What is the cause for the well-known problems of construction? What should be done to achieve a solution to these problems? A number of renewal initiatives, such as industrialization, open building, design/build, partnering, re-engineering and others, have been put forward. A common feature of such initiatives is that they imply structural changes to the organizational pattern and/or to the flows of information and materials. The aim here is to discuss critically the idea of the primacy of the structural solution for the problems of construction. To create a basis for such discussion, the theoretical field related to construction is outlined. Three major theoretical areas are recognized: theory of production, theory of management and conceptualization of the peculiarities of construction. For the theory of production, there are'three conceptualizations that should be used simultaneously: transformation, flow and value generation (the TFV framework). For the theory of management, there are three intrinsically different managerial actions: design, operation and improvement of a production system. For the peculiarities, three major factors are perceived: one-of-a-kind nature of projects, site production and temporary organization. Based on this framework, a number of conclusions are drawn. Foremost is that due to its peculiarities, construction is characterized by a high level of variability, and the role of managerial action at the level of operation and improvement is crucial in stemming the penalties and further propagation of variability. Five renewal initiatives are analysed based on the theoretical framework. They all focus primarily on production system change and all have given modest or disappointing results. Even if the causal relation cannot be established definitively, there is evidence for the claim that it is the neglect of changes at the level of operation and improvement that has contributed to the relative lack of results. As a conclusion, it is argued that the problems of construction require (besides structural changes in the production system) new initiatives at the level of operation and improvement. Moreover, it is concluded that to support integrative new solutions to the pervasive practical problems of construction, we need to develop further the theoretical foundation, or first principles, of production in general and especially in construction.