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Construction strategy – UK style

Our focus in this short course is on developing an organisational strategy, which occurs as part of an organisation’s strategic management process.

One key area of guidance would be to evaluate the future plans of your biggest client. For the UK construction industry, the biggest client is the UK government.

The UK government realises the economic importance of the UK construction industry, both in terms of delivering physical outputs, ie roads, bridges, schools, hospitals etc, and wanting to further the ‘Keynesian’ economic multiplier effect of construction output.

Very briefly, the Keynesian economic effect gets its name from the 1930s economic theory suggested by John Maynard Keynes, which is described below using the example of the affordable housing initiative in the UK:

The government injects £200m in a project to build thousands of affordable new houses. The construction industry then uses this money to begin the housing project. Some of this money will be lost in taxes but the majority goes to architects, labourers, businesses supplying materials, and other businesses reliant on the construction industry. Again some of this money will be lost in taxes but the majority will pay wages and create profits. Some of the wages will be lost to circulation through savings but it will also inject money into the local economy. The boost in the local economy plus the profits encourages construction businesses to begin new housing projects.

Therefore, to reflect the importance of construction to the national economy, the UK government produced its latest strategy: Construction 2025: industrial strategy for construction – government and industry in partnership.

Your task

Download the Construction 2025: industrial strategy for construction – government and industry in partnership document and read the Executive Summary (page 3) and the Vision for 2025 on pages 4 and 5.

What do you consider are the main implications for the small, medium-sized, and large construction organisation? Pick one key item for each and post the answers in the comments.

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This article is from the free online course:

Business Strategy: The Art of Looking into the Future

Coventry University