Sustainable Development in Construction: A Tool to Bridge the Gap between Strategic and Tactical

Planning

Herazo-Cueto, B.

Groupe de recherche if, Faculté de l’aménagement, Université de Montréal

(email: bj.herazo.cueto@umontreal.ca)

Lizarralde, G.

Groupe de recherche if, École d’architecture, Université de Montréal

(email: gonzalo.lizarralde@umontreal.ca)

Abstract

The adoption of the principles of sustainable development (SD) is increasingly seen as an important

way to align the strategic plan of organizations with the specific objectives and procedures used for

project execution. However, more research is still needed to identify how SD contributes to align the

strategic plan of clients of the building sector with their short-term needs of construction projects

(their tactic plans).This article presents the preliminary results of an ongoing research project that

hypothesises that SD contributes to bridge the gap between the strategic plan of construction clients

and their project-based tactical planning. It presents a case study of an institutional construction

client in Canada that has incorporated principles of SD in both project procedures and strategic

management. The client currently conducts a project aiming a LEED certification. The key study

findings are: (i) important changes have been noticed in the tendering process, and (ii) top-down

environmental management plans and environmental management systems have been implemented

under the pressure of various bottom-up initiatives of environmental responsibility. The principles of

SD now transcend both short-term needs and long term responsibility, potentially facilitating the

alignment of the strategic and tactical plans.

Keywords: sustainable management, temporary multi-organization, strategic management,

sustainable construction, project management.

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1. Introduction

International corporations are increasingly using the principles of sustainable development (SD) to

align corporate vision, mission and objectives with day-to-day decision making conducted at the level

of individual projects (Fister, 2009). These organizations (including Saatchi & Saatchi, L’Oreal and

Yahoo! Inc.) increasingly perceive that the principles that represent sustainable practices (see second

column in table1) contribute to coordinate two hitherto fragmented scales of decision making:

strategic and project management. “A good sustainability manager and a strong project manager

working together can make that connection, bringing the business priorities down to the project level

and making sure those metrics are measured” say Christina Page, of Yahoo! Inc (Sunnyvale,

California) (Fister, 2009). However, insufficient knowledge still exists on what is the scope of this

influence in the building sector.

The concept of alignment has gained wide acceptance in management. The term permits to explicitly

examine the relations between strategies, structure, and planning methodologies within organizations

(Reich & Benbasat, 2000). The concept has been largely used in strategic management to describe,

for instance, the relationship between business goals and products of information technology.

Nogeste (2008) uses the concept of alignment to describe the link between intangible project

outcomes and tangible project outputs. Similarly, Pulaski (2005) uses it to describe the relations

between the objectives of sustainability and those of the construction process.

The purpose of this article is to report the preliminary results of an ongoing research project that

explores the influence of SD in the alignment of strategic planning and tactical project management

in organizations that commission construction projects. The article begins with a review of strategic

planning and tactic management concepts, highlighting the gaps that exist between the two

approaches. It then presents the principles of sustainable development as a possible link between

strategic and project management in design and construction projects. This is followed by the

explanation of the case study approach and other qualitative methods used. It then presents the

patterns found in the case study, the preliminary results of the study and an overview of further steps

sill required in this research.

2. Strategic and tactic management in construction

Strategic planning is based on the explicit description of the organization’s mission, vision and

strategy (Byars, 1984). The organization’s strategy is often seen as a “top management’s unique plan

to develop and sustain competitive advantage and superior performance so that the organization’s

mission is fulfilled" (Parnell, 2008, p. 37). According to Mintzberg (1987), it reflects the results of

organizational learning by incorporating patterns of behaviour that have worked best. Thus, it enables

the organization to fully concentrate its resources and exploit its skills and knowledge. While the

mission is the reason behind the very existence (and pertinence) of the organization, and its vision is

the ideal state of the organization in the future, the strategy defines the way to achieve that ideal state

(Naaranoja, Haapalainen, & Lonka, 2007). Strategies therefore identify the high objectives of the

organization and dictate the long-term direction of the most important activities (Byars, 1984).

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Strategic management thus refers to a process that includes top management’s analysis of the

organisation’s internal and external environments prior to formulating a strategy, as well as long-term

plans for implementation and control (Parnell, 2008).

However, urgent problems and some of the needs of organizations must often be solved by

responding to precise objectives in the short term; that is to say, at a tactical level. Projects efficiently

respond to tactic needs, they are indeed dedicated to the attainment of a specific and measurable goal

in conformance with predetermined performance specifications (Gaddis, 1959; PMI, 2008). Even

though, project management permits to organize and coordinate the activities that respond to a tactic

plan, it is often considered as a linear sequence of procedures and methods that is not adequate to

manage the complex situations that modern organisations must now confront (Thiry & Deguire,

2007). A number of authors therefore claim that an important transformation of the discipline of

project management is needed to respond to the dynamic and integrative needs of current projects

(Forgues & Koskela, 2009; Koskela & Howell, 2002).

The dichotomy between strategic and tactical approaches have led some authors to identify two main

theoretical traditions: "The first tradition with intellectual roots in the engineering science and

applied mathematics, primarily interested in the planning techniques and methods of project

management. The other tradition with its intellectual roots in the social sciences, such as sociology,

organization theory and psychology, especially interested in the organizational aspects of project

organizations" (Söderlund, 2004, p. 185).

Some authors have thus identified a gap between the strategic and tactical levels of management

(Katsanis, 1998). According to Thiry (2007), "the actual strategy process, in contrast to project

processes, is often not planned, linear and rational, but rather ongoing, emergent and enacted" (Thiry

& Deguire, 2007, p. 649). However, project management practices influence organisational strategies

and vice versa (Thiry & Deguire, 2007). However, insufficient knowledge exist on how the project

planning and management influences strategic organisation levels (Thiry & Deguire, 2007).

The existing gap between strategic and tactical planning in the building sector is not surprising.

Adapting the principles of long-term strategic planning in a project-based industry (like the building

industry) is not an easy task. At least four main difficulties arise. First, fragmentation: The

organizational fragmentation that characterises the building sector (Cherns & Bryant, 1984; Mohsini

& Davidson, 1991) reduces the capacity of organizations of design and implement concerted long-

term plans (Bryde, 2008). Second, project complexity: Construction projects are becoming

increasingly complex requiring more participants, involving additional stakeholders and rising the

level of specialization of project actors (Langford & Male, 2001; Ngowi, Pienaar, Talukhaba, &

Mbachu, 2005). The linear approaches to construction management are insufficient to fully integrate

project actors (Forgues & Koskela, 2009), let alone to align their objectives and strategies (Maqsood,

Finegan, & Walker, 2003). Third, environmental complexity: Strategic management is based on a

comprehensive knowledge of the environment, but in project-based businesses, project environments

are highly dynamic and thus the establishment of a vision is difficult (Naaranoja, et al., 2007).

Fourth, the size of companies: The fragility of the project temporary teams (due to their fragmented

nature) increases the vulnerability of companies (particularly small and medium-sized enterprises -

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SMEs, which account for 90% of the industry) to fluctuating commercial and financial environments

(Davidson, 1988). SMEs cannot easily implement research and development departments or

knowledge management procedures, making it difficult for companies to manage uncertainty, share

knowledge and, thus, create strategic approaches (Leslie & McKay, 1995).

3. Sustainability in strategic and project management

The Agenda 21 defined sustainable construction as: "a holistic process in which the principles of

sustainable development are applied to the comprehensive construction cycle, from the extraction and

beneficiation of raw materials, through the planning, design, and construction of buildings and

infrastructure, until their possible final deconstruction, and management of the resultant waste" (Du

Plessis, 2002, p. 6). Even though there are many interpretations of sustainable development, a

common consensus exists towards its adoption in the building sector. This, despite of the fact that the

construction industry has been accused of causing various environmental problems “ranging from

excessive consumption of global resources both in terms of construction and building operation to the

pollution of the surrounding environment” (Ding, 2008).

Table 1: Sustainability as bridge link between strategic and tactical planning.

Strategic planning Sustainable

development

Tactical planning

Based on Vision

Mission

Objectives (Byars,

1984)

Social, economic and

environmental

responsibility

(Brundtland, 1987)

Respect of quality, time and

cost (PMI, 2008)

Scope Long-term (Langford &

Male, 2001)

Short term decisions and

long term effects

(Gladwin, Kennelly, &

Krause, 1995)

Short term (PMI, 2008)

Main decision

makers

Top management

(Betts, 1999)

All levels (López-

Fernández & Serrano-

Bedia, 2007)

Team managers, project

leaders (Raiden, Dainty, &

Neale, 2004)

Approaches to

implementation

Strategic management

(Byars, 1984)

Sustainable strategic

management (Stead &

Stead, 2008)

Project management (PMI,

2008)

Means to reach

objectives

Motivation, review of

procedures,

negotiation (Mintzberg,

1993)

Integrative actions,

consultation and

negotiation between

stakeholders (Hacking &

Guthrie, 2006)

Programming and control

(PMI, 2008)

Standards ISO 9000 (Kelada,

1996)

ISO 14000, GBTool,

BEES, LEED, (Cole,

2005)

Project Management Body

of Knowledge (APM, 2006;

PMI, 2008); Code of

practice for project

management for

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construction and

development (Chartered

Institute of Building, 2002)

Focus The pertinence and

relevance of the

organization in the

environment

(Mintzberg, 1987)

Alignment of short term

needs with long term

responsibilities

(Gladwin, et al., 1995)

Responding to a need and a

clearly identified objective

(Gaddis, 1959; PMI, 2008)

Approach to control Based on monitoring

change in the

environment (Kato,

2008)

Based on impact

assessments (Glasson,

Therivel, & Chadwick,

2005)

Based on controlling

schedule, budget and quality

(Williams, (1999)

Ultimate focus Organization-focused

(Wysocki, 2003)

Environment-focused

(Stead & Stead, 2008)

Project-focused (Walker,

2007)

In the construction industry, where each project is unique, one of the main challenges is monitoring

environmental performance over time (Christini, Fetsko, & Hendrickson, 2004). During the phases of

planning and designing, most architects and consultants now search for new materials and innovation

to improve environmental efficiency. However, it is in the management of the project itself where

strong innovations are now needed to bridge the gap between sustainable objectives and tactical plans

(Forgues & Koskela, 2009; Naaranoja, et al., 2007). New approaches have recently emerged to

reduce the gap between long-term management objectives and short term management goals.

Shrivastava (1993), Parnell (2008) and Stead & Stead (2008) have develop a conceptual frameworks

that merge strategic management, sustainable development and project management. Stead & Stead

(2008) call this approach Sustainable Strategic Management (SSM), which proposes “a more

comprehensive global view of the term [strategic management], referring not only to the survival and

renewal of the firm itself, but also to the survival and renewal of the greater economic system, social

system, and ecosystem in which the firm is embedded” (Stead & Stead, 2008, p. 73).

Table 1 shows the characteristics of strategic planning, tactical planning and sustainable development

as they have been discussed in the literature. The table illustrates the important differences between

strategic and tactical levels and shows how the principles of sustainable development respond to

some of the characteristics of the two approaches.

4. Research design

The objective of this research is to identify how SD contributes to align the strategic plan of clients

of the building sector with their short-term needs of construction projects (the tactic plans). We

adopted a qualitative research approach, and more specifically the study case method proposed by

Yin (2003). Case studies are often “based on interviews, which are used to investigate technical

aspects of a contemporary phenomenon with its real life context; when the boundaries between

phenomenon and context are not clearly evident; and in which multiple sources of evidence are used”

(Yin, 2003 p.3). The research includes the detailed analysis of three study cases. In this article, we

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present the preliminary results obtained from the analysis of the first case, which was used as a pilot

study of the research.

It was important for the study to examine the case of construction clients that simultaneously

establish strategic plans and tactical plans. It was also important to identify organizations that have

adopted principles of SD. We therefore decided to examine construction clients that have the

following characteristics:

1. Experienced clients, as defined by Gameson & Masterman (1994), namely organizations that have

gained experience after commissioning more than one construction project. This is important because

one-off clients do not have the same opportunity as experienced clients to learn from tactical

management decisions to improve strategic management procedures.

2. Secondary clients: that is, organizations who require buildings to enable them to house and

undertake their own main activities. We therefore omitted primary clients (whose main activity

consists in constructing buildings for sale, lease, investment, etc.) (Nahapiet & Nahapiet, 1985). This

is important because, contrary to primary clients such as residential and commercial developers,

secondary clients establish strategic plans that are not directly focused on improving construction

practices.

3. Institutional clients in Canada, where the term “institutional clients” describes large and complex

organizations that may operate with mixed capital (private and public). We therefore aimed at

medium-size or large-size organizations, deliberately avoiding small enterprises that probably have

not established formal strategic management procedures.

These criteria led us to identify institutions that operate in the following sectors: education, financial

services, public health, etc. In other to facilitate access to information, we opted for studying three

universities that are currently conducting large construction projects.

The first part of the study involved the review of the literature on organizational theory, sustainable

development, knowledge management, project management and strategic planning. A particular

attention was given to articles and documents that discussed the relations between strategic and

planning management. The second part of the study included a review of documents and printed

material related with the case study. This included: official documents about building policies,

contractual documents, project reports, meeting reports, feasibility studies, etc. This second step of

the study also included conducting an interview with the project manager in charge of the

department of building procurement in the organization. The interview has been complemented by

several informal discussions in order to clarify information and experiences gained from the project.

We then adopted the methods of triangulation of information for case study research proposed by

Proverbs & Gameson (2008). This permitted us to compare written information with data obtained

from the interviews. In case of discrepancies between the two sources, validity was given to printed

material.

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The third part of the study included analysing the data obtained. This included identifying the project

stakeholders and representing their relations in a graphic manner (see figure 1). It also included

organizing the information according to the principles and categories previously identified in the

literature (following the structure used in table 1).

5. Results of the case study

Client’s strategic plan: The mission of the University of Quebec (UQ) is the advancement of

learning and scientific research, a mission adopted in 1967 (Université de Montréal, 1967). The

current document of strategic planning - called the White Book - was adopted in 2007 and it

comprises the actions to be taken between 2007 and 2010. It was the result of extensive consultation

with the academic community, including units, departments, employees’ unions, student associations,

etc. The rector of the university must present every year a report of activities responding to the

objectives of the White Book. This report is presented annually to the community by the Rector in an

open lecture.

Client structure: The top management structure of the university includes: the board, the executive

committee; the university assembly and the committee of studies (Université de Montréal, 1967). The

second level of hierarchy includes the rector and vice-rectors, who have are in charge of strategic

decisions but who also influence tactical decision-making. The third level of hierarchy includes

faculties and departments along with the Building Management Office (BMO), a unit in charge of

planning and procuring construction projects in campus. This unit is accountable to the rector and is

mandated to respond to the needs of the academic community and their space requirements, adapting

time scales, specifications and size of each project according to the needs of faculties or departments.

Campus Master Plan: The university undertook in 2007 a consultative process to prioritize space

needs, which resulted in a Campus Master Plan adopted in 2008. The Campus Master Plan is a

document that proposes strategic principles, priorities, timelines and a budget for developing the

campus over a twenty year period (Université de Montréal, 2007).

Environmental Policy: The university adopted in 2003 a very basic environmental policy,

concentrated on three main objectives: 1) the adoption of rational methods to manage resources;

including reuse and recycling of resources, reduce of consumption of resources and the preservation

of natural resources, 2) ensure the protection of employees to environmental risks and 3) reduce the

environmental impact of activities conducted by the academic community (Université de Montréal,

2003).

The path towards the alignment of SD, strategic management and tactical management: Like

other institutions of higher education, the university first developed environmental initiatives and

projects of SD launched by students, faculty and groups of employees. These initiatives appeared

before SD was adopted at the strategic level (in the White Book, the Campus Master Plan and the

Environmental Policy). In fact, administrative units started to implement in the early 90s internal

processes for environmental management without having a strategic plan for the whole organization.

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The BMO, for instance, adopted a program for training its staff in environmental issues. It also

started hiring new employees who had knowledge or experience in environmental management in

buildings (Université de Montréal, 2005). The organization adopted a formal environmental policy

and an environmental management system on campus following the pressure from: (i) Internal

pressure groups, such as the unions, the student associations and research groups; (ii) Policies

enforced by the Ministry of the environment, the Ministry of culture and other provincial legislation;

(iii) The regulations imposed by the Municipality and the Borough where the main campus is located.

Once SD was adopted at the level of strategic management, the BMO did not have to modify its

organizational structure, yet it included new requirements of sustainability for consultants and

contractors. This has enabled the BMO to adopt a new environmental policy without increasing its

staff. The experience and the transfer of knowledge in the processes have been crucial in formalizing

tendering procedures within the TMO. For example, standard contracts used by the BMO are often

reviewed and adapted following the experiences of previous projects. Table 2 illustrates the way in

which the principles of sustainability have been interpreted and implemented at the levels of strategic

and tactical planning.

Example of a sustainable project: Now that the university has adopted the principles of SD at both

the strategic and tactical levels, the organisation faces the challenge of implementing the values and

principles included in the strategic plan in an ongoing and ambitious project of urban development.

Based on the Campus Master Plan, the university constantly commissions renovations and new

buildings. However, demand for space recently increased, forcing the university to plan the

development of a secondary campus. Thus, in 2006, the university purchased an ancient railway yard,

with the intention of building an extension to its original campus. The university justified its choice

of an extension to the campus based on arguments previously exposed in the Campus Master Plan

(Université de Montréal, 2008). An invitation for tenders was then organized, and an architectural

firm was hired to conduct the general urban design as well as to manage the process of zoning

changing and other modifications to local regulations (see figure 1). The call for tenders put a strong

emphasis on the sustainability of the new project and the contract was awarded to a firm that is well

recognized for its experience in SD, particularly in projects certified LEED.

“The University proposes to develop the urban area based on the structure of Global

Environmental Assessment LEED-ND (a LEED certification for neighbourhood

development). This new tool integrates the principles of smart development (smart growth)

and green building, promoting higher densities, proximity to public transportation,

multipurpose buildings and alternative means of transportation. LEED-ND is a recognized

standard that identifies and stimulate demand for environmentally responsible buildings and

neighbourhoods” (Groupe Cardinal Hardy, 2006).

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Figure 1 Diagram of the TMO of the project conducted by UQ.

Despite of the good intentions stated in the initial project documents, one of the most important

challenges of the project was to explain to local residents and other pressure groups the feasibility

and pertinence of the new campus on the site. In fact, the location of the project in a traditional

residential neighbourhood generated fierce environmental debates. It was therefore necessary to

organize a participatory process which was led by the Office of Public Consultation (OCPM., 2007).

This process forced the university to adopt two important decisions: (i) to develop special

communication strategies, including a website, flyers, conferences, special meetings, etc., and (ii) to

hire a company specialized on communications and stakeholder management to facilitate the relations

between the university, the pressure groups and the control agencies (see fig 1). Stakeholders

particularly active in the consultation process included local neighbours, teachers, employees, unions,

student associations, academic staff, the city of Montreal, local merchants, etc. (Convercité, 2006).

During the consultation process a group of participants requested that the intentions and principles

stated by the university in strategic management documents were considered regulatory obligations

(OCPM., 2007). Figure 1 shows the participants that were involved in the main decisions at the

strategic level. It also shows the actors that have worked in the project at a tactical level. All of them,

however, are already committed to sustainable actions.

Table 2: Synthesis of the principles of SD presented in official documents of strategic and tactical

planning (free translation)

Level Documents Content

Sustainable

development

principles

Environmental Policy Statement

of the University (Université de

Montréal, 2004)

“The University wishes to confirm its

commitment to the paradigm of sustainable

development; by encouraging the academic

community to endorse the protection of the

environment, maintaining its integrity and

preserving natural resources.” (p. 2)

Report presented by the university

to the consultation process on

regional sustainability organized

The university can contribute to regional

sustainable development by “promoting the

sustainability of infrastructure and buildings”

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by the provincial governemt.

(Université de Montréal, 2005)

Strategic Level Statutes(Université de Montréal,

1967)

The university council approved projects of

major importance for the development of the

university

Strategic Plan 2010. White Book

(Université de Montréal, 2007)

This document incorporates the results of

consultations with the academic community.

Campus Master Plan (Université

de Montréal, 2008)

“While the timeframe of previous master plans

covered a decade, the new Campus Master

Plan, by its very nature and the scope of the

project behind it, offers a prospect of

influencing decisions over a much longer

period” (p. 4)

Tactical level Statement of principles for

investment and supply

(Université de Montréal, 2003)

Policies promote that managers should be

“sensitive and attentive to ethical issues

related to environment and social

responsibility in their decisions and activities”

(p. 1)

Campus Master Plan

(Université de Montréal, 2008)

The Campus Master Plan “defines a

framework and the priorities of the university

for managing and planning spaces” (p. 49)

6. Discussion and further research

The objective of this research was to understand the relations between strategic planning, tactical

management and sustainable development. The overall research is based on case study methods;

however, this article reports only the results of a first case study that has been used as a pilot case for

the research. The case shows that:

Principles of SD were first implemented at the level of units and departments and not at a strategic

level (the principles followed initially a bottom-up approach).

Pressure from units and departments and the provincial and municipal legislations ultimately led

the institution to adopt the principles of SD at the level of strategic management.

Following the adoption of SD in the documents produced by the head of the organization, a top-

down approach was implemented.

The principles of SD align long-term objectives included in the strategic plan and short term

objectives required at the tactical plan.

Principles of SD have translated into requirements for call for tenders and performance

specifications in bidding documents.

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The principles of SD include social responsibility, which forces the institution to adopt

participatory and integrative methods of project management, aligning in this way the strategic

plan of social responsibility and the tactical objective of social acceptability of the project.

The findings suggest that more research is still needed to identify the effects of SD in the alignment

of the long-term objectives of organizations and the short-term needs of individual projects. The

following phases in this ongoing research project must address:

1. Validating among other case studies the preliminary results presented in this article;

2. Creating a model based on the patterns found in the sequence of alignment of strategic and tactical

planning;

3. Testing the model with additional empirical research (including discussing the model in focus

groups with specialists in project management and strategic management in the building sector).

This preliminary study has led us to propose the following research questions, which must be

addressed in further phases of the study:

1. How are the lessons learned at the tactical level (in project management decision-making)

transferred at the strategic level of the organization?

2. What are the differences between (i) the values and principles presented in the strategic plan of

institutions and (ii) the real interventions and decisions implemented at the tactical level?

3. What are the principles of SD that institutions do easily implement and what are the principles

that they struggle to adopt?

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