Performance management of value management implementation in the Malaysian construction industry

Abstract

The criticism that the construction industry underperforms has attracted the interest of researchers in an effort to help improve the situation. Various methods, techniques, and tools have been introduced over the years to enhance the performance of projects. From these, value management (VM) has emerged as a strategic management approach to promote better value for projects and offer benefits to both the project itself and the project team. Relevant literature reveals that the major focus of VM research is practices and awareness, support tools, and integration of VM with other management tools; there has been less emphasis on the development of VM theory and the performance of VM. Although there have been attempts to measure VM workshop performance through incorporating both quantitative and qualitative measures, in order to provide meaningful information the measured data needs to be transformed through performance evaluation and insightful management. The aim of the research underpinning this thesis was to investigate the extent to which VM implementation can contribute positively towards the successful execution of projects. To achieve this aim, the Malaysian construction industry was studied with the objectives of identifying a set of critical success factors (CSF) and key performance indicators (KPI) for VM implementation; measuring and evaluating the efficiency and effectiveness of the processes and outputs of VM applications; exploring the critical issues encountered in implementing VM; and developing and validating a performance measurement model, a performance evaluation model, and a performance management framework for VM implementation in the construction industry. The first stage of the research employed content analysis to explore knowledge gaps and identify CSFs and KPIs through statistical testing. In the second stage, a case study approach was adopted that involved analysing the application of VM in five public sector projects in Malaysia through observations, questionnaire surveys, and semi-structured interviews. Finally, the models and framework were developed and validated using structural equation modelling (SEM) and focus group meetings with VM practitioners in Malaysia. The research identified ten CSFs and fifteen KPIs for VM workshop implementation in Malaysia. The performance measurement model was developed using SEM to present the interrelationships between the KPIs and VM performance, while the performance evaluation model was developed using the fuzzy synthetic evaluation to transform the performance data into valuable information. Based on overall scores from the questionnaires, the performance of VM implementation for the five case studies can be concluded as good. Findings from the semi-structured interviews and the observations supported this conclusion, as well as identifying the critical issues in VM implementation from the perspective of VM domains and stakeholders. Both developed models were incorporated into the performance management framework, which will assist VM stakeholders in understanding the variables that may impact VM success and help to inculcate a VM learning culture among them. The overall findings of this research could have a profound impact on the way VM is applied within the construction industry in the quest to institutionalize VM as one of the best 'value for money' management practices. In addition to which, the discussions generated by this thesis contribute to the literature on VM practices and could serve as a reference for practices in other countries.