Organizational change in Australian building and construction: rethinking a unilinear ‘leaning’ discourse

Abstract

Over the past few decades there has been extensive reorganization of the construction industry in many developed countries including removal of head contractor companies from direct operational construction, elongation of the subcontracting chain, rising self‐employment, casualization of work and reduced investment in training. These trends are the subject of a prescriptive, industry literature directed at industry ‘improvement’ and an important British‐based critique of the underlying drivers of ‘leanness’ and organizational ‘re‐engineering’. Drawing primarily upon interviews with organizations across the breadth of the industry, this paper provides evidence concerning such key changes in the Australian context, revealing both ‘leaning’/‘re‐engineering’ tendencies but also counter‐tendencies necessitated by the goal of sustaining enduring enterprise and a viable labour force. A more reflexive approach by major companies to competitive pressures and risk shifting is revealed. Further, this evidence provides grounds for challenging the re‐engineering/lean construction critique which is discerned as succumbing to the unitarist and unilinear discourse which it seeks to challenge.

Keywords:

• Business process re‐engineering
• lean production
• Australia

Acknowledgements

The research was funded via an ARC Linkage grant (LP0348736) that included the University of Sydney and the University of Western Sydney. The support of eight contributing industry partners is acknowledged. Yasmin Rittau and Annette Riley provided vital research assistance regarding aspects covered in this paper. The authors acknowledge and appreciate the comments of Linda Clarke and Graham Winch which helped with nuances concerning the UK, plus those of the journal’s anonymous reviewers. Errors remain the authors.

Notes

1. All firms within the construction industry that provide subcontracting services to other construction firms are classified to the construction trades sector.

2. Private sector construction for the public sector.

3. The systemic nature of insolvency in the industry proved so disruptive that several State governments introduced Building and Construction Industry Security of Payment Acts to limit the disruptive flow‐on effects of subcontractors or head contractors ceasing work because they cannot meet operating costs. The schemes provide ‘downstream cash flow’ with the objective of supporting project completion.

4. Although the global financial crisis has created a slight lull in the pace of construction, the underlying issues remain.

5. The Housing Industry Association, an organization that represents industry supply companies and residential construction companies, and the Australian Industry Group, whose members include the larger construction subcontractors, have long championed industry training schemes based on training in discrete competencies and skill sets, as distinct from the traditional apprenticeship system. The Master Builders Association, which is the industry association representing tradespeople who work as self‐employed or head companies, mainly continues to advocate the importance of the well‐rounded apprenticeship scheme.

6. The conservative Howard government conducted a quite determined campaign to contain union influence in setting wages and conditions in the industry by establishing the Building Industry Taskforce in 2005 that severely restricted the rights of unions on building sites.

7. The apprentice training ratio required companies to meet a minimum ratio of apprentices to total employees.

8. One positive outcome has been the establishment of training and certification for sub‐trades occupations.

9. One employer committed to the apprenticeship system expressed concern that young apprentice bricklayers were leaving before completing their apprenticeship, and thus not acquiring the requisite skills to do anything more than basic straight‐line bricklaying, because they could earn substantial income engaged in such basic work.

10. Industry unions, and especially the Construction, Forestry, Mining and Energy Union, which has strong coverage in commercial and civil engineering construction but not residential, the Electrical Trades Union and the Plumbers and Gasfitters Union, have been very active in supporting the group training scheme with the object of countering employer disengagement from training and investing in skill formation.

11. This recourse to recruiting construction workers offshore is a not uncommon feature of the industry globally, and the capacity of employers to draw on new labour sources has proved critical to the effectiveness of offshore labour sourcing. For instance, the UK industry was able to shift its immigrant sourcing strategy from the long‐time source, Ireland, to Eastern Europe as strong economic conditions during the 1980s/90s diminished the Irish as a labour source (Green, 2006).

12. There was an increase to 87 310 457 visas issued in July 2007, an 80% rise, compared to 2005.

13. A more recent initiative of the Howard government—the Trade Skills Training visa (subclass 71)—sought to extend the temporary work visa scheme to permit employers to recruit apprentices from overseas.

14. Unions have waged a campaign to expose the exploitative conditions of employment that have featured among 457 visa workers, and the Rudd Labor government imposed more stringent requirements on 457 employers.

15. Although critical of what were described as rogue elements, the majority of the major companies interviewed expressed discomfort with the Howard government’s campaign to force the unions off‐site and out of the industry.

16. The company is responding to a worldwide skills shortage in construction, a challenge which for a number of observers has emerged as the ‘biggest single priority for contractors worldwide’ (Harley, 2008).