The Link Between Stakeholder Power and Value Creation in Construction Projects

Amin Haddadi1, Olav Torp2, Jardar Lohne3 & Ola Lædre4

1PhD Candidate, NTNU - Norwegian University of Science and Technology, Trondheim, Norway, +47 977 98 227, Amin.haddadi@ntnu.no
2PhD Candidate, NTNU - Norwegian University of Science and Technology, Trondheim, Norway, +47 977 98 227, Amin.haddadi@ntnu.no
3Research Scientist, NTNU, Trondheim, Norway, +47 934 44 930, Jardar.lohne@ntnu.no
4Associate Professor, NTNU, Trondheim, Norway, +47 911 89 938, Ola.ladre@ntnu.no

Abstract

This paper presents a study on what effect stakeholder power has on value creation in construction projects. Fourteen main sources of power in organizations, described by Morgan, form the analytic framework. The ambition is to identify 1) how the distribution of power between the main stakeholders is, 2) which sources of power are most common in a construction project organization, 3) which effect the sources of power have on value creation in projects. The data is collected through semi-structured interviews. Experienced representatives from four main stakeholders in early phase of construction projects (owner, architect, design manager and project manager) were interviewed. The collected data through the interviews was coded, analyzed and linked to the literature study. The results reveals that 10 of 14 sources of power are identified as common sources of power in construction project organizations. Out of the ten, control of knowledge & information and formal authority are rated as the most influential sources of power. Apparently, all main stakeholders can possess these two sources. Rhetorical skills – which is not among the fourteen main sources described by Morgan – turn out to be an underrated and complex source of power. The LCI triangle model suggests that all project delivery systems have three basic domains whining which they operate i) organization, ii) the project´s “Operating system” and iii) the commercial terms binding the participants. These are equally important and should be aligned for the system to be coherent. Power is one of the main elements in organizational affairs that effect transparency and decision processes. There is a knowledge gap in how the power can affect the processes in project organization and which effects it can have on the projects´ overall value creation.

Keywords

Power, Organization, Value creation, Early phase, Rhetoric

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Reference

Haddadi, A. , Torp, O. , Lohne, J. & Lædre, O. 2016, 'The Link Between Stakeholder Power and Value Creation in Construction Projects' In:, 24th Annual Conference of the International Group for Lean Construction. Boston, USA, 20-22 Jul 2016.

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