Boundaries, Interdependence, and Coordination in ConstructionNetwork Organizations

Of the profileration of new business paradigms in recent years, one of the primary foci has been building closer relationships between firms in the value adding chain. Lean production, which encompasses J1T, supply-chain management, and TQM/continuous improvement, has provided an important paradigm for reorganization of business practices and is in the process of revolutioni-zing western mass production industries, particularly the automotive industry. While lean production is attractive, it is not appropriate for all industries or production requirements. Lean production works best within a relatively stable production volume and stable range of products. “Mass customizationi has proven difficult for accomplished lean producers such as Toyota, and requires a different set of organizational disciplines than those used in lean production. For example, in the lean production paradigm, relationships with suppliers are long-standing and steady, while in a mass customization paradigm, relationships with and between long-term suppliers will vary over time, and new suppliers will enter and leave the organization in a transient fashion. The organization form appropriate to mass customization is the network organization (also known as the virtual corporation in the popular business press), of which construction project organization is an instance, At the project level, we examine construction organization in the context of network organization theory. In particular, we examine boundaries between firms to highlight problems of coordination in a multi-firm environment, and the interdependencies that arise due to coordination needs. We provide a conceptual framework to describe these aspects of construction network organization, and discuss ways that different construction firms are dealing with coordination and boundary problems by rethinking contractual relationships and building closer ties with other firms in the network