The effects of formalisation on coordination and effectiveness of refurbishment projects

PurposeThe paper's aim is to establish the relationships between the formalisation of construction firms on the level of coordination and effectiveness of refurbishment projects.Design/methodology/approachThe approach takes the form of a literature review of published journals and textbooks, a postal questionnaire survey with managing directors, project managers and contract managers. About 94 construction companies were selected for the postal questionnaire survey. In total, 54 (57 percent) of returned questionnaires were considered to be useful for statistical analysis.FindingsHighly formalised construction firms require higher level of coordination than lowly formalised construction firms. In highly formalised construction firms, the participants managing refurbishment projects tend to circumvent formalisation by having more informal interactions, which contradicts the needs of the firms. The effectiveness of highly formalised construction firms is not significantly better than lowly formalised construction firms.Research limitations/implicationsThe study is limited to medium and large refurbishment projects, with contract value above £500,000.Practical implicationsThe paper highlights the need to reduce formalisation in managing refurbishment projects. Large construction firms, which tend to be highly formalised should set up autonomous refurbishment division to manage refurbishment projects.Originality/valueThe paper shows that the formalisation of the organizational structure of construction firms affects the level of coordination of refurbishment projects.