Internal Governance of Design and Engineering: The Case of the Multinational Firm
Publication: Journal of Construction Engineering and Management
Volume 138, Issue 1
Abstract
This paper examines the process of design and engineering in large-scale construction projects delivered by multinational organizations. The analysis is on the basis of using transaction cost economics to represent design and engineering as a stream of intra-firm transactions between the local contracting office and the network of subsidiary offices. The paper then applies the concept of asset specificity to process-level design and engineering knowledge and induces a theoretical framework on the basis of local and expertise specificity of assets. The framework posits that different levels of local and expertise specificity lead to different modes for intra-firm governance of work packages in design and engineering. The paper validates the theoretical framework with interview data from six major international design and engineering organizations and derives a set of management recommendations for practitioners. The framework takes the transaction cost theory into the realm of intra-firm governance represented as a stream of asset-specific transactions. The framework extends construction engineering and management literature with a transaction-based elaboration of the design and engineering process.
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Acknowledgments
The writers thank the three anonymous reviewers for their helpful comments on the first two drafts of this paper. Furthermore, the writers would like to thank all the informants and organizations who participated in this research and chose to remain anonymous.
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Information & Authors
Information
Published In
Journal of Construction Engineering and Management
Volume 138 • Issue 1 • January 2012
Pages: 135 - 143
Copyright
© 2012 American Society of Civil Engineers.
History
Received: Oct 30, 2010
Accepted: May 18, 2011
Published online: May 20, 2011
Published in print: Jan 1, 2012
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