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ENTREPRENEURIAL STRATEGIES AND NEW FORMS OF RATIONALISATION OF PRODUCTION

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Entrepreneurial Strategies and New Forms of Rationalisation of Productionin the Building Construction Sector of Brazil and FranceProceedings IGLC-7 369ENTREPRENEURIAL STRATEGIES ANDNEW FORMS OF RATIONALISATION OFPRODUCTION IN THE BUILDING CONSTRUCTIONSECTOR OF BRAZIL AND FRANCEFrancisco F. Cardoso1ABSTRACTThis article presents an inquiry-research conducted in France (Cardoso 1996) which wasaimed at identifying and analysing new forms of rationalisation of production employed in thebuilding sector, both in France and Brazil, in the light of strategies of the building constructionfirms.The above mentioned research dealt with the issue of the productive competence of thebuilding construction firm, not only by means of higher efficiency but also of the perception ofmeso and macroeconomics contexts of where the production system is situated; this is donebased on the competitors viewpoint.KEY WORDSStrategic planning, competitive advantage, production strategy, building construction,construction enterprises. 1 Assistant Professor, Civil Construction Engineering Department, Escola Politécnica of theUniversity of Sao Paulo, CP 61548, 05424-970, Sao Paulo, SP, Brazil, +55 (11) 8185469, fax: +55 (11) 818 5715, [email protected] July 1999, University of California, Berkeley, CA, USA370INTRODUCTIONSeveral changes in the Brazilian meso and macroeconomics contexts in the early 90s resultedin an unprecedented rise in competition among building firms. The sector became verycompetitive as evident in the degree of commercial and financial efficiency. There was addedto the productive inefficiency issue of the general contractors, the absence of competitiveefficiency. The threat facing Brazilian building construction firms was that they would nolonger be able to conduct their basic activity, which was: to build.Meanwhile, the resulting substantiations were hardly surprising; since analysis of thebuilding sectors of France and Europe, as well as in other industrial sectors pointed to the factthat, they too, were experiencing similar transformations, with similar consequences.This was a paradoxical substantiation: of a weak competitive situation and an outstandinglogic of commercial and financial efficiency, in the face of which, companies could afford toneglect techno-economical efficiency, the building sector in Brazil was experiencing thereverse situation. As they faced an ever rising competitive market, companies could only beeffective provided they could, at the same time, be technically and economically efficient.The central consideration was no longer for efficiency, better production, or optimisation,which could be re-expressed as a criteria of quality and productivity. The question could nolonger be dealt with from the operational and managerial point of view. The strategic levelwas now indicating a function of primordial importance. A building construction firm could nolonger accept to be merely efficient neither could it only manage the activities carried outthrough its production system; it would have to be both more competitive and more efficient.On the other hand, the firms perceived that they could no longer mention growth in termsof competence without taking into consideration the external circumstances and thepositioning, in terms of competitiveness, within the several markets where they intervened.The analysis of business strategies appeared to be fundamental.This article examines the competence conditions formulated in this context according tothe terms of the “New Forms of Rationalisation of Production” (NFRP). For that, it propose atypology of NFRP that could represents the strategies conducted by building firms (eightBrazilian firms are analysed).RATIONALISATION OF PRODUCTION AND CHAIN OF VALUESAlthough our starting point was a strategic analysis, here, we will not use the term“production strategy”, but we will use the concept of “rationalisation of production”:• Rationalisation of production - representing sources and mechanisms of efficiency,bearing in mind the conditioning elements of a market sector, and the capacity toanalyse, formalise and operate them as tools and organisational and managerialmethods or in terms of decision making instruments.Two other reasons can help explain this option. The concept suggests an all-inclusivesignificance, inasmuch as it considers, at the same time, the “production function” and otherservices that intervene throughout the production, as well as other agents of the project. ItEntrepreneurial Strategies and New Forms of Rationalisation of Productionin the Building Construction Sector of Brazil and FranceProceedings IGLC-7 371also disposes of a component associated, at a tactical level, to decision making, to the firmestablishment of previous options and to changes in the company’s organisation andmanagement structure. The sector’s environment is also an essential aspect of the concept.In view of this, the challenge was to identify and characterise NFRP, or ways, accordingto which, firms dealing with building construction could effectively carry out the severalstages of the task, in order to be better placed competitively within their operational markets.In the course of representing the NFRP, we set off by identifying the key efficacy factorsconditioning competitive strategies employed by the firms.For this reason, the Porter (1986) and (1991) methodology of the chain of values wasemployed. This represents the breaking-down of work carried out by the firm in activitiesrelated to the viewpoint of competitive strategy conducted, either by a primacy in terms ofcost leadership, or by differentiation. It serves to identify activities which “aggregate value”either to the process or to the product. This is the essential factor in understanding the patternof costs and in identifying existing and potential sources of differentiation.Two “imaginary” chains of values were then suggested, one of a standard Brazilian firm,operating as a housing promoter-constructor, and one of a standard French “entreprisegénérale” (general contractor).The chain of values comprises other agents besides the building construction firm andconsiders the up stream activities of the project (e.g., designers) and the down streamactivities (external chains of subcontractors and industrials or materials producers).In accordance with Porter, the various activities that are part of the value chain can beassembled into families


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