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Managing the tensions between exploration and exploitation in large construction projects

Per Erik Eriksson (Department of Economy, Technology and Social Sciences, Luleå University of Technology, Luleå, Sweden)
Henrik Szentes (Department of Civil, Environmental and Natural Resources Engineering, Luleå University of Technology, Luleå, Sweden)

Construction Innovation

ISSN: 1471-4175

Article publication date: 17 October 2017

Issue publication date: 15 November 2017

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Abstract

Purpose

Prior studies highlight the importance of building ambidextrous capabilities to achieve both exploitation of current knowledge and technologies to make profits today, and exploration of new knowledge and technologies to adapt to and prepare for tomorrow’s demands. In spite of its theoretical and practical importance, research on organizational ambidexterity in project-based organizations is scarce. Thus, the purpose of the paper is to study how ambidexterity may be managed and how exploration and exploitation may be achieved in construction projects. The research identifies some drivers and barriers to exploration and exploitation and also sheds light on how various management approaches interact and affect exploration and exploitation activities.

Design/methodology/approach

The empirical material is drawn from 40 semi-structured interviews with managers representing the client, the contractor and the designer involved in each of the seven large construction projects in the sample.

Findings

In contrast to prior literature in high-tech industries where exploitation focuses on continuous development, exploitation in construction projects often involves adopting conventional methods and solutions based on existing knowledge without any development efforts at all. This may enhance short-term efficiency and lower risk at the project level but increase risk at the firm level. Tight time schedules hinder both radical innovations and incremental developments, and the findings also reveal that to invest in efforts on explorative solutions, it must be possible to exploit the solutions in the same project.

Research limitations/implications

In this empirical context, the traditional structural and sequential ambidexterity solutions are not sufficient. In construction projects, contextual ambidexterity solutions in which key project actors collaborate in developing systemic innovations and fine-tuning solutions across projects are more effective.

Practical implications

Sufficient project size and/or long-term contracts over a series of projects enhance both investments in explorative activities and exploitation through continuous developments from project to project. In design–bid–build contracts, the client and consultant often miss opportunities to explore new technical solutions that rely on contractor competencies. Early procurement of contractors (e.g. in collaborative design–build contracts) thereby enables the achievement of both exploration and exploitation.

Originality/value

This study provides important input to the authors’ understanding of how exploration and exploitation may be managed in project-based industries, which has been scarcely studied in previous ambidexterity literature.

Keywords

Acknowledgements

The authors gratefully acknowledge the financial funding received from the Swedish Research Council Formas and the Swedish construction industry’s research and development fund SBUF, which made this comprehensive study possible.

Citation

Eriksson, P.E. and Szentes, H. (2017), "Managing the tensions between exploration and exploitation in large construction projects", Construction Innovation, Vol. 17 No. 4, pp. 492-510. https://doi.org/10.1108/CI-05-2016-0032

Publisher

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Emerald Publishing Limited

Copyright © 2017, Emerald Publishing Limited

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