Institutional complexity and organizational responses : a case study of Chinese construction firms

Abstract

Recent years have witnessed Chinese construction firms’ dramatic expansion into the international markets to undertake overseas mega infrastructure projects. Simultaneously, the processes for Chinese construction firms to undertake overseas megaprojects have proven to be problematic. With the presence of institutional complexity, they are experiencing great difficulty in resolving the conflicting demands held by multiple while divergent participants on overseas megaprojects and combining the efforts together for completion. In order to sustain long-term survival in the international markets, Chinese construction firms have to deal with the issues related to institutional complexity strategically. This thesis probes into the tensions arising from institutional complexity and investigates how Chinese construction firms respond to conflicting institutional demands held by divergent stakeholders engaged in overseas megaprojects. A qualitative research strategy following the abduction approach is adopted for the research. Data were collected through a mixed-use of qualitative research methods, including participant observation, interviews, and case study. The participant observation was conducted within a Chinese construction engaged in a photovoltaic power plant project located in Ukraine. Several preliminary interviews were conducted with practitioners from Chinese construction firms who had experience of working on overseas megaprojects. The findings from the participant observation and preliminary interviews reveal that the extent of institutional complexity varies largely according to the types of work, the differences in institutional environments between different parties, and project dynamics. Chinese construction firms preferred to adopt different strategies according to the features of different markets. It has been proven that the use of a single response was not always effective in dealing with institutional complexity on overseas megaprojects. Furthermore, although Chinese construction firms are more prevalent engaged in hybrids to undertake megaprojects, the actual strategies adopted are detached from the form of hybrids, which aims at combining organizational elements from different institutional logics to reconcile conflicts. A trans-national pipeline project which is located in the Central Asian region, connecting Turkmenistan to China, crossing Kazakhstan and Uzbekistan, was selected for the case study. The findings show that hybrid organizing could be achieved structurally through the arrangements on four aspects—deployment of functional departments, human resource management, decision-making power, and management mechanisms. The different organizational arrangements in blended and differentiated hybrids lead to the distinctive features of power relations in the two forms of hybrids, which partly frame how Chinese construction firms adopt strategies. Three types of strategies—eliminating, balancing, and integrating, are identified to be adopted to deal with institutional complexity in hybrids. The adoption of a particular strategy is determined by the incompatibility and nature of the conflicting demands, and the power relations between the conflicting parties. The thesis enhances the understanding of institutional complexity and organizational responses by explaining how to achieve hybrid organizing and why a particular response is preferred in specific contexts.