CC BY
99
XOK [330.131.7+005]:69 DOI: 10.22227/1997-0935.2018.11.1341-1348
Reducing risks in the construction enterprise under strategic leadership of the management
Victoria G. Borkovskaya
Moscow State University of Civil Engineering (National Research University) (MGSU), 26 Yaroslavskoe shosse, Moscow, 129337, Russian Federation
ABSTRACT
Introduction. Discusses the issues of risk reduction with strategic leadership in construction area. We focus on leadership strategy in construction from the perspective of reducing risks (environmental, occupational, enterprises and so on) and costs. In strategic management, one of the general strategies of building enterprise goals is aimed at creating competitive advantages. Using a cost leadership strategy in construction, the company focuses on a wide market and produces large quantities of goods, minimizing costs and offering low prices.
Subject of research business leaders in construction, top managers, department heads, with characteristic signs of a leader. Materials and methods. When analyzing the questions posed, methods of system analysis, modeling and synthesis were used.
Results. Leadership in construction can develop a strategy to reduce risk and improve processes to also result in minimizing
costs. The strategy for reducing risk is to carry out activities that reduce either the probability or the damage, or both, from
medium to low, from high to medium or low. It was revealed that in order to achieve high results of the economic and
corporate activities of an organization, one cannot hope only for a happy coincidence of circumstances. One of the most
important conditions for the successful development of any construction company is the interested personnel and quality of <S" (D
leadership. Each success in construction is the result of the well-coordinated and painstaking work of the whole team, as a ü 5
single mechanism. The smooth functioning of such a mechanism is ensured by the team, which is formed by the leader. In k u
the context of globalization of markets, it is not enough for the head of an organization to be a leader, in the traditional sense. _ k
A modern leader in construction must be an ideologue, strategist and technologist in one person. The presence of a complex G S
of three qualities is a strategic leadership. s C
Conclusion. It is determined that strategic leadership in construction is not a fashionable tendency of the denomination C y
of classical leadership, but an inherent need for long-term planning of the organization's activities. One of the main p
consequences of strategic leadership in construction is the reduction of enterprise risks to facilitate and maybe guarantee °
the success of a construction company. e
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KEYWORDS: leadership in construction, SWOT analysis, strategic planning in construction, PAEI model, risk management g N in construction, project management in construction, risk reduction w 1
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FOR CITATION: Borkovskaya V.G. Reducing risks in the construction enterprise under strategic leadership of the man- o — agement. Vestnik MGSU [Proceedings of Moscow State University of Civil Engineering]. 2018; 13:11:1341-1348. DOI: c § 10.22227/1997-0935.2018.11.1341-1348 o w
Снижение рисков на строительном предприятии при стратегическом
лидерстве руководства
о —
В.Г. Борковская С 6
Национальный исследовательский Московский государственный строительный университет 1 0
(НИУ МГСУ), 129337, г. Москва, Ярославское шоссе, д. 26 п О
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АННОТАЦИЯ г)
Введение. Рассматриваются вопросы снижения рисков при стратегическом лидерстве руководства в строительстве. Щ
Стратегия лидерства в строительстве — стратегия лидерства за счет экономии на снижении рисков и издержек. •
В стратегическом управлении — одна из общих стратегий строительных предприятий, направленных на создание ^
конкурентных преимуществ. Используя стратегию лидерства в строительстве по издержкам, предприятие ориентиру- О О
ется на широкий рынок и производит товары в большом количестве, минимизирует затраты, предлагая низкие цены. § м
Предметом исследования являются руководители строительных предприятий, топ-менеджеры, начальники отделов ^
с характерными признаками лидера. 1 Материалы и методы. Использованы методы системного анализа, моделирования и синтеза.
Результаты. В строительстве следствием лидерства руководства является стратегия снижения риска и решение ¡д П
задач по минимизации затрат. Стратегия снижения риска заключается в проведении мероприятий, снижающих либо ^ о
вероятность, либо ущерб, либо и то и другое со среднего уровня до низкого, с высокого уровня до среднего или ® к
низкого. Для достижения высоких результатов хозяйственной и корпоративной деятельности организации нельзя 1 1
надеяться лишь на счастливое стечение обстоятельств. Одним из самых важных условий для успешного развития - -
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© Victoria G. Borkovskaya, 2018
1341
любой строительной компании является заинтересованный персонал и лидерство руководства. Каждый успех в строительстве — это результат слаженного и кропотливого труда всего коллектива как единого механизма. Бесперебойное функционирование такого механизма обеспечивается командой, которая формируется лидером. В условиях глобализации рынков руководителю строительной организации мало быть лидером, в традиционном понимании. Современный лидер в строительстве должен быть идеологом, стратегом и технологом в одном лице. Наличие комплекса трех качеств является стратегическим лидерством.
Выводы. Определено, что стратегическое лидерство в строительстве — не модная тенденция деноминации классического лидерства, а присущая необходимость в долгосрочном планировании деятельности строительной организации. Одно из главных следствий стратегического лидерства в строительстве — снижение рисков предприятия, а это гарантированное развитие и успех любой строительной компании.
КЛЮЧЕВЫЕ СЛОВА: лидерство в строительстве, SWOT-анализ, стратегическое планирование в строительстве, модель PAEI, риск-менеджмент в строительстве, управление проектами в строительстве, снижение риска
ДЛЯ ЦИТИРОВАНИЯ: Борковская В.Г. Reducing risks in the construction enterprise under stratégie leadership of the management // Вестник МГСУ. 2018. Т. 13. Вып. 11. С. 1341-1348. DOI: 10.22227/1997-0935.2018.11.1341-1348
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INTRODUCTION
We differentiate leadership in construction from management conceptually. Management is a social characteristic of a person's position in the company with the main function of the distribution of management roles and subordination. Leadership in construction is a psychological characteristic of a person's position, possessing qualities of superiority that are recognized by other employees of the construction company. For example, the head/boss of a unit may often force employees to work and is personally responsible for the results. Interaction with subordinates are based purely on metrics that can be empirically measured within the framework of business communication and ethics. The leader in construction, on the other hand inspires colleagues, stimulates interest in the work, generates enthusiasm, conveys his vision and helps to adapt to new stages of the company's development [1-3].
The head often takes a passive position in the long-term development and improvement of the construction company. He believes that "the best is the enemy of the good". Why change anything, if the performance is carried out, the company is in the black. The main motto of the head/boss: "We will solve problems as they come!"
The leader is likely to take an active position by setting measurable goals and objectives for the long term. It uses all means to change the attitude of people
Table 1. Comparative characteristics of the boss and leader
about the business. For a leader, quality, not quantity, is important. The main quality of a leader is strategic planning and the ability to stimulate people to a high-quality result. Strategic planning is the ability to anticipate all the problems and risks of an building organization on the way to achieving long-term goals, which in consequence significantly reduces costs [4-6].
It is often a critical success factor for a construction company to have a boss that is also a leader. This is likely to enhance the guarantee of sustainable development of the building organization. Table 1 shows the comparative characteristics of the leader and boss.
The most significant contribution to the development of risk reduction aspects in the domestic literature was made by V.N. Burkov, D.A. Novikov, and others. In their work, they consider a general assessment of the risk category and introduce new methods for risk reduction. Despite the fact that the topic of research on risk reduction is widely published, there are still many open questions about the risk-reduction techniques that the head/boss should carefully address within complex building organizations. And in the field of leadership outside of Russia, one can study the work of Stephen Covey, Benjamin Franklin and others1 [7-15].
1 A Guide to the Project Management Body of Knowledge (Pmbok Guide). 6th Edition.USA : Project Management Institute, 2017.
Management/head/boss Leadership in construction
Social and official organization of relations in the company Psychological organization of relations in the company
Associated with elements of the company's macro environment Is an element of the company's macro environment
Passive position, short-term planning Active position, long-term planning
A certain set of incentives and sanctions Uncertain set of incentives and sanctions
Decision making is mediated by current circumstances Decision-making directly on the corporate mindset
Inertial thinking Strategic thinking
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MATERIALS AND METHODS
Risk Management and Operational Efficiency
Risk management is one of the key tools aimed at increasing the efficiency of managers-builders' programs that they can use to reduce the cost of the product life cycle and to mitigate or avoid potential problems that could hamper the success of the construction company's operations.
Achieving the objectives of the enterprise requires specific representations about the main type of activity, production technologies, and the study of the main types of risks. Preventing risks and reducing losses from exposure leads to sustainable development of the enterprise. The process by which a company's activities are directed and coordinated to achieve effectiveness represents risk management. Risk management is a process of identifying the losses that an organization incurs from the activities and their degree of impact; choosing the most appropriate method for managing each particular type of risk is a decision that the leadership in construction should strategically implement [16, 17].
In another view, risk management is a systematic process in which risks are evaluated, and analyzed to reduce or eliminate their consequences, as well as to achieve goals.
SWOT-analysis is a method of strategic planning, which consists of revealing the factors of the internal and external environment of the organization and dividing them into four categories (Fig. 1).
SWOT analysis is the embodiment of the company's life cycle. It is very important to understand at what stage the construction company is at the moment and from this the basic strategy is being built. SWOT analysis is one of the tools that helps to conduct this diagnosis [17].
Using SWOT analysis, you can obtain:
• diagnostics of the life cycle stage of the firm;
• development of strategic programs;
• diagnosis of the informal structure of the top management team in construction.
To carry out SWOT analysis, it is necessary to determine the management team. The composition of the team must be "informal". It should include only those people who really can assess the current situation and suggest different ways of getting out of the crisis, rather than those who, for some other reasons, occupy managerial positions. The number of the team should be from five to twelve people, the greater number of participating employees is less effective, since there will be a very wide range of opinions.
To determine the composition of the team, a study should be conducted to determine the management style by the method of I. Adizes (PAEI model: (P) roducing — production of results; (Administrating — administration; (E)ntrepreneuring; (integrating integration), which is based on the basic principle: organization, as a living organism, have their own life cycle [7]. At every stage of corporate and economic development, the company is facing problems. How well the builder's leader and the team copes with them, how quickly adapts to the changes and how effectively it moves from stage to stage and determines the ultimate success or failure of the construction company (Fig. 2).
RESULTS
The effectiveness of the construction company, is partly due to proper strategic leadership, and is largely determined by the following system of factors:
• leader's potential;
• leadership style;
• "climate" of the company;
• degree of team involvement;
• team performance.
Under the "climate" of a construction company, we can conditionally designate several circumstances that are most important for an building organization's effective work:
• clear understanding by all employees of the tasks facing the organization;
• an atmosphere of freedom to take the initiative;
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Fig. 2. Life cycle of the construction company with the indication of the type of management activity in the PAEI mode. Compiled by the author on the basis of published sources [1-27]
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Fig. 3. Types of "leadership" and mechanisms of influence within the construction company in terms of management. Compiled by the author on the basis of published sources [1-29]
• a sense of fair and worthy remuneration for work;
• mood of creative growth and commitment to a common goal.
Summarizing, it is conditionally possible to distinguish three main areas of leadership:
• ideological leader (leadership in generating new ideas and business concepts);
• strategic leader (leadership in planning and choosing the path to implement new ideas);
• technological leader (leadership in the field of skill and key competences).
To one degree or another, all three areas of leadership in construction may be inherent in outstanding managers, sometimes this phenomenon is called strategic leadership [18-29].
Ideas of strategic leadership in construction cause a kind of resonance in the organization, which leads to the rapid spread within the company through management levels (Fig. 3).
Each level of management has feedback from the leader, which contributes to the refinement of the initial ideas, taking into account the real possibilities of the building organization. This does not exclude the direct influence of the leader on all levels of his environment. Naturally, the intensity of such an influence goes downward. The leader's risk reduction strategy is that measures are taken to reduce either the likelihood or the damage, or both, from medium to low, from high to medium or low. Depending on the type of project, there are various risk reduction options. For projects of type (H; C) or (C; H), there is only one option for reducing the risk of a leader from medium to low (damage or probability). For projects of type (C; C), there are already three options. The first two options are associated with reducing the leader's risk to a low level, either in probability or in damage. The third option is associated with reducing
the leader's risk to a low level both in probability and damage. For projects of type (B; H) or (H; B), there are two options for reducing the risk of a leader from high to medium or low. One option is to reduce the risk from medium to low. Two more options are associated with reducing the risk from medium to low while reducing the risk from high to medium or low. Finally, for projects of type (B; B), there are eight options. Four options are associated with reducing the risk of a leader from high to medium or low, either in probability or in damage. Four more options are associated with a decrease in the leader's risk from high to medium in probability (or damage) while reducing the leader's risk from high to medium or low in damage (or probability).
Each option to reduce the leader's risk will be measured by the magnitude of the reduction in the degree of influence that he provides. This value is equal to the difference in the degree of influence of projects of this type and the degree of influence of projects to which the project belongs after the risk reduction.
CONCLUSIONS
In the framework of strategic leadership in construction, not only are the priorities and values of the company defined, but experience, knowledge and energy are accumulated for long-term goals. Not every leader for years to come is able to rationally plan resources, correctly motivate employees and systematically and persistently go towards the goals set. In today's globalized market, strategic leadership is a compelling need for construction companies with long-term development plans and seeking to improve their competitive advantages. One of the main consequences of strategic leadership is to reduce enterprise risks and minimize costs, and this is guaranteed development and success of any construction company.
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About the author: Victoria G. Borkovskaya — Candidate of Economic Sciences, Associated Professor of Department Housing & Communal Service, Moscow State University of Civil Engineering (National Research University) (MGSU), 26 Yaroslavskoe shosse, Moscow, 129337, Russian Federation, [email protected].
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Поступила в редакцию 8 сентября 2018 г. Принята в доработанном виде 2 октября 2018 г. Одобрена для публикации 31 октября 2018 г.
Об авторе: Борковская Виктория Геннадиевна — кандидат экономических наук, доцент кафедры жилищно-коммунального хозяйства, Национальный исследовательский Московский государственный строительный университет (НИУ МГСУ), 129337, г. Москва, Ярославское шоссе, д. 26, [email protected].
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