The Impacts of Industrialization On Construction Subcontractors A Resource Based View

Construction Management and Economics
ISSN: 0144-6193 (Print) 1466-433X (Online) Journal homepage: https://www.tandfonline.com/loi/rcme20
The impacts of industrialization on construction

subcontractors: a resource based view
Edward Goh & Martin Loosemore
To cite this article: Edward Goh & Martin Loosemore (2017) The impacts of industrialization
on construction subcontractors: a resource based view, Construction Management and
Economics, 35:5, 288-304, DOI: 10.1080/01446193.2016.1253856
To link to this article: https://doi.org/10.1080/01446193.2016.1253856
Published online: 08 Nov 2016.
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https://www.tandfonline.com/action/journalInformation?journalCode=rcme20
Construction Management and Economics, 2017
VOL. 35, NO. 5, 288–304
http://dx.doi.org/10.1080/01446193.2016.1253856
The impacts of industrialization on construction subcontractors: a resource

based view
Edward Goh and Martin Loosemore
Faculty of the Built Environment, University of New South Wales, Sydney, NSW, Australia
ABSTRACT ARTICLE HISTORY

Industrialization of the construction process is increasing around the world due to its potential Received 10 March 2016
to improve safety, sustainability, effectiveness, productivity and efficiency. While there has been Accepted 18 October 2016
research into the impacts of various forms of industrialized construction on the construction
KEYWORDS
sector, surprisingly there has been little research into the impacts on subcontractors. The lack of Off-site; sub-contracting;
subcontractor’s voice in the industrialization debate is important to address since they operate resource based view
at the coalface of the industry where the impacts of such changes will have a significant impact.
The resource based view of the firm (RBV) is used as a theoretical lens to study these potential
impacts through interviews with senior executives and managers of six major subcontracting firms
which have worked with off-site bathroom pod technologies in Australia. It is found that the key
subcontractor resources affected by this off-site technology are human, financial, intellectual and
social and that subcontractors will need to pursue strategies which develop new skills, knowledge,
networks and deeper supply chain collaborations if they are to turn the potential risks associated
with off-site into potential opportunities to achieve competitive advantage.
Introduction
moved into position such as timber framing, handmade
Industrialized construction applies production processes roof trusses or façade units. In contrast, off-site prefabrica-
and technologies from the manufacturing sector to con- tion involves the off-site assembly of building components
struction in order to improve key project objectives of time, such as roof trusses or air conditioning units which are
cost, quality, environment and safety (Gann 1996, Egan then transported to site and assembled in place. Pods are
1998, Gibb 1999, Lawson et al. 2014). The concept of indus- pre-assembled units such as toilets or bathrooms manu-
trializing construction activities is not new. However, today facturer off-site that enclose space which are transported
the concept is much more complex with various overlap- to site to be connected to other building elements. At the
ping definitions used throughout the literature, including: highest level of industrialization to date, complete mod-
off-site production (OSP) (Nadim and Goulding 2011); off- ular encompasses fully finished units that form the com-
site manufacturing (OSM) (Hampson and Brandon 2004); plete structure and form of a building.
Prefabrication (Prefab) (Steinhardt et al. 2013a, Steinhardt This paper focuses on pods as one particular type of
et al. 2013b); modern methods of construction (MMC) industrialization in the context of the Australian con-
(Rahman 2014); Industrialized Construction (Lewicki 1966); struction industry because of its growing use and due to
and modular construction (Modular) (Parrish 2012, Lawson numerous research projects and government reports in
et al. 2014). In order to avoid any confusion we adopt a Australia which have highlighted its many potential ben-
typology developed from the work of Lewicki (1966), Gibb efits (CIDA 1993, Hampson and Brandon 2004, Blismas
(1999) and Gibb and Isack (2003) who introduced a simple and Wakefield 2009, Mostafa and Chileshe 2015). Pods are
hierarchical model to classify various levels of industriali- also increasingly used in many other countries particularly
zation of construction techniques (Figure 1). in the residential building market where customers are
Traditional building is craft-based construction by open to industrialization as a way to meet shortages of
hand which involves in situ manufacture and installation affordable housing (Allison and Parker 2014). Pods may
of prefabricated elements such as windows, doors, pipes, be load bearing or non-load bearing modular units, typi-
roof trusses, bricks, tiles, etc. On-site prefabrication is the cally used to install highly serviced building components.
assembly of building components on-site which are then Pods are normally manufactured entirely off-site through
CONTACT Martin Loosemore [email protected]

© 2016 Informa UK Limited, trading as Taylor & Francis Group
CONSTRUCTION MANAGEMENT AND ECONOMICS 289
awareness of a material exists. Interestingly, Koebel et al.

4
(2004) also found that early-stage adopters tend to rely
Complete Modular
Level of Industrialisation on technology transfer programmes and universities more
than middle or late-stage adopters. Furthermore, they
3 Pods
tend to be proactive in educating their customers about
the benefits of new technologies, employ technology
2 Offsite Prefabrication advocates in their business and reduce path dependen-
cies on traditional risk-averse supply chains. Finally, first
1 Onsite Prefabrication movers tend to be less concerned about immediately prof-
iting from innovation and stress the longer-term contribu-
0 Traditional Building tions of innovation to culture and productivity. In contrast,
middle- and late-stage adopters tend to be locked-into
Figure 1. Industrial construction hierarchy adapted from Lewicki
established supply chains, are more likely to learn about
(1966) and Gibb and Isack (2003) new technologies from other builders and trade shows
and will wait for others to show that the benefits and costs
of new technologies are known. However, in general they
a production line process modelled on car manufacturing, argue, there is substantial financial and market risk asso-
complete with all internal finishes. They are then trans- ciated with innovation in residential building where prod-
ported to site for installation by a specialist installer which uct failures among risk-averse customers, can cost builders
works alongside traditional subcontractors to connect the dearly, both in direct losses and in damage to the firm’s
pod to the building services and functional elements. The reputation.
pods are then commissioned and tested to ensure func- Within the above context, the aim of this paper is to
tional performance. explore the impact of emerging industrialized pod tech-
However, the construction industry is well known for nologies on subcontractors in the Australian residential
being slow to adopt new innovations such as pods in com- construction market. More specifically, given the above
parison to other industries (Loosemore 2014, Goulding et discussion which demonstrates the importance of intellec-
al. 2015). Furthermore, to date, the limited research on tual, financial, human and social resources to innovation in
pods (Kempton and Fergusson 2004, Taylor et al. 2009) and the residential construction sector, this paper will explore
on the adoption of innovations in general, has neglected the value of the resource based view (RBV) of the firm as
to sufficiently consider the special innovation challenges a theoretical basis to better understand which subcon-
faced by the multitude of subcontractors that dominate tractor resources will be affected by this new technology,
the construction industry in adapting to these types of providing new strategic insights into how subcontractors
new emerging technologies (Sexton and Barrett 2003, should adapt.
2005, Barrett et al. 2008). Giving subcontractors a voice in
this debate is important, not only because of their critical
The opportunities and risks of industrialized
role in the adoption of such innovations but because sub-
construction
contractors are likely to face very different challenges in
adopting new innovations than large firms. As Sexton et The modern drivers of industrialized construction are
al. (2008) found, subcontractors are typically smaller, more influenced by a holistic view of the industry, with advan-
highly geared and less technology-intensive than larger tages spread through the whole building lifecycle cov-
construction firms and lack the scale and slack human, ering design, manufacturing, construction and facilities
physical, intellectual and financial resources to invest in management (Nadim and Goulding 2011, Goulding et al.
innovation (Sexton et al. 2008). Demonstrating the com- 2014). For example, Jaillon and Poon (2008) found a sav-
plexity of this issue, Koebel et al.’s (2004) investigation into ing of up to 20% compared to on-site construction time
innovation diffusion in the US residential market found on Hong Kong construction sites, following adoption
that national and regional firms, multi-family and modu- of off-site prefabrication. Gibb and Isack (2003), Blismas
lar builders, and custom builders are more likely to adopt and Wakefield (2009) and Steinhardt et al. (2014a) point
innovations such as industrialization than single-family to numerous indirect cost benefits associated with off-
production builders. They also found that large builders site prefabrication associated with reduced site prelimi-
tend to be first to adopt new technologies that offer cost nary costs, reduced site congestion, and earlier income
savings, improvements in production, reduced call-backs, generation for clients, etc. Court et al. (2009), Gibb (1999)
or reduced exposure to liability. In contrast, smaller builders and Chen et al. (2010) show that off-site prefabrication
are often first to adopt technologies where high consumer can also reduce safety risks by about 35% due to, less site
290 E. GOH AND M. LOOSEMORE
congestion and removing operatives from a dangerous Australian studies by Lu and Liska (2008) and Blismas and
site environment to a controlled factory environment with Wakefield (2009) identify other related constraints around
better working conditions. Off-site prefabrication has also industrialized component sizes, transportation costs,
been proposed as an effective way of reducing the neg- congestion, community impacts and the need for special
ative environmental impacts of construction (Chen et al. permits. The location of both site and manufacturing facil-
2010) through reduced waste, increased reuse and recy- ities is also seen as a major determinant of off-site pre-
cling and reduced emissions on-site and in use (Jaillon and fabrication viability, particularly in countries like Australia
Poon 2008). At the same time, construction quality and where there is no longer a strong domestic manufacturing
maintenance costs are also said to be improved through capacity (Loosemore 2014). Furthermore, Gibb and Isack
opportunities for tighter managerial control of production (2003) highlight the need for high levels of supply chain
(Gann 1996, Steinhardt et al. 2013a). Indeed, Pan et al.’s co-ordination between designers, developers, builders,
(2008) survey of the top 100 UK house builders identified manufacturers and suppliers to enable the benefits of
achieving high quality as the most important driver for off-site prefabrication to be fully realized. As Goulding et
utilizing off-site prefabrication. Finally, there are said to al. (2014) argue, successful off-site prefabrication requires
be many advantages associated with off-site prefabrica- three traditionally separate groups of people with very dif-
tion around skills and diversity. For example, Blismas et al. ferent skill sets to work more effectively together: design-
(2006) and Blismas and Wakefield (2009) found that off- ers, manufacturers and constructors. Goulding et al. (2014)
site prefabrication reduced the need for many trades that found design and manufacturing stakeholders could eas-
are currently in short supply and Steinhardt et al. (2014b) ily adapt to the changes required when adopting off-site
and Loosemore (2014) argued that off-site prefabrication prefabrication. However, in contrast, he found that other
has many benefits for groups which are normally excluded construction stakeholders, such as subcontractors, would
from the construction labour market such as the aged, dis- require significant help to do so. The finding that on-site
abled and women. workers may not possess the skills required for adoption of
However, numerous barriers have also been identified off-site prefabrication technology is reinforced in findings
in the effective uptake of off-site technologies such as: by Lu and Liska’s (2008) study of US general contractors,
lack of technology awareness; supply chain capacity con- architects and engineers.
straints; cultural perception; lack of viable business process
models/solutions; high initial investment costs; incom-
The RBV of the firm
patibility and inflexibility of designs; separation of design
from manufacturing; perceived higher overall cost; logis- A central theme which emerged from the literature above
tics and transportation challenges; and a lack of skills to is that a firm’s resources and the way that they are used
work with these new technologies and components (Gibb and managed are central to the adopting of industrial-
1999, Chiang et al. 2006, Lu and Liska 2008, Loosemore ized construction. However, there has been no research
2014, Rahman 2014, Goulding et al. 2015). In Hong Kong, into how a firm’s resources can be affected by the adop-
the Provisional Construction Industry Coordination Board tion of off-site technology such as bathroom pods. To this
has noted upfront investment remains a significant barrier end, the RBV of the firm is a useful theoretical lens since it
to the adoption of off-site prefabrication techniques and recognizes that every firm has a unique pool of tangible
to unleashing the full potential of cost savings (Chiang and intangible resources which interact in unique ways to
et al. 2006). Pan et al. (2008) found the most significant give a firm its distinct identity and ethos (Penrose 1959,
barrier to the adoption of off-site prefabrication was high Wernerfelt 1984, Rumelt 1984). In simple terms, the RBV
initial set-up costs and in a survey of 47 UK industry pro- suggests that the resources possessed by a firm are the
fessionals (including clients, consultants, contractors and primary determinants of its competitive advantage. These
manufactures). Rahman (2014) found the main barriers resources include: Financial (cash, capital, etc.); physical/
were cost and design incompatibility and flexibility issues. technological (land, premises, plant, etc.); organizational
This was supported by Lu and Liska (2008) who also found (culture, reputation, relations, etc.); human (people, expe-
that inflexibility of design was a major challenge because rience, expertise, etc.); intellectual (knowledge and ideas);
off-site prefabrication requires and an early design freeze, and social (relationships, networks, and connections)
whereas the industry has become accustomed to pro- (Rumelt 1984, Wernerfelt 1984, Barney’s 1991). The RBV
jects progressing with incomplete designs which involve argues that a firm’s sustainable competitive advantage is
numerous changes and adaptions throughout construc- maximized when these resources are rare, valuable, inim-
tion. Transportation and logistics issues are also seen as itable, non-tradable and non-substitutable, as well as firm
major impediments to the adoption of off-site prefabri- specific (Barney 1991, Makadok 2001). It also argues that
cation (Nadim and Goulding 2010) and in both US and firms should develop and protect resources that possess
these attributes (Crook et al. 2008) and focus on build- new technologies in construction. Furthermore, research
ing unique “imitable capabilities”, “core competencies” by Barney (1986), Green and Brown (1997), Boxall (1998),
and “dynamic capabilities” based on its unique resources Rangone (1999) and Leila et al. (2006), has shown that it is
(Prahalad and Hamel 1990, Teece et al. 1997, Eisenhardt possible to successfully utilize the RBV to understand strat-
and Martin 2000). egy in SME’s which are similar to the many subcontractors
However, the RBV is not without its critics. For example, that characterize the construction industry. However, no
Priem and Butler’s (2001a, 2001b) formative criticism of one has yet used the RBV as a theoretical framework to
Barney’s (1991) original work raised many key points of understand the impact of new innovations such as pods
criticism which include: its tautological and self-verifying in the construction industry. To this end, the following sec-
nature and its lack of empirical content to enable general- tion discusses in more depth, how each of the resource
ized causality to be proven. According to them, the theory categories in the RBV might be affected by off-site in the
does not explain how different resource configurations construction sector.
can generate the same value for firms. They also argue
that the role of product markets is underdeveloped in the
Financial resources
argument, there is a limited focus on capabilities, success
could be attributed to a number of reasons other than Green and Brown (1997) define financial resources as
unique resources, and the theory has limited prescriptive funds from any monetary source used to start, operate
implications. Furthermore, there is insufficient focus on and grow the business. These funds are known as a firm’s
depreciating resource value and it is extremely difficult in working capital (Elsas et al. 2014) and according to Garcia-
practice to find a resource which satisfies all of the Barney’s Teruel and Martinez-Solano (2007) firms can adopt an
(1991) criteria. Also, there is the assumption that a firm can approach along a continuum from conservative (main-
achieve competitive advantage as long as it can exploit taining high levels of working capital to reduce risk) to
advantageous resources, but this may not necessarily be aggressive (investing heavily to increase efficiency and
the case since many other competitive factors and indus- production). As discussed above, off-site prefabrication
try-specific influences can be at play. Indeed, through requires significant up-front set-up costs, requiring a firm
external changes, initial competitive advantage from to move towards a more aggressive working capital strat-
unique resources could be nullified or even transformed egy, at least in the short term, as capability is built-up.
into a weakness. Finally, Ritsumeikan (2005) argues that the However, this might represent a major challenge for
RBV has overlooked the role of entrepreneurial strategies many subcontractors, not only because they are generally
and entrepreneurial abilities as one of the crucial sources highly geared and might find it difficult to secure nec-
of the competitive advantage of a firm. Ritsumeikan (2005) essary finance, but because the majority of these firms’
argues that a firm’s main source of competitive advantage financial resources are also normally held in the form of
is not the heterogeneity of its resources and dynamic capa- “cash” assets (White et al. 2003).
bilities, but the abilities of the entrepreneur to recognizes
and capture the future value of these resources to enable
Physical resources
core capabilities to be harnessed to meet a firm’s vision
and strategy. A firm’s physical resources include the raw materials or
However, despite these criticisms the value of the RBV products, tools and equipment, plant and buildings used
in understanding construction innovation has been recog- to create an organization’s products and services. The
nized by Barrett et al. (2008) who argued that the potential adoption of off-site prefabrication by a subcontractor has
for innovation does not come from the unique resources obvious implications for its physical resource base since it
a firm owns but from how a firm uses and develops them will likely require the purchasing or renting of new man-
to drive innovation. Barrett et al. (2008) argue that the pro- ufacturing equipment and facilities, transportation tech-
active “resource-push” view of innovation offered by the nologies and installation equipment which is different
RBV (where firms innovate because they can), provides to those needed for traditional construction processes.
a more stable grounding for construction innovation Off-site may also result in the abandonment of tradi-
research than the dominant reactive “market-pull” orien- tional physical assets which are no longer needed such as
tation (where firms innovate because they are asked by equipment around wet trades. The physical capital require-
clients). As Loosemore and Phua (2011) and Loosemore ments associated with off-site will vary depending on the
and Richard (2015) have found, the reality is that very few decision a subcontractor takes about manufacturing their
sophisticated clients will specifically ask for an innovation own components (alone or in partnership with existing
or be prepared to pay for it. So market-pull theories are of manufacturers) or simply buying ready-made components
little value in understanding what drives firms to adopt from established manufacturers.
Organizational resources relations will need to be managed to navigate around

fear and resistance to change, traditional role demarca-
A firm’s organizational resources fall into three categories:
tion, changes in status and power and even the potential
firm structure; systems and policies; and culture (Barney
loss of jobs linked to the replacement of people with old
1991, Haeri and Rezaie 2014). Although there is currently
redundant skills (Loosemore 2014).
no research on what impact the adoption of off-site pre-
fabrication might have on a subcontractors’ organizational
resources, contemporary models of innovation proposed Intellectual resources
by researchers such as Eisenstat et al. (2001), Tidd (2006),
A firm’s intellectual resources refer to the intangible assets
Samson (2011) and Muller and Becker (2012) offer some
provided by a firm’s employees’ knowledge and experience
insights. These researchers argue that modern innovative
and is typically measured by assets not normally listed
companies must develop a “systematic” innovation capa-
on a firm’s balance sheet such as the number of patents,
bility and innovative culture which develops a flexible
trademarks, copyrights, and other results of human inno-
portfolio of resources which they can bring to bear on
vation and thought (Edvinsson and Malone 1997, Choo
promising opportunities. In these decentralized, organic,
and Bontis 2002, Leila et al. 2006). A simple way of meas-
opportunity-based firms, quasi-autonomous business
uring a firm’s intellectual capital is the amount by which
units are connected by a corporate centre. Resources from
its market value exceeds the value of its tangible (physical
multiple business units are not held in silos, as in traditional
and financial) assets. In terms of adopting off-site fabri-
businesses, but are organized around emerging opportu-
cation, a firm’s intellectual resources are likely to be very
nities in different parts of the organization. Eisenstat et al.
important in developing and protecting competitors from
(2001), Tidd (2006), Samson (2011) and Muller and Becker
copying new products and services. Off-site prefabrication
(2012) offer some insights. These researchers argue that
by nature involves new technologies or new combinations
in the modern business environment, few firms have all
of old technologies which already exist and the knowledge
the resources to be able to innovate. So they must pursue
required to do this will often not exist. New knowledge will
partnerships which facilitate the collaborative co-creation
also be required about how to install and transport these
of new knowledge, products and services in deeply inte-
new products and new services, supply chains and value
grated supply and demand chains. In other words, sub-
streams built around them.
contractors will need to secure new supply and demand
chain partnerships to allow them to secure the resources,
connections and knowledge they will need to make off- Social resources
site prefabrication work.
Social resources (or social capital) is the most intangible
resource a firm possesses. As Nahapiet and Ghoshal (1998)
Human resources
and Burt (2005) point out, the central proposition of social
Human resources refer to the individuals who make up capital is that a firm’s connections and positioning in its
the workforce of an organization and their associated network of relationships represent a valuable resource.
commitment, skills and capabilities. In contrast to man- Social capital differs from traditional sources of capital in
ufacturing which is typically technology-intensive, con- the sense that it is intangible and tacit, it is located outside
struction is a service-based industry which is inherently the business in relations with others and is not owned by
labour-intensive meaning that adopting an innovation like any specific firm. It is also important to realize that a firm’s
off-site prefabrication, which typically involves less people social networks do not translate automatically into social
on-site, has a strong human and behavioural dimension capital. Rather, it is the positioning of a firm in its social
(Sundbo 1996). As Gronroos (2000) shows, even when a network and the nature and quality of its relationships
service-based organization develops a systematic innova- with others in that network which creates its social capital
tion capability, innovations themselves must be developed (Nahapiet and Ghoshal 1998).
by the people working in that organization, often working Gann (2000) and Walker and Rowlinson (2008) have
closely in collaboration with customers as co-producers both pointed to the potential of collaborative models of
of knowledge. So the adoption of off-site prefabrication business and project organization to stimulate innovation
is likely to have many implications for a subcontractor’s in the construction industry. Therefore, social capital is a
human resources. Less people may be needed in certain critical resource for subcontractors engaging in off-site
roles, new attitudes, knowledge and skills will be required prefabrication because they will need to develop new
and old ones replaced or adapted, meaning that peo- supply and demand chain partnerships to allow them to
ple will need to be educated and given opportunity to secure the resources, connections and knowledge they will
experience and work with the new technology. Industrial need to make off-site prefabrication work.
Method a pilot study was undertaken by interviewing six con-

struction professionals from different backgrounds. This
By using the RBV as a conceptual lens, the discussion above
revealed that some of the resource categories identified
suggests the process of moving from traditionally craft
by the RBV (especially social and organizational capital)
methods to off-site prefabrication will impact significantly
were poorly understood in the proposed sample frame
and in many ways on a construction subcontractor’s finan-
and that the interview questions had to be simplified
cial, human physical, intellectual, social and organizational
and clarified to ensure that every respondent was talking
resources. To better understand what these impacts might
about the same thing. The final interviews were divided
be and how they may need to be managed differently in
into three parts. Part one collected data about the firm’s
the future, data was collected around the utilization of
background, trade, size, operating sectors. Part two was
modular bathroom pods in the Australian residential high-
designed to collect information about a firm’s experience
rise building sector. Modular Pods and residential high-rise
of using bathroom pods and part three was designed to
buildings were chosen as the focus of analysis because
collect information about the impact of bathroom pods
as stated above, they are an increasingly popular form of
on its financial, physical, intellectual, human, social and
advanced (Level 3 – see Figure 1) off-site prefabrication
natural capital/resources. The interviews typically lasted
in many countries (Vokes and Brennan 2013). The most
for about an hour and interviewees were emailed a copy
common types of pods used in Australia are bathrooms,
of the interview before it was conducted to allow them to
kitchens and plant rooms. Bathroom pods were chosen as
think about it in advance. Price (2010) implemented spe-
the focus of this research because their widespread use
cific strategies when interviewing directors and managers
across the construction industry. Bathroom/toilet pods
of small to medium sized enterprises to maintain consist-
have been used “ad hoc” on commercial and government
ency and reliability in the data. These strategies were used
buildings since the 1980s (Lawson et al. 2014) and in UK,
here and included active listening, interview flexibility and
Pan et al. (2008) found 44% of the top 100 house builders
probing questioning and this guidance was followed in the
thought kitchen and bathroom pods offered the greatest
conducting of our interviews for this research. The popu-
potential for OSM. Furthermore, bathroom pods offer a
lation for this study was all subcontractors working in the
unique window into the impacts of off-site technologies
Australian construction industry and the sampling frame
on subcontractors since they are particularly complex and
were subcontractors that had worked on bathroom pods.
affect at least five different trades to achieve a high-qual-
To obtain a representative sample we used non-probabil-
ity installation and finish. Bathrooms are also well known
ity snowball sampling (Berg 2006) which involved start-
to account for a large proportion of rework due to poor
ing with a small sample of subcontractor senior managers
quality and for a relatively small space with high-quality
who had worked with bathroom pods and asking them to
requirements, bathrooms offer an excellent opportunity
nominate others who had similar experience. Bathroom
to gain an insight into the impact of off-site prefabrication
pod technology is relatively new in Australia and this pro-
technologies on a wide range of subcontractors in the con-
cess resulted in a sample of only six subcontractors rep-
struction industry.
resented by senior managers with experience of working
Following Silverman’s (2010) research design method-
on projects which had used bathroom pods as detailed in
ology, this research adopted a qualitative approach, which
Table 1. While we could have interviewed other managers
used semi-structured interviews designed to: examine
in the same firms, after interviewing each senior manager
the impact to subcontractor’s firm resources of the move
we felt that no further insights would be gleaned from
from traditional craft-based construction to off-site pre-
lower managers in the same firms. We also noted, in ana-
fabrication; and to examine the impact on different sub-
lysing the results as we were progressing, that the same
contractor resources and success strategies through the
themes were emerging in the data as illustrated in our
lens of the RBV. In developing the interview questions
Table 1. Sample description

Respondent Position Trade Firm age (years) No. pod projects Size (No. employees) EBA status Turnover million ($)
R1 Director Hydraulic 10 2 18 No EBA 14
R2 Director/State Mechanical 30 2 60 No EBA 70
Manager
R3 Director Electrical 23 2 56 Yes EBA 12
R4 Director/State Mechanical 30 3 197 Yes EBA 140
Manager
R5 Director Hydraulic 4 2 95 Yes EBA 22
R6 Director Hydraulic 60 3 150 Yes EBA 40
Note: EBA = Enterprise bargaining agreement with construction union exists.

ongoing Leximancer analysis (see below) which mean that The themes generated by Leximancer are higher-level
our sample of six subcontractors had enabled us to reach groupings of related concepts and are labelled using the
theoretical saturation (Fusch and Ness 2015). most prominently occurring concept within the cluster.
The data from the semi-structured interviews was Each theme is graphically represented on the concept
transcribed and analysed using Leximancer software map as a coloured circle. Circle colour and size is directly
(Leximancer 2011). In contrast to content analysis which proportionate to the relevance of a theme within the data.
involves the manual pre-coding of data to produce a coding Leximancer produces a themes report (Figure 3) which
framework (Myers et al. 2012), Leximancer uses a process includes the connectivity and relevance ratings of each
based in advanced computational linguistics and Bayesian theme on the map. The connectivity score indicates the
theory to produce results without the requirement for degree to which each theme is connected to others and
manual pre-coding (Sotiriadou et al. 2014). The software the relevance column represents the importance of each
performs an automatic content analysis, utilizing a thesau- theme.
rus as a classifier Rooney (2005) and Smith and Humphreys Utilizing Leximancer’s review function to interrogate
(2006) cites a high level of coding stability and highly sta- the source of these concepts within the narrative response
ble concept maps as key advantages of this approach. In identifies the Resource Category “most” associated with a
addition to extracting concepts and themes from the data, particular theme. This understanding allows connections
Leximancer identifies underlying connections within and to be drawn between the Qualitative data (interview
between concepts and themes and graphically presents Responses) and the Quantitative outputs of Leximancer.
the results in a concept map. In an assessment of quali- For example the third theme from Figure 2 is Pods which
tative software, Sotiriadou et al. (2014) divided computer comprised of the concepts Pods, Resources, Human,
assisted qualitative data analysis (CAQDA) tools into two Financial and Having. When the concepts source within the
categories: tools that emphasize the manual handling of text is extracted the concepts are identified as highly asso-
data (e.g. NVivo and Atlas.ti); and tools that provide auto- ciated with a response to the interview question regarding
mated analysis based on statistical properties of text (e.g. Human capital. Hence the authors can draw conclusions
Leximancer). While NVivo has been the most widely used as to the link between a Leximancer output theme and a
software package to date in qualitative management and particular RBV resource category.
business studies, the use of Leximancer software has been In reporting our results narrative analysis was also
growing steadily since it is useful when there is no “a pri- used narrative to assist in contextualizing the individ-
ori” theory to develop a coding framework and does not ual perspectives of each respondent, while allowing
require the researcher to code data, introducing potential the expression of individual connections and differing
bias into the results. However, the main limitation of using views. Narrative analysis has evolved from what has
Leximancer as an analytic tool is that while the software been described as the “narrative turn” in social science
produces mapping and relational data, the eventual results research. As Reissman (2008) points out, the key skill in
depend on the researcher’s skill in interpreting the concept good narrative analysis is an ability to produce a good
maps it produces. A typical concept map is illustrated in narrative account of a phenomenon, using questions
Figure 2. which are inculcated early on. The questions used in this
Concepts are essentially related words occurring with research were deliberately broad to allow respondents to
a high frequency throughout the interview transcripts follow their own individual and “instinctive” path through
and are clustered together through attractions defined their experiences.
by the frequency of co-occurrence within a coding block. Although there is some dispute among researchers
Concepts with high co-occurrence will therefore group about whether the results of narrative analysis should
closer together on the concept map. The lines of con- also be presented as a narrative (Connelly and Clandinin
nection define links between concepts and proximity 2000), it was decided to summarize the narrative of the
of concepts gives an indication of association strength. discussions in selected quotes rather than reduce the data
Leximancer also produces a table of ranked concepts by: to quantitative counts of variables. There are two reasons
Relative Frequency (Rel Freq), Strength and Prominence for this. First, Leximancer effectively conducts a numerical
(see Table 3 under results). Relative Frequency (Rel Freq) analysis of the data and second, we wanted something
is a measure of the conditional probability of the concept, to complement this and communicate the full richness
given the category. Strength is a measure of the condi- of insight contained in the narratives we collected from
tional probability of the category given the particular con- these highly experienced respondents. As Meisel and
cept. Prominence is a combination of the strength and Karlawish (2011, 2023) argues that the power of narrative
relative frequency, given by joint probability/product of is in translating respondent accounts into data that people
marginal probabilities. can comprehend.
Name_r4
1
site
2
Name_r1 Name_r3
people
factory
factory level people time
firm 3
everything
job take everything 4

guys
job
work term
plumber
knowledge
early
plumber tradesmen 5
work whole
project
skills different
human change project
resources Name_r2
plumbing trades
builder
pods having
pods
materials
design
design
financial
labour
labour financial
issues
Name_r5 building
bathroom
bathroom money
Name_r6
Figure 2. Leximancer concept map
Results No [change] you still have to have the same office, tools,
and that to run the company. So the overheads still all run
Table 2 shows the results relating to the general impact of the same. R1
bathroom pods on our respondents’ businesses. With further probing, it was evident that there was a clear
Table 2 shows a balance between positive and negative demarcation between trades regarding changes to phys-
impacts although the respondents who argued for nega- ical resources but also an important link between physical
tive impact were more extreme in their responses. and financial resources. For example, respondents in the
The narrative analysis of our interview transcripts in hydraulic trades argued that bathroom pods reduced the
relation to each type of RVB resource explains this further. physical raw materials they invested in a project. These
were resources from which they traditionally derived sig-
Physical resources nificant income.
They [pods] are taking the whole cream of the job its
The respondents indicated that bathroom pods had not gone, I don’t see any other avenues to get the cash. R1
resulted in any significant change to the tools, equipment,
The results also show that the resources of different trade
office space and technology used by their firms and that
subcontractors are impacted in different ways. For exam-
there was a general reluctance to invest in new resources
ple, mechanical subcontractors pointed to the need for
to position them for the future.
Name_r3
design
design early
money everything Name_r2
term
financial having builder
building
project
issues change project
pods
pods
bathroom time
take
Name_r6 bathroom
human
resources firm
job
materials whole
labour
site
trades different
Name_r5
tradesman work level people
work Name_r4
factory
factory guys
Name_r1
skills
plumber
plumbing
knowledge
Theme Connectivity Relevance

project 100%
work 92%
pods 60%
bathroom 26%
design 07%
factory 03%
Figure 3. Concept map and summary output
I think with the pods we should have done them in 3D

Table 2. Overall impact of bathroom pods
it would have helped especially with the prototype pods
Respondent Impact Impact category Why [for coordination]. If you move to hospitals or other led
R1 8 Negative Financial typical you will need 3D. R4
R2 3 Positive Small impact
R3 6 Positive Better projects
R4 7 Positive Smoother project
R5 9 Negative Financial Financial capital
R6 9 Negative Financial
All respondents noted the impact of bathroom pod tech-
upgraded information technology (IT) systems to improve nology on financial resources. However, there was con-
coordination with new pods manufacturers in the supply siderable disagreement about whether this was positive
chain. or negative. On the positive side, R1, R5 and R6 agreed if
Table 3. Concepts and prominence by respondent (I = intellectual On the downside, a loss of financial resources was also
capital; H = human capital; F = financial capital; O = organization- linked to a reduction of turnover from a reduced scope of
al capital; S = social capital; P = physical capital) work which reduce the earning capacity of each project,
Concept and resource Rel Freq (%) Strength (%) Prominence while labour and overhead cost remain constant.
Category: Name_r1 Say a 5 million dollar contract I don’t do the fit out and I
Guys (H/F) 20 29 2.5 don’t supply the fixtures so it reduces the 5 to a 3.8 but I
Skills (I) 15 24 2 still have my managers on site for the whole project … so
Different (I) 15 22 1.9
Site (H) 15 21 1.8
while my workload reduces my overhead stays the same.
Take (F) 15 17 1.5 R6
Job (H/F) 22 16 1.4
A coping strategy identified by a number of respondents
Category: Name_r2 was to “increase the margin on the work we actually do”,
Design (S) 13 28 2.2 or increase project turnover.
Project (S) 80 28 2.1
Builder (S) 36 26 2
When you take the bathrooms away we then have to
Early (I) 18 25 2 make the money on the labour and when it is priced into
Change (H/I) 20 19 1.5 the materials as a flat rate there is no risk allowance in
People (I) 11 18 1.4 there. We always lose money on labour, so it going to
Category: Name_r3 be a real issue…. Maybe we will have to increased our
Everything (S/F) 18 43 2.7 turnover and get more jobs, it can be catered for but it is
Site (H/F) 18 35 2.2 expensive to take on more work. R5
Time (F) 24 34 2.1
Early (S) 16 29 1.8 Margins could also be damaged by the potential of pods
Take (F) 15 23 1.5
Change (ALL) 20 23 1.5 use to increase competition.
what it [pods] has done is open the door for a lot of other
Category: Name_r4 companies that wouldn’t normally look at a big job can
Plumber (S/O) 14 26 1.6 now look at the jobs and it will increase competition and
Resources (ALL) 14 23 1.4 the race to the bottom. R1
Trades (S) 16 20 1.2
Job (F) 18 18 1.2
Work (S) 41 18 1.1
Take (I) 11 17 1.1 Human capital
Category: Name_r5 All respondents saw human resources as a key impacted
Skills (I) 12 40 1.6 resource with anticipated reductions in lower skill level
Different (I) 10 33 1.3
Job (F) 19 30 1.2 tradesmen of about 30–35% while senior site staff num-
Resources (H/F) 12 29 1.2 bers remain the same. The cause of this reduction was
Take (F) 12 29 1.2
Trades (O) 15 28 1.1 unanimously seen as a reduction in project scope for sub-
contractors compared to a conventional project.
Category: Name_r6
As far as human resources go you still have your site man-
Bathroom (H) 15 36 2.1
ager, your leading hand. It is hard to measure however,
Building (F) 14 32 1.9
Tradesmen (S/H) 12 29 1.7 we reduced the workforce a little. R6
Design (S) 10 28 1.7
Labour (H/F) 10 26 1.5
There were also implications for more involved workforce
Pods (F) 53 18 1.1 planning as a result of bathroom pods.
If anything it may be a little more intricate in the planning
of the worker’s. We may require more skilled people in
bathroom pod projects were constructed as planned then the detailed work … Your plumbers are always changing
a reduction in project duration would translate to financial but your leading hands and foremen are staying and they
benefit. work together. R6
a quick job is a good job. R1 Significant potential impacts on skill levels of tradesmen
However, on the downside, others noted any financial and apprentices were also noted by a number of respond-
gain was limited because intense competition for work, ents, both in transitioning to pod projects and back to tra-
onerous subcontracts and traditional power structures ditional work.
ensured any gains were fell to major contractors rather I had a lot a guys actually leave me because they were
not getting the knowledge of plumbing, they were
than subcontractors.
losing their skills and the work was becoming boring
Competition is so high we don’t get to retain any of the … they didn’t want to work like that doing all the
savings or indirect cost benefits for ourselves. We still end connecting work without being challenged in that
up making the same margin as per usual because every- regard. R1
one just passes the cost savings along. R3
Interestingly respondents also noted moving workers from secrets” and his strategy to retain this resource was to retain
a site-based role to a factory environment could cause skilled tradespeople who would in-turn transfer the knowl-
motivation problems. edge through the business. In contrast, R5 had begun to
The thing with the pod factories they go out and get local document or codify the knowledge gained from working
labour and trade professionals and they basically work on on projects with bathroom pods and noted a strategy to
the production line. The tradesmen work in the factory develop skills in tradesmen through a rotation process to
and it would kill our guys to work in that sort of environ- gain experience on projects using pods.
ment. Doing that kind of repetitive work all day. R3
Based on our knowledge and skills with prefabrication
we are looking to do way more of it … working with mul-
tiple trades on the one unit to share the cradles and bits
Social capital and pieces this is much like the bathroom pods where
All respondents agreed the use of bathroom pods various trades are organised together to do the compli-
cated work elsewhere. R6
increased the need for greater collaboration between
subcontractors, designers and manufacturers.
We had to be heavily involved in the initial design pro- Organizational capital
cess and design of the connections … I would say we
will need to communicate more with people and other Organizational resources proved the most difficult for
trades … R6 respondents to comprehend. Organizational routines
were not seen as generally impacted by the use of pods,
With the pods you need to start to think differently
although it was noted that there were not yet enough pro-
because we had to do things we had not done before like
get a special fitting made up to connect the pod to the jects using this technology to require significant organi-
floor waste. R6 zational change.
Interestingly a number of subcontractors noted a reduced We didn’t change the organisational structure on the job
you couldn’t we still had the same number or manage-
need for normal raw material supplier relationships, on
ment people there from day one for the start up to the
which their business traditionally depended. end of the project. R6
Take for example (supplier name) the largest tap ware
and sanitary supplier in Australia. Our relationship with In the front end of the project we had our drafting guys in
them will reduce because we will not be purchasing the earlier and longer to get the prototype working and signed
product any longer. R5 off. It didn’t fundamentally change our structure. R4
Intellectual capital Leximancer analysis
The intellectual resources question drew a mixed response. The Concept Map in Figure 3 expresses the concepts from
On the downside there was a sense that new apprentices our data clustered into six themes with its associated the-
would see a loss of skills due to not having the experience matic summary report. The respondent tags are located
of seeing multiple trades go into a traditional bathroom. on the map in red where Name_r1 relates to Respondent
R1, etc.
If you’re a young apprentice if you work on three pod
projects you will be finished [the apprenticeship] and will Figure 3 identifies “project” as the most important theme
have never set a bathroom you have never set a pan, put emerging from our qualitative data with 100% connectiv-
a basin in or put a shower on the wall that is a huge risk ity to all other themes and concepts. The theme “project”
[to my company]. R6 comprised of the concepts project, builder, job, change,
However, on the upside, in contrast to concerns over a loss time, take, early, everything, whole and firm. Interestingly,
of trade skills, there was also a need to develop better and our narrative analysis showed that these concepts cover
new planning, logistics, designing, scheduling, estimating the whole range of RBV resources suggesting that the
and coordination skills, especially at supervisor and man- introduction of off-site technologies challenges the pro-
ager level. However this skill was not seen as in-imitable ject-based nature of construction by moving it off-site and
or rare. in doing so, affects many parts of a subcontractor’s busi-
We are trying to leverage off that knowledge … But I ness. The second most important theme “work” comprised
really think that is just a short-term thing once everyone the concepts work, trades, plumber, different, guys, skills,
has done it and it becomes the norm the competition is people, tradesmen, site, level, plumbing and knowledge.
back. R6 These concepts were mainly associated with the intellec-
Firm strategies to retain intellectual resources as forms of tual, human and social resource impacts of off-site tech-
competitive advantage differed. For example, R6 did not nology. This indicates that respondents considered new
document knowledge since he saw them as “the family knowledge as necessary to exploit the benefits of off-site
and social resources in the form of new logistics and coor- R2’s response focused on the following concepts: design
dination skills, supply chain partnerships and collaborative (S) – new social networks required to improve the process
working during early project involvement. The inclusion of of integrating pods into a project; project (S) – early sub-
the concept “plumbers” within the second most important contractor involvement in the project would be benefi-
theme in the map expresses the significance impact of cial; builder (S) – builders controlling the outcome for the
these new technologies on this trade and on existing and subcontractors which involves reliance on the resources
new skills. The third most important theme “pods” com- of another firm; early (I) – new knowledge required about
prised the concepts pods, resources, human, financial and manufactured units and fixing in place; change (H/I) – new
having, conveying a view that the use of bathroom pods skills (especially coordination and logistics) are required;
required a change in human resourcing strategy since people (I) – the respondent didn’t not intend to use this
pods required different amounts of tradesmen at differ- new knowledge as a source of competitive advantage.
ent times, compared to traditional bathroom construction. R3’s responses focused on the following concepts:
This theme also supports the qualitative data in highlight- everything (S/F) – a major improvement in communication
ing the financial resource implications of using pods in between project participants required if future projects to
terms of increased competition and reduced scope of be successful and avoid negative financial impacts due to
work, etc. theme “bathroom” comprised the concepts bath- miscommunication; Site (H/F) – less site operatives needed
room, building, labour, issues, materials and money articu- and reduced scope will lead to reduced revenue; time (F) –
lating the risks involved with the use of pods. Particular financial gain from a reduction in overheads and project dura-
reference is made to human, intellectual and financial risks tion; early (S) – a lack of established manufacturer/designer/
when using bathroom pods. The “design” theme comprised subcontractor networks prevent effective use of pods; take
the concepts design and term and indicates the need to (F) – financial benefits passed up the chain; change (ALL) –
increase social resources linked to long-term coordina- change was associated with all the resource categories.
tion and collaboration in the effective use of bathroom R4’s responses focused on the following concepts:
pods. Finally, the theme “factory” was again linked to an plumber (S/O) – the plumbers (hydraulic subcontrac-
increased need for social resources particularly through tors) required to take a more leading role on the project;
new connections to pod manufacturers which did not resources (ALL) – all resource types affected; trades (S) –
currently exist. This theme also indicates the importance new joint ventures will increase need for new business
of the cost of human resources since moving work to a networks; job (F) – early completion brings financial ben-
factory is seen as a financially beneficial move away from efits; work (S) – new supply chain relationships need to be
union negotiated EBA rates. However, the data also indi- forged; take (I) – need to ensure capture benefits of new
cated that site workers value their site environment and intellectual resources developed.
might not like to work in a factory. R5’s responses focused on the following concepts: skills (I)
Table 3 compares the individual respondent’s concept – intention to use the knowledge learned to improve the firm;
lists for the six most prominent concepts and related RVB different (I/F) – reduction in firm financial resources and intel-
resources in rank order. Analysing the results on an indi- lectual resources due to scope reductions; job (F) – utilizing
vidual basis with reference to the interview transcripts for pods was purely a financial decision; resources (H/F) – a reduc-
each respondent is useful in triangulating the results and tion in both human and financial resources; take (F) – pods
more deeply understanding the impacts of bathroom pods reduce turnover unless new value can be created through
on the respondents’ subcontracting businesses. joint ventures with manufacturers; trades (O) – the respond-
Table 3 identifies the differences in prominence of par- ents have to adapt future business strategy to develop new
ticular concepts and related resources between respond- value-propositions around this new technology.
ents. These are discussed in detail below in relation to each R6’s responses focused on the following concepts:
respondent. bathroom (H) – reduction in human resources needed
R1’s response focused on the following concepts: guys on projects due to reduction in scope of trades involved
(H/F) – the loss of employees and skills, and reduction in with pods use, how to balance with blend of existing tra-
financial gain available from this type of project; skills (I) ditional work; building (F) – a perceived negative impact to
– a loss of trade skills and knowledge and a reduction in financial resources with pods; tradesmen (S/H) – increased
the competitive advantage of their firm; different (I) – firm connections with other organizations such as manufactur-
employees need to develop new skills and knowledge; ers needed and new skills to manage these relationships;
site (H) – a reduction in tradesmen on the project; take design (S) – increased connections with designers needed;
(F) – bathroom pods were taking “the cream” out of the labour (H/F) – emphasizes strong link between human
projects; job (HF) – a reduction in skills combined with a resources and financial prosperity; pods (F) – reductions
loss of financial gain. in financial rewards associated with pod use.
Discussion mechanical and electrical subcontractors a positive impact.

Respondents with a negative impact saw this manifest in a
Overall, according to Kahneman and Tversky’s (1979)
reduction in turnover, scope of works, working capital and
Prospect Theory, the overall negative results we obtained
rewards being passed up the chain, whereas the positive
in Table 1 from our respondents and in the narrative analy-
impact respondents noted faster and more productive
sis is not surprising. Although impacts varied by trade, the
jobs enabling higher long-term turnover. In some ways,
vast majority of comments made by our respondents were
our results support Steinhardt et al. (2014b) who reported
negative (reduced scope, increased competition, reduced
an increase in turnover as the result of higher project clear-
margins, contractors capturing benefits, loss of skills, etc.).
ances. It appears that the nature of the financial impact on
Prospect theory describes the way that peoples’ utility
subcontractors is contingent on how firms can position
function when assessing a new situation is asymmetrical,
themselves in the new value chains that will emerge. This
meaning that potential losses hurt more than gains feel
supports Loosemore (2014) who showed that any inno-
good (an affect called loss aversion). When it comes to
vation like off-site prefabrication will create winners and
interpreting the results relating to each type of resource
losers and disturb the long-established power and reward
categorized by the RBV the discussion below summarizes
structures of the construction industry.
our findings.
Human resources
Physical resources
Human resources are identified in the OSM literature as
Both the narrative and Leximancer results do not reflect an important and significantly impacted resource with
the literature around off-site prefabrication regarding researchers such as Blismas and Wakefield (2009) and
impacts on physical resources. Although G4C (2015) Court et al. (2009) forecasting significant reductions in
notes IT will be a significant resource for firms in the on-site labour. Our results support this and also suggest
future, surprisingly IT was not seen by respondents as a significant reduction in trade labour on-site. However,
being significantly impacted (though some respondents our results indicate that levels of management staff are
noted the use of bathroom pods would increase the use likely to remain the same due to the wider coordination
of CAD as an integrating technology). Interestingly BIM requirements from design through to manufacturing and
was not mentioned by any subcontractor suggesting this construction. However, the skill base of these managers
new “integrating” technology has not yet penetrated the will need to change. Turnbull et al. (1992) and Helper and
Australian construction subcontractor sector. Our results Henderson (2014) identify employee empowerment as
suggest that until pods have greater market penetration, a key contributor to the successful transition from craft-
subcontractors will be reluctant to invest in new technol- based production to off-site. However, our results show
ogies such as BIM to support them. This finding supports that this may be a challenge because manual workers see
Cidik et al.’s (2014) recommendation that it is important to off-site as deskilling the industry, threatening wages rates
evaluate different uses of BIM models by different stake- and conditions and moving workers from site to controlled
holders in order to understand the implications of new factory environments. Sliwinski (2004) and Aburas (2011)
technologies on design collaboration. In other words, the also identify training as a key to the successful implementa-
implementation of new technologies like BIM will likely tion of off-site, a conclusion supported by our subcontrac-
only move at the same pace as the other technologies it tors who noted training as a significant issue. Furthermore,
depends on and which depend on it. This linking between and importantly, our results add some qualifications to
interdependent resources is a common theme throughout Blismas and Wakefield (2009), Gibb (1999) and Chen et al.
the results in relation to other resources. Our results also (2010) who all argue that a move to a factory environment
support those of Bidarianzadeh and Fortune (2002) which is beneficial to employees. While this may result in a safer
show subcontractors prefer to operate on a just-in-time environment with fewer accidents, our findings show that
model, purchasing new materials, plant and equipment there may be a hitherto unrecognized mental welfare issue
on a “needs” basis. associated with the increased repetition and control such
as environment entails, compared to traditional site work.
Financial resources
Social resources
The results show off-site prefabrication can significantly
impact subcontractor financial resources. However, the Overall the results support the literature indicating the
impact was not uniform across the supply chain with high importance of social capital for subcontractors
hydraulic subcontractors noting a negative impact and engaging on off-site prefabrication. However, in contrast
to other industries such as car manufacturing where sub- their systems to integrate with other organizations with
contracting firms horizontally integrate social capital into which they will need to collaborate more closely. On the
their businesses through processes such as co-opetition one hand our narratives indicated that organizational
and long-term relationships with subcontractors (Wilhelm resources are very important to the success of a change
and Kohlbacher 2011), our results suggest that these social from traditional craft-based methods to off-site but on the
resources are currently project-based and not held as long- other hand our Leximancer results do not reflect this find-
term cooperative strategic relationships. Furthermore, in ing, perhaps because of the esoteric nature of this concept
contrast to the relational contracts found in other indus- to many of our respondents. Loosemore (2014) identifies
tries that effectively use OSM (Helper and Henderson a spectrum of organizational structures from organic to
2014), our respondents were hampered by traditional sub- mechanistic and argues that organic forms are more con-
contracts which resulted in rewards being passed up the ducive to the adoption and diffusion of innovations like
line to head contractors. Until this is resolve the incentive off-site. However, our results reflect no structural change
to collaborate will not exist. to the organizational resources of the firm in the form of
Asanuma (1989), McMillan (1990), Turnbull et al. (1992), a move to an organic structure.
McIvor et al. (1998), Subrahmanya (2008) and Helper and
Henderson (2014) all support joint product development
Conclusion
as a key to the successful transition into off-site technology
in other industries. Our results provide strong support for The aim of this paper was to explore the impact of emerg-
this strategy and indicate that subcontractors would ben- ing off-site technologies on construction subcontractors in
efit greatly from greater input into the design of bathroom Australia. This paper has shown the potential value of the
pods at the prototype stage. However, respondents noted RBV of the firm in understanding how off-site will impact
that pod designs agreed was not always what arrived on subcontractors in the construction industry. The value
on-site, a breakdown in communication which hindered of the RBV is its ability to isolate the resource impacts of
project success and new relationships between subcon- new construction technologies such as bathroom pods,
tractor, head contractor and the pod manufacturer. This allowing firms to think about how they might adjust vari-
supports Zhai et al.’s argument that high levels of supply ous aspects of these resources strategically. In other words,
chain co-ordination are required between project partici- while our research has highlighted the main impacts on
pants to successfully utilize off-site prefabrication. the resources of subcontractors, its real value is in showing
how changes in the resources of subcontractors can also
affect their potential to successfully adapt to the use of
Intellectual resources
these new technologies in the future. The key resources
As Leila et al. (2006) argue the majority of a firms compet- affected by off-site technologies like bathroom pods
itive advantage is derived from its intellectual resources. appear to be human, financial, intellectual and social. As
Our results reflect this and suggest that a move to off-site pointed out earlier, the RBV argues that a firm’s sustainable
will increase the importance of intellectual resources to the competitive advantage is maximized when these resources
competitive advantage of subcontractors. All respondents are rare, valuable, inimitable, non-tradable and non-sub-
pointed to the importance of developing new skills in the stitutable, as well as firm specific. It also argues that firms
areas of IT, planning, collaboration, logistics and supply should develop and protect these key resources and focus
chain management and firms can to take very different on building unique “imitable capabilities”, “core competen-
approaches to this issue, depending on their unique cies” and “dynamic capabilities” to respond to changes in
organizational culture. For example, one respondent is this type of technology as they emerge into the future. To
working to ensure that knowledge learned from projects this end, our results indicate that as the construction sector
is codified and circulated while another respondent “never becomes more industrialized, new business models and
wrote anything down”. ways to increase turnover will need to be developed in
the subcontracting sector, new knowledge, relationships
and partnerships, skills and human resource management
Organizational resources
strategies will need to be developed to secure competitive
A firms organizational resources consist of its structure, advantage in the new value chains which industrializa-
systems, policies and culture. Grant (1996) identifies sys- tion will create. In the longer term, while our respondents
tems and policies as a key organizational resource but pointed to little impact on organizational structure, it is
our results in relation to organizational resources were inevitable that subcontractors will also need to consider
somewhat inconclusive. This may change in the future as how to adjust their organizational and physical resource
off-site becomes more common, forcing firms to change management strategies as they move from production
to service-based organizations which is likely to involve Asunuma, B., 1989. Manufacturer-supplier relationships in
less physical production on-site but more management, Japan and the concept of relation-specific skill. Journal of the
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subcontractors were only just beginning to understand the delivery of sustainable construction projects. Cardiff:
Association of Researchers for Construction Management
these impacts and still retaining the old structures in a
Conference.
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The limitations of this research are based in the rela- the future of off-site manufacture in Australia. Construction
tively small sample size which reflected the limited num- innovation, 9, 72–83.
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The Impacts of Industrialization On Construction Subcontractors A Resource Based View

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Construction Management and Economics

ISSN: 0144-6193 (Print) 1466-433X (Online) Journal homepage: https://www.tandfonline.com/loi/rcme20

The impacts of industrialization on construction

Edward Goh & Martin Loosemore

To link to this article: https://doi.org/10.1080/01446193.2016.1253856

Published online: 08 Nov 2016.

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The impacts of industrialization on construction subcontractors: a resource

ABSTRACT ARTICLE HISTORY

CONTACT Martin Loosemore [email protected]

awareness of a material exists. Interestingly, Koebel et al.

Organizational resources relations will need to be managed to navigate around

Method a pilot study was undertaken by interviewing six con-

Table 1. Sample description

Note: EBA = Enterprise bargaining agreement with construction union exists.

job take everything 4

Figure 2. Leximancer concept map

Theme Connectivity Relevance

Figure 3. Concept map and summary output

I think with the pods we should have done them in 3D

Intellectual capital Leximancer analysis

Discussion mechanical and electrical subcontractors a positive impact.

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