailed configuration of the proposed drainage connection. Wastewater that is dischargedfrom the wash basin is discharged into the inclined tail pipe. While the downstream flow is dischargedinto the vertical drainage stack, the minor upstream flow replenishes the water trap. In addition,foam is unable to penetrate the water seal of the water trap and foam flooding is prevented.

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installation work of the test setup. This not onlyincreases the cost of the entire investigation butalso lengthens the period of the experiment. Inaddition, the experimental results are qualitativein nature. Video recorders were employed tocapture the visual performance of the drainageconfigurations. Such qualitative information is notsufficient to understand the flow behavior: thephysical quantities of the fluids inside thedrainage configuration (that is, air and waterpressure distributions, velocities, and mixturefractions of air and water) are unknown from thequalitative results but are important to the designand development of the drainage configuration.

COMPUTATIONAL FLUIDDYNAMICS

Computational fluid dynamics (CFD) is a powerfultool to simulate the behavior of fluid flows. It hasbeen widely applied to areas such as urbandrainage (Ma et al., 2002), nuclear industry(Yadiaroglu, 2005), food engineering (Xia andSun, 2003), and clinical applications (Muelleret al., 2002). The CFD modeling approach isable to achieve high spatial resolution. It usesthe finite volume method (Patankar, 1980) anddivides the region of interest into many smallcontrol volumes. For each local control volume,a set of local conservation laws for physicalquantities - such as mass, momentum, energy,and species concentration - is employed as thegoverning equations of the computationaldomain. These conservation laws can be writtenin a general partial differential equation that iscalled the ‘general transport equation’ where øis the variable that represents various physicalquantities,� is the mass density of the fluid, Urepresents the velocity vector of the flow field,�ø is the diffusivity of physical quantities ø, andSø is the creation or destruction rate of ø.

This set of governing equations is discretized allover the computational domain by using the finite

volume method to form a set of linear algebraicequations. By solving the set of linear equations,the physical quantities and field information canbe obtained in the computational domain. Thebasic architecture of a typical CFD model consistsof 4 major components that are described below.

Geometry Builder - The geometry builderis used to input the geometry of the physicalproblem under investigation. In addition, thevolume mesh is applied to the computationaldomain to divide it into many small controlvolumes.

Pre-processor - The user can specify the wallsand conditions of the fluid flow into and out ofthe computational domain at the boundaries ofthe computational domain. The pre-processor setsup the complete computational problem for thecomputer to solve.

Solver - The solver is the kernel of the CFDmodel. It determines the physical quantities (suchas velocity, mixture fraction, and temperature)of all of the small control volumes within thecomputational domain by solving a large set ofpartial differential equations that describe theinteractions between the physical quantities ofthe small control volumes.

Post-processor - After solving the physicalquantities of all of the small volumes, the data isfurther processed to be presented graphicallyby, for example, a colour contour or velocityplot, from which professionals can determine thefluid behavior that is predicted by the CFDsimulation.

The CFD simulation in a partially filled conduitflow (such as a drainage pipe or river) involvescomputations not only for a liquid but also forthe air above the free surface of the liquid. Thiskind of fluid flow involves more than one kind offluid. It is called a multiphase-flow in whichVolume-of-fluid (VOF) technique (Hirt and Nichols,1981) was adopted to simulate the free surfaceflow inside the water trap.

∂�ø∂t

+ div(�Uø) – div(�øgradø) = Sø

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RESULTS

The dynamic behavior of fluids that are runningthrough the drainage configuration that wasdeveloped by HKIE (2003) was simulated bythe CFD. The configuration consists of a floordrain, a water trap, a back-inlet pipe, and a tailpipe. The computational model is shown in Figure5. The back-inlet pipe conveys the waste waterthat is being discharged from the wash basin toreplenish the water seal of the water trap priorto it being discharged into the tail pipe. Thedischarge rate was determined to be 0.15 liters/second (IoP, 1988) which is the nominaldischarge rate of the water tap of the wash basinfor which the size of the waste pipe is ø32 mm.The floor drain, the water trap, and thedownstream pipe are ø50 mm.

The entry of the back-inlet pipe and the outlet ofthe tail pipe are in partial flow conditions forwhich the water depths were estimated by usinghydraulic calculation that is based on the flowrate, pipe material, pipe size, and the gradientof the drainpipe. The extended region wasprovided at the inlet of the floor drain.Atmospheric pressure was patched to theboundaries of the extended region to simulatethe natural release of the air from the floor drainto the atmosphere via the grating. Otherboundary surfaces of the geometry were patchedinto solid walls. The initial condition was set tothe scenario that the water seal is filled to a leveljust blocking the free passage of air flowingacross the water trap. The CFD simulation wasperformed and the simulation results are shownin Figure 5. The simulation results show thedynamics of the water as it flows through thefloor drain’s water trap. The CFD simulation resultsalso show that the ambient air that is drawn fromthe back-inlet pipe into the water trap may passthrough the water trap initially but be blocked

by the water seal eventually. That is, the air insidethe bathroom in which the floor drain is situatedmay pass through the water trap at the beginningof the water trap replenishment. The studydemonstrates that the CFD simulation can provideuseful information for future modification of thewater trap.

CONCLUSION

The importance of the building drainage systemto the hygienic environment of the building hasbeen described. Different designs of the floordrain’s water trap were developed to tackle theemptying of the water trap and the preventionof foam flooding. The designs were developedbased only on the per formance in theexperiments without consideration of fluidpressures and velocities inside the water trap.This study demonstrates the application of CFDin the simulation of the fluid flow inside the floordrain’s water trap. The CFD modeling is able todepict the physical quantities (such as velocitiesand pressures) of the fluid, which is very usefulinformation for the industry to design an effectiveand safe water trap. In future, the CFD simulationwill be verified by a full-scale experiment toconfirm the practical application of thisapproach.

This preliminary study explores a new approachto the design of the building drainage system byemploying CFD techniques. It is able to simulatethe performance of the drainage configurationprior to actual erection and provides usefulquantitative hydraulic information for a futureengineering design. The advancement of thenumerical computat ion may lead to aperformance based building drainage designin the future.

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Figure 5 The CFD simulation of the dynamics of water and air flow inside a floor drain water trap.The contour plots indicate the mixture fractions of air and water that runs inside the water trap atdifferent time intervals.

(a) Time = 0.5 Second (b) Time = 1.0 Second

(c) Time = 1.5 Seconds (d) Time = 2.0 Seconds

(e) Time = 2.5 Seconds (f) Time = 3.0 Seconds

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ACKNOWLEDGEMENT

The work described in this paper was fullysupported by a grant from the City University ofHong Kong (Project No. 7200033).

REFERENCES

1. BSEN12056 (2000) Gravity drainagesystems inside buildings, British Standard BS EN12056: Part 1 to 5, British Standard Institution,UK.

2. Campbell DP and Macleod KD: Detergentsin drainage systems for buildings, WaterResearch, Vol. 35, No. 4, pp. 1086-1092,2001.

3. Cap123I (1997) Building (Standards ofSanitary Fitments, Plumbing, Drainage Worksand Latrines) Regulation, Chapter 123, SectionI, Laws of Hong Kong, Hong Kong SpecialAdministrative Region.

4. DoH (2003) Outbreak of severe acuterespiratory syndrome (SARS) at Amoy Gardens,Kowloon Bay, Hong Kong, Main findings of theinvestigation, Department of Health Report,Department of Health (HKSAR).

5. Hirt, C.W. and Nichols, B.D. (1981) Volumeof fluid (VOF) method for the dynamics of freeboundaries, Journal of Computational Physics39, 201-225.

6. HKIE (2003) Press Conference on DrainageEnhancement, The Hong Kong Institution ofEngineers, 06 June 2003.

7. IoP (1988) Plumbing Engineering ServicesDesign Guide, The Institute of Plumbing, UK.

8. Mueller, X.M., Mallabiabrena, I, Mucciolo,G. and Segesser, L.K. (2002) Optimized venousreturn with a self-expanding cannula: fromcomputational fluid dynamics to clinicalapplication, Interactive Cardiovascular andThoracic Surgery, Volume 1, Issue 1, September2002, Pages 23-27.

9. Patankar, S.V. (1980) Numerical HeatTransfer and Fluid Flow. New York: Hemisphere.

10. PNAP277 (2003) Floor Drains in Kitchensand Bathrooms, Practice Note for AuthorizedPersons and Registered Structural Engineers no.277, Buildings Department, Hong Kong SpecialAdministrative Region.

11. Swaffield, J.A. and Galowin L.S. (1992)The Engineered Design of Building DrainageSystems, Ashgate, Great Britain.

12. Whitcombe (2002) Computational fluiddynamics and the physical modeling of anupland urban river, Geomorphology 44(3-2),375-391.

13. WHO (2003) Risk factor involved in thepossible environmental transmission of severeacute respiratory syndrome (SARS) in specifiedresidential buildings in the Special AdministrativeRegion of Hong Kong, Wor ld Heal thOrgan i sa t i on Repo r t , Wor ld Hea l t hOrganisation.

14. Xia, B. and Sun, D.W. (2002) Applicationsof computational fluid dynamics (CFD) in the foodindustry: a review, Computers and Electronicsin Agriculture, Volume 34, Issues 1-3, May2002, Pages 5-24.

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15. Yadigaroglu, G. (2005) ComputationalFluid Dynamics for nuclear applications: fromCFD to multi-scale CMFD, Nuclear Engineeringand Design, Volume 235, Issues 2-4, February2005, Pages 153-164.

16. Yuen RKK, Lee EWM and Lo SM (2003)The fight against SARS: a backfilling connectionfor the prevention of drying out of floor drains’U-traps, Structural Survey, Vol. 21, No. 4, pp.114-118.

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Using Balanced Scorecard (BSC)Approach to Measure Performance ofPartnering ProjectsTrevor Lo, Peter Shek-pui Wong and Sai-on Cheung1

ABSTRACT

Partnering has been advocated as one of the plausible solutions for improving project performance.Notwithstanding a number of studies about partnering had been undertaken, few of them werecontributing to the measure the performance of partnering projects in a holistic manner. This studyseeks to investigate the use of Balanced Scorecard (BSC) approach to measure the partneringproject performance in a holistic manner. Through an extensive literature review, 36 strategic objectiveswere identified as the metrics for measuring the partnering project performance. In accordance withtheir nature, these are further classified into four different perspectives namely: Benefits, Attitudes ofproject stakeholders, Attitudes enhancement process and Strategic learning & growth. The results ofthe questionnaire survey generally support the importance to measure the partnering project performanceby these perspectives.

KEYWORDS

Partnering, project performance, Balanced Scorecard

INTRODUCTION

Effective coordination and non-adversarialcollaboration among developers, professionals,specialist contractors and labours are critical tothe successful project management. However,conflicts and disagreements are inevitable in thecourse of construction. They can easily escalateinto disputes that are detrimental to relationshipsamong contracting parties. Wong et al. (2002)indicated that adverse relationship among the

collaborating parties in a construction projectinduced many consequential harmful effects suchas declining profits margin, delay in completion,poor quality standard of works etc.

Many published researches advocated the useof partnering as one of the plausible solutionsfor improving working relationships and projectperformance (Weston & Gibson 1993, Ellisonet al. 1995, Bennett and Jayes 1998, Bresnenand Marshall 2000). As such, implementingpartnering in construction projects aims atestablishing mechanism for better communicationin order to prevent dispute or settle it effectivelyand economically without destroying the workingharmony (Wong et al. 2002). In recent years,adopting partnering approach to deliverconstruction projects has become popular in

1Construction Dispute Resolution Research Unit

Department of Building and Construction

City University of Hong Kong

83 Tat Chee Avenue, Kowloon Tong, Hong Kong

Fax: (852) 2788-7612 Tel: (852) 2194-2380

E-mail: [email protected]

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Using Balanced Scorecard (BSC) Approach to Measure Performance of Partnering Projects

many countries (Kadefors 2003). In Hong Kong,many projec ts f rom the publ ic sec tororganizations like the Housing Authority, theHousing Society, the Mass Transit RailwayCorporation and the Kowloon-Canton RailwayCorporation are adopting partnering approach.Several successful partnering projects were alsoreported in previous literatures (Howlett 2002,Cheung et al. 2003).

Many researches about construction partneringfocused on identifying critical success factors,models, barriers, and effective tools forimplementation (Black et al. 2000, William etal. 2002, Cheung et al. 2003). However, littleattention was given to the development of themodel or conceptual framework for performancemeasurement (Pocock et al. 1997). As Li et al.(2000) emphasized, the performance indicatorswere not comprehensive enough in evaluatingperformance. Most traditional performancemeasurements merely focused on the result-orientated indicators, such as Return on Equity(ROE), Return on Asset (ROA) and the growthrate. Nevertheless, they failed to include theleading performance indicators, which arecritical determinants leading to the success ofthe performance outcomes, into account(Atkinson & McCrindell 1997, Niven 2002).Previously reported studies identified that leadingper formance indicators should includeproductivity rate, process efficiency, processeffectiveness, employee’s capability of learningand growth (Atkinson & McCrindell 1997, Niven2002). As pinpointed by Crane et al. (1999),the performance of strategic partnering inconstruction projects should be measuredproactively using both financial & non-financialperformance indicators. Evaluations on theproject performance outcomes, the process ofcollaboration in the course of construction, aswell as the relationships among partners are ofequal importance (Crane et al. 1999).

The significance of using the Balanced Scorecard(BSC) approach in measur ing projectperformance has previously been addressed in

this connection (Amaratunga et al 2000, Landinand Nilson 2001). The BSC was developed byProfessor Robert Kaplan and Professor DavisNorton in 1992. It has been described as anapproach to evaluate whether the predeterminedproject goals are achieved in terms of ‘financial,customer perspective, internal businessprocesses, and learning and growth’ aspects(Landin and Nilsson 2001, Mohamed 2003).Kagioglou et al. (2001) further describedperformance indicators with regard to thefinancial aspect as the ‘lagging’ indicators whichreport ‘the results and decisions made in the pastand therefore are of little use in improving currentperformance’. Performance indicators whichrelate to the customer perspective, internalbusiness processes, and learning and growthaspects were described as the ‘leadingindicators’ which help identifying mistakes andwrong strategies for project goals achievement(Kagioglou et al. 2001). Nevertheless, ‘laggingindicators’ are rarely found in the performancemeasurement systems developed in previousstudies (Kagioglou et al. 2001). In this regard,Landin and Nilsson (2001) described the BSCapproach to performance measurement systemdevelopment ensures a balance between the‘leading’ and ‘lagging’ performance indicatorsin the system (Landin and Nilsson 2001). Assuch, BSC is an approach for translating theorganization’s strategy into operational terms,aligning organization into strategy, makingstrategy everyone’s job and making strategy acontinual process, in which it can cope with whatobjectives the partnering intends to achieve(Atkinson & McCrindell 1997, Kaplan andNorton 1996, 2001). In construction, a numberof performance measurement systems weredeveloped by the BSC approach. For example,Landin and Nilsson (2001) based on theliterature reviews and developed a frameworkfor measurement construction quality in BSCapproach. Likewise, Mohamed (2003) reviewedliteratures and applied the BSC approach todevelop the construction safety performanceindicators. Based on the case studies in UnitedKingdom, Kagioglou et al. (2001) applied the

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BSC approach to develop a conceptualframework for evaluating contractors’ projectperformance. This study describes a holisticapproach to deve lop a per fo rmancemeasurement system for partnering projects usingBalanced Scorecard (BSC) as the conceptualframework.

The anticipated benefits of adopting the BSCapproach in partnering project performancemeasurement include:

Achievement of common goals

The BSC approach facilitates transformation ofthe common strategic objectives among partnersto a set of standardized and measurableperformance metrics. This facilitates partners’continual review of their performance in terms oftheir achievement of pre-determined strategicobjectives in the course of construction.

Better Communication

Using BSC approach to deve lop theperformance measurement system ensurespartners using a common set of metrics to gaugeand interpret project performance. This facilitateseach collaborating party to understand thestrategic objectives and become explicit indiscussing and improving performance throughthe information feedback channel.

Creativity and Innovation

Strategy is not a static matter (Kaplan and Norton1992). Instead, project strategies and workingprocedures require continuous revisions in orderto suit the changing environment. BSC enablespartners to focus on this issue by measuringproject performance in terms of their creativityand innovation for performance enhancement.

Enhancement of partners’ relationships

Performance measurement system using BSCapproach highlights the importance of partners’communication and working under communalgoals and project strategies. This avoids

a rgumen t s and d i spu t e s cau sed bymisunderstanding among partners.

Incentivization and Motivation

The BSC links the performance of strategymeasures with the incentives and reward system.In this way, it motivates the partners to work asa team that works towards project success.

BALANCED SCORECARD (BSC)APPROACH TO MEASURESTRATEGIC PARTNERINGPROJECT PERFORMANCE

BSC emphasized a comprehensive and holisticapproach in performance evaluation. BSCconsists of both financial and non-financialperformance metrics, which are developed inFinancial, Customer, Internal Business Processand Learning and Growth perspectives (Kaplanand Norton 1992). Nevertheless, thesemeasures are not stone casted. Indeed, BSC isno more than a template in which it can becustomized for the specific elements of anorganization or industry. The selection of theperspectives should be based on what arenecessary to tell the story of the strategy andcreate a competitive advantage for theorganizations. In this study, a set of performancemeasurement metrics are developed under thefollowing four perspectives:

Benefits Perspective

It refers to what constitute project success in theview of clients. The project success can bedefined from the missions and visions mentionedfrom above, some of them are focused on client’sobjectives, which are completion on time andwithin budget, products completed in quality,safety and environmental standard and improvedend users satisfaction. Relationship measure, likereduction of the number of disputes, is one ofthe leading objectives that lead to the laggingobjectives mentioned. As project success focuses

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on the objectives which are more than simplyfinancial success, the “financial perspective”should be replaced by the “Benefits” whichencompasses many non-monetary or intangiblebenefits derived by partnering.

Attitudes of Project StakeholdersPerspective

The second perspective refers to what attitudesshould the project stakeholders have in order toachieve partnering success. This perspectivefocuses on the partnering alliance internally andis different from the external-oriented Customerperspective suggested by Kaplan and Norton.The difference is due to nature of the subjectmatter that needs to be measured. Kaplan andNorton’s perspectives are derived from businessoperation whereby financial success of anorganization is related to customer’s valuepreposition since whether the customers buy theirproduct or services directly affect the income ofthe organization. Moreover, this study is focuseson the performance of the partnering system inwhich the success of partnering is mainly relatedto the internal factors, such as the attitudes of theproject stakeholders.

Attitudes Enhancement ProcessPerspective

The third perspective refers to the processes oractivities that should be organized in order toexcel the attitudes of the project stakeholders inachieving the success of partnering. Theimplementation of this perspective should coverall the project stakeholders in the partneringalliances in order to align the partnering withthe partnering alliances.

Strategic Learning and Growth’sPerspective

The last perspective refers to what the partner’sskills and knowledge are. The companyinfrastructure should be changed in order toachieve the attitude enhancement process. Thisperspective differs from the “benefits” perspectiveas long-term strategic goal of the partneringalliance is directed. Such change requires culturaltransformation which cannot be simply achievedthrough one-off project (i.e. project partnering).

A conceptual framework of developing aperformance measurement system is thusdeveloped as shown in Figure 1.

Figure 1: Conceptual framework of developing a performance measurement system for partneringprojects employing a BSC approach

Benefits

Attitudes of ProjectStakeholders

Attitudes EnhancementProcess

Strategic Learning& Growth

Common project goals

among partners

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Table 1: Strategic objectives of partnering projects

Strategic objectives of partnering projects Bre

snen

& M

arsh

all

(200

0)

Bla

ck e

t al.

(200

0)

Che

ng e

t al.

(200

1)

Cra

ne e

t al.

(199

7)

Li e

t al.

(200

0)

DeV

ilbis

s an

dL

eona

rd (2

000)

Che

ung

et a

l. (2

003)

Nao

um (

2003

)

Ng

et a

l. (2

002)

In Benefits Perspective:√√√√√√√√√tsoc tcejorp ecudeR√√√√√√√√√emit tcejorp ecudeR√√√√√√√√√ytilauq evorpmI

Reduce disputes √ √

√√noitcafsitas resu dne evorpmIImprove safety issues √Improve environmental issues √

In Attitudes of project stakeholders Perspective:√√√√√√√√√tsurT lautuM√√√√√√noitacinummoc nepO

√√√tnemtimmoc level poT√√√√evitcepsrep mret gnoL

√√√√seitrap fo gnidnatsrednu raelCCreativity √ √ √

√√srentrap thgir eht tceleSLeadership √√

√seitilibisnopser & selor raelc hsilbatsE√edutitta gninoitseuQ

In Attitudes enhancement process Perspective:√√√√√ssecorp noituloser melborp & noitavele eussI√√√√√√sesicrexe gnidliub maeT

√√sgniteem weiver gnirentrap raluger dleH√√√tnemegnarra lautcartnoc ksir tnioj gnisu etomorP

√√√esicrexe gnireenigne eulav gnisu etomorP√√srentrap fo noitceles ni erutluc & ecneirepxe gnirentrap no sisahpmE√√noitcnuf laicoS

√srotcartnocbus fo tnemevlovni ylraE√metsys TI hsilbatsE

In Strategic learning & growth Perspective:√√√√√metsys evitnecni laicnanif s’eeyolpmE√√√√√metsys evitnecni laicnanif-non eeyolpmE

√√elarom s’eeyolpmE√√slliks pihsredael evorpmI√ygetarts fo ssenerawa s’eeyolpmE

√√√noitcafsitas eeyolpmE√√slliks cigetartS√metsys noitseggus eeyolpmE

√erutcurtsarfni TI fo ycneiciffuS√noitacilppa TI

A hol i s t ic approach for per fo rmancemeasurement system development using theabove framework starts with the identification ofstrategic objectives. In this aspect, previous

literatures on this topic identified a number ofstrategic objectives to be achieved in thepartnering projects. They are summarized underdifferent perspectives as shown in Table 1.

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THE STUDY

This study seeks to investigate the use of BalancedScorecard (BSC) to measure the performance ofthe construction par tnering projects. Toaccomplish the research objectives, a postalquestionnaire survey was conducted. Thequestionnaire has two parts; the first part consistsof questions on demographic information suchas working experiences, as well as particularsof the referenced project. The second partcontains 40 questions. The first four questionswere designed to measure the importance ofmeasuring the strategic partnering performanceby the four perspectives. The remaining questionsare about the 36 strategic objectives assummarized in Table 1. Respondents were askedto provide their assessment on the importanceof including the strategic objectives in theirrespec t ive Per fo rmance MeasurementPerspectives (PMPs) for measuring the strategicpartnering performance. A seven-point Likertscale was used, with 7 as the most importantand 1 as the least important.

To ensure the relevance of data, responses haveto be collected for those who have hadpartnering experience. The names and the postaladdresses of the respondents are obtained fromthe web pages of the local professional institutesas well as the Hong Kong Builder Directory. Inorder to safeguard the reliability of the receivedresponses, respondents were asked to provide

information on their experiences in partneringprojects. If the respondents replied that they hadnot taken part in any partnering projects, theirreturned questionnaires were discarded.Therefore, the reliability of the survey results isassured.

THE RESPONSE RATE

A total of 60 questionnaires were sent to privateand public sector developers, consultant firmsand contractor firms. A total of 25 replies werereceived, representing a 42.0% response rate.56% of the respondents have over 10 years ofworking experience in the construction industry.As this research is largely exploratory, therelatively small number of responses is acceptablewith the understanding that the findings areindicative only.

DISCUSSION

Relative importance ranking of thePMPs

The importance of the PMPs was ranked by theirmean scores derived from all valid responses. Iftwo or more PMPs happened to have the samescore, the one with the lower standard deviationwill be assigned the higher ranking. The resultsare shown in Table 2.

Table 2: Relative importance ranking of the PMPs

PMP Mean Std. Deviation Rank

Attitudes of project stakeholders 6.5200 .7703 1

Benefits 6.4400 .6506 2

Strategic learning & growth 6.0000 1.2247 3

Attitudes enhancement process 5.6800 1.5199 4

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The mean scores of the PMPs range from 5.68to 6.52, which are greater than 3.5 on a 7-point liker t scale. This indicates that therespondents general ly agreed with theimportance to include all these PMPs formeasuring the strategic partnering performance.Attitudes of project stakeholder ranked highestamong PMPs. The result is in line with Cheung etal. (2003) who recognized that the collaborativeattitudes among partners are crucial for sustainingthe long term relationship, and thus for partneringproject success.

Relative importance ranking of thestrategic objectives

The importance of the strategic objectives wasalso ranked by their mean scores (Table 3 refers).The mean scores of the 36 strategic objectivesare higher than 5. This indicates that they are allconsidered by the respondents as importantstrategic objectives to be included in theirrespective PMPs for measuring the strategicpartnering performance.

Table 3: Relative importance ranking of the strategic objectives

Performance

Measurement

Perspectives

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186.027.6setupsid ecudeR217.025.6tsoc tcejorp ecudeR309.023.6emit tcejorp ecudeR451.180.6ytilauq evorpmI500.106.5seussi ytefas evorpmI

Improve end user satisfaction 5.48 1.12 6

Benefits

Improve environmental issues 5.00 1.61 7

146.046.6tnemtimmoc level poT275.046.6tsurT lautuM328.044.6noitacinummoc nepO421.104.6srentrap thgir eht tceleS563.121.6pihsredaeL674.180.6evitcepsrep mret gnoL

Attitudes of projectstakeholders

Establish clear roles & responsibilities 6.20 0.96 7Clear understanding of parties 5.96 0.73 8

961.144.5edutitta gninoitseuQ0185.104.5ytivitaerC

Emphasis on partnering experience &culture in selection of partners

5.96 1.14 1

Issue elevation & problem resolutionprocess

5.92 1.08 2

385.106.5sesicrexe gnidliub maeTHeld regular partnering review meetings 5.76 1.01 4Promote using joint risk contractualarrangement

5.88 0.88 5

Promote using value engineering exercise 5.40 1.55 6Early involvement of subcontractors 5.48 1.05 7

854.142.5noitcnuf laicoS

Attitudes enhancementprocess

905.180.5metsys TI hsilbatsE

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198.082.6elarom s’eeyolpmEImprove leadership skills 6.12 1.05 2Employee’s awareness of strategy 6.20 0.91 3

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Employee’s financial incentive system 5.84 0.94 6Employee suggestion system 5.80 1.08 7Employee non-financial incentive system 5.48 1.26 8Sufficiency of IT infrastructure 5.20 1.55 9

Strategic learning &growth

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Table 4: Adequacy of the data set for PCFAs

PCFA for factorizing strategic Kaiser-Meyer- Bartlett Test of Spericityobjectives in perspective of Olkin (KMO) Chi-square Df p value

Measure of SampleAdequacy

Benefits 0.548 104.371 21 0.000

Attitudes of project stakeholders 0.525 231.858 45 0.000

Attitudes enhancement process 0.724 207.615 36 0.000

Strategic learning & growth 0.675 221.063 45 0.000

Nevertheless, the close range of the mean scoresfor the strategic objectives makes the resultsinterpretation difficult and a small difference oftheir mean scores would cause a noticeablevariation of the rankings. In this respect, groupingof strategic objectives into a smaller number offactors may prove useful. This is because thefactors identified could better represent theunderlying construct of the similar type of strategicobjectives in a more concise and interpretableform (Dulaimi et al. 2002, Hair et al. 1998). Inthis connection, a principal component factoranalysis (PCFA) was conducted by the use ofthe Statistical Package of Social Science (SPSS)- Version 11.0. In general, PCFA requires asample size of at least five times greater thanthe number of variables (Hair et al. 1998).Nevertheless, in this study, only 25 samples wereinvited which cannot fulfill the above requirement.In this connection, the findings from the PCFA inthis study can only be treated as a pilot study.

Grouping strategic objectives usingPCFA

In connection with exploring the factors of thestrategic objectives for measuring the strategicpartnering performance in perspective ofBenefits, Attitudes of project stakeholders,Attitudes enhancement process and Strategiclearning & growth, four PCFAs were conductedin this study. The suitability of the data set for thefour PCFAs was firstly investigated. As shown inTable 4, the sample data is deemed to beadequate as supported by the results from theBartlett Test of Spericity (all are significant atp<0.00) and the KMO Measure of SamplingAdequacy (all with values higher than thethreshold of 0.50) (Sharma 1996, Dulaimi etal. 2002).

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Strategic objectives in these analyses arefactorized under the Eigenvalue greater than 1rule (Sharma 1996). The results of the PCFAsare shown in Table 5. The total varianceexplained in these results range from 70.89% to83.24%. Thus, the factors grouped in theseanalyses are considered sufficient to representthe underlying construct of their respectivestrategic objectives (Wong et al. 2003, Wongand Cheung 2004). Considering the samplesize of this survey, strategic objectives with factorloadings 0.75 or above were retained (Hair etal. 1998). They became the basis of the factorsinterpretation enlisted in the same table. Fromthe PCFAs, the following findings are observed:

1. The strategic partnering performance inrespective of Benefits is suggested to bemeasured in terms of the Long-term benefitsand the Short-term benefits for the projects.

2. The strategic partnering performance inrespect of project stakeholders’ Attitudes issuggested to be measured in terms of thepartners’ levels of Open communication &Creativity, as well as of Mutual trust &commitment.

3. The strategic partnering performance inrespect of Attitudes Enhancement Process issuggested to be measured in terms of thepartners’ ef fectiveness of introducingintegration processes as well as joint riskcontractual arrangement in their projects.

4. The strategic partnering performance inrespect of Attitudes Enhancement Process issuggested to be measured in terms of thepartners’ awareness & implementation of thestrategic skills, the IT infrastructure of theirrespective projects and the effectiveness ofintroducing the incentive schemes forencouraging partners’ learning.

Fi =

nAij

n�j =1

Relationships among the identifiedfactors

The PCFAs performed enable the suggestions ofthe major factors for measuring the strategicpartnering performance in different perspectives.In addition, it is mindful that the importance ofthese factors for measuring the strategicpartnering performance varies. In this connection,the relative importance of these major factors(as well as their respective PMSs) is compared.This is achieved by computing the factor scoreusing the following formula:

Where Fi is the Factor score, Aij is the meanscore of the jth strategic objective of factor i.

The factor score of each factor is the mean scoreof the strategic objectives grouped accordinglyto the PCFA. For example, the factor score ofLong term benefits (Factor 1 of the BenefitsPerspective) is computed as follows:

Factor 1= [6.08 (Improve quality) +

5.48 (Improve end user satisfaction)] / 2= 5.78

Therefore, the factor scores are ranked indescending order as shown in Table 6.

Mutual trust and commitment is ranked as themost important factors in measuring the partneringstrategic performance. The findings augmentedprev ious s tudies which iden t i f ied theestablishment of mutual trust as the most importantfactors for partnering success (Wood andMcDermott 1999, Kadefors 2004).

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Table 5: PCFAs results and factor interpretations

Perspective Strategic Objective Component

Factor 1 Factor 2 Factor 3Long-term benefits Short-term benefits

Improve quality .885Improve end user satisfaction .880Improve environmental issues .746Improve safety issues .701Reduce project cost .932Reduce project time .852

Ben

efi

ts

(Tot

al V

aria

nce

Exp

lain

ed:

70.8

9%)

947.setupsid ecudeROpen

communication &

Creativity

Mutual trust &

commitment

Leadership .901Open Communication .862Creativity .851Clear understanding of parties .847Long term perspective .791Establish clearroles & responsibilities

.710

936.edutitta gninoitseuQMutual trust .888Top level commitment .801

795.srentrap thgir eht tceleSIntroducing

integration

processes

Introducing joint risk

contractual

arrangement

Team building exercises .953Establish IT system .924Promote using value engineeringexercises

.917

Social functions .898Emphasis on partnering experience& culture in selection of partners

.797

meetings.765

resolution process.694

Early involvement ofsubcontractors

.661

Att

itu

des

en

han

cem

en

t p

ro

cess

(Tot

al V

aria

nce

Exp

lain

ed: 8

0.74

%)

Promote using joint riskcontractual arrangement

.965

Awareness &

implementation of

strategic skills

IT infrastructure of

the partnering project

Effectiveness of

introducing the

incentive

schemes

Strategic skills .911Employee satisfaction .877Employee’s morale .787IT application .928Sufficiency of IT infrastructure .883

405.metsys noitseggus eeyolpmEEmployee non-financial incentivesystem

-.944

Employee’s financial incentivesystem

-.798

Str

ate

gic

learn

ing &

gro

wth

(Tot

al V

aria

nce

Exp

lain

ed:

83.2

4%)

Improve leadership skill -.783

Att

itu

des

of

pro

ject

stak

eh

old

ers

(Tot

al V

aria

nce

Exp

lain

ed:

72.8

2%)

Held regular partnering review

Issue elevation & problem

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Short-term benefits ranked second, while amongthe Introducing integration processes rankedeighth identified factors. As such, strategicobjectives that are grouped in the factor‘Introducing integration processes’ have longbeen identified as the leading performanceindicators of the partnering projects (Landin andNilson 2001, Rivan 2002). They weredescribed as the performance drivers that leadto the achievement of the project performance(Landin and Nilson 2001, Rivan 2002).Conversely, strategic objectives that are groupedwere known as the lag performance indicatorswhich could merely be used for reporting thepast project performance (Rivan 2002). Theseresults are generally in line with many previousliteratures claiming that stakeholders in thepartnering projects often ignore the importanceof including the leading performance indicatorsin the project performance measurement system(Amaratunga et al 2000, Landin and Nilson2001).

CONCLUSION

This study employs the Balanced Scorecard(BSC) methodology as a conceptual frameworkfor measuring the partnering project performancein a holistic manner. An extensive review onliteratures of both partnering and balancedscorecard was conducted. Accordingly, theperspectives (4 nos.) and the strategic objectives(36 nos.) were developed, followed by dataanalysis from a questionnaire survey.

25 valid responses were collected through thequestionnaire survey in which the target samplingwas the project stakeholders who experiencedon partnering. The results presented in this studysupport the importance of using the identifiedstrategic objectives (and their respectiveperspectives) to measure the partnering projectperformance. However, as the study can onlybe treated as exploratory due to the limitation ofsmall sample size, further study with larger samplesize should be conducted in order to provide amore statistically significant result.

Table 6: The factor score ranking

Ranking Factor Factor Score1 Attitudes of project Mutual trust & commitment 6.64

stakeholders

2 Benefits Short-term benefits 6.59

3 Strategic learning & Awareness & implementation of strategic skills 6.15growth

4 Attitudes of project Open communication & Creativity 6.00stakeholders

5 Attitudes enhancement Introducing joint risk contractual arrangement 5.88process

6 Strategic learning & Effectiveness of introducing the incentive schemes 5.81growth

7 Benefits Long-term benefits 5.78

8 Attitudes enhancement Introducing integration processes 5.51process

9 Strategic learning & IT infrastructure of the partnering project 5.12growth

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Moreover, the identified strategic objectives, aswell as the measurement perspectives mayrequire refinements and revisions according todifferent nature and aims in different partneringprojects. Notwithstanding, the proposed BSCapproach for measuring partnering projectperformance integrates a variety of projectstakeholders as a project team so that it makeseveryone know the partnering strategy which canfoster the achievement of common goals.

The results of this study are consistent with someprevious findings that the result-orientatedindicators were viewed as more important thanthose leading indicators for project performancemeasurement. There is no attempt to undervaluethe role play by those lag performance indicatorsin facilitating partnering success. Nevertheless,as emphasized by Kaplan and Norton (1992),the designers of the BSC system, the imbalanceweightings between lag and lead performanceindicators in the performance measurementsystems should be avoided, as this may hamperthe identification of the correct path to achievethe project goals efficiently and effectively(Kaplan and Norton 1992).

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