RELATIONSHIP BETWEEN FLIGHT TIME AND ORGANIZATION DESIGN OF INTERNATIONALIZING ARCHITECTURAL AND ENGINEERING (ae) CONSULTANCY FIRMS

RELATIONSHIP BETWEEN FLIGHT-TIME AND ORGANIZATION STRUCTURES OF INTERNATIONALIZING ARCHITECTURAL AND ENGINEERING (A/E) CONSULTANCY FIRMS LUKE PEH LU CHANG (BSC. BUILDING, NUS, 2005) A THESIS SUBMITTED FOR THE DEGREE OF DOCTOR OF PHILOSOPHY DEPARTMENT OF BUILDING NATIONAL UNIVERSITY OF SINGAPORE 2010 ACKNOWLEDGEMENTS It had been a fascinating journey. From worrying about modules, comprehensive and qualifying examinations’ results, swelling of the head from reading loads and buckets of books and journal papers for literature review, fretting over and planning the “supposedly” meticulous design of the study, city-hopping (on commercial planes, trains, taxis, scooters and my comfortable shoes) around Asia for the fieldwork, squeezing every brain cell for the analysis of the data collected, to finally, the penning of this very environmentally-unfriendly thick thesis ;-p (I promise to go green in the future.) The wonderful opportunity to have embarked on my PhD studies was actually a matter of chance, albeit one offered to me by a benefactor whom I will be grateful forever. I reminisces frequently, the moment when Professor George Ofori enthralled me suggesting that I pursue a doctorate degree in my alma mater, a thought I had never contemplated prior to that life-changing day. He then recommended me a brilliant academia and supervisor – Professor Low Sui Pheng to guide me for my research. Professor Low’s energy and invaluable encouragements had been inspirational and instrumental to the completion of my studies. Without Professor Ofori and Professor Low who have influenced me in the most positive way possible, this endeavor would not have begun and occurred at all. The “Butterfly Effect” set off by them will be tremendous to my life and also those around me. I would also like to express my tribute and sincere gratitude to CPG, Jurong International, Surbana, DP Architects, A61 and ADDP who had participated in my research. I am truly indebted to those whom had been so hospitable and generous towards me when I visited them in their cities. Special thanks! All of you have imparted and shared with me a lot and I really look forward to seeing all of you again. In the faculty, I was like a foreigner living in my own country! Around me were graduate students from everywhere around the world, and I was vastly outnumbered. But this multi-nationality and multi-cultural characteristic and fabric made up for a very diverse and vibrant community. This melting pot of different people from different places and heritages provided the platform for interesting dialogues during our regular Building Research Students’ Network (BRSnet) and informal conversations in the research rooms, and the get-togethers to celebrate one another’s festivals and traditions in unison and joy. Those were times to savvy and treasure forever. I am grateful for my family’s support. All of them have been beacons of light and encouragement these few years. Thank you, O’Lord, God, for all the guidance and blessings. Yours sincerely, Luke Peh Lu Chang October, 2011 Singapore i TABLE OF CONTENTS Summary List of Tables List of Figures vii viii xi 1. 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 1.10 1.11 INTRODUCTION Background Research problem Knowledge gap Aims and objectives Research hypotheses Innovation Research scope and limitations Research layout Expected significance and contribution of the research to knowledge and practices Likely problems of investigations and the proposals to overcome them Structure of the research 1 4 5 2. 2.1 2.2 2.3 FLIGHT-TIME, GEOGRAPHICAL DISTANCE AND RELATED ISSUES Introduction The associated attributes of distance Flight-time and distance 2.3.1 Time 2.3.2 Flight routes 2.3.3 The aircraft’s speed 2.3.4 Climate 2.3.5 Time-zones 2.3.6 Jet-lag and circadian rhythm Globalization versus geography Manifestations of distance 2.5.1 Cultural distance 2.5.2 Administrative/ attributional distance 2.5.3 Geographical distance, gravitational distance and topological distance 2.5.4 Economic distance 2.5.5 Technological distance 2.5.6 Socio-demographical distance 2.5.7 Relational/ affinity distance 2.5.8 Organizational distance Summary 12 12 12 15 16 17 19 19 20 20 21 22 23 25 28 31 34 35 36 38 44 CORE AND PERIPHERY SYSTEM OF CITIES Introduction Human and economic geography Geopolitics Geo-economics Transportation Location Localization 3.7.1 Virtual clusters 3.7.2 Paradox of globalization and localization 46 46 46 47 48 49 52 56 56 57 2.4 2.5 2.6 3. 3.1 3.2 3.3 3.4 3.5 3.6 3.7 ii 3.8 3.9 3.10 3.11 3.12 3.13 Agglomeration Centrality Complementarities of services System of cities Firm’s behavior Summary 58 63 64 64 66 68 4. 4.1 4.2 4.3 4.4 INTERNATIONALIZATION OF SINGAPOREAN A/E FIRMS Introduction Discontinuities or inter-connectivity Economics and internationalization MNE and FDI 4.4.1 FDI 4.4.2 Trade agreements 4.4.3 Borne global 4.4.4 Embeddedness 4.4.5 Barriers of entry International construction Singapore-domiciled service firms 4.6.1 Singapore’s construction industry 4.6.2 Singapore’s construction exports 4.6.3 Architectural and engineering services 4.6.4 A/E communications 4.6.5 Supply-chain of A/E consultancy services 4.6.6 Role of the government Internationalization risks 4.7.1 Risks and uncertainty 4.7.2 Country or city risk 4.7.3 Forecasting 4.7.4 Risk management Market entry 4.8.1 Entry mode 4.8.2 Progression of entry modes Eclectic-Diamond framework 4.9.1 Eclectic paradigm 4.9.2 Diamond theory 4.9.3 Combining the Eclectic paradigm with Diamond theory Distance and internationalization Conclusion 70 70 70 71 71 76 76 77 77 78 78 79 80 80 85 85 85 87 87 88 88 88 89 89 90 90 91 92 93 94 96 97 BUSINESS STRATEGIES AND ORGRANIZATION DESIGN Introduction Military strategies and formations Theory of the firm 5.3.1 Resource-based theory 5.3.2 Transaction-costs theory 5.3.3 Behavioral theory 5.3.4 International product life-cycle theory 5.3.5 Uppsala model 5.3.6 Networks theory Issues on strategic management 99 99 99 100 103 104 105 105 106 106 107 4.5 4.6 4.7 4.8 4.9 4.10 4.11 5. 5.1 5.2 5.3 5.4 iii 5.4.1 New economy 5.4.2 Complexity and flexibility 5.4.3 Intelligence 5.4.4 Psychoanalyzing the organization 5.4.5 Competency 5.4.6 Internationalization 5.4.7 Strategies and systems 5.4.8 Entry strategy 5.4.9 Organization structure 5.4.10 Leadership 5.4.11 Human resource 5.4.12 Partnering 5.4.13 Communications 5.4.14 Marketing 5.4.15 Value creation 5.4.16 Learning and knowledge management 5.4.17 Cultural management Strategic analysis, planning and implementation Entry strategy and entry modes Organization design Inter-dependence of strategy and organization structure McKinsey 7S A/E firms’ business strategies Summary 107 109 111 112 113 114 115 116 117 119 121 123 124 125 125 127 127 128 129 131 136 137 139 140 6.7 THEORETICAL AND CONCEPTUAL FRAMEWORK Introduction Theoretical framework 6.2.1 Flight 6.2.2 Gravity model 6.2.3 Agglomeration in core locations and back-washes in periphery locations 6.2.4 Venturing overseas 6.2.5 Embeddedness 6.2.6 Risks, business strategies and organization structures 6.2.7 Dynamic 8S framework 6.2.8 Organization design of an A/E firm 6.2.9 Isomorphism 6.2.10 Eclectic-Diamond framework Relationship between key elements Conceptual model of study Parameters of measurement Implications of study 6.6.1 Interpolation and extrapolation of organization design 6.6.2 Location theory and research design Summary 142 142 142 143 143 145 146 147 148 148 150 150 151 152 153 154 158 159 160 160 7. 7.1 7.2 7.3 7.4 RESEARCH DESIGN AND METHODOLOGY Introduction Pilot study Population and sampling Data collection instruments 163 163 164 164 166 5.5 5.6 5.7 5.8 5.9 5.10 5.11 6. 6.1 6.2 6.3 6.4 6.5 6.6 iv 7.5 7.6 7.7 7.8 7.9 7.10 8. 8.1 8.2 8.3 8.4 8.5 8.6 9. 9.1 9.2 9.3 9.4 9.5 9.6 9.7 9.8 9.9 9.10 10. 10.1 10.2 10.3 10.4 10.5 10.6 7.4.1 Questionnaire surveys and interviews Data collection 7.5.1 Fieldwork Statistical analysis Content analysis Case-based reasoning (CBR) Validation, reconciliation and adaptation Summary 167 170 170 172 173 174 176 177 DATA COLLECTION AND RESULTS Introduction Profile of questionnaire replies and interviewees Content analysis 8.3.1 Content analysis methods 8.3.2 Differences in perceptions between private and government-linked firms Statistical analysis 8.4.1 Factor and reliability Integration of content analysis and statistical analysis Summary 178 178 178 180 180 194 195 204 205 209 DISCUSSION OF FINDINGS Introduction Singapore’s A/E firms’ traits and characteristics 9.2.1 Firm A 9.2.2 Firm B 9.2.3 Firm C 9.2.4 Firm D 9.2.5 Firm E 9.2.6 Firm F Corporatized or privatized firms Motivations and objectives Competitiveness and competitive strengths of Singapore’s A/E firms Internationalization of Singapore’s A/E firms 9.6.1 Reasons for internationalizing 9.6.2 “Hot-spots” and “cold-spots” 9.6.3 Preferred locations to internationalize 9.6.4 Countries and cities Difficulties of internationalization Management of risks Prerequisites and CSF Summary 210 210 210 211 211 212 212 213 213 214 215 217 219 220 220 222 225 236 238 245 247 SYNTHESIS OF THEMES Introduction 7-hour flight-radius Core and periphery locations Gravitational distance 10.4.1 Globalization and virtual collocation 10.4.2 Importance of physical presence Double-octagonal perspective of distance Eclectic-Diamond framework 247 247 247 252 256 264 264 267 281 v 10.6.1 Factor conditions 10.6.2 Demand conditions 10.6.3 Related and complementary industries 10.6.4 Strategies due to competition 10.6.5 Government interferences 10.6.6 Chances 10.6.7 Ownership qualities 10.6.8 Locational factors 10.6.9 Internalization 10.7 The 8S framework 10.7.1 Business strategies 10.7.2 Organization structure 10.7.3 Organization systems 10.7.4 Leadership styles 10.7.5 Skills and staffs 10.7.6 Shared values 10.7.7 Supply-chain 10.7.8 Dynamic strategies 10.8 Synthesis of findings and themes 10.8.1 Generalization of findings from content analysis 10.8.2 Generalization of findings from statistical analysis 10.9 Decision-support systems and management information systems 10.10 Summary 281 282 284 286 288 290 291 293 294 296 297 310 314 317 320 322 323 325 328 330 337 337 338 11. 11.1 11.2 11.3 11.4 11.5 11.6 11.7 CBR-DSS AND VALIDATION Introduction Management of an A/E firm Sharing and learning from others in the industry Discussion on findings in content analysis and statistical analysis The CBR logic Step-by-step demonstration of the CBR-DSS Validation 11.7.1 Feedback 11.7.2 Recommendations and modifications The completed CBR-DSS prototype Conclusion from validation 340 340 340 342 343 345 353 358 358 360 361 371 CONCLUSION Introduction Major contributions of the study 12.2.1 Major findings of the study 12.2.2 Validation of hypotheses 12.2.3 Contribution to knowledge 12.2.4 Contribution to industry 12.2.5 Innovations of the study Limitations of the research Recommendations for future research 372 372 373 374 385 386 387 389 389 390 References Appendices 392 424 11.8 11.9 12. 12.1 12.2 12.3 12.4 vi Summary of Thesis The thesis synergizes several knowledge areas such as Corporate Geography, Agglomeration, Management and Organization, and examines how flight-time is a mediator factor for a spectrum of factors, such as climate, time-zone, bodily adjustments, cultural distance, administrative distance, geographical distance, economical distance, technological distance, socio-demographical distance, relational distance and organizational distance. It is postulated in the study that organizational distance could be manifested as changes, spill-over, time-lag, time-differences, psychic distance, networks, communications, net costs-benefits and control. The thesis postulates that these in turn influence the organizational strategies of an internationalizing A/E firm. The thesis investigated how flight-time affects gravitational distance between an A/E MNC’s home and host-cities, which determines the firm’s embeddedness and access to location-specific assets, and its spatial interaction with a city. It was found that contrary to many studies which have propounded that new transportation and communication technologies have subverted the urbanization processes, distance continue to shape corporate geography in a myriad of ways. The study discussed how flight-time influences the variety of mediator factors, such as its effect on a city’s hierarchical ranking in the CorePeripheral System of Cities, how firms have a proclivity to agglomerate in locational clusters, and in turn, how architectural and engineering firms strategize and structuralize themselves in cities of different positions in the global mosaic of regional cores, semi-cores and peripheral hinterlands. The researcher visited Johor Bahru, Kuala Lumpur, Penang, Ho Chi Minh City, Hanoi, Shanghai, Beijing and Tianjin for his research field-work. The information collected from these cities was examined using Content Analysis and Statistical Analysis, and then built into a demonstrational Case-Based-Reasoning Decision-Support-System (CBR-DSS), which makes use of the concepts of i) institutional isomorphism; ii) coercive isomorphism; and iii) mimetic isomorphism. The system has been validated to be a useful toolkit and checklist for firms to obtain preliminary guidance, advices and recommendations on business strategies and organization designs for an internationalizing firm. The Double-Octagonal Perspective of Distance reminds firms of how distance can complicate their overseas ventures, and warns of how firms routinely overestimate the attractiveness of foreign markets while ignoring the costs and risks of doing business in a new market. The study drew on the Eclectic Diamond Framework conjured up by the study which merges Dunning’s Eclectic Paradigm and Porter’s Diamond Theory, to internalize the business conditions and develop fitting strategies and organization design in the form of 8S, an extension of the McKinsey 7S Framework, in the form of Strategy, Structure, Systems, Leadership Style, Firm’s Skills, Staffs’ characteristics, Shared Values and Supply-chain. The study contributes to knowledge and industry’s practices through its evaluation of i) the competitiveness of Singapore’s A/E firms in regional markets; ii) strategies adopted by Singapore’s A/E firms when they venture overseas; iii) comparisons between overseas offices of private and governmentlinked firms; iv) discontinuities in environment and access to resources due to distance; and v) distance’s implications on risk perception, managerial decisions and organization structures. vii LIST OF TABLES Table Description 2.1 2.2 2.3 Attributes of virtual distance The CAGE distance framework: opportunities for global arbitrage Impact of flight-time on communication, the employee and the firm Geodesics of cities and distances of cities away from Singapore Cultural indexes between selected countries Hofstede’s cultural index score Communism around the world Country openness Major legal systems of the world Several forms of distance and their definitions Top exporting markets 13 15 16 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 Brief description of important theories on location Population of cities Cities with the most skyscrapers Passenger numbers by airports GDP (nominal) per capita Ranking of global cities Leading world cities and their hierarchies Comparative ratings of global cities Degree-scores for the cities which host the most number of the world’s top 100 architectural firms 54 60 61 62 62 65 66 67 67 4.1 4.2 4.3 4.4 4.5 Evolution of theories on internationalization Indicators of the Singapore economy Strengths of Singapore’s A/E and related firms Comparison of eclectic paradigm and diamond theory Justification of Eclectic Diamond framework 73 79 86 94 96 5.1 Firm and international management concepts 101 5.2 Analysis of the environment, planning, matching and implementation Summary of literature on the new economy Summary of literature on complexity and flexibility Summary of literature on intelligence Summary of literature on psychoanalysis of the organization Summary of literature on firm’s competences and competitive 107 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 5.3 5.4 5.5 5.6 5.7 Page 18 24 24 25 27 28 29 33 108 110 111 112 113 viii 5.8 5.9 5.10 5.11 5.12 5.13 5.14 5.15 5.16 5.17 5.18 5.19 5.20 5.21 5.22 5.23 5.24 5.25 strengths Summary of literature on internationalization Summary of literature on strategies and systems Summary of literature on entry strategies Summary of literature on organization structure Summary of literature on leadership Summary of literature on human resource Summary of literature on collaboration Summary of literature on communications Summary of literature on marketing Summary of literature on value creation Summary of literature on organizational learning Summary of literature on cultural management Choice of entry modes International entry strategies/modes: advantages and critical success factors Traits and characteristics of different organization structures Control mechanisms n multinational organization structures Forms of organization Strategy and the appropriate structural variations 114 115 116 118 119 121 123 124 125 126 127 128 130 130 133 134 135 137 6.1 6.2 6.3 Classifications of organization design Table of constructs Inter-relationship between internal octagon factors of distance, business strategies and organization design 155 156 159 7.1 7.2 7.3 7.4 7.5 7.5 Choice of sampling method Rationale for choice of cities Interview questions Questionnaire survey Research design and methodology Table of statistical tool 165 166 168 162 170 172 8.1 Profile of questionnaire and interview respondents in terms of designations Profile of questionnaire respondents in terms of firms and cities Profile of interviewees in terms of firms and cities Methods of content analysis Frequently cited categories and codes Sequence matrix (A follows B) Sequence matrix (B follows A) Co-occurrences between factors Geographical distance and its proximity to other factors Organization structure and its proximity to other factors 178 8.2 8.3 8.4 8.5 8.6 8.7 8.8 8.9 8.10 179 179 180 182 183 184 186 188 189 ix Woodward, J. (1958). The Contingency Theory of Organizations. Sage Publications. Wolf, C. Jr. and Weinschrott, D. (1973). International Transactions and Regionalism: Distinguishing “Insiders” from “Outsiders”. The American Economic Review, Vol. 63, Iss. 2, pp. 52-60. Xu, H. (2002). Jing Shang Bao Dian: Tao Zhugong Shangxun – 2nd Edition. Asiapac Books. Yin, R. (1994, 2003). Case study research: design and methods. Sage. Yisa, S. and Edwards, D. (2002). Evaluation of Business Strategies in the UK Construction Engineering Consultancy. Measuring Business Excellence. Bradford. Yu, W.D. and Skibniewski, M. (1999). Quantitative Constructability Analysis with a Neuro Fuzzy Knowledge-Based Multi-Criterion Decision Support System. Automation in Construction, Vol. 8, No. 5, pp. 539-558. Yuan, L.T. and Lee, T.Y. (1991). Growth Triangle: The Johor-Singapore-Riau Experience. Institute of Policy Studies (Singapore). Zhao, X. and Decker, R. (2004). Choice of Foreign Market Entry Mode: Cognitions from Empirical and Theoretical Studies. International Journal of Business and Economics, Vol. 3. No. 3, pp. 181 - 200. Zhao, H. Luo, Y. and Suh, T. (2004). Transaction Cost Determinants and Ownership-based Entry Mode Choice. Journal of International Business, Vol 35. pp. 524-544. Zipf, G.K. (1946). The P1P2/D Hypothesis: On the Intercity Movement of Persons. American Sociological Review. Vol. 2, December, pp. 677-686. 423 APPENDIX A Internationalization of Architectural and Engineering (A&E) firms This is part of a cross-country research project that examines the organizational management of A&E firms when they venture overseas. Please rest assured that the information which you provide in this interview will be kept strictly confidential and will be used solely for academic purposes only. Thank you in advance for your kind assistance. Professor LOW, Sui Pheng, FCIOB Department of Building School of Design and Environment National University of Singapore Singapore 117566 Telephone: (65) 6516 3439 Fax: (65) 6777 3953 Email: bdglowsp@nus.edu.sg Mr. PEH, Lu Chang, PhD Candidate Department of Building School of Design and Environment National University of Singapore Singapore 117566 Telephone: (65) 9842 8080 Email: bdgplc@nus.edu.sg A. BACKGROUND Interviewee’s information • Company • Designation • Name • Role • Years of experience Contact • Telephone number • Email address Interview • Location • Time 424 APPENDIX A B. DISCUSSIONS Please note that The Organization refers to the collective units of main and field-offices while The firm refers to the branch office which is away from the headquarters. S/no Questions and aims Reference (and rationale) Internalization and Strategic models • • Please describe your organization and firm’s background in -Dunning’s Eclectic terms of ownership, locational and internalization (OLI) Paradigm factors. How does flight-distance influence OLI factors? (OLI and distance) • • Please describe your organization and firm’s strategies -Porter’s Diamond and structures due to rivalry, factor and demand conditions, Theory supporting and related industries, government intervention and chances. How does flight-distance influence the Diamond’s factors? (Diamond and distance) • • • Please describe your organization and firm’s strategic -McKinsey 7S management model and strategic thrusts. What are the key aspects of business and organizational strategic management? (Change in strategies Discuss embeddedness of organization and personnel due to distance) Discuss isomorphism of firms Internationalization: Reasons for overseas venture and where, when, what, why, who, how • Discuss agglomeration and localization effects • Discuss centrality of cities in the world • In which countries and cities does your organization have -Ghoshal and Barlett’s offices? Transnational • When were these country and branch-offices formed? Organization • What were the reasons for these overseas ventures? • Why were these countries/cities chosen? What were their qualities? How familiar is the firm with the environment, its Krugman’s Agglomeration economics 425 APPENDIX A regulations and markets? (Internationalization What type of entities are these offices? How are the and distance) experiences of the firm in internationalizing? Who are the managers of these offices? How are the experiences of the managers in internationalization? • What varieties of services these offices provide? • How are these services similar or different from those provided by the main office or headquarters? • How much control does the headquarters have over the overseas offices or how much independence each overseas office has? • How are the resources available different or similar? • How are the businesses integrated? • How did the firm decide on these strategies? Organizational structures and business/entry strategies – from vision to implementation • What are the firm’s vision, mission, objectives, investment Waterman and Peters’s horizon and pay-back considerations, policies, programs, Excellent Company plans, culture and values? (Company’s soft values) • Please describe the organization structure, processes and Mintzberg’s Strategic culture of the organization, headquarters and overseas Management office? (Company’s organizational structure) • What was the spearheading/entry strategy when the firm entered the particular geographical market? • Did the firm consider and apply varied entry strategies in different countries/cities? • How did the firm prepare itself for the particular overseas venture? • How were the decisions made? What were the sequence and steps of considerations? • What were the entry modes? • What were/are the instructions for the overseas office – from setting-up to present? • What are the costs break-down for an overseas posting and assignment? Root’s Entry Strategy (Company’s entry strategy) Theory of the firm Value-costs evaluation 426 APPENDIX A 10 • What are the competitive strengths of the firm? How Hamel and Prahalad’s competitive is the firm? Did venturing abroad impose Core Competencies discontinuities and erode comparative and competitive advantages? (Core competence and distance) 11 • Does the firm take a region-centric, ethnocentric, Geocentric model of polycentric or geocentric approach in management? Please management and give some examples. marketing (region-centric –approach based on regional environment; ethnocentric – approach solely based on home environment; polycentric – approach based on individual country/city; geocentric – integrated approach) 12 • How does your firm manage internationalization and Octagonal + factors distance’s implications on inconveniences, control, psychic and cultural distances, communications, value and costs , sap of resources, time-differences, time-lags, and physical changes which may require assimilation training for A&E (Internationalization and distance) specialists, networks, spill-over, friction etc? 13 • What are the main risk considerations by the organization? Risk-Returns evaluation What are the social interactions that affect risk assessment? Why is the firm concerned about these risks? How are they different or similar in each city? • How is the risk adverseness of the firm towards (Risk and distance) commitment and investment in each city? What are the firm’s goals of risk management? • How are risks managed? - Political, legal and contractual, project and operational, management, financial, cultural, etc. 14 • How does the firm perform risk evaluation? What were the techniques used? • How does risk management benefit the organization? • What are the critical success factors (CSF) and possible pit- CSF and Pit-falls falls in each city? • What are the pre-requisites for internationalizing A&E firms? Is the Singapore-brand helpful? Pre-requisites 427 APPENDIX A 15 • What were some of the problems regarding organizational Problem-solving design encountered by the firm and how were they solved? • What were some of the problems regarding business strategies encountered by the firm and how were they (Problem solving and solved? distance) • How were conflicts resolved? 16 • How have the organizational structures of A) of the Collin’s Organic organization evolved? And B) of the branch-office evolved? Evolution of the Firm • How have the business strategies of A) of the organization evolved? And B) of the branch-office evolved? (Evolution of strategies and distance) 17 • What is the value chain of the organization and branch- Networking office? Does the firm have alliances or collaboration with other firms or institutions to enable overseas ventures? (Networking and distance) 18 • Is there localization in resource management? What are the Resource Management procurement assessment criteria and options? 19 • What are some important lessons from previous Experience and internationalizing experiences? Learning • How can organizational learning and experiences aid to improve decision making for these instances? (Experience, learning and distance) 20 Flight-time/distance and • What are your experiences with transnational work? • What you think of flight-distance and availability of travel flight and their impact on internationalization? • What you think of “time-space compression” and “virtual collocation”? • Does distance sap resources? 428 APPENDIX B Internationalization of Architectural and Engineering (A&E) firms You are invited to participate in a NUS survey. This is part of a cross-country NUS-funded research project that examines the organizational management of A&E firms when they venture overseas. Please rest assured that the information which you provide in this interview will be kept strictly confidential and will be used solely for academic purposes only. Thank you in advance for your kind assistance. Professor LOW, Sui Pheng, FCIOB Department of Building School of Design and Environment National University of Singapore Singapore 117566 Telephone: (65) 6516 3439 Fax: (65) 6777 3953 Email: bdglowsp@nus.edu.sg Mr. PEH, Lu Chang, PhD Candidate Department of Building School of Design and Environment National University of Singapore Singapore 117566 Telephone: (65) 9842 8080 Email: bdgplc@nus.edu.sg Survey on Organizational Structures in Architectural and Engineering (A&E) Consultancy Firms Part 1: General information of your firm Does your company have overseas branch-offices? If yes, how many does it have and where are these offices situated? What is the organizational structure of the firm? What is the nature of your organization’s businesses and services? How are the services provided by the overseas branchoffices similar or different to those provided by the headquarters? What are the business strategies of the organization? Are they different at the overseas branch offices? Financial turnover of organization Age and evolution of the organization Permanent/ contractual/ temporary employees in organization 429 APPENDIX B Least relevant Most relevant To what extent does the following best describe your assessment? Please circle your assessment, based on a specific city, like the example shown above. Part 2: Internationalization Proximity and access to resources, networks and markets Our foreign office have accesses to resources from our Singapore head-quarters/regional head-quarters Our foreign offices have accesses to networks from Singapore Our foreign offices are patronized by our Singaporean business partners Our Singapore office has access to the host resources Our Singapore office has access to the host networks Our Singapore office has access to the host markets Discontinuities Our foreign office’s access to organizational resources, networks and markets could be discontinued at city boundaries (e.g. office in Boston not receiving adequate support from RHQ in New York) Our foreign office’s advantages due to access to home’s resources, networks and markets are discontinued at national boundaries Our foreign office’s advantages due to access to home’s resources, networks and markets erode with cultural distance 10 Our foreign office’s advantages due to access to home’s resources, networks and markets erode with attributional/institutional distance 11 Our foreign office’s advantages due to access to home’s resources, networks and markets erode with geographical distance 12 Our foreign office’s advantages due to access to home’s resources, networks and markets erode with economical distance Compression of time-space dimensions, Virtual collocation and Global-interconnectivity 13 The organization is multinational (each subsidiary is independent) Yes/ No 14 The organization is global (universal approach) Yes/ No 15 The organization is international (retaining much of the characteristics of the parent firm/HQ) Yes/ No 5 5 430 APPENDIX B 16 17 The organization is transnational (fully integrated and taking the strengths of each location) The offices are well-interconnected with one another – there is significant time-space compression and virtual collocation Yes/ No Part 3: Location of overseas offices or operations Flight-time/geographical distances, Agglomeration and Location 18 Flight-time is an important consideration to select location of offices overseas Availability of direct flights is a consideration to select setting up of offices overseas Shuttling between cities/countries (including preparations, transit/transfers and flight-time) is physically or mentally demanding and tiring; it takes up a considerable amount of our working time and is an inconvenient aspect of transnational work Long term overseas posting (more than year) will help to improve on work efficiency in the foreign office 22 Geographical distance is a consideration to select location of overseas offices 23 Geographical distance is a consideration to select procurement and allocation of resources 24 Geographical distance is a consideration to select networks abroad 25 Geographical distance is a consideration to select overseas markets 26 Geographical borders is a consideration to select setting up of offices 19 20 21 27 5 Geographical borders is a consideration to select procurement of resources, choice of networks and choice of markets overseas 28 Accessibility to clients and partners is an important determinant to the location of the overseas office 29 Accessibility to amenities is an important determinant to the location of the overseas office Cost-value evaluation 30 The organization incur significant transportation and freight costs due to air-travel/air-mails and packages The organization incur significant communications costs due to the need to set up infrastructural network The organization incur significant training costs to inculcate values and assimilate to host environment 31 32 5 431 APPENDIX B 33 The organization incur training costs because of the need to inculcate local staff with the company’s values and culture 34 Geographical distance increases operating costs 35 Geographical distance reduces potential value 36 Geographical distance affects net value-costs. Communication 37 There are losses of information 38 There are miscommunications 39 There are problems of coordination with overseas counterparts/colleagues 40 There are problems of cooperation with our overseas counterparts or colleagues (sometimes, familiarity and trust are absent) 41 There are problems of reporting 42 There are problems and undesirable time-lags in decision-making due to geographical separation of the offices Psychic distances 43 The cultures between the cities are different 44 The organizational cultures between the offices are different Spill-over and the Core to the Periphery 45 46 The location of regional offices are determined by spill-over and influences from the headquarter/Singapore’s resources, networks and markets The political environment in the host and home markets are similar 47 The economical environment in the host and home markets are similar 48 The socio-cultural environment in the host and home markets are similar 49 The demographical environment in the host and home markets are similar 50 The technological environment in the host and home markets are similar 51 There are commonalities in demand in the host and home markets Time-zones and time-lags 432 APPENDIX B 52 We contact and communicate with our overseas counterparts/ colleagues during our working hours which not coincide with their working hours 53 We contact and communicate with our overseas counterparts/ colleagues during their working hours which not coincide with our own working hours 54 The differences in time-zones affect our work 55 We often have to wait for longer to receive our overseas offices’ counterparts/colleagues’ replies to continue with our work Sociological and physical change 56 57 Training is required to assimilate and educate staff because of sociocultural changes There are climate differences between the host and home cities 58 Physical changes necessitates different technologies 59 Physical changes necessitates different designs 60 Training is required to re-educate and assimilate staff because of the difference in the physical environment Control 61 The overseas branch-office is controlled by the headquarters There is a control and autonomy paradox: Control is desired by the headquarters while Autonomy is preferred by the branch-offices Networks 63 62 Networks are important for businesses/ operations overseas Friction 64 65 66 Friction in the form of bounded knowledge and rationality, and sequential actions increases with geographical distances Telecommunications, technology and globalization have deemed distance irrelevant Physical/personal presence and contact is becoming more important in modern business 5 Part 4: Factor, Demand, Complementary and related industries, Government, Chance, Ownership and Locational factors Factor 67 68 Changes in environment are huge and require the firm to switch business strategies and organizational design Changes in accessibility require the firm to switch business strategies and organizational design 5 433 APPENDIX B 69 70 Diminished knowledge of overseas market requires the firm to switch business strategies and organizational design The firm adapts well to environmental changes 5 Demand 71 The host market is more sophisticated than the home market 72 The firm is capable of meeting the expectations of the host market Related and supporting industries 73 Related and supporting industries in the host environment are critical to the success of the firm in the overseas market 74 The overseas branch-office relies on local business partners more than home business partners Government 75 The firm is able to turn statutory restrictions by the home government into opportunities 76 The firm is able to turn statutory restrictions by the host government into opportunities 77 The firm is able to make use of the benefits given by the home government 78 The firm is able to make use of the benefits given by the host government Chance 79 The firm is aware of the opportunities available 80 5 Our intelligence are accurate and useful to inform us of the opportunities around 81 The firm is concerned about the long-term sustainability of the firm in the overseas market Ownership 82 83 The foreign office has autonomy and is not controlled excessively by the head-quarters The managers delegate to and empower the subordinates 84 The organization is Singaporean Locational 85 The city is conducive for business 86 There are commonalities in the home and host markets 87 It is difficult to coordinate work with a distant colleague 88 It is difficult to integrate work with a distant client 89 It is difficult to integrate work with a distant business partner 90 It requires extra efforts to integrate work with more distance 434 APPENDIX B 91 Deception is more common when distance increases 92 Physical distance changes the cultural, attributional/institutional, geographical and economical aspects of the business environment Part 5: Risk management Risks 93 The firm has a structured and elaborate risk management plan 94 Risk is an important consideration for overseas ventures 95 The firm is risk adverse (low threshold towards risks) 96 The firm seeks to minimize uncertainty by gathering intelligence and conducting due diligence The firm uses framing of possible scenario to manage risk 99 The firm makes decision based on anticipation of regret/opportunity costs The firm seeks to minimize risks by avoidance 100 The firm seeks to minimize risks by reduction 101 The firm seeks to minimize risks by transference 102 The firm seeks to retains risks 103 Political risks are significant in this particular country/city 104 Legal risks are significant in this particular country/city 105 106 Market and industry risks are significant in this particular country/city Financial risks are significant in this particular country/city 107 Socio-cultural risks are significant in this particular country/city 108 Management risks are significant in this particular country/city 109 110 Technological/engineering and project risks are significant in this particular country/city Design risks are significant in this particular country/city 111 Risk perception of foreign market is influenced by cultural distance 112 116 Risk perception of foreign market is influenced by administrative and political distance Risk perception of foreign market is influenced by geographical/flight distance Risk perception of foreign market is influenced by access due to transportation and communications infrastructure Risk perception of foreign market is influenced by economic distance Risk analysis is an important component of value-costs evaluation 117 The choice of business strategies and management is influenced by 97 98 113 114 115 5 5 435 APPENDIX B the perception of risks 118 The choice of organizational design is influenced by the perception of risks Part 6: Organization design Organizational structure (– Please provide organizational chart) 119 125 Organizational design follows business strategies – Please choose 1; or Business strategies follow organizational design – Please choose The relationship between organizational design and business strategies is dynamic Business strategies are organic and dynamic; it evolves with time and situations. It is a contingency/situational model that is flexible to deal with complexity The organizational structure is organic and dynamic; it evolves with time and situations. It is a contingency/situational model that is flexible to deal with complexity Value-costs evaluation influences business strategies and organizational design The structure (reporting, communication, coordination, cooperation, authority and responsibility) can be flexible The organizational structure is efficient and effective 126 The firm is a learning organization 127 The lines and processes of reporting are efficient 128 129 The lines of communication are top-down – Please choose 1; or bottom-up – Please choose 5; or Please choose if it is both ways The lines of coordination and cooperation are efficient 130 The set-out of authorities and responsibilities are effective 131 133 Power distance (preferential treatment to senior management) is large Masculinity/manliness traits is preferred (vs. feminity and emotionality) Staff have a short term time orientation (vs. long) 134 There is uncertainty avoidance 135 The staff practices individuality (vs. collectivity) 136 Decision making is autocratic (vs. democratic and with consensus) and centralized (vs. empowerment) The firm encourages employee movements across offices The firm tends to promote from within the organization (instead of employing senior staffs from “outside”) Employees share common values 120 121 122 123 124 132 137 138 139 5 5 5 436 APPENDIX B 140 The office is fully functional, equipped to handle, e.g. procurement, financial, technology, networking, human resource, service, marketing and other aspects of a normal organization in entirety Part 7: BACKGROUND Interviewee’s information • Company • Designation • Name • Role • Years of experience Contact • Telephone number • Email address Kindly complete by 30th June 2009  Thank you for your kind participation! We value your inputs and contributions. If you would like to have a copy of the aggregated survey findings sent to you, please tick here  437 APPENDIX C VALIDATION FORM Please help us to evaluate the Case-Based-Reasoning-Decision-Support-System (CBR-DSS) on Internationalization, Business strategies and Organization design of Architectural and Engineering (A&E) firms when they venture overseas. Please rest assured that the information which you provide in this interview will be kept strictly confidential and will be used solely for academic purposes only. Thank you for your kind assistance. 1. Do you think organization design is important to a firm and its overseas offices? Important ( ) Moderately important ( ) Unimportant ( ) 2. Do you think Artificial Intelligence (AI) or Decision-Support-Systems (DSS) is useful for managerial decisions (e.g. decisions on internationalization)? Useful ( ) Moderately useful ( ) Not useful ( ) 3. Do you find the CBR-DSS easy to use? Yes ( ) No ( ) 4. Do you think the CBR-DSS accurately reflects the actual business strategies and organization design implemented (or to be implemented) by the firm’s offices in overseas markets? Accurate ( ) Moderately accurate ( ) Inaccurate ( ) 5. Do you think the CBR-DSS is an easy-to-use useful toolkit and/or checklist for you to obtain preliminary guidance, advices and recommendations on business strategies and organization designs for an internationalizing firm? Useful ( ) Other comments? Moderately useful ( ) Not useful ( ) ________________________________________________________ 438 [...]... Top 3 grouped factors in terms of mean and the unranked factors Strategic concerns of firms for their overseas offices Traits of firm’s offices in various locations CBR-logic and relationships between the determinants and the strategic choices of organization design Co-occurrences and weights between factors Profile of respondents for validation exercise Recommendations and modifications to CBR-DSS 344... concentration of economic activities in the world Core, semi-core and periphery Dynamic model of flight- time, agglomeration and organization structure’s relationship 56 Macroeconomic system Value of construction exports by Singapore Number of Singapore’s construction exporting firms and markets assessed Overseas construction exports by region in 2005 Number of consultancy firms and projects Trend of overseas consultancy. .. friction and fission effect of distance Time- lag tolerance of different industries Types of networks Relationship between distance and communications Model of flight- distance and organization structure relationship 13 Optimum or refraction routes considering minimization principle and traffic principle Total costs due to land and transportation Cost versus distance Cost and revenue of firm due to location... Interpolation and extrapolation of organization design Axial, sectoral and concentric land-use patterns Balancing business environment, business strategies and organization structures 159 160 162 7.1 7.2 7.3 7.4 Research design Design of case studies Mapping of new problem to database and adaptation The relationship between induction, deduction and abduction 164 167 175 177 8.1 8.2 Coding of documents... distribution of assets and resources and the allocation of roles and responsibilities; the physiology – the flows of goods, resources, people and information around the organization and the processes and relationships such flows create; and the psychology – the culture, shared vision and values that give the organization a meaning and glues all things together Markides (1999) described the organization. .. environment and in access to resources due to borders and geographical distances; iii) Analyze if geographical distances alters an organization s risk perception of its overseas market; and analyze the relationship between flight- time (proxy for geographical distance) and organization designs adopted by Singapore-domiciled A/E consultancy firms when they export their services; iv) Compare and contrast the organization. .. business strategies and organization design Another new finding is to link all these re-posturing to flight- time or flight- distances 1.7 Research scope and limitations The focus of this research is on A/E consultancy firms domiciled in Singapore and their business strategies and organization structures Due to financial and time constraints, only the cities that are along the North-eastern flight- route via... and co-occurrences with one another, pertaining to the research’s central theme of flight- time and its influences on organization designs of Singaporean A/E firms when they venture into regional overseas markets Chapter 9 presents the background information of the A/E firms and cities involved in the case studies The characteristics, motivations, competitive strengths, choice of markets of firms, and. .. design of an internationalizing A/E consultancy firm Chapter 2 appraises on the physical dimensions of flight- time and geographical distance 8 Flight- time causes changes in climate, time- zones, culture, administration, geography (e.g topography), economy, technology, demography, historical links and organizational distance A firm has to deploy appropriate business strategies and organization designs... Organization design must complement business strategies, and encompasses organization structure, organization systems, leadership style, skills of firm, characteristics of staff and shared values Firms have to re-posture themselves or realign their business strategies and organization designs when they internationalize Chapter 6 explains the theoretical and conceptual framework of the study The relationships between . RELATIONSHIP BETWEEN FLIGHT- TIME AND ORGANIZATION STRUCTURES OF INTERNATIONALIZING ARCHITECTURAL AND ENGINEERING (A/E) CONSULTANCY FIRMS LUKE PEH LU CHANG (BSC Research design and methodology 170 7.5 Table of statistical tool 172 8.1 Profile of questionnaire and interview respondents in terms of designations 178 8.2 Profile of questionnaire. respondents in terms of firms and cities 179 8.3 Profile of interviewees in terms of firms and cities 179 8.4 Methods of content analysis 180 8.5 Frequently cited categories and codes 182