1.0 NATURE OF CONSTRUCTION INDUSTRY
The construction industry is a conglomeration of diverse fields and participants that have been loosely lumped together as a sector of the economy. The construction industry plays a central role in national development, including the development of the nation’s infrastructure and other public facilities. The importance of the construction industry lies in the function of its products which provide the foundation for industrial production, and its impacts on the national economy cannot be measured by the value of its output or the number of persons employed in its activities alone.
To be more specific construction refers to all types of activities usually associated with the erection, and repairs of immobile facilities such as buildings, offices, dams, bridges, motorways, home extensions, chimneys, factories and airports.
The fragmentation of construction in to a larger number of diverse skills is an inevitable consequence of the economy, technology and sociological environment, there is an extra ordinary diversity of professions, specialist and suppliers. It is important to approach construction contract problems in an organized, rational way. Although each professional discipline likes to focus upon its own contribution and the way that it relates to other project team members, a deeper understanding can be gained by considering how the industry provides a service to clients and the society at large.
1 The characteristics grouping of project teams very often results in dispute at a variety of levels. Each project participant has particular aims and it is rare to find contact structures that encourage harmony among these aims. Project participantly expect to enter into confrontations with each other and with the client. One of the purposes of assembling a team of people from different professions is to achieve standard. It should be expected that each person brings his own idea for discussion-making; they all have their own agenda and this as it should be. The tension thus generated should precipitate debate and dialogue so that clear choices can be made.
Tjosvold (1992): The idea that dispute is destructive and causes misery is so self-evident that it is seldom debated. Employees fight about many issues, but the wisdom of avoiding dispute is too often not one of them. However , it is the failure to use dispute that causes the distress and low productivity, associated with escalating dispute. Dispute avoidance and the failure to develop an organization equipped to manage it, not dispute itself. Open, skilful discussion is needed to turn differences into synergistic gain rather than squabbling losses.
Dispute is inevitable in construction projects and it can be regarded as endemic in the construction industry. Disputes can either be avoided from the start by way of efficient risk allocation and management or resolved once it is occurs. The former seems to be more suitable to avoid unnecessary time and cost. However, the latter may be practical for complex issues which require third party’s interference (Edwards & Shaoul, 2003). 2 Construction disputes are fairly common, and they vary in their nature, size, and complexity. Mark Appel, senior vice president of the American Arbitration Association, stated that “[t]he construction industry…[is] really the industry that sponsors our work.” (ENR 2000). Although this statement may initially appear to be an indictment, it simply reflects the complexity of a contemporary construction project, which requires the orchestration of numerous interdependent components, including information, materials, tools, equipment,...