Understanding the Future Competitive Advantages of the Construction Industry

Abstract

Technological changes (such as Construction 4.0) in an organization cause the workforce to exhibit resistance to change, job redundancy, etc. Geographical location will no longer provide a competitive advantage, but resources will be the source of competitive advantage in the future, and these resources will be intangible, valuable, and not be easily imitated. The aim of this study is to provide an understanding of the future competitive advantages of organizations in the construction industry that could help the construction workforce easily adapt to technological changes. This study is based on resource-based theory and the ADKAR change management model. This study developed an ADREKA sequence for organizations to achieve future competitive advantage during technological changes in the construction industry. Hence, building social, relational, and human capital is necessary during technological changes to achieve competitive advantage for an organization and foster workforce adaptability to change.

1. Introduction

The 1700s birthed the Industrial Revolution, which has contributed in no small measure to the growth of today. The First Industrial Revolution introduced mechanical looms (water- and steam-based); this industrial revolution brought about increased urbanization, business, and agricultural productivity, the invention of scientific models/instruments, new machines, technologies, and a more sophisticated market economy [1]. While the Second Industrial Revolution, which occurred in the 1870s, introduced electrical energy, powering mass production. During the Second Industrial Revolution, many nations became more productive than in the previous industrial revolution, as there was the invention of elevators, electric machinery, consumer appliances, the motor car, trucks, and aeroplanes, the building of suburbs, highways supermarkets, and sewers to carry wastewater away [2]. The Third Industrial Revolution was based on electronics and the Digital Revolution (IT). The general-purpose technologies associated with this revolution were computers, lean production, the internet, and biotechnology, while the major developmental blocks were factory automation, telecommunication, and biotechnology [3]. Today, the Fourth Industrial Revolution (IR 4.0) is built on a cyber-physical system (i.e., Digital Revolution), which helps blur the lines between the physical/digital and biological entities [4].

Technology changes industry structure, creates competitive advantages, and ultimately affects the way companies compete [5]. Competition is going to be fierce, and there will not be any geographical advantage [6]. Resources will become the major competitive advantage for organizations [7]. Ref. [8] described competitive advantage as when organizations acquire or develop attributes or a combination of attributes, such as highly competent personnel, that allow them to stay ahead and outperform their present and potential competitors. Technology has introduced new workforce issues [9]; hence, the future workforce is often confronted with issues that affect their quality of life due to technology adoption in the workplace, which, in turn, affects their stay in an organization. They often resist change in a rational response based on self-interest due to fear of the unknown, fear of loss, fear of failure, and disruption of interpersonal relations [10]. Effectively managing the workforce and transforming them into smart resources/intelligent assets can make the revolution easily adaptable by industries [6]. Hence, organizations need to develop attributes that give them competitive advantages in securing the buy-in of their workforce during technological changes and keep them ahead of their competitors. Therefore, this study aims to provide an understanding of the future competitive advantages required by organizations in the construction industry during technological changes to achieve competitiveness and foster workforce adaptability to change.

2. Methodology

This study was based on a systematic review methodology based on secondary data sources such as journals and articles. The articles and journals were sourced from Scopus databases, Google Scholar, EBSCO, etc. The criteria for searching the literature included individual and collective keywords and the use of Boolean logic to refine the literature searches. The keywords used were “Construction”, “Construction industry”, “Technological changes”, “Competitive advantage”, “ADKAR Model”, and “Resource Theory”, among others. A qualitative approach was adopted for this study, as thematic analysis was used to produce themes and generate conclusions in this study in line with Braun and Clark’s study of thematic analysis in psychology, which explains that thematic analysis includes the repeated reading and assessment of text in order to recognize patterns and constructs drawn from across diverse scholarship claims.

3. Competitive Advantage

Ref. [11] defined competitiveness as the capacity to increase growth in added value and stay competitive for a long time. Furthermore, that study described the characteristics of competitiveness as long-term oriented (emphasis on long-term performance), controllable (different resources and capabilities of a firm), relative (how competitive a firm is against others in the industry), and dynamic. Ref. [8] defined competitive advantage as when organizations acquire or develop attributes or a combination of attributes that allow them to stay ahead of and outperform their present and potential competitors. Ref. [11] identified a firm’s competitiveness as a number of firm-specific factors such as human resources, image and reputation, culture, organizational structures, and systems.

4. Resource-Based Theory

Ref. [12] described resource-based theory as the competitive advantages a firm has due to the resources it possesses internally. Ref. [13] defined resource as “all assets, capabilities, organizational processes, firm attributes, information, knowledge, etc. controlled by a firm that enables the firm to conceive of and implement strategies that improve its efficiency and effectiveness”. Furthermore, Ref. [14] stated that firms obtain sustained competitive advantages by implementing strategies that exploit their internal strengths by responding to environmental opportunities while neutralizing external threats and avoiding internal weaknesses. Ref. [15] opined that the RBV views resources and capabilities as the fundamental sources of value creation and rests on two fundamental assumptions, namely, that resources and capabilities are heterogeneously distributed among firms and that they are imperfectly mobile, which allows for differences in firm resource endowments to both exist and persist over time. The author of [14], furthermore, stated that a firm’s resources should be valuable, rare, imperfectly imitable, etc. Ref. [16] opined that organizations should focus on intangible resources like intellectual capital against tangible resources, which can be easily copied to attain long-term competitive advantage or improve performance. Furthermore, Ref. [16] described intellectual capital as being categorized and measured by human, social, and relational capital and having the capacity to improve performance.

5. Adapting the ADKAR Model for Change Management

This model was developed by Jeffery Hiatt. In his study in 2006, Hiatt presented a framework for understanding change at an individual level and a sequence for managing the people side of change. The model comprises five elements that can be used to address individual resistance to change such as: Awareness and Desire (AD), Knowledge and Ability (KA), and Reinforcement (R). But this study adapts these elements to ADREKA, which is as follows: Awareness and Desire (AD), Relations (RE), Knowledge and Ability (KA). This is a sequence for achieving organizational competitive advantage during technological changes using social capital like trust, relational capital like positive organizational perception, and human capital like knowledge, skill, and ability as intangible resources, which gives an organization its competitiveness and fosters workforce adaptability to change.

5.1. Awareness and Desire

Awareness establishes the groundwork upon which individuals make their choices about the change. Management explains the need for the change, the nature of the change, why the change is being made, the drivers of the change that created the need for it (both internal and external factors), the risk of not changing, and the benefit of the change to the individual. Awareness is the first step to managing change according to this model. Through desire, management persuades the individuals to support and participate in the change and address their concerns.

5.1.1. Competitive Advantage

The sources of an organization’s competitive advantages have shifted from financial resources to intangible capital like employees’ attitudes, competencies, and skills, as well as their ability to generate commitment and trust, communicate aspirations, and work in complex relationships [17]. Hence, at the awareness and desire phase, the intangible resource that can give organizations a competitive advantage is the building of social capital (trust).

Build Social Capital (Trust)

Social capital provides a competitive advantage for organizations in times of change. According to Ref. [18], based on Putnam’s definition, social capital refers to elements within a social organization, such as trust, norms, and networks, that enhance societal efficiency by facilitating coordinated actions and pursuing common goals.

Trust: The authors of [19] defined trust as the belief that the “results of somebody’s intended action will be appropriate from our point of view”, indicating a willingness to be vulnerable to another party due to the belief in the good intent and concern of exchange partners, belief in their competence and capability, belief in their reliability, and belief in their perceived openness. Ref. [20] stated that some of the hindrances to the adoption of a gig economy in the construction industry are trust, education, and job uncertainty. Ref. [18] highlighted the pivotal role of trust in accessing benefits within social networks, such as knowledge assets that foster innovation and bolster competitiveness. Furthermore, Ref. [17] stated that managers should foster a work environment that is low in personal conflict, surprises, and unrealistic demands and create an atmosphere of mutual trust necessary for the personnel to communicate problems and concerns candidly and at an early point in time. Trust in leadership during technological change can help break resistance to change and encourage adaptability. This kind of trust is not based on a response to governance mechanisms that impose a cost on opportunistic behaviour but on values, standards, and principles of behaviour that have been internalized by parties to an exchange [21]. Ref. [22] stated that, for organizations to be trustable, they must uphold the principles of extreme trust, such as doing things right (being competent), doing the right things, and being proactive. Also, organizational leaders must be able to model effective leadership behaviours (i.e., transformational leadership) by dealing with the non-comfort exhibited by their subordinates towards new technologies and the mindset of their workers to embrace such changes [9,23] through transformational leadership attributes such as idealized influence, inspirational motivation, intellectual stimulation, and individualized consideration [24,25] as this helps build trust among the workforce and helps address the fear and resistance of technology adoption and encourages adaptability.

(a)

Idealized Influence

These are behaviours that help leaders earn the admiration, trust, and respect of followers, and this involves prioritizing the followers’ needs over self-needs, risk sharing moral and ethical conduct [25]. Ref. [26] stated that digitalization incorporates novelty into processes and outcomes. Hence, trust is an essential phenomenon in innovative behaviours. The behaviour of sharing can be linked to collaboration as collaboration is closely linked to trust, which are all important in digitalization [26]. Furthermore, collaborative behaviour or relationships can be a way to build trust between employers and employees, as employers provide resources while employees make adequate use of the resources [27,28].

(b)

Inspirational Motivation

This includes behaviours that challenge the follower’s work by adequately communicating a vision. It also demonstrates clear expectations and commitment to the goals of the organization [25,29]. It arouses team spirit (through enthusiasm and optimism) and inspires and motivates others; this can help in achieving the desired change in an organization [25,29,30].

(c)

Individualized Consideration

This prioritizes the followers’ growth and achievement needs by paying special attention and listening attentively to their concerns [25,31]. The followers are treated as individuals, and much time is spent knowing them on a personal level and providing them with coaching, mentoring, and learning opportunities [32,33,34].

(d)

Intellectual Stimulation

Encouraging novelty and creative problem solutions (i.e., thinking out of the box) from followers by questioning assumptions and trying out new approaches to solving old problems [25,33]. The follower’s mistakes are not publicly criticized; they become aware of challenges, and their capabilities/tendency to rethink old problems in a new way is enhanced [35,36].

As the future workforce manages its own tech-enabled workload, employees will yearn for innovative leadership that promotes (through its organization) vision, integrity, communication, inspiration, and empowerment, which will help attract and retain the highest quality future workers [37]. Several research works endeavours underscore the significance of social capital as a bridging element during technological shifts in the workplace. The authors of [38] assert that companies aiming to navigate future skills successfully must foster employee buy-in for proposed changes. Additionally, effective management practices, including aligning actions with words, providing constructive supervisory feedback, ensuring system transparency, and building trust, are deemed crucial for enhancing engagement [39]. These measures are essential for improving engagement, cultivating intellectual capital (knowledge), and fortifying competitive advantages.

5.2. Knowledge and Ability

Knowledge is the provision of all the necessary information regarding skills, job roles, techniques, etc., as well as the training and education necessary to know how to change. Through ability, change is executed by individuals by applying knowledge or what they have learnt at the required performance level.

5.2.1. Competitive Advantage

At this phase, building human capital (competence) helps organizations become more competitive and fosters workforce adaptability to change.

Build Human Capital (Competence)

Human capital provides a competitive advantage for organizations in times of change. Ref. [40] defined human capital as the stock of the labour force’s productive skills, talents, and expertise. Ref. [16] described human capital as the characteristics of employees, such as knowledge, skill, or education. Ref. [41] also defined human capital as people’s knowledge, skill, or expertise derived from the investment in formal or informal education or learning by doing.

(a) 

Knowledge, Skill, Ability (competence)

Knowledge can be defined as intangible human capital, which cannot be codified and made available as information, as well as being heterogeneous and unique in each and every bit of it [42]. This type of knowledge is known as tacit knowledge, which consists of cognitive capabilities and rests in implicit personal or institutional practices, often associated with craft-like skills, awareness of reputations, and hands-on techniques [43]. Furthermore, that study stated that the diffusion of technological knowledge requires sophisticated learning, and the transfer of knowledge needs high-quality human capital. Skill is defined as the level of proficiency exhibited in the execution of activities [44]. Ref. [45] stated that skill has a number of different dimensions ranging from personal elements of expertise, education, and cognitive abilities, to competence. Ref. [20] opined that the skill of construction workers is a crucial resource on the construction site. Ability is the capacity to perform certain tasks in a particular way due to formal training or instruction [46].

KSAs are usually, or at least partly, built on a person’s suitability to undertake training at some time, engage in formal learning, and demonstrate the acquisition of skills through their performance [46]. Amidst technological changes, employees often grapple with challenges such as job redundancy, operational disruptions, and potential job loss. Ref. [47] emphasized the imperative of an ongoing workforce transformation, advocating for the continuous development of human capital through initiatives like work redesign, reskilling, and upskilling. This approach aims to equip the workforce with updated skills and knowledge, providing the organization a competitive advantage in the dynamic landscape shaped by technological advancements.

(i) 

Reinventing Jobs

This involves the deconstruction of jobs (which includes breaking down the work in the job), assessing the best way to automate the task and redeploying it using technology (reevaluate), optimizing and reconstructing into new jobs, and talent reskilling [48].

(ii) 

Reskilling

Reskilling (as well as upskilling) as an intervention strategy will need to become increasingly important in enabling businesses to develop talent and contribute to socially responsible approaches to workforce transition [48]. Ref. [49] indicated that reskilling is empowering employees with knowledge and skills to take up new or different roles. Ref. [50] defined reskilling as transitioning to a completely new role by learning a new set of competencies. Reskilling can be carried out in various ways: training and continuing education, curriculum review, communication of opportunities, and collaboration [51] or partnering with educational and training providers and providing a clear-eyed view of the necessary skills across functions [52]. Ref. [53] highlighted the importance of reskilling (and upskilling), which includes changing workplaces and workforces, increasing employee competitiveness, and ensuring long-term cost effectiveness.

(iii) 

Upskilling

The introduction of IR4.0 in construction, known as Construction 4.0, will transform the work environment and change job profiles and will, therefore, require employees to be upskilled in a wide range of competencies [54]. Upskilling can be referred to as learning new skills that will support improving the current position [55]. Ref. [49] further referred to upskilling as when employees gain new skills to help in their current job responsibilities. In this post-pandemic era, employee upskilling will require the acquisition of digital capabilities, decision-making, complex cognitive skills, and lifelong learning skills [56]. Also, the requirement of upskilling builds on the current skill set, which involves continuous learning and education, which helps establish a culture of innovation, productivity, and a continuous learning mindset that typically entails collaboration across team networks to develop career paths that bridge the skill gap and improve proficiency in an area of specialization [57]. Some of the strategies for upskilling are determining the skills needed for the workforce, creating corporate education partnerships, designing programmes with learning in mind, recruiting and assigning the appropriate resource personnel, and designing relevant support services [58].

5.3. Relations (Instead of the Original Reinforcement in the Model)

Relationships are a crucial aspect of organizational life, playing a vital role in the development of a meaningful and productive work environment. Ref. [59] opined that work relationships strongly influence employees’ attitudes and behaviour, shaping the overall dynamics of the workplace. Ref. [60] stated that, in a work context, the dimensions of relationships could include trust, respect, and support; these relationship dimensions are critical for relational quality. Furthermore, the study also stated that relationships are ever evolving and require flexibility, loyalty, and commitment, which are essential ingredients for a healthy relationship.

5.3.1. Competitive Advantage

At this phase, building relational capital (positive organizational perception) helps organizations become more competitive and fosters workforce adaptability to change.

Build Relational Capital (Positive Organizational Perception)

Relational capital provides a competitive advantage for organizations in times of change [61]. Petrash’s definition describes relational capital as the perceived value that customers associate with their business interactions with suppliers of goods or services. In a professional setting, this concept extends to employees’ perceptions while engaged in their work within an organization. Consequently, the effective management of social capital elements, such as trust, norms, and networks, contributes to cultivating a positive organizational reputation and image. This, in turn, fosters a positive perspective among employees, potentially providing the organization with a competitive advantage. This positive employee perspective of an organization is necessary for overcoming resistance to change during technological shifts and the adoption of technology in an organization.

Figure 1 During technological changes, workers exhibit resistance to change. The major competitive advantage for organizations will be to build both social and relational capital. Workers also experience job redundancy, job loss, inoperability, and shortened shelf life of their skills; building human capital (knowledge, skill, ability) in the workforce will give the organization a competitive advantage and foster workforce adaptability. Ref. [16] opined that organizations should focus on intangible resources like intellectual capital against tangible resources that can be easily copied to attain long-term competitive advantage or improve performance. The authors of [38] assert that companies aiming to navigate future skills successfully must foster employee buy-in for the proposed changes. Furthermore, effective management practices, including aligning actions with words, providing constructive supervisory feedback, ensuring system transparency, and building trust, are deemed crucial for enhancing engagement [39].

Figure 2 below represents the attributes organizations can adopt to give them a competitive advantage over their competitors during technological changes. Trust and positive organizational perception help foster employee buy-in, and building competence will give an organization a competitive advantage and foster workforce adaptability.

6. Discussion and Conclusions

During technological changes, organizations need to build social capital (trust), relational capital (positive organizational perception), and human capital (competency) to gain competitive advantage and foster workforce adaptability. This agrees with the authors of [22], who state that organizations can achieve competitive advantages through “extreme trust”. Furthermore, Ref. [62] opined that talented individuals prefer working environments where there is a trust relationship with their line managers, empowerment, and growth prospects.

Ref. [63] stated that knowledge, skill, and abilities are required to perform a specific job and fulfil the current and future requirements of the organization in order to earn a competitive advantage. Competencies relate to the skills, knowledge, and technological know-how that give a special advantage at specific value chain points [64]. Furthermore, Ref. [65] highlighted the relationship between perception, knowledge, and trust, which can help develop a long-term relationship. Also, high job security during technical changes, social relationships, and personal development (training) collectively contribute to an employee’s long-term loyalty, which leads to a competitive advantage [17]. This, therefore, highlights the importance of trust, perception, knowledge, skill, and ability as valuable and intangible resources that give the industry a competitive advantage in the adoption of technology.

In the modern economy, the major competitive advantage of a company is its intangible assets (such as trust, competence, and positive organization perception), which help foster greater employee involvement, enhance access to benefits within a social network, and foster a positive organizational image [61,62,66].