Construction Change Management: Analysis of Caledonian LLC's Projects

This report examines change management within the construction industry, using Caledonian LLC as a case study. It explores the challenges posed by project changes, including financial losses, conflicts, and impacts on leadership and company culture. The report reviews relevant literature, discussing the causes and effects of changes in construction projects, and the importance of effective change management processes. It analyzes the impact of changes on project costs, schedules, and team dynamics, and offers recommendations for Caledonian LLC to improve its change management practices, reduce project failures, and mitigate financial losses. The study emphasizes the need for proactive change management styles, direct efforts in project management, and the adaptation of project programs to minimize the negative impacts of changes and ensure project success.

CONSTRUCTION MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION......................................................................................................................1
LITERATURE REVIEW / RELEVANT BACKGROUND RESEARCH...............................1
Changes in construction project.............................................................................................2
Analysis/ critical thinking and discussion..............................................................................4
CONCLUSION & RECOMMENDATIONS............................................................................5
Recommendations..................................................................................................................5
REFERENCES...........................................................................................................................7

LIST OF FIGURES
Figure 1Engineering change in manufacturing..........................................................................3

INTRODUCTION
Most of the firms nowadays are facing huge competition. Due to this, they are
adopting several change management practices in order to smoothing their business
operations. This study is based on the Caledonian LLC which is a medium sized construction
organization. In their recent projects they, have faced several issues which have been
adversely affected by changes. All such changes made by the contractor and client and have
struggled with the management of these changes. Due to all these changes, they have faced
several issues which have led to clashes between them and resulted in significant financial
losses (Cole, 2003). Further, this whole study put high emphasis on the change management
as well as how conflicts affects the leadership, power and culture of firm. Moreover, it also
determines that how it affects the people working within this project environment.
LITERATURE REVIEW / RELEVANT BACKGROUND RESEARCH
In today’s climate, economic pressure as well as evolving political priorities,
organizational change is becoming one of the most important concepts. However, change is a
complex process and it may have positive as well as negative impact on the organizations.
According to Gioia and Chittipeddi (2006) against the background of rapid technological
development, change is becoming an ever present feature of organizational life. However,
most of the firms appreciate the needs of change as they are able to achieve intended
outcomes as well.
As per the given scenario, construction is an extremely fragmented industry where
with their structural design and speciality trades. There are several projects which are
involved in the construction projects and companies required to manage these projects in an
effective way (Blake and Bush, 2008). At the time of managing different projects there are
some major issues which are faced by them such as:
 Their whole team must involve multiple players at multiple locations
 The whole construction supply chain are short term and project based. It consists of
completion of project on a given deadline.
 Different styles of project management and costing systems
 Unique needs to manage the involved the involved legal contracts and various other
documents
The above given issues are some major problems due to which construction firms are
moving towards the change within their business operations. Green (2007) stated in his article
that it is a pure application oriented issues and requires engineering innovation to solve the
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existing problems. At the time of change within any set project companies might face several
clashed within their team and it gives resultant into financial losses as well.
Changes in construction project
According to Bordum (2010) changes in construction projects are very common and
may have considerable negative impacts on items such as a costs and schedule delays. A
critical may cause consecutive delays in project schedule, extra demand of equipment’s,
labour, overtime and materials as well. It is quite essential for companies to go through the
formal change management process and it can become a major source of contract disputed.
Due to this, the project might contribute towards the failure and company is not able to
successfully attain the selected objectives. From the past studies it has been founded that
there are several past studies and conflicting views relating to leadership, power and
culture affecting people when working in project environments (Kneer, 2009). Companies
must adopt best leadership practices in order to avail better service to their customers. Within
the construction domain change can be classified into different terms such as:
 Based on the time: Change could be anticipated, proactive or reactive
 Based on the need: Change could be elective or required and preferential or
regulatory
 Based on the effect: Change could be neutral or disruptive
All the above stages required to be taken into consideration at the time of managing
project and process on different needs. However, construction industry is totally based on
their project management tasks. Since, the construction industry is project based, the whole
classification must be discussed on the basis of the typical stages/phased in any of their
project (Cameron and Green, 2009). There are some external as well as some internal reasons
for change such as
External reasons: Change due to the environmental issues, technological and political
issues. Such type of change also occurs due to the economic and financial losses, change in
the economy, consumer expectations, cultural factors as well as quality and standards change.
Internal reasons: There are some of the most common internal reasons are change in
organizational culture, project plan execution, changed design parameter, change in
organizational structure as well their goals and values (Goncalves, 2007).
A generic change process model need to be considered by company in order to
incorporate changes effectively. This model is having 5 stages in a sequence such as:
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Figure 1Engineering change in manufacturing
(Source: Kneer, 2009)
 Identification of change
 Evaluation of proposed changes
 Approve changes
 Implementation of changes
 Analysing changes
These are the major five stages which construction company need to take into consideration
at the time of implementing change within their firm. It is the best process through which
they can smoothly run all their process and manage their financial losses as well. Eckerson
(2010) designed a change management toolkit for construction project and a knowledge
management guide as well. By implementing this process model Construction Company is
able to analyse the success of change within their process and manage the total losses in an
effective way.
There are very limited researches which specifically address the construction
management project’s change management process. According to Finch (2011) construction
companies are sometimes required to implement changes at business level. These are related
to the technology, people, cultural issues as well as handling many changes at project level.
All these factors are the major concerns and organization requires managing all these
functions in an appropriate way. Moreover, changes in projects at the time of designing and
construction phase needs to be managed appropriately. It is the most effective process
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through which negative impact can be reduced by the companies in order to safeguard and
profitability. In today’s globalized world managing customer expectations are becoming key
concerns for companies. For this, change management is becoming more important when the
construction companies have a geographically dispersed organisational structure.
According to Gioia and Chittipeddi (2006) construction firms are highly focused with
the outcome and success of their individuals projects. With the help of appropriate change in
their process they are able to increase the quality of their projects. Project management is a
term which is highly considered to be as a several additions within a single project. It is
considered being any additions, deletions or various other revisions to project goals and
scope. Most of the time firm might increase or decrease the project cost and schedule. Due to
sudden changes most of the workers are not fit themselves with these changes. It highly
affects the scope, requirements, capital cost, time, project team relationships as well as total
form of procurement. These are some of the major barriers which highly affect the
relationship among existing teams and it resultant into the clashes between them. Due to this,
company might lead to face significant financial loss and it decreases their performance
within the industry as well (Fullan 2007). Most of the time changes take place due to the
changing expectations of customers and various unexpected events as well such as industrial
action and inclement weather.
Analysis/ critical thinking and discussion
From the above literature section it has been founded that change in construction
projects are likely to occur from different source. At any of the project management stage
change can be occur and it may have considerably negative impact.
It has been founded that there are typical causes of change in project
environments and their impact on the various organisations involved in projects. At the time
of working within any project environment most of the time employees have to deal with
culturally diverse range of people. This is the time where they might face huge problem and
not easily able to maintain this process. At this time, they might leads to face huge problems
within their co-ordination and control, changes in values and beliefs as well as human
relations to social rules as well. For this, most of the constructions firms are try to avoid all
the misfits which mean loss to their performance. Blake and Bush (2008) in his study
suggested that when change has been introduced within the firm it highly affects the total
project management team. One of the major causes of this change is the inevitable resistance
from the employees. Under this, employees might have a fear of unknown, lack of
information, fear of failure and lack of perceived benefits etc. At this time, employee
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resistance might occur which covers: A reward system that reinforces old ways of doing
things. It motivates workers to give their best in performing their whole tasks. In addition to
this, a project might be handling with the team of workers who belongs to different culture
and they all having different values and beliefs (Finch, 2011). It might leads to cause a huge
pressure on them while working and they are not able to adjust with the team as well.
Further, it has been analysed from the above section that at the time of working within
project environment to leadership, power and culture affects people as well as their working
capabilities. The total changes take place on the basis of time, need as well as effect. Further,
there are some external whether some internal reasons also exists which might become a
reason for change within the construction industry. It has been founded that some of the most
common barriers includes the increasing and decreasing cost of project and schedule (Gioia
and Chittipeddi, 2006). The whole project team relationship gets affected by the existing
issues and it becomes the major reasons for significant financial loss and decreasing
performance of company.
CONCLUSION & RECOMMENDATIONS
From the above whole study it has been founded that changes are inevitable in
construction project. It has also been defined as major problems faced by this industry. The
efforts of managing change orders have imposed a heavy burden on the project management.
Further, this whole study concludes that due to the project failure, culture, power, leadership,
defects etc. are some major issue which might occur. Due to these factors, companies need to
acquire some of the most effective process of change through which all such problems can be
easily resolved. It has been recommended that direct efforts can be also being taken into
consideration by Caledonian LLC so that they can overcome with the current project failure
as well as financial loss problems. Moreover, it can be articulated that construction projects
are very common and may have considerable negative impacts on different items of
companies such as a costs and schedule delays.
Recommendations
Caledonian LLC is a medium sized construction organisation and they can manage
their business operations more appropriately by managing change in a significant way. In
recent projects, several changes made by the client/main contractor and have struggled with
the management of these changes which, in certain situations, have led to disputes and
resulted in significant financial losses.
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By selecting most suitable and appropriate change management style Caledonian LLC is
able to handle all their business operations more effectively. In order to not go through the
fully changed process company can easily go with the direct effects of change. In this, all the
changes within the project team requires to review their work, change their project
information and outputs as well as update their communication to the other. Rather than
changing the whole process they can go through some updations and reorganize their work
methods and schedules. Further, company can also maintain their project programme by the
way to introducing acceleration measures. Further, Construction Company can effectively
manage the change and overcome with the clashes between client and main contract as well
as significant financial losses by adopting best change management model such as:
 Promoting a balanced change culture
 Recognizing change
 Evaluation of change
 Implementation of change
 Continuous improvement from lesson learned
Further, these are the major steps which must be taken into consideration before
implementing change process within an organization. In this way, it can be stated that
Caledonian LLC Company can maintain their recent changes in projects made by the
client/main contractor by following the above given model. Another appropriate way to
manage the change is to maintain better relationship with employees as well as healthy and
friendly culture within the workplace. With the help of this, all the employees feel happy and
satisfied and they are able to accept any type of change.
In addition to this, it can be stated that fundamental to the success of organizational
change is the acceptance of the change by all the workers. With this regard, Caledonian LLC
construction firm can adopt the work of Kubler-Ross. He stated that all humans go through
the 5 stages of grief such as denial, anger, bargaining, depression and acceptance. All such
situations might occur when management or organization goes through the change. With the
help of this model, company can support their workers during the period of change and help
them by appropriate guidance. In this case, at the time of delivering the news of change,
employees need to be given information to tackle their denial. At this time, they requires
support and they are able to attain manage their feelings in such situation. After this, they are
able to put their commitment and full efforts as per the vision of company. With the help of
this, they are able to managing change in their projects and improve their performance as
well.
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REFERENCES
Blake, I. and Bush, C., 2008. Project Managing Change: Practical Tools and Techniques to
Make Change Happen. Prentice Hall.
Bordum, A., 2010. The strategic balance in a change management perspective. Society and
Business Review. 5 (30. pp. 245-258.
Cameron, E. and Green, M., 2009. Making Sense of Change Management. Kogan Page.
Cole, A. G. 2003. Strategic Management. Cengage Learning EMEA.
Eckerson, W. W., 2010. Performance dashboards: measuring, monitoring, and managing your
business. John Wiley & Sons.
Finch, E., 2011. Facilities Change Management. John Wiley & Sons.
Fullan M., 2007. Leading in a Culture of Change. Jossey-Bass.
Gioia, D. and Chittipeddi, K., 2006. Sensmaking and sensegiving in strategic change
initiation. Strategic Management Journal. 12(6).pp. 433-448.
Goncalves, M ., 2007. Change Management: Concepts and Practice. American Society of
Mechanical Engineers, US.
Green M., 2007. Change Management Masterclass. Kogan Page.
Kneer, C., 2009. Change Management. GRIN Verlag.
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