1. Introduction
With the rapid changes of built environment, professional development has been attracting increasing attention in recent decades. The traditional notion of professionalism prevailed in Western countries in the 1960s and 1970s is under pressure to change due to cognitive change (i.e., information technology), immediate context (i.e., business values and client attitudes), and wider social change (i.e., economic pressures, legislation, and national policy) [
1]. Rapid changes in external environments of the construction industry cause a shift in how it is executed [
2,
3]. Professional service as a part of the construction industry is facing challenges with regard to how its business model can be changed to adapt to the changing environment, as EDGE (Edge was established in 1995–1996 in England as the result of an initiative by Jack Zunz, former Chair of the Ove Arup Foundation, with the purpose of improving connections among professional institutions working in the construction industry) reported:Few in the industry believe that it is organized in a way that works well for clients and the full depth of the supply chain. There is little or no integration between design, product manufacture, construction, operation and asset management; no feedback loop that increases the chances of a completed asset performing as it should, and of future projects learning from the past; and no alignment of interests both within the supply chain and between the supply chain and the client. This fragmentation of interests destroys value [
4] (p. 8).
The forces that continuously shape services and work are considered to be professional as a result of the rapid changes in today’s business and technology environment [
5]. Professional services termed as knowledge intensive service that is client-tailored service based on sound professional judgement which can be interpreted as the owners’ project management or organizational project management [
6]. Owing to a lack of professional knowledge, owners hire professional service firms to manage projects. Initially, Project management was expected to “get the job done”, however, in the 21st century, it is viewed as a competitive weapon [
2] and is under continual pressure from pure value-seeking to achieving cheaper, better and more efficient services [
5]. Project management is a complex undertaking, involving many kinds of professional services in different stages and processes, which makes it difficult to close feedback loops and apply these to briefing, design, and construction [
7]. Meanwhile, all the built environment professions must be considered as a whole when judging the outcomes of their combined performance [
7]. Therefore, professional service model innovation (PSMI) demands the integration of the life cycle of professional services as well as all professional institutes. The new service model provides a number of advantages over traditional professional service, including (1) providing a feedback loop, (2) one entity being fully responsible for owners in the life span of projects, and (3) realizing improved synergistic effects between individual professionals for better value addition. In China, the central government and local authorities have been active in promoting the implementation of this professional service model. For example, the Ministry of Housing and Urban–Rural Development of the People’s Republic of China (MOHURD) has issued a statute to publicize 40 units to pilot the model in public projects.
In recent years, the status and role of professionals and their service in society, as well as in business, have been the focus of increased scrutiny by academics, policymakers, and professional practitioners [
8]. The construction consulting sector is facing PSMI challenges caused by ongoing project management inefficiency [
3,
9] and value fragmentation [
4]. As argued by Shi [
10], methods of implementing and improving project management in the “right way” remains a relatively important research subject. Fernandes et al. [
11] developed a framework contributing to embedding useful project management improvement initiatives (PMIIs) in organizations, the framework was specifically developed to identify key factors and PMIIs for facilitating the embedding of these initiatives on an organizational level. Ross [
12] discussed professional service innovation at a strategic perspective from the firm level. Despite growing academic interest in the professional service sector in construction, mainstream economics and management literature has tended to concentrate more on firms and their clients [
3,
13,
14,
15,
16] than on industry efficiency or professionalism.
Innovation uptake is not only promoted by itself efficiency but may also be motivated by the external environment according to previous study on other innovations in the construction industry [
17,
18]. Research on other industries’ innovations further indicates that industry nature and innovation characteristics influence organizational behavior in responding to the external environment [
19]. PSMI is a relatively complex innovation, and its performance has yet to be ascertained [
3,
9]. The related innovation characteristics and the construction industry nature may make the relationship between PSMI and external environment complicated. To date, however, little empirical literature has been provided to help understand whether different types of external pressures exert an influence on PSMI in the construction industry, and if so, how. Literature on professional service in construction within a well-established theoretical framework during a technological shift is also limited.
2. Theoretical Framework and Hypothesis Development
Business model innovation (BMI) was especially helpful for the present research. BMI is an important business strategy to maintain commercial values in a new way by re-engineering existing business models [
20,
21]. The technological revolution in the 21st century in the construction industry, especially BIM, offers a fresh approach to redefining the construction industry and its business models [
21,
22]. As a main part of the construction industry, the professional service sector should redefine its model to achieve sustainability in the context of technological change and decreasing project management efficiency due to fragmentation. Gaining a deeper understanding of the external drivers and internal mechanisms of PSMI is the most critical part of PSMI research [
23] (
Figure 1).
In transaction cost economic theory, organizational behavior is with the purpose of rationally minimizing the total production and transaction costs based on an efficiency-seeking logic [
24]. By contrast, institutional theory underscores the decisive role of rules and belief systems prevailing in the external institutional environment in propelling organizations to conduct structural and procedural changes aimed at gaining organization legitimacy [
25,
26]. Through regarding organizations as open systems subject to external environments, institutional theory provides a solid theoretical basis for several model or organizational innovations and diffusion in other industries [
19,
27]. Few published studies have applied institutional theory to professional service issues in the context of technological shift. The present study presumes that the institutional theory could also provide an important angle on how PSMI is driven in the construction industry. On the basis of institutional theory [
25], this study frames a hypothesized model and empirically validates it to explain how three types of institutional pressures (including coercive, mimetic, and normative pressures) influence PSMI in the construction industry in China.
PSMI is a systemic and complex innovation whose successful promotion needs accompanying processes and organizational changes. If innovated successfully, the model can generate a series of advantages [
11,
28]. These advantages include the added value result from integrated solutions for owners and industry competitive advantages in international markets as an internationally popular service model. However, at present, some of the value is not easily measured or hard to realize [
3,
9]. As a consequence, the life cycle of the professional service model has not been adopted in the whole industry.
Owners can play a crucial role in a project as triggering construction activities [
29,
30], and the practices demonstrated by project owners or clients can significantly impact innovation adoption [
31]. Therefore, the owner’s cognition is also considered to explore its mediating role between institutional pressures and PSMI. In conclusion, to fill the gap of PSMI research for the consulting sector, the authors frame a model by four hypotheses (H1–H4) to examine the correlations between PSMI and its drivers in the background of professionalism shift and technological shift (
Figure 2). The four hypotheses are described as follows.
Hypothesis 1 (H1). Institutional pressures have a positive impact on PSMI for the consulting sector in the Chinese construction industry.
Demil and Lecocq [
32] found that business model may potentially be impacted by the change of business environment in terms of macro-sociology, macro-economy, or competitors. Reuver et al. [
33] stated that changeable regulatory environment propel organizations to re-engineer their business models. Institutional pressures, as a core component of institutional theory, are defined as an institution of organizations to be procedurally and structurally consistent with their corresponding business environment by conforming to socially identified rules and belief systems [
25,
30]. To sum up, the present study adopts institutional theory [
25], which concludes three types of institutional pressures framing the professional organization service model: coercive, mimetic, and normative. Therefore, the following set of hypotheses is proposed.
Hypothesis 1a (H1a). Coercive pressures (CPs) have a positive impact on PSMI for the consulting sector in the Chinese construction industry.
Hypothesis 1b (H1b). Mimetic pressures (MPs) have a positive impact on PSMI for the consulting sector in the Chinese construction industry.
Hypothesis 1c (H1c). Normative pressures (NPs) have a positive impact on PSMI for the consulting sector in the Chinese construction industry.
Hypothesis 2 (H2). Institutional pressures have a positive impact on the owner’s cognition.
CPs by definition are “formal and informal pressures exerted on organizations by other organizations upon which they are dependent” [
25]. According to the definition, coercive pressures can mainly derive from rules and regulations enacted by regulatory agencies. Given the potential benefits of the life cycle professional service, China has issued nationwide regulations mandating utilization of the life cycle professional service, though the actual value is difficult to measure [
34]. Moreover, some local governments have already established official life cycle professional service promotion initiatives or publicly supported the new model in large public-funded projects. These official activities, whether project-specific requirements or authoritative purpose, may prominently influence owners’ cognition on the life cycle professional service model, and thus result in PSMI adoption. Accordingly, the following set of hypotheses is suggested.
Hypothesis 2a (H2a). CPs are positively correlated with the owner’s cognition on PSMI for the consulting sector in the Chinese construction industry.
MPs are those that force organizations to imitate other structurally similar organizations with successful performance to cope with uncertainty [
25]. The uncertainty performance of the new model makes project owners be more easily impacted by other successful projects with similar business environments and project characteristics.
Hypothesis 2b (H2b). MPs are positively correlated with the owner’s cognition on PSMI for the consulting sector in the Chinese construction industry.
NPs consist of social pressures which are mainly derived from industry norms or professionalization [
25,
30]. Professional institutions are responsible for shared norms and industry expectation. Through constant contact with professionals, project owners can better understand industry expectations and the values concerning the life cycle professional service model and thus advocate the model’s innovation. Therefore, these discussions lead to H2c.
Hypothesis 2c (H2c). NPs are positively correlated with the owner’s cognition on PSMI for the consulting sector in the Chinese construction industry.
Hypothesis 3 (H3). Owner’s cognition has a positive impact on PSMI for the consulting sector in the Chinese construction industry.
There is sufficient evidence in technical literature demonstrating the significance of the owners’ influence on business, such as the influence of managerial cognition on organizational change [
35], more extensive involvement of the customer in promoting professional service innovation and purchasing knowledge-intensive business services and effective solutions [
36,
37], business models based on cognitive mechanisms [
21,
38], owner commitment to the delivery performance of green building projects [
39], and client requirements on renewal in construction projects [
40]. Project owners or clients also have a significant impact on innovation adoption [
31]. The owner’s or customer’s cognition has a direct influence on the adoption of PSMI. By arguing that PSMI is a behavior, the authors are underscoring the significance of cognition. This study assumes that owner’s cognition and, consequently, their attitudes toward innovation strongly influence the creation and development of the professional organization service model and play a crucial role in the dynamics of PSMI. Therefore, this study combined H1, H2, and H3 and established the following hypothesis.
Hypothesis 4 (H4). The owner’s cognition mediates the relationship between institutional pressures and PSMI for the consulting sector in the Chinese construction industry.
3. Research Method
In accordance with the suggestions of Liu et al. [
21], the present work adopted the following research design and process to ensure the validity and reliability of the research (
Figure 3). In steps 1 and 2, the conceptual framework of professional service innovation model and four hypotheses were developed through literature review and analysis. The results were reported in
Section 2, entitled “Theoretical Framework and Hypothesis Development.” In step 3, an instrument development was conducted that includes 17 indicators (termed as items) to test the conceptual model. The instrument development was based on literature review and interviews with academic professionals, which will be described later in detail in this section. In step 4, the authors conducted an industry-wide survey and short semi-structured interviews to collect data. In step 5, the authors employed the PLS technique to analyze data and test the hypotheses. The PLS technique includes an exploratory factor analysis (EFA), a confirmatory factor analysis (CFA), and a mediating effect test. The following sections elaborate on the instrument development, data collection, and tools for data analysis.
3.1. Instrument Development
Table 1 lists the 3 constructs, 8 subconstructs, and 17 measure items, all of which constitute the instrument used in this study. The eight items for measuring the external environment of PSMI (i.e., items 1–8 in
Table 1) were extracted from established studies, such as Cao et al. [
30] and Wang et al. [
41]. The item owner’s cognition was measured by the three items (i.e., items 9–11), which were developed depending on literature and the context of de-professionalization, such as D’Antone [
36] and Olanipekun et al. [
39]. The six items for measuring the construct of PSMI (i.e., items 12–17) were designed by the authors from the studies, such as Ding et al. [
42], Enberg [
43], Kleinschmidt et al. [
44], Vickery et al. [
45], and Kirsilä et al. [
46]. In the questionnaire, a Likert scale was used for measuring 17 items, where from “1” to “7” represents respectively strongly disagree to strongly agree.
3.2. Data Collection
The instrument was developed via literature review and short semi-structured interviews, based on which data collection was conducted by a questionnaire survey. Then a pilot study consisting of 10 professionals was conducted to further evaluate the suitability of the questionnaire scope, identify the vague expressions of measurement constructs, and verify the rationality of related items. Thereof, 3 out of 10 professionals were found to possess both theoretical knowledge and practical experience. The questionnaire was further revised based on feedback and the final version was formed.
Only Chinese mainland construction projects adopting the life cycle professional service and professionals who were directly involved in the service were considered for the formal survey because they were expected to be familiar with the related laws and regulations. As the utilization of the service is still relatively scarce in China, a completely random sampling method could not be used. Instead, typical life cycle professional service projects and suited project respondents were selected through several kinds of methods, such as by choosing from pilot construction projects issued by MOHURD, referring to related industry publications, and interviewing pilot projects in model innovation. In order to enlarge the sample size, a snowball sampling approach was also applied, with the first-round respondents required to introduce other knowledgeable practitioners or professionals in other life cycle professional service projects. To enhance the reliability and validity of the samples, a diverse array of projects with different geographic locations was chosen, thus provided a broader vision of industry practices.
To enhance the rate and quality of responses, all respondents were notified the aim of the survey. Considering the low response rate of the questionnaire, each respondent was activated by several methods, for example, by giving out some souvenirs to respondents on site (i.e., notebook, and gel pen) or offering a cash gift by internet WeChat. In the questionnaire, respondents were required to fill in according to their most typically experienced life cycle professional service project. In addition, when selecting respondents, the authors and friends helping to give the questionnaires out assured that the respondents were those knowledgeable practitioners and professionals directly involved in the life cycle professional service. A forced-choice response was prevented by the inclusion of an option [
41,
47].
Data collection was conducted by various ways, including an online invitation system, a training course, and personal visits. After a survey was conducted from April 2018 to September 2018, a total of 132 responses were taken back. In order to get better understand of the finished questionnaire, some respondents were also asked to further explain their responses after completing the questionnaires and offer other detailed information about surveyed projects. The inter-rater agreement by the interclass correlation coefficient (ICC) was gained to evaluate the reliability of the questionnaire for projects with more than one response [
30,
48]. In the survey, most ICC values were larger than the suggested criterion of 0.6. After deleting those responses with incomplete information concerning key variables, a total of 106 questionnaires were ultimately analyzed in the research. The demographics of the investigated projects and respondents are shown in
Table 2.
3.3. Tools for Data Analysis
EFA and CFA were utilized to verify the validity and reliability of the measurement model. EFA combining with principal component analysis (PCA) was employed to verify the factor structure and improve the measurement items, while CFA was performed to further validate the consequences of EFA [
41,
49].
The structural equation modeling (SEM) approach was adopted in data analysis, where measurement items and hypothesized research model were tested by partial least squares (PLS), a component-based SEM technique. Because of minimum requirements on the sample size and residual distribution PLS is preferred in this research in order to achieve the expected statistical power and robustness [
41,
50]. Contrasted with other SEM techniques such as LISREL, PLS allows for the concurrent estimation of multiple dependent variables and is thus well-applicable for the assessment of mediation effects [
30,
50]. According to Hair et al. [
50], PLS-SEM is suitable for identifying key “driver” constructs or predicting key target constructs. The study stresses its prediction-oriented nature [
51,
52]. Moreover, the non-parametric PLS-SEM approach is suitable for the data from the perception-based measurement items [
53] and the nature can maximize the explained variance of endogenous latent variables [
54].