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Overcoming Organizational Lock-In in Decision-Making Construction Clients Facing Innovation

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Overcoming Organizational Lock-In in Decision-Making Construction Clients Facing Innovation ISSN: 1402-1544 ISBN 978-91-7439-XXX-X Se i listan och fyll i siffror där kryssen är DOCTORAL T H E SIS Erika Hedgren Overcoming Organizational Lock-In in Decision-Making Erika Hedgren Overcoming Department of Civil, Environmental and Natural Resources Engineering Division of Structural and Construction Engineering ISSN: 1402-1544 Overcoming Organizational Lock-In ISBN 978-91-7439-572-3 (tryckt) ISBN 978-91-7439-573-0 (pdf) in Decision-Making Luleå University of Technology 2013 Construction Clients Facing Innovation Erika Hedgren Construction Clients Facing Innovation Construction Clients Facing Overcoming Organizational Lock-In in Decision-Making Construction Clients Facing Innovation Erika Hedgren April, 2013 Luleå University of Technology Department of Civil, Environmental and Natural Resources Engineering Division of Structural and Construction Engineering – Timber Structures Printed by Universitetstryckeriet, Luleå 2013 ISSN: 1402-1544 ISBN 978-91-7439-572-3 (tryckt) ISBN 978-91-7439-573-0 (pdf) Luleå 2013 www.ltu.se Overcoming Organizational Lock-In in Decision-Making Construction Clients Facing Innovation Erika Hedgren Luleå University of Technology Department of Civil, Environmental and Natural Resources Engineering Division of Structural and Construction Engineering – Timber Structures Dissertation for the degree of Doctor of Philosophy (Ph.D.) in Timber Structures which, with the permission of the Faculty Board at Luleå University of Technology, will be defended in public in F1031, Friday 26th April, at 10.00 am. Akademisk avhandling som med vederbörligt tillstånd av Tekniska fakultetsnämnden vid Luleå tekniska universitet för avläggande av teknologie doktorsexamen, kommer att försvaras i universitetssal F1031, fredag den 26 april, kl. 10:00. Supervisor/handledare Professor Lars Stehn, Department of Civil, Environmental and Natural Resources Engineering, Luleå University of Technology, Luleå, Sweden Faculty examiner/fakultetsopponent Associate Professor Suvi Nenonen, Department of Civil and Structural Engineering, Aalto University, Aalto, Finland Examination board/betygsnämnd Professor Christine Räisänen, Department Civil and Environmental Engineering, Chalmers University of Technology, Gothenburg, Sweden Professor Siri Hunnes Blakstad, Architectural Design and Management, Norwegian University of Science and Technology, Trondheim, Norway Associate Professor Anna Öhrwall-Rönnbäck, Department of Management and Engineering, Linköping University, Linköping, Sweden 1Professor Birgitta Bergvall-Kåreborn, Department of Business Administration, Technology and Social Sciences, Luleå University of Technology, Luleå, Sweden 1 Substitute member of the examination board. THESIS FOR THE DOCTORAL DEGREE This compilation thesis for the doctoral degree consists of an integrating text (“kappa” in Swedish) with five chapters and the four appended papers listed below. It should be noted that, in 2012, my surname changed from Levander to Hedgren. Paper I Levander, E., Engström, S., Sardén, Y. and Stehn, L. (2011) Construction clients’ ability to manage uncertainty and equivocality. Construction Management and Economics, 29(7), pp. 753-764. Paper II Engström, S. and Levander, E. (2011) Clients as drivers of innovation: lessons from industrialised construction in Sweden. In: Proceedings of the 6th Nordic Conference on Construction Economics and Organisation: Shaping the Construction/Society Nexus, Haugbølle, K., Gottlieb, S.C., Kähkönen, K.E. Klakegg, O.J. Lindahl, G.A. and Widén, K. (red.). Hørsholm: Danish Building Research Institute, Aalborg University, Copenhagen, Denmark, April 13-15, pp. 13-24. Paper III Engström, S. and Hedgren, E. (2012) Sustaining inertia?: Construction clients’ decision-making and information-processing approach to industrialized building innovations. Construction Innovation: Information, Process, Management, 12(4), pp. 393-413. Paper IV Hedgren, E. and Stehn, L. (2012) The impact of clients’ decision- making on their adoption of industrialized building. Submitted for publication in: Construction Management and Economics (special issue on Industrialized Building). PREFACE The greatest enemy of knowledge is not ignorance; it is the illusion of knowledge Stephen Hawking This Ph.D. thesis reflects a part of my research journey as a doctoral student. It has been made possible thanks to the organizations and the many persons around me that have provided support, help and assistance, and what is more, that have inspired me and provided me with understandings beyond what is incorporated in this thesis. To you I would like to express my sincere gratitude. First of all, I would like to thank my supervisors, Professor Lars Stehn and Associate Professor Helena Johnsson, for guiding and encouraging me throughout the course of my doctoral studies. Lars Stehn, you have supported me throughout the whole process, and especially, you were there when I needed it the most and for that I am grateful beyond words. Also, thank you for your leadership guiding the Timber Structures research group. You provide an environment where multiple meanings can surface and where people with different competences interact. Helena Johnsson, thank you for your support and for your perceptive comments – always hitting the nail on the head. I am truly grateful to you all helpful people at client organizations all across Sweden, for taking your time to answer all my questions in interviews, for guiding me around and for providing me with valuable information and internal data. The research was supported financially by the R&D centre TräCentrum Norr and by Interreg IV A North (project IEEB), which are gratefully acknowledged for their financial support that enabled this research project. Adjunct Professor Dan Engström, you are gratefully acknowledged for your valuable feedback on the thesis-draft, and for cheering me on. A special appreciation also goes to my colleagues, past and present, at Timber Structures and at the Department of Civil, Environmental and Natural Resources Engineering. This journey would not have been the same without you. And to my sister-in-arms, Susanne Engström: doing research has been so much more fun when doing it with you. And finally, I am so thankful for having you in my life: Mathias, making life easy and Sally, the essence of my life. Thank you both for making me smile every day. Sally, my smart and stubborn girl – you can do and become whatever you decide to! I dedicate this thesis to you. Luleå, March 2013 Erika Hedgren ABSTRACT The role of clients in construction innovation is receiving increasing research attention due to their perceived tendencies to adhere to conventional practices preserving the status-quo. The aim of this thesis is to improve understanding of construction client organizations’ behaviour that affects their ability to overcome organizational lock-in in their new-build decision-making processes, and thus their ability to adopt innovation. A more specific aim is to compare and contrast the behaviour and decision-making processes of innovation adopters and non-adopters. The theoretical frame of reference integrates organizational information processing and three discrete, but mutually dependent decision-making schools of thought. The methodological approach acknowledges the importance of human interpretation. Most of the empirical data are qualitative, and were collected mainly through in-depth face-to-face interviews with key decision-makers of professional Swedish multi- dwelling client organizations with a property portfolio, both private and public. The research addresses clients’ practices for information processing and new-build decision-making, and their impact on their adoption of more radical innovation, as well as their perceptions and behaviour when facing the radical innovations of industrialized construction of timber-framed multi-dwelling buildings (IB) that extends beyond their frames of reference. The results show that Swedish clients’ perceptions about IB innovations are affected by both uncertainty and equivocality (i.e. the human problem of managing multiple meanings of information and conflicting interpretations). Thus, managing equivocality appears to be essential for making judgments about radical innovation alternatives. Both individual- (cognitive) and organizational-level barriers to the adoption of IB innovations are identified. These barriers create an organizational lock-in to conventional alternatives because they lead to decision-makers not recognizing the need to revise their heuristics, question given meanings and make different interpretations that would enable them to reach different conclusions. Finally, the results show that the behaviour of innovation adopters differs from that of non- adopters in terms of how they manage uncertainty and equivocality in their new-build decision-making processes. The conclusion is that to overcome the organizational lock-in that hinders radical innovation adoption, organizations must manage equivocality through information-processing practices that allow for multiple meanings and different interpretations to surface and interact with their new-build decision-making. The research findings show that practices that support decision-making on conventional alternatives can simultaneously present organizational lock-in. These findings indicate that the current research assumptions regarding the negative impact of uncertainty and positive impact of experience may have to be reversed in decision-making about radical innovation. They
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