Introduction
The Smith Tower, a skyscraper in Washington, D.C., will demonstrate how external factors influence a construction project implementation process. A trend has emerged in which cities across the world are utilizing technology to build upwards rather than outwards to boost inner-city populations and offices for successful enterprises. The fight against gravity was the biggest issue in the construction of the skyscraper. Advances in steel make made it possible for architects to design such a tall buildings. The skyscraper consists of a steel skeleton structure in which giant girder grids were formed by riveting metal beams end to end to develop vertical columns. The columns were connected to horizontal girder beams to strengthen and reinforce the structure on each floor. Diagonal beams between girders provide additional support. The Smith Tower remains one of the tallest buildings in Washington with the gleaming white terra-cotta monument creating an unparalleled cultural position. The contractor and project team attempted to balance business needs with those of the society because of the growing concerns about sustainable development. Ethical and social responsibility were critical development pillars enabling project sponsors to compensate the community for the detrimental effects of new initiatives (Duman, Giritli, and Mcdermott, 2016, p. 218).
The contractor and the project team faced significant challenges when balancing various stakeholder interests in the project. For instance, the project sponsors were interested in the delivery of a state-of-the-art tower within the minimum possible budget. Community members were interested in how the skyscraper and the process of developing it would affect their livelihoods. Positive impacts such as increased job opportunities were welcome, while negative impacts such as environmental degradation were opposed. A critical review of the literature will be conducted to determine the external factors likely to affect the project and appraise ethics and social responsibility. The approach will help to evaluate the project from the perspectives of different scholars and determine the best practices to ensure successful implementation balancing multiple stakeholder interests.
External Influences
The project team had to address the multiple aspects of implementation. Internal hindrances were easier to address because they were within the scope of the management. However, external challenges were difficult to deal with because they were beyond the control of those in charge of the contractor. Examples include the gross domestic product (GDP), labor availability and work experience, technology, interest rates, inflation rate, material price index (MPI) (Szymański, 2017, p. 174). Evaluating the potential impact of each of the elements guided the project team in anticipating potential obstacles and develop proactive strategies of addressing them.
Most of the issues likely to interfere with project execution are quantifiable, making it conceivable to conduct a factor analysis. A multiple linear regression model can help to determine the extent to which each of the external influences can affect a critical deliverable, such as cost or completion time. For example, a change in each of the variables may affect the total cost of building the skyscraper or the duration critical milestones, thus affecting the budget and scope. Additionally, some elements may have a stronger effect on project implementation than others. The following model presents the project cost as a function of the external factors:
With accurate data of each variable, the project team can use the model to determine the extent to which a change in an external variable can affect cost. The focus should be on the factors with a huge impact on the price. Although the model can help to have a holistic view of the impact of external factors on the task, it faces some weaknesses. For instance, the model assumes a linear relationship between each independent variable and the dependent factor, which is not always the case (Černý, 2019, p. 379). For example, the relationship between the project cost and inflation may be linear, but that between the scope and labor availability may be non-linear.
The project faced significant risks, which interfered with the execution process. Risks are incidences that may or may not occur, which, if they happen may have an impact on the project (Mubarak and Oktaviati, 2017, p. 1). They are related to the concept of opportunity such that unexpected conditions and probable consequences can lead to project failure. If they are experienced, unexpected incidences can affect time, cost, and project performance. Acritical threat analysis is required to identify potential failure causes and take appropriate action before it is too late.
Socio-Political Risks
The project faced significant socio-political risks, which could potentially change or stop the flow process. The government may also develop regulations or policies concerning public interest, which may hinder the execution process (Mubarak and Oktaviati, 2017, p. 2). The construction of buildings is highly regulated in Washington through the State Building Code (SBC), which incorporates the 2015 International Building Code, International Fire Code, State Energy Code, International Residential Code, Uniform Plumbing Code, and the International Mechanical Code (Washington State Building Code Council, 2021, para. 2). Complying with the various rules and regulations was a challenging task affecting the budget and the scope. For instance, the project team had to hire legal experts, which affected the costs. Additionally, the processes of acquiring the various certifications were lengthy and tedious, affecting the project scope. Some concerned community members filed lawsuits opposing the project but the project team was able to negotiate out-of-court settlements.
The various codes contain rules and regulations that must be followed in construction projects to protect the public from harm and conserve the environment. There are also provisions for restoration where damage has occurred (The Redmond Municipal Code, 2020, para. 3). They also provide penalties for violations to deter similar incidences in the future. The project team had to adhere to the various regulations to avoid penalties, which could have affected the budget, schedule, and scope. The project was executed at a time when there were various regulations aimed at ensuring sustainable development, especially in urban settings. The different rules posed significant legal risks in the unfortunate event of a violation.
Natural Disasters
Natural disasters affecting human populations, such as earthquakes, floods, and extreme weather conditions can also have an adverse effect on the project. The likelihood of such events is beyond the control of the project team (Mubarak and Oktaviati, 2017, p. 6). The cost of essential goods and services and supplies escalate in areas affected by natural disasters. The risk of earthquake damage in Washington is 0.07, which is significantly low compared to the national average of 1.7 (“Washington, DC natural disasters and weather extremes,” no date, para 1). However, the occurrence of a disaster, such as a flood, cannot be overruled indicating the need for those implementing construction projects to be cautious.
Existing studies indicate a myriad of consequences of natural disasters on construction projects. Unexpected natural occurrences can increase overhead costs and affect profit margins (Pamidimukkala, Kermanshachi, and Karthick, 2020, p. 103). The incidences may cause damage to machinery, disrupting the construction processes. The time and cost spent in repairing damaged parts of a building and critical equipment causes variances that affect gross margins, especially in tight-budget projects. Labor costs may also escalate as workers demand higher pay to compensate for the risks they are likely to face working in a risk-prone site. New materials may also have to be sourced causing an upward shift in the budget estimates.
A natural disaster can affect logistics and public utilities, such as fuel, electricity, transport, and communication, as well as water supply and sewerage. Disruption of critical infrastructure can slow a construction project, affecting the schedule, scope, and budget (Pamidimukkala, Kermanshachi, and Karthick, 2020, p. 104). In such, instances, emergency services agencies mainly focus on saving the lives of the affected people, including construction workers. Search operations may lead to further damage to a partially completed building and delay the reconstruction process. The demand for construction materials and labor escalates after a natural disaster, pushing the prices of the services and products upwards.
The frequency of natural disasters has increased globally posing significant environmental risks. Existing studies indicate that management teams and workers in construction firms are distressed by unexpected events because of the associated effects, such as uncertainty of contracts, job insecurity, as well as discriminatory practices in remuneration and career development (Pamidimukkala, Kermanshachi, and Karthick, 2020, p. 105). The project was not immune from those challenges in the unfortunate event of an earthquake or an extreme weather condition, such as flooding. Fortunately, no natural disaster interfered with the construction of the Smith Tower.
Economic Factors
Economic conditions may change in unanticipated ways affecting the execution of a project. For instance, monetary factors relating to macroeconomic conditions through the regulation of money in circulation can cause inflation, thus affecting the price of inputs (Mubarak and Oktaviati, 2017, p. 6). Business cycle changes are beyond the control of the project team yet they can fluctuate in ways disrupting the flow of tasks. A problem in a major economic sector may have a huge impact affecting the other sectors. For instance, a housing bubble caused the 2008-2009 global financial crisis (Szymański, 2017, p. 176). The disruptions caused by the rapidly changing technologies can disrupt the world economy in the future, which would affect the execution of a construction project significantly. Digital technologies, such as blockchain, machine learning, and artificial intelligence may advance in ways affecting the economy significantly. For instance, cryptocurrencies may continue to disrupt the financial markets affecting the way business is conducted. Capital-intensive projects, such as skyscrapers are affected in case of such incidences.
The economy is a complex issue depending on a myriad of factors. Experts in the financial sector make predictions about the trends likely to be experienced in the near future. Some of the published projections may occur but others may not happen. Some incidences may occur without a warning. For instance, the recent COVID-19 pandemic, which has had a massive economic impact, caught the world by surprise (World Health Organization, 2020, para 1). The plague has affected ongoing construction projects, especially because of supplies challenges created by travel restrictions imposed by governments. The construction of a skyscraper is a labor-intensive mission, which has experienced problems of the social distancing requirements by the authorities to contain the spread of the epidemic (Wee, 2020, p. 113). Similar viruses may emerge in the course of the project, challenging its flow significantly. Starting the project during a period of good economic performance may facilitate success. For instance, it is not advisable to commence the project now with the ongoing restrictions to contain the disease. Waiting until the issue is controlled and the economy recovers may ensure smooth progress. The United States was not actively involved in World War I, which created some favorable economic conditions for the project.
Ethics and Social Responsibility
Although construction projects are necessary and account significantly for the growth and development of cities and regions, their execution can have adverse effects on the environment and other critical aspects of human livelihood. Many organizations use corporate social responsibility (CSR) to account for the detrimental effects of their projects on society (Duman, Giritli, and Mcdermott, 2016, p. 219). It is critical for the project team to come up with an explicit CSR policy defining the activities and measures they will take to ensure ethical practice and social responsibility in the course of executing the project.
There are numerous factors indicating the need for the project team to have a clear plan for ethical and social responsibility. For instance, the construction industry is among the sectors leading in the exploitation of natural resources (Duman, Giritli, and Mcdermott, 2016, p. 220). CSR initiatives relating to the environment, employment, ethical business practices, and community relationships can help to respond to some of the challenges. The contractor building the Smith Tower consulted local community leaders and groups to address their concerns, which promoted the ethical practice. Prioritizing community members in employment opportunities and disposing of waste materials responsibly also contributed significantly to the success of the project.
Ethics and social responsibility were challenging task because of their multifaceted nature. The project team ensured that CSR activities affected the various stakeholder groups interested in the development. For instance, environmentalists were interested in the ways in which waste products were disposed of and how the skyscraper designer would optimize energy use. Government agencies were concerned about the contractors’ compliance with existing rules and regulations. The community members were interested in the job opportunities created by the project. Balancing the various stakeholder interests was a challenging task. A CSR committee focusing on moral and societal responsibility helped to optimize party interests in the initiatives conducted to account for the detrimental effects of the task.
The value created by CSR has facilitated the development of management systems and standards guiding its conduct. The contractor in charge of the Smith Tower prioritized sustainable development, as well as economic, social, and environmental accountability (Duman, Giritli, and Mcdermott, 2016, p. 225). The project team used CSR assessment and evaluation tools to measure the impact of their initiatives on society. Quantifying the negative impacts of building the skyscraper and comparing them with CSR initiatives helped to analyze the net value of the project to the community. The benefits outweighed the costs to make the project valuable to society. Benchmarking with other construction projects helped to ascertain the extent to which the project team was ensuring ethical and social responsibility.
Conclusions and Recommendations
Project risk management played a vital role in addressing the external factors affecting the project. It involved maximizing the probability of occurrence and positive impact of activity and minimizing the likelihood and negative consequence of an incidence (Mubarak and Oktaviati, 2017, p. 1). Taking appropriate actions saves the costs incurred when adverse events occur. The project team anticipated unexpected occasions and took preventive measures to ensure effective task implementation. Contractors’ All Risk (CAR) insurance provided coverage for property damage and third-party injuries that may have occurred when the construction process was ongoing (Akinradewo et al., 2020, p. 1). The project team considered the policy as a potential way of dealing with unforeseeable occurrences. Although an unexpected event may have affected the project schedule, the cover provided protection against financial losses, which may have affected the budget.
Different management practices were combined to address the external factors and ensure successful project implementation. Team performance training enhanced the success of the project team (Pamidimukkala, Kermanshachi, and Karthick, 2020, p. 103). Those responsible for the various milestones were educated to acquire the skills and knowledge required to succeed in group tasks. A key focus was on the importance of communication among group members to ensure an effective flow of information and task coordination. The educators nurtured emotional intelligence among people actively involved in the delivery of critical project milestones to minimize wrangles and promote synergy (Mayer, Caruso, and Salovey, 2016, p. 1). Harmony at the workplace increased job satisfaction and enhanced the staff members’ commitment to the overall project goals and objectives.
As critical stakeholders, managers and staff members were empowered to enhance their performance. Fair remuneration, effective dispute resolution, and flexible working hours enhanced staff satisfaction and motivated them to deliver the best, which helped to meet the project goals and objectives (Maynard, 2020, p. 345). Applying multiple linear regression models to forecast price increases, simulation software for emergency evacuation plans, and Bayesian network model and scheme dynamics simulation to evaluate infrastructure criticality can enhance risk response (Pamidimukkala, Kermanshachi, and Karthick, 2020, p. 104). A balanced scorecard can reduce overruns.
Appointing a CSR manager to be among the project team members helped to ensure ethical practice and social responsibility. The construction was conducted in the most responsible manner to minimize waste and environmental degradation. However, it was impossible to minimize environmental harm entirely, indicating the need for community initiatives to compensate society for the negative effects associated with the project. The CSR manager recruited a team to monitor and evaluate the negative effects of the projects. The objective was to ensure that the activities conducted to compensate the society created more value exceeding the quantified economic, social, and environmental costs.
The contractor could use the net present value (NPV) method to compare the costs and benefits. It involves discounting all current and future costs and benefits to the current values to draw useful comparisons (Neupane, Afroze, and Phommasone, 2020, p. 318; Spackman, 2020, p. 244). The present value of benefits should exceed the present value of costs for a project to be viable. The team should identify all the cost and benefit items, quantify them, and monetize the impact on the project. NPV calculation and result interpretation follow to determine the impact of ethical and social responsibility. Benchmarking with previous skyscraper projects of the same scope can also help to ensure success and effective management of external influences.
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