A critical discussion of models for conceptualizing the economic logic of construction

Abstract

The construction industry has developed a certain economic logic that reflects the way in which tasks, parts, and units are organized and related to each other in order to create economic benefits in the construction process. Four different models in the literature portray this logic. We examine how they complement and constitute alternatives to understandings of the economic logic of the construction industry. Along with transaction cost economics, we have identified three more empirically based models: a project-oriented model, a supply-chain-oriented model, and a network-oriented model. Associated with different streams of research, these models are discussed in terms of the typical problems and key interdependencies in the construction process they address, and the type of solutions they suggest, including organizing principles for how construction parties should relate to each other. The findings show how examining different models provides a comprehensive, albeit non-exhaustive overview and an explanation of why the construction process is organized in the way it is. There is a need for increased awareness of the utilization of models (or combinations of models) and the models must also be seen as arguments in a broader discussion of how the construction process could or should function.