An insight into heuristic approach to building strategy

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An insight into heuristic approach to building strategy

 

Author: Tang, Lai Yee Sandy
Title: An insight into heuristic approach to building strategy
Degree: Ph.D.
Year: 2009
Subject: Letting of contracts
Construction contracts.
Hong Kong Polytechnic University -- Dissertations
Department: Dept. of Building and Real Estate
Pages: x , 338 pages : illustrations
Language: English
InnoPac Record: http://library.polyu.edu.hk/record=b2815729
URI: http://theses.lib.polyu.edu.hk/handle/200/8033
Abstract: Competitive tendering in the form of sealed bidding has traditionally been widely adopted in the construction industry as the principal method of procuring construction contracts. Bid decisions by contractors in tender submission require the formulation a competitive bidding strategy and the determination of the tender sum. Although recently variations in the method and procedures for the procurement of projects in both the public sector and private sector have emerged competence in winning cotracts in the task environment of competitive bidding remains a significant impact on the business turnover and the performance of the contractor's organization. Research into competitive bidding behaviour in the discipline of construction research has been founded on the classical approach formulated by Friedman and Gates in 1956 and 1967 respectively. The conventional approach to bidding in practice has been commented as being intuitive and intractable. Thus, the central idea of the two classical papers was to pose a rational and systematic approach to bidding practice through the introduction of the concept of optimal expected profit and the formulation of a probabilistic model as a decision tool. Whilst the precision of the method to determine the probability of winning has generated heated debate in the construction research community, the classical approach to bidding problem has evolved as a core research area in the discipline of construction research since the 1970s. A systematic analysis of the literature revealed that the lack of knowledge transfer between the development of decision tools in the research community and the application of such tools in practice has been conceived as the basic problem in the field. Surprisingly, despite the continuous development in the precision of the mathematical modeling techniques and the revolutionary technological advancement in the complex decision support systems during 1990s, the problem remains. Bidding practice in the millennium remains heuristic in nature feating decision-making based on experience, judgment and intuition. This research makes an important contribution to this key problem. The primary goal of the study is to provide an insight into the essence of the heuristic approach to bidding strategy in practice. An empirical study was conducted to explore the approach to bidding strategy contextualized in two sets of longitudinal bid incidents submitted by two contractors. The research adopts an interpretive approach in which the inquiry process is designed to explore, conceptualize and integrate the emerging themes from two distinctive perspectives: the approach in practice by the practitioners and the approach in academia by the researchers. Bid incident analysis and content analysis with the use of cognitive mapping were used to facilitate the collection and analysis of data from the two distinctive sources: the descriptive account by the bidders and the normative representation in the literature. The discovery from the explorative study has led to the construction of a novel conceptual framework to understand the nature of heuristic approach to bidding strategy in practice. The enquiry into the foundation of the theoretical framework reveals the evolution of bid models and throws light to the way in which the progress of the body of knowledge has been confined by the paradigm-bounded mental model implicated in the classical models and a fundamental misconception of the complexity of bidding in the built environment. The insight displays the deep rooted structural problem in the development of bidding models since the 1960s and poses a new perspective for a realistic and significant conception of the structure and operation of competitive bidding in the built environment.

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