Development of a conceptual framework on rewarding failure in innovation attempts as an incentive for employees with outsets in the Construction Industry
Similaire à Development of a conceptual framework on rewarding failure in innovation attempts as an incentive for employees with outsets in the Construction Industry
Similaire à Development of a conceptual framework on rewarding failure in innovation attempts as an incentive for employees with outsets in the Construction Industry (20)
Development of a conceptual framework on rewarding failure in innovation attempts as an incentive for employees with outsets in the Construction Industry
5.
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Summary
This research was conducted as a Master of Science final Thesis in Management in the Building
Industry Programme (MSc) at Aalborg University, Department of Mechanical and Manufacturing
Engineering, Aalborg, Denmark. This thesis was conducted as a paper based version, based on
three papers, cf. Appendix, and annexes which describe the data collection and analysis process
in a full perspective.
The construction industry has long been known as a main driver for the economy in many
countries, and an important part of today’s job sector. However, the construction industry is also
well known for its resistance to change, and considered slow adapting when it comes to
innovation. Instead of being focused on long term planning, development and innovation; it
focuses on short‐term gains or “low hanging fruit”. Regardless of these aspects, the construction
industry has a large potential for fostering innovation processes through its complex
organizations and intertwined environment. In many industries, the employees are considered
an important and effective source of innovation and creativity potential. Incentive programs,
either financial or psychological have been used along time to reward productivity or successful
application of different innovation processes, whereas failure has been always rejected and
dismissed bluntly in most cases, by thus having a negative impact on employees’ motivation.
The main topic of this research was the development of a conceptual framework in which an
incentive program that rewards failure in innovation attempts can find its place within the
construction industry. The key areas of interest were: firstly, innovation management in different
industrial sectors, and their application of incentive systems which rewards failure in innovation
attempts. And second to find a place for the applicability of such an incentive system in the
construction industry.
The findings were based on an exploratory case study with multiple case units; a comparative
analysis between them and another case study from previous research made in this topic. The
originality was based upon the fact that this topic has been researched scarcely so far.
The research was initiated by literature review, where answers to such an incentive system could
be found, and once contact with a corporation has been established which fosters such an
incentive program, a case study was developed based on two units within the main corporation.
In order to ensure credibility of the data, a comparative analysis has been made between the two
case units and a previously researched case study, to identify recurring patterns and key
mechanisms for adopting such a system. The research was then directed, towards the learning
capabilities of the construction industry from other industries. Through the research, the
adoption of Lean practices was undertaken and also Employee‐driven innovation, in order to
identify similar key mechanisms as to where an incentive system such as rewarding failure could
be fostered within the Construction Industry.
6.
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Dansk Resume
Denne undersøgelse var udført som kandidatspeciale i Byggeledelse (cand.scient.tech) ved
Aalborg Universitet, Institut for Mekanik og Produktion. Denne afhandling blev udført som en
papirbaseret udgave, hvor den er baseret ud fra tre bilag.
Byggebranchen har længe været kendt som den vigtigste drivkraft for økonomien i mange land
og er derfor en vigtig del af jobsektoren i dag. Byggebranchen er også kendt for sin modstand
mod forandring, og anses for langsom tilpasning, når det gælder innovation. I stedet for at være
fokuseret på langsigtet planlægning, udvikling og innovation, fokuserer den på kortsigtede
gevinster eller kortsigtet profit. Uanset disse aspekter har byggeriet et stort potentiale for at
fremme innovationsprocesser gennem sine komplekse organisationer og sammenflettede miljø.
I mange brancher betragtes de ansatte som en vigtig og effektiv kilde til innovation og kreativ
tankegang. Programmer for medarbejdere har længe eksisteret for at belønne medarbejdere
økonomisk. Enten ved at øge produktiviteten, eller implementere innovative processer,
hvorimod fiasko altid bliver afvist, og dermed har det en negativ effekt i forhold til
medarbejdernes motivation. Det vigtigste emne i denne forskning var udviklingen af en
begrebsramme, hvor et incitamentsprogram, der belønner svigt i innovationsforsøg kan finde sin
plads i byggebranchen. De mest interessante hovedområder var først og fremmest
innovationsledelse i forskellige industrielle sektorer og deres implementering af
incitamentsordninger, som belønner på trods af fejl i innovationsforsøg, og for det andet at finde
anvendeligheden af et sådant incitament system i byggebranchen.
Resultaterne var baseret på forskningsmæssige sager med flere sags enheder, og en komparativ
analyse mellem dem og sager fra tidligere forskning foretaget i dette emne. Originaliteten var
baseret på det faktum, at dette emne er blevet forsket minimalt.
Forskningen blev indledt af en litteraturgennemgang, hvor svar på et sådant incitament system
kunne findes, og når der er etableret kontakt til en virksomhed, der fremmer et sådan
incitamentsprogram, blev en sag udviklet på baggrund af to enheder inden for det centrale
selskab. For at sikre troværdigheden af de oplysninger er der blevet lavet en komparativ analyse
mellem de to sags enheder, hvor tidligere forskning af disse studier har identificerede de vigtigste
mekanismer til at vedtage et sådant system.
Forskningen blev derefter rettet mod læringskapaciteter af byggebranchen fra andre industrier.
Gennem forskning har implementeringen vist hvordan besparelser skal gennemføres og også
medarbejder drevet innovation med henblik på at identificere lignende vigtige mekanismer til,
hvordan et incitament system som belønner medarbejdere, som tør tænke og arbejde innovativt
selvom der er risiko for fiasko, hvor incitament systemet kunne fremme dette inden for
byggebranchen.
8.
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Acknowledgments
This thesis was conducted in collaboration with the Construction Management group at the
Department of Mechanical & Manufacturing Engineering at Aalborg University. There are a
number of people who have been involved in making this Master Thesis possible and guiding me
through my studies. Therefore I owe a special thanks to:
First and foremost, I am gladly in debt to my supervisor, Henrik Sørensen for his continuous
support, good feedback and willingness to encourage and keep me on track with my research. In
understanding my ambitions for the future in hoping to take a Ph.D. degree and guiding me
through the process as best as possible, you have become a model and an inspiration for me as
a researcher and a professional in the field.
Second of all I am grateful for all the good input and the occasional good talks with my professor
Jesper Kranker Larsen, especially on research paradigms and his more detailed explanation on
some information I used in this thesis. A special thanks I owe to Prof. Lene Faber Ussing, our class
coordinator for listening to me when I was in need and guiding me through various problems.
I wish to also express my gratitude towards all my teachers from Aalborg University. Without
their guidance, I would not have reached in finishing a Master Thesis.
A special thank you I owe to Mr. Ranjeet Joshipura, from TATA Group for helping me out get in
touch with several departments of TATA Group in pursuing this research. I also am grateful and
wish to thank for their good input to Mr. Sujit Guha from TATA Consultancy Services and to Peter
Brown from Jaguar Land Rover Ltd. for his input and data provided for my thesis. Without their
help, I would not have had the data I needed.
I also owe a special thanks to my girlfriend, Tiffany who has been most patient with me especially
in the last few weeks of this Thesis, when the work was at its hardest peak and for her continuous
support. I also wish to say I special thank you to my best friend Olimpiu, for all the talks we had
on my thesis and his support always when I needed. A thank you should also go to Asbjørn for
his willingness to jump in and help when my Danish skills were out of control or simply not
enough.
Last but not least, I wish to dedicate this Thesis to my family. It is a challenge and a hard one to
raise a child and guide him through life giving him the best you can, so he can grow and develop
as a human being. So far, this thesis encompasses all the years of hard work and sacrifices, and it
is for now the peak of my professional development. Especially to my little brother Tudor; one
day when you grow up, I hope you get even further than I ever did and make me proud even
more for being your humble, older brother.
Aalborg, January 2016
Dragos Bogdan Todoran
13.
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CHAPTER 1. INTRODUCTION
In this chapter, the background for the report, motivation and clarifications will be presented.
Moreover, the research questions are outlined, together with the thesis structure, including the
separation between the main thesis and appendixes. The specific methods for obtaining the
necessary data are presented in Appendix A – Methodology for Introduction and Problem
formulation [Working paper].
1.1 BACKGROUND AND MOTIVATION
One of the perspectives that has not really been resolved, is the dilemma whether failure in
innovation attempts should be rewarded, while keeping in mind that employees should be
rewarded for their effort, and motivated to contribute more to innovation attempts. [Sørensen,
2015]. This thesis looks into this specific gap in research. Also, what needs to be considered is
that there is a common agreement between most actors involved in one way or another in the
construction industry that it is conservative and slow paced when it comes to innovation
compared to other industries. [Tatum, 1987; Winch 2003; Bygballe & Ingemansson, 2014].
[Bougrain et.al. 2010] give this conservatism of the industry the term laggard.
However slow paced and conservative the construction industry is, [Winch, 2003] draws the
conclusion at the end of his research that the construction industry is not that idiosyncratic to
not be able to learn from other manufacturing industries. The construction industry innovation
process is very different compared to the manufacturing process but provides excellent potential
for fostering innovation through its existing project models and network capability [Anderson &
Schaan, 2001; Johnston & Lawrence, 1988; Seaden & Manseau 2001]. And what is also important
is that this goes the other way around. [Winch, 2003] argues that the manufacturing industry can
also learn from the construction industry.
[Bygballe & Ingemansson, 2014; Slaughter, 1993] found out that employees are the main driver
for innovation in construction companies, and most importantly that [Arditi & Tangkar, 2000;
Sørensen, 2015] seem to agree that R&D departments are not solely responsible for innovation
anymore, but that employees strive and drive the innovation processes forward; [Kesting & Ulhøi,
2010] support this.
In order to assess properly the innovation process within the construction industry, it has to be
considered that innovation in this industry is rather challenging with a very complex arena
[Seaden & Manseau, 2001]. However, it is important to look upon how innovation is defined in a
broader aspect. The problem is that the variations of the term innovation are quite large.
Innovation can be described as “a change in routine” [Nelson & Winter, 1982]. Others, describe
it in this context as a first use of a new technology in a construction firm [Tatum, 1987]. Or, as
[Higgins, 1994] goes, he resolves this into an equation giving 4 dimensions to innovation; Product,
Process, Marketing and Management.
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Drawing a simple perspective on this, it is imperative to look into a source which is widely used
and commonly agreed upon in the OECD countries where the following explanation is given:
“A technological product innovation is the implementation/commercialization of a product with
improved performance characteristics such as to deliver objectively new or improved services to
the consumer. A technological process innovation is the implementation/adoption of new or
significantly improved production or delivery methods. It may involve changes in equipment,
human resources, working methods or a combination of these.” [OECD, 1997 sect. 24]
As seen in the Oslo Manual in its second edition, it focuses only on two dimensions, which Higgins
came up with through the Innovation equation. However, in its third edition the Oslo Manual
[OECD & Eurostat, 2005] adds Marketing and Organizational innovation into account, by thus
aligning itself to Higgins’s equation1
. Considering this, the need to look into specific explanations
for marketing and management innovation is required.
[Higgins, 1994] defined Marketing innovation as being product functions separate from the
product development itself therefore according to [Pearce, 1992] attributed all this to a
management process responsible for planning action to satisfy and identify customer needs.
On the other hand, Management innovation, can be found for example in reengineering which
he calls an innovation but the basis of the dimension would be improving the way the
organization is managed. [Higgins 1994].
Figure 1.1 – The innovation equation [Higgins 1994]
In regards to innovation in Scandinavia, [Bygballe’s & Ingemansson, 2014] present findings from
two studies of innovation in the Norwegian and Swedish market. As they mention the similarities
between the two markets, it is quite sensitive to assume that any similar study conducted on the
Danish market would give similar results. The similarity between Denmark, Sweden and Norway
can be sustained by [Hansen, 2011].
Briefly illustrating, in their study, [Bygballe’s & Ingemansson, 2014] present the findings in their
joint study that in Sweden, 78% of the respondents were defining co‐workers as the main driving
force of innovation while in Norway around 53% were following the same pattern. Also it is
1
It is the authors’ belief that the explanation provided in the OSLO Manual, third edition on organizational
innovation is almost similar to the management innovation definition provided by Higgins, therefore the two
differences in terms are considered to be irrelevant being one and the same principle.
15.
3
interesting to mention that customers were the second choice in Sweden as a driving force for
innovation, while in Norway the customers where the first option.
The study conducted also showed that it is processes and managing projects that are innovated
mostly whereas technical developments and materials are less centralized [Bygballe &
Ingemansson, 2014]. The research also reinforced previous research that innovation in the
construction industry is highly different compared to manufacturing industries due to the
relations between construction parties, by thus the “complex arena” being confirmed [Seaden &
Manseau 2001].
In regards to the Danish construction sector, a Master thesis report conducted at Aalborg
University showed that innovation in Northern Denmark at least is mostly present within middle
sized and larger companies [Bohnstedt & Larsen, 2012]. But the most interesting aspect to be
considered as a starting point and seeing the similarity with the Swedish and Norwegian industry
is that the half of the companies that are seeking improvements and potential breakthroughs by
using innovation not only are involving employees but they are also rewarding successes.
In Figure 1.2 research conducted by the Danish Statistics show again similarities with the previous
study in Sweden and Norway. The similarities conclude the fact that it is process and
organizational innovation that are predominant throughout the industry, therefore reinforcing
the findings in the other two Scandinavian countries.
Figure 1.2 – Innovative companies according to branch and innovation type [Danmark statistik,
2015a]
If until now, the data presents that larger companies adopt and foster systems that can have
improved potential for advanced innovation processes, the next part looks into one structure or
methodology which essentially deals with the involvement of employees into the innovation
process – Employee‐driven innovation. To further detail on the topic and find which potential
solutions can be adopted, Employee Driven Innovation is chosen as a reference point into what
type of processes can foster and have potential answers.
For a better understanding, the following figure shows the core elements of EDI at an
organizational level. The figure presents three main viewpoints and interaction into EDI:
Organizational culture/Organization of work, Learning processes and Innovation processes.
16.
4
Figure 1.3 – EDI in an organizational context [Høyrup, 2012]
Innovation can be derived from the way employees perform their jobs, taking into account the
organization as well as personal interests [Price et. al, 2012] Whereas the authors acknowledge
the appearance of innovation from different practices, they also take into account the
aforementioned characteristics of the organization; but the main aspect being that while day to
day processes keep going on, and teams tend to disband and re‐form according to the different
tasks assigned, the learning process keeps continuing. Taking into account the complexity of
construction companies organizations, this topic becomes much more interesting to follow.
The motivation for pursuing the topic of “rewarding failure” lies in the willingness to find
examples of how “rewarding failure” can be done. The significance of this thesis is that it
combines elements from different industries and tries to organize them into a conceptual
framework of how innovation failures can be a positive process and should be rewarded in some
situations – with the end scope of attributing these elements to the construction industry.
1.2 RESEARCH PROBLEM
Drawing conclusions from the previous subchapter, it can be clearly underlined that:
The construction industry is having an intertwined complex system – “arena” [Seaden
& Manseau 2001].
The construction industry it is conservative and slow paced when it comes to
innovation compared to other industries. [Tatum, 1987; Winch 2003; Bygballe &
Ingemansson, 2014] – laggard [Bougrain et.al. 2010]
However, the construction industry provides excellent potential for fostering
innovation through its existing project models and network capability. [Anderson &
Schaan, 2001; Johnston & Lawrence, 1988; Seaden & Manseau 2001] et.al.
The task of innovation does not rely only on the shoulders of R&D Departments
anymore, employees being an important part of it. [Bygballe & Ingemansson, 2014;
Slaughter, 1993; Sørensen, 2015; Tangkar & Arditi, 2000; Kesting & Ulhøi, 2010]
Creativity + Organizational culture usually results in proper innovation products
[Higgins 1994]
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1.3 DEFINITIONS, DELIMITATIONS AND CLARIFICATIONS
This section contains essential definitions and clarifications of various key terms which are used
across this thesis. As they are used in a general context, but with a specific scope, their definitions
and clarifications are important to ensure the reader understands the perspectives in which they
are used.
“Innovation is the process of making changes, large and small, radical and incremental, to
products, processes, and services that results in the introduction of something new for the
organization that adds value to customers and contribute to the knowledge store of the
organizations.” [O'Sullivan & Dooley, 2009, p. 5]
By using this, the research is widened and various types of innovation can be discussed, but the
research cannot go out of topic by addressing clarifications or add debate on whether one
process or another can be considered as innovation. Any small value adding change added to a
company or any attempt to do so can go under the term innovation. To reinforce this, the main
starting point in defining innovation is called upon: “innovation is novelty that creates economical
value” [Schumpeter, 1934].
“The term "incentive" implies a diverse set of meanings. The literal definition states that an
incentive is something that inspires action. In terms of the construction industry this definition is
translated into attempts to increase production or performance in return for increased
psychological or material rewards.” [Liska & Snell, 1992]
Motivational factors, sources of motivation and incentives were considered congruent terms in
this research. As explained by [Liska & Snell, 1992] incentives are attempts of increasing
production or performance in return for psychological or material rewards. Therefore they have
the same underlying meaning as motivational factor and source of motivation
In this Thesis, the term “phenomenon” has two implications. When sources were referenced, it
related to the theory. Then it was used outside that context, it implied the phenomenon of
“rewarding failure”
The main delimitation of this thesis can be considered the scarce data received from the units
within the case study. Steps were undertaken to ensure that the methodology is to be followed
through, however the method had to be shifted ultimately.
The second delimitation of this thesis was the time‐frame and limited resources in conducting
this research. The limitations were out of the researchers’ possibility of altering.
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1.4 THESIS STRUCTURE
This thesis is based upon a collection of papers, where the important elements of the research
are based on the papers2
and annexes that contribute each to the development of the chapters.
The structure of the thesis is based on a main report and three appendixes plus annexes. The
main report summarizes the research in terms of introduction, research questions, research
design and the research conclusions. The appendixes comprise the full descriptive papers with
the data and the methods for collecting, conducting and analyzing it. The annexes comprise the
step by step process of what has been done in regards to the development of the papers and the
Main Report.
The structure of the thesis is divided in the following chapters:
CHAPTER 1 – INTRODUCTION
The introduction chapter presents the background and motivation for the thesis, the research
background, the proposal for the final topic, research questions and the definitions and
clarifications of some important terms. The chapter is based on the steps detailed in Appendix A.
CHAPTER 2 – RESEARCH DESIGN
This chapter presents the overall research design consideration, the philosophical considerations,
and the final research design with a step by step description of the Master Thesis project.
CHAPTER 3 – DEVELOPMENT OF A BASE OF KNOWLEDGE
This chapter contains the main research conducted in this thesis. Each sub‐chapter deals with the
main objectives of the thesis, presents the findings, and draws partial conclusions related to the
research questions. The papers on which this chapter is based are Appendix B and Appendix C.
CHAPTER 4 – PROPOSAL OF A CONCEPTUAL FRAMEWORK
This chapter contains the overall proposal of a conceptual framework, derived from the findings
and partial conclusions drawn from chapter 3 cf. also Appendix B and Appendix C.
CHAPTER 5 – CONCLUSIONS AND PERSPECTIVES
Finally, the conclusion chapter’s purpose is to conclude the overall findings of the research. The
chapter gives at the end some overall perspective on the research and where further research is
needed.
2
In this thesis structure, papers refer to the working papers, cf. Appendixes A to C, related to the paper‐based
thesis. Appendix A is a working paper and does not contain the specific elements of an IMRaD structure. Articles
refer to literature published by other authors and used in this research.
20.
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CHAPTER 2. RESEARCH DESIGN
The conducted research is based on philosophical assumptions, which shape how the research is
performed. The philosophical approach affects the choice of how the research design is made,
based on what considerations. In this chapter the scientific paradigm, key concepts of ontology,
epistemology and methodology are presented which have served as a groundwork for the
research design as an overall. Together with the research design, the applied methods for
collecting and analyzing data are presented, and the steps taken to ensure the credibility and
trustworthiness of the data.
2.1 SCIENTIFIC PARADIGM
In any research, the scientific paradigm occupies an important role in how the research is
performed. According to Kuhn [1977], "A paradigm is what members of a scientific community,
and they alone, share". However, the original explanation of Kuhn has shifted in recent times.
The scientific paradigm applied to any paper is considered to be the researcher’s basic beliefs –
how he perceives the world [Guba and Lincoln 1994]. Given that, Heron and Reason [1997]
essentially added one more paradigm based on arguing that the “constructivist position fails to
account for experimental knowing”. The initial basic beliefs of Alternative Inquiry Paradigms by
Guba and Lincoln [1994] are positivism, postpositivism, critical theory et al., constructivism and
participatory being the contribution of Heron and Reason [1997].
Guba and Lincoln [1994] argued that the inquiry paradigms are highlighted by three interrelated
and fundamental questions. The ontological question “what is the form and nature of reality and,
therefore, what is there that can be known about it?” the epistemological question “What is the
relationship between the knower or would‐be knower and what can be known?” and finally the
methodological question “How can the inquirer […] go about finding out whatever he or she
believes can be known?”
Figure 2.1 – Basic beliefs of Alternative Inquiry Paradigms – Updated [Guba & Lincoln, 2000: pp.168]
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However, there is no clear definition of these “paradigms”. The inquiry paradigms of Guba and
Lincoln could be argued that they are more approachable to social science study, due to several
referrals as to “social scientists use the main philosophical concepts in very different ways”
[Erikssonn & Kovalainen, 2008]. A different option to the Alternative Inquiry Paradigms [Guba
and Lincoln 1994], is available for research conducted within business areas. There are
alternatives such as [Arbnor & Bjerke, 2009] which define an operative paradigm instead of the
traditional, more commonly adopted Inquiry Paradigms. They, [Arbnor & Bjerke, 2009] motivate
their contribution to methodology studies by arguing on the fact that “an operative paradigm
relates a methodological view to a specific study area. […] It consists of two important parts:
methodical procedures and methodics. […] In our opinion, one cannot talk about a methodology
if the components mentioned above are merely described separately.” [Arbnor & Bjerke, 2009]
[Arbnor & Bjerke, 2009] argue on the premises that there has to be a difference between the
paradigm and the way it is applied. While [Guba & Lincoln, 1994, 2000] come with some
established set of rules, [Arbnor & Bjerke, 2009] allow through the Operative paradigm a more
open groundwork for the researcher to express his scientific approach in accordance to his topic.
Figure 2.2 – Theory of Science and Methodologuy [Arbnor & Bjerke, 2009: pp.168]
Although, it is acknowledged the valuable contribution of Arbnor and Bjerke, this research is
going to use as defining the philosophical approach, Guba and Lincoln’s Alternative Inquiry
paradigms due to the following consideration:
Since Guba & Lincoln’s Inquiry paradigms are more close to the social science research topic, and
the theme is into extensive qualitative research in analyzing the phenomenon of “rewarding
failure as incentive for employees” the theme is somehow drawn closer to Guba & Lincoln, than
Arbnor & Bjerke.
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Going back to [Guba & Lincoln, 2000] the Inquiry paradigms3
need to be presented before the
choice of philosophical stance is defined. A short note on the Inquiry paradigms is that they are
defined by the three fundamental questions as [Guba & Lincoln, 1994] argue.
By framing the three fundamental questions into the a table [cf. Fig 2.1], combined with the
inquiry paradigms, positivism can be defined as so that the knowledge on the world or reality
cannot be influenced by the investigator, and that the investigator and the “object of
investigation” has to be treated as a separate entity. Positivism is usually attributed as a
philosophical stance to research conducted in a quantitative manner where hypothesis are
elaborated and empirically tested for validation [Guba & Lincoln, 1994]. Postpositivism can be
argued as a loosened version of positivism but where critique is included against the basic version
of positivism [Erikssonn & Kovalainen, 2008]. Critical realism refers to a reality that “once existed
but it was shaped by a congeries of factors and then crystalized in a series of structures that now
are considered “real” [Guba & Lincoln, 1994]. [Johnson & Duberley, 2000] suggest that critical
realism can be used in multi‐methodological approaches, both qualitative and quantitative. On
the other hand, based on the assumption that the human mind being limited and flawed [Guba
& Lincoln, 1994], [Nygaard, 2005] draws perspectives on the problem that this can reflect in the
researcher’s objectivity towards the studied phenomenon or topic. Therefore in general it is more
attributed to the use in qualitative research. Constructivism is defined by not having a general
“reality” which cannot be argued for. Constructivism implies variations of reality, in multiple
constructions based on experiences, meanings and social constructions. The constructions are
simply less informed and/or sophisticated and also alterable as their various realities. [Guba &
Lincoln, 1994]
2.2 ONTOLOGY
Ontology can be defined as the perception of reality, where in positivism it is realist or “naïve
realism” perspective, in postpositivism critical realism has been the reality, in critical theory a
virtual reality or historical has been the assumed reality, modified by factors and crystallized over
time and lastly in constructivism relativism has been the assumed reality. Specifically constructed
‐ in accordance to the view and meanings or participants. [Blaikie, 1993]
My philosophical stance in this research is constructivist. I believe in a reality that is dependent
of people and groups, either organizations or research groups and their different meanings;
where social, cultural, ethnic etc. values are at the core of one’s “constructed reality”. The
constructivist approach was selected, due to its allowance of creating an independent value‐free
world. My choice of selection can be also traced back in literature and argued by the following:
3
The participatory paradigm, contribution of [Heron & Reason, 1997] has been intentionally left out. The reason
behind this is that delimitations imposed by context of the researcher in conforming to rules. The Curriculum for
Study Program does not allow that much subjectivity to be present.
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“Geertz’s (1988, 1993) prophecy about the “blurring of genres” is rapidly being fulfilled. Inquiry
methodology can no longer be treated as a set of universally applicable rules or abstractions […]
is inevitably interwoven with and emerges from the nature of particular disciplines […] and
particular perspectives.” [Guba & Lincoln, 2000, pp. 164]
2.3 EPISTEMOLOGY
The epistemological question has the purpose of defining how can knowledge be produced and
accounted for by the researcher. The main difference is that while selecting an inquiry paradigm
and its accounted for ontological implication, the research cannot take place by shifting between
different epistemological stances while having a pre‐defined ontology [Guba & Lincoln, 1994].
This means that since in this case a constructivist approach has been selected and the ontology
defined as relativism, the epistemological stance cannot be objectivist, as in a positivist
approach. This simply means that the findings are considered “created” as shaped by the context
and the reality surrounding them.
Starting from there, the research was based on qualitative research, and therefore different
perceptions from different source/actors. This contains several “realities” according to the
sources values and it is acknowledged that the knowledge found and framed could not exist
without the individuals and their values.
2.4 METHODOLOGY
Methodology is the frame that guides the researcher in finding his answers. Again, as literature
shows, the methodological stance cannot be argued for, nor changed, once the inquiry paradigm
has been selected and ontology and epistemology alike [Guba & Lincoln, 1994]. This does not
mean that knowledge cannot be comprehended outside the selected “reality”. It simply means
that studying a certain problem, a research needs to be defined as qualitative, quantitative or
mixed‐methods. [Creswell, 2009] accounts for a constructivist approach being solely attributed
to qualitative approaches, however research shows that comprehending basic concepts through
deep qualitative methods [Burgess, 2004], can be verified later by quantitative study [Have,
2004].
While establishing the purpose and the research questions, the researcher must ask himself
about what methodology of conducting the research he will select. If the conclusion is that a
deeper understanding of the topic at hand is needed, then the qualitative research is the best
option. [Irby & Lunenburg, 2008].
[Creswell, 2007], argues:
“A qualitative study is defined as an inquiry process of understanding based on distinct
methodological traditions of inquiry that explore a social or human problem.”
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Researchers, who engage in this form of inquiry, support an inductive style, a focus on individual
meaning and the importance of altering and rendering the complexity of a situation. [Creswell,
2007]
[Guba & Lincoln, 1994], argue that the methodological question does not account for the
methods used. Methods have to be embedded into a research design and besides the
philosophical implications, the research problem defines also the path towards a qualitative,
quantitative or mix‐method approach [Creswell, 2009]
By taking the research questions into account, they contain enough evidence to show that the
research is an exploratory one, in search for understanding, when the researcher does not know
variables which can be exanimated, there is no theory, or the theory existing does not apply to a
particular group/area which is a pre‐requisite. [Morse 1991]
This part is concluded by adding the methods of conducting this research into the research design
and their relevance to the research.
2.5 RESEARCH DESIGN
Based on the philosophical position, the considerations in regards to the research paradigm, and
the research questions, the chosen methodological approach as a qualitative one, the research
design was undertaken as an exploratory case study with multiple units within the same
organization. However, there is also a comparative analysis which should be accounted for. Even
though comparative analysis is closely related to Grounded Theory cf. [Glaser & Strauss, 1967],
the research was not conducted as such. The arguments for this are presented in the discussion.
This thesis has been conducted in a 5 steps approach, each step contributing to the development
of the thesis. For every step the overall description of the contribution made is shown, the
method for conducting the research and the output in the form of Research Questions or
Appendixes and Annexes.
Table 2.1 – Research Design of the thesis in five steps
Step Method Output
Introduction and Problem
Formulation
This step has been the
initiation step in conducting
this research. Testing the
literature, defining the
objectives and the research
problem
Literature review
Analytical:
Content analysis
Introduction and Problem
formulation
Appendix A
Annex A 1.1
Annex A 1.2
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A perspective that has not been tackled yet is the reasoning in this research. Essentially there are
two basic methods of reasoning. Inductive and deductive reasoning; both have applications in
research but where inductive reasoning is more open‐minded, deductive reasoning is more
narrow and concerned with testing hypothesis or theory.
The reasoning in this thesis is both inductive and deductive. While the applicability of inductive
reasoning is more related to the study case, the comparative analysis, the interview and content
analysis; deductive reasoning appears in testing the literature4
for various signs or gaps, where
applicability of an incentive system could take place.
Following the reasoning method in this research, a description of the steps is necessary:
Step 1
The first step in this research was an initiation step. The exact steps of the process are
summarized in [Appendix A – Methodology for Introduction]. In establishing a proper research
ground and topic, several issues were addressed. First of all, the initial idea of research came
from an external source [Sørensen, 2015]. Then, the construction sector general status was
tested in terms of innovation, and possible ideas were brainstormed of were answers could be
found. The methods used in this section was literature review and content analysis. The
reasoning in this part was both inductive and deductive since the overall purpose was to establish
a groundwork and test the current situation of the industry. The output were the research
questions and Appendix A – Methodology for Introduction.
Step 2
The purpose of this step was to establish the philosophical stance, the paradigmatic implications,
and to create a research design for conducting this thesis based on the information obtained. The
output of this step was the research design.
Step 3
Here, the first research question was undertaken in the study. It comprised of testing the
theoretical and practical landscape of “rewarding failure as incentive for employees”. The exact
steps of the process are explained in [Appendix B – Rewarding failure in innovation processes. An
incentive program]. The overall purpose was to answer RQ 1. The reasoning level in this step was
both deductive, but by “testing the literature” and inductive due to inducing from the empirical
data gathered. First, the literature was tested for potential sources of data collection from real
cases. Second, once an organization has been selected, steps were undertaken in establishing
contact and obtaining data, by an exploratory case study with multiple units. Third, a comparative
analysis was made to establish and deduce several reoccurring themes from the data collected,
4
Although literature attributes deductive reasoning to testing a hypothesis or theory, it should be emphasized that
it is literature that is tested, not theory. The amount of literature present in rewarding failure does not constitute
in my opinion a theory.
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and fourth, a synthesis was done to develop the theoretical base of knowledge. The output was
Appendix B, and a clear answer to RQ 1.
Step 4
Step 4 comprised of an extensive literature review and content analysis. The exact steps for
conducting the research can be seen in [Appendix C – The possibilities of the construction
industry of learning by example]. The purpose of this working paper was to answer RQ 2. First,
the identification of literature was necessary for obtaining credible data. The reasoning level in
this step was inductive. Once literature has been reviewed, content analysis revealed the
potential areas for implementing a new incentive program; and how the construction industry
learns a different approach but still with the same principles and the same methods. The second
step was conducting an extensive analysis of where could an incentive system take place, in what
type of organizational setting, and how this is relevant to the construction industry by previous
implementations. The final step was synthetizing the findings into a larger theoretical base of
knowledge, where the incentive program could find its outset in the construction industry, by
using the industry’s current situation and advantages. The output was a clear answer to RQ 2
and Appendix C.
Step 5
The final step of the thesis concluded with the accumulation of knowledge gained from the
research through the steps described above. The reasoning level in this step was inductive, due
to the accumulation of knowledge. A conceptual model for implementation of a new incentive
system in an organization was proposed and the conclusions were made.
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CHAPTER 3. DEVELOPMENT OF A THEORETICAL BASE OF
KNOWLEDGE
In this chapter, all of the main research carried out to develop a conceptual framework on
rewarding failure in innovation attempts, and the way it was outset to the construction industry,
is presented. The first part of the chapter has the purpose of answering RQ 1 – Is rewarding failure
in innovation attempts done in other industries, and if so, how is it done?. The second part of the
chapter has the purpose of answering RQ 2 – How can the construction industry learn from other
industries by taking example?
This chapter contains the main research conducted in this thesis. The papers on which this
chapter is based, are Appendix B and Appendix C. During the chapter, the different methods and
the methodological approach cf. Table 2.1 are applied.
3.1 REWARDING FAILURE IN INNOVATION ATTEMPTS AS AN INCENTIVE
SYSTEM
This part of the thesis, covers the first research question [RQ 1]:
Is rewarding failure in innovation attempts done in other
industries, and if so, how is it done?
To understand better the concept behind an incentive system as “rewarding failure” and to test
the concept, a theoretical landscape was constructed through literature study. This has been
done, to gain a theoretical perspective on the topic and to obtain knowledge of industries and
organizations with this type of incentive system. The applied methodology was a case study with
multiple case units [Yin, 2009], and a comparative analysis [Glaser & Strauss, 1967]. For the full
work of this research, see [Appendix B ‐ Rewarding failure in innovation processes. An incentive
program].
3.1.1 TESTING THE THEORETICAL AND PRACTICAL LANDSCAPE OF THE TOPIC
“REWARDING FAILURE IN INNOVATION”
In organizations of any type, innovation is slowly becoming a necessity for survival on the market.
Innovations, of any nature have shaped the modern management [Hamel, 2006]. Testing the
theoretical and practical ground of “rewarding failure in innovation attempts” implied both a
collection of empirical data, and literature review. The literature review process involved both a
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taking a calculated risk should, in the event of failure not be punished but, rather encouraged to
further take calculated, sensible risks, in a spirit of optimism.
3.1.3 PARTIAL CONCLUSION
[Kriegesmann et. al, 2007] conclusions are that:
Behavioral latitude must be ensured so that innovative forces can be freed from routine
activities and decoupled from rigid structures. Similarly, resources need to have space
from counterproductive control and regulatory systems.
However this latitude can quickly degenerate into “a playground” unless the incentives
related to the tasks itself and their implementation are of a sensitive and careful manner.
[Kriegesmann et. al, 2007] recommend “upward career mobility or the prospect of
challenging and rewarding projects in the future”
Another important conclusion not really underlined by the case study is the fact that instead of
a financial reward, a personal present was awarded to emphasize the commitment. Further
literature showed, that a financial incentive system is to be used cautiously even in successful
implementation cases, due to negative outcomes [Georgellis et.al, 2011; Bysted & Jespersen,
2014].
The next step of the research was to approach an organization which could provide empirical
data in the form of semi‐structured interviews, in order to conduct the case study through
appropriate methods.
3.1.4 TESTING THE PRACTICAL LANDSCAPE OF THE TOPIC “REWARDING
FAILURE IN INNOVATION” – CASE STUDY AT TATA GROUP
This section, follows up the information gathered through literature review. The applied
methodology in this part of the thesis, as explained in [cf. Sect. 2.5, Step 3] is an exploratory case
study with multiple case units. The full collection of results can be seen [cf. Appendix B]. The
complete process, step by step can be seen [Annex 3.1].
TATA Group, with over 100 independent operating companies is a leader in the corporate world
and has a program which fosters innovation processes within the organization, called InnoVista.
[TATA InnoVista]. The program has a range of awards, which can be defined as incentive
mechanisms meant to encourage the innovation process within the organization. The case study
has focused on one type of award – “Dare to Try Award”.
“‘Dare to try’ award category of InnoVista, which recognizes sincere and audacious attempts at
innovation that failed to get the desired result. […]The growing number of entries in this category
(from 12 in 2007 to 174 in 2014) indicates that we have been successful in encouraging people to
experiment and innovate.” [Gopalakrishnan, 2014]. The award was created based on the same
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literature and case study presented before, so it was considered to be even more relevant to the
thesis purpose of studying this phenomenon. The two case units are Jaguar Land Rover Ltd.5
and
TATA Consultancy Services.6
3.1.5 CASE STUDY RESULTS – THE PRACTICAL LANDSCAPE
The following section will present the findings concluded through the case study. The two sets of
answers from the case units are summarized below:
Jaguar Land Rover Ltd.
“Daring to Try” without fear is helpful as a precursor to innovation – taking chances.
The recognition of “failure” in “Dare to Try” is mostly after the event. Therefore it does
not contribute in developing an innovation culture directly.
People apply for the award in order to make from failure “a success” but they rather have
succeeded in the first place.
“Dare to Try” should be a motto of an innovation strategy and should be rewarded
directly.
Companies prefer “low hanging fruits” but they do not take chances by doing so
The biggest issue is to resource “Dare to Try”
TCS (TATA Consultancy Services)
Dare to Try rewards failure and thus encourages risk taking. Risk taking is a precursor for
a culture of innovation.
Most companies want to progress on assured success only.
It requires management support.
The ideas are judged for recognition based on their effort.
The team should also plan going again for it.
“Dare to Try” is mostly used to attract management attention and revive failed projects
“Dare to Try” should not be necessary a motto for an innovation culture but an innovation
culture should accept failure as a pillar to success rather than punish it.
The biggest setback of Dare to try is that unless this process is continuing, failures are
hidden and it causes deterioration of the innovation culture.
The overall impression was that several themes were re‐occurring within the literature and the
themes emerging from the content analysis. Therefore, the next step was made as a
methodological approach with the objective of testing both the theoretical landscape and the
practical landscape. This has been done for a better comprehension and extraction of key
5
http://www.jaguarlandrover.com/gl/en/
6
http://www.tcs.com/Pages/default.aspx
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within the Construction industry. The significance of the theoretical landscape and the
mechanisms and barriers is that they contribute to a general overview, on what factors affect “a
paradigm shift” within the construction industry.
To be accounted for, the notion of “paradigm shift” is important because it encompasses a radical
innovation within the construction industry, an unusual tendency. [Slaughter, 1998] argued that
most of innovations happening in the construction industry are rather incremental. But the
adoption of Lean Construction can be extrapolated to the EDI theory were in a historical
perspective the adoption of such a system is a radical innovation [Kesting & Ulhøi, 2010].
3.2.4 PARTIAL CONCLUSION
As explained, key mechanisms for the implementation of Lean Construction, and also barriers
were extracted through the literature study, where themes were encoded. The results are the
following:
DRAWBACKS:
The application of lean to an entire industry involved first and foremost the issue that the
construction industry delivers different products with no clear definition of what is value
for the customer, while the manufacturing industry can easily define the quality and value
of a finite product for a customer.
The second issue encountered was the “control”. While construction industry evaluates
results by looking backward to a project already finished and assessing the results, the
manufacturing industry can overcome that issue by preventing and foreseeing any issue
by looking forward, acting directly on the process [Sullivan, 2011]
Inexperience of work force
Resistance to change of employees
Unavailability of products on the market [Ozorhon et. al, 2014]
Misunderstanding of Lean principles; employees tend to misunderstand the whole point
and they mix the meaning for example LPS (Last Planner System) with Lean thinking.
Lack of commitment from the foremen
Confusion of Lean as Building Information Modeling (BIM) combined with Virtual Design
Construction (VDC) [Thaís et. al, 2012]
KEY MECHANISMS:
Project participants were integrated through partnering of the contractor with the user‐
client
Commitment of leadership towards adoption of innovative measures [Ozorhon et. al,
2014]
Concept mapping to negotiate meanings (merely a tool for better communication)
Organizational learning
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Action learning in the form of regular meetings – “problem solving method” [Hirota et. al,
1999]
One interesting remark is to be done though. While reviewing the literature for the needed
information, an auxiliary information came through as well. As a precursor for learning,
organizations need to “unlearn” outdated practices and discard them to make room for better
ones. [Thaís et. al, 2012]
The partial conclusion presented here, is based upon an extensive literature study. The relevance
of the findings are connected to the next sub‐chapter, which tests Employee‐Driven innovation
for a potential fostering environment of “rewarding failure”
3.2.5 TESTING EMPLOYEE‐DRIVEN INNOVATION FOR A POTENTIAL FOSTERING
ENVIRONMENT
This step, emphasizes an important part of this research. While conducting the literature review,
and testing the theory for possible niches of implementing an incentive program such as
“rewarding failure in innovation attempts”, the Employee‐Driven Innovation methodology came
in the literature several times. The choice for a further analysis and testing whether it is a
potential fostering environment is argued on several considerations.
Employee‐Driven Innovation, is an approach focused on innovation within an organization, by
using the employee’s spoken and tacit knowledge in terms of new products, methods, processes.
It focuses on the employees’ creativity, which by support from management and giving them
temporary authority, can develop new tools, structures, and processes to optimize within an
organization. [Sørensen, 2015; Høyrup, 2010]
Due to the fact that EDI is based on improving the innovation process within an organization, by
using the employees’ knowledge in generating innovative ideas, it has been considered an
approachable theory for a possible implementation of an incentive system such as “rewarding
failure in innovation attempts”. Another consideration is the necessity of support from
management. The literature study, shows evidence of a theoretical framework of conducting EDI,
content data from a framework for conducting EDI in a large project based organization within
the construction industry in Denmark [Sørensen, 2015], and experiences from the Norwegian
work life [Aasen et. al, 2012].
From a theoretical point of view, Employee‐Driven Innovation can have five main drivers in
decisions about innovation within an organization [Kesting & Ulhøi, 2010]. Figure 3.2 illustrates
how an ideal type organizational structure which fosters EDI would work.
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the history of radical innovations in the construction industry, or “paradigm shifts”, potential
systems which could benefit the industry, can be learned from other industries.
On an even higher importance is that, “rewarding failure in innovation attempts” seems to have
a place within an EDI framework. The final chapter of the thesis, summarizes the partial
conclusions drawn from the research.
CHAPTER 4. DEVELOPMENT OF CONCEPTUAL
FRAMEWORK FOR THE IMPLEMENTATION OF AN
INCENTIVE PROGRAM WITHIN AN ORGANIZATION
This chapter, presents the accumulation of knowledge in the form of a synthesis based on chapter
3, cf. [Appendix B; Appendix C]. The chapter relates to all the partial conclusions drawn through
the previous chapter.
The construction industry is facing once again a paradigm shift. Innovation processes have
become increasingly more important due to the potential they have, and the industry is starting
to realize that.
This research was based on the premises that people and organizations are all different and
therefore their realities can differ. In the search for obtaining the best answers possible for the
two research questions, similar patterns have been re‐occurring and some were differing. The
process of answering the research questions, was interesting to follow, as it took the research,
through various disciplines in the search of developing a conceptual framework for the
implementation of an incentive program such as “rewarding failure”.
Through this research, some key mechanisms were identified for conducting an incentive
program such as “rewarding failure” [RQ 1]. Once this step was resolved, the dilemma of how the
construction industry learns was undertaken. Through an extensive literature study, the key
mechanisms extracted for the learning industry were related once to:
The historical perspective of how Lean Construction has been adopted by the
Construction Industry.
The key mechanisms for conducting EDI in an organization, and outsets in the
construction industry have been already defined.
The final step, is to synthesize these results into a conceptual framework for how “rewarding
failure as an incentive mechanism” fits the methodology of EDI.
