Exploring the use of financial capacity as a predictor of construction company corporate performance

2015 ◽  
Vol 13 (4) ◽  
pp. 596-611 ◽  
Author(s):  
George Cyril Tucker ◽  
Abimbola Windapo ◽  
Keith Stone Cattell
Keyword(s):  
Financial Performance ◽  
Construction Industry ◽  
South African ◽  
Corporate Performance ◽  
Financial Capital ◽  
Content Type ◽  
Financial Capacity ◽  
Construction Company ◽  
Construction Companies ◽  
Operational Variables

Purpose – The purpose of this paper is to examine the resilient operational variables that impact the corporate performance of construction companies in the South African construction industry and to explore whether financial capacity can be used as a predictor of construction company performance in the context of the South African construction industry. Design/methodology/approach – The operational variables of construction companies that impact their corporate performance were identified through an in-depth review of the extant literature. A combination of convenience and snowball sampling techniques were used in identifying 185 building and civil engineering construction companies based in four provinces of South Africa and registered in Grades 2-6 of the Construction Industry Development Board (CIDB) contractor grading register. The data used in the study were collected from this cohort of respondents through the use of structured questionnaires. At the end of the study period, 62 valid responses representing a response rate of 33.5 per cent were received. Data collected were analyzed using descriptive and inferential statistics. Findings – The findings of this study indicate that there is a significant positive relationship between the financial capital and net assets of construction companies and their corporate performance in terms of turnover. The data collected did not support any significant relationship between other operating financial variables, such as Return on Capital Employed and profitability and financial performance. Research limitations/implications – A predictive model for predicting the financial performance of firms was developed from the data collected. The implication of this is that the more financial capital possessed by a construction company, the more the company’s financial performance in terms of turnover. The CIDB can use financial capacity as a measure when grading contractors, as a good number of contractors are not performing. The predictive model developed could be adopted by the CIDB as an instrument for predicting the corporate financial performance of construction companies that seek to be listed on their contractor grading register. Originality/value – This research will be of significance to researchers and members of the research community in providing new knowledge as well as to contractors in enabling them to understand the importance of having financial capital. It is also of importance to the CIDB in their quest for contractor and construction industry development. Further research to validate the results obtained in this study using a larger sample size across more provinces of South Africa will form the basis of future studies.

Analysing Japanese contractor activity on the basis of panel data

2015 ◽  
Vol 22 (4) ◽  
pp. 390-402 ◽  
Author(s):  
Yukiko Konno
Keyword(s):  
Panel Data ◽  
Financial Performance ◽  
Construction Industry ◽  
Performance Indicators ◽  
Random Effect ◽  
Random Effect Model ◽  
Public Works ◽  
Content Type ◽  
Construction Company ◽  
Different Characteristics

Purpose – The purpose of this paper is to examine the factors influencing defaults and exits from public works by prime contractors of small and medium-sized enterprises in the Japanese construction industry. By analysing the data for several years as panel data, this study determines the extent of influence of changes in company characteristics on the defaults and exits. Design/methodology/approach – Using construction company evaluation (Keiei Jikou Sinsa or Keisin) data and by employing the panel binary logit random effect model, this study empirically analyses the construction industry. Findings – This study shows that defaulting and exiting companies have different characteristics. The result shows financial performance indicators, non-financial performance indicators and Keisin scores to significantly affect defaults and exits. In particular, this study finds non-financial performance indicators, such as whether a firm draws insurance, to significantly affect its likelihood to default or exit and the influence varies on the basis of insurance type. Originality/value – The feature of this study is that its analysis focuses not only on defaulting companies but also on exiting companies, defined as those that stop operating as prime contractors for public works but otherwise stay in business. In contrast to existing research, this study distinguishes between defaults and exits and analyses the factors that influence a firm following one of these two outcomes. Moreover, although Keisin data are usually used to determine whether companies qualify to enter bids for public works, they can be applied for an attribution analysis of corporate defaults and exits.

The effect of communication capabilities of suppliers and external green integration on the green and financial performance in Iran

2018 ◽  
Vol 10 (3) ◽  
pp. 309-323
Author(s):  
Mahdi Salehi ◽  
Hoda Majbouri Yazdi ◽  
Mohammad Nekoei
Keyword(s):  
Financial Performance ◽  
Construction Industry ◽  
Engineering System ◽  
Field Methods ◽  
Statistical Population ◽  
Content Type ◽  
Construction Companies ◽  
Practical Research ◽  
Building Engineering ◽  
South Khorasan

Purpose Human developments in constructing buildings and their subsequent infrastructures despite certain advantages have unfortunately considerable effects on the environment, such that construction could be named as the main exploiter of the natural, physical and biologic resources. Hence, the purpose of this paper is to evaluate the effect of communication capabilities of the suppliers and external green integration on the green performance and financial performance of engineering and construction companies. Design/methodology/approach The statistical population of the study comprises all 300 members of the Building Engineering System of South Khorasan Province. According to the Morgan table (1972), 167 participants were selected as the sample of the study using the stratified random sampling, and a standard questionnaire was distributed among them. Data were collected through library and filed methods. Data were analyzed using the factor analysis method (SPSS), and LISREL Software was used for evaluating the research hypotheses. Findings The obtained results indicated that information sharing has a significant effect on environmental coordination and the green balance of green cost reduction of coordinate competitive advantage. Originality/value Accordingly, given the results obtained from a developmental-practical research, the authors initially gathered and classified the required data on the construction industry using the library and field methods, then extracted the obstacles of the supply chain to help facilitate the implementation of efficiency in the so-called industry.

An empirical analysis of the exit of SMEs tendering for public works in the Japanese construction industry

2014 ◽  
Vol 19 (2) ◽  
pp. 101-116 ◽  
Author(s):  
Yukiko Konno
Keyword(s):  
Financial Performance ◽  
Construction Industry ◽  
Empirical Analysis ◽  
Performance Indicators ◽  
Public Works ◽  
Content Type ◽  
Construction Companies ◽  
Binary Logit ◽  
Entry Qualifications ◽  
The Empirical Analysis

Purpose – The purpose of this study is to examine what factors affect the exit of small and medium-sized enterprises (SMEs) from tendering for public works in the Japanese construction industry using the Keiei Jikou Sinsa or Keisin (the database for evaluation of construction companies in Japan). Design/methodology/approach – This study empirically analyzes SMEs’ exit using the binary logit model. For the empirical analysis, it uses the scores as well as financial and non-financial performance indicators of Keisin data. Findings – The Keisin scores (the total score and W score), financial performance indicators (cash flow from operations and capital) and non-financial performance indicators (having unemployment insurance and operating years) significantly affect SME exits. Although the Keisin data are used for bid entry qualifications of public works, they can be applied to a factor analysis of the exit of SMEs in the construction industry. Originality/value – As there exists little empirical analysis of the exit of SMEs globally, this study contributes to the research on this phenomenon.

Understanding the gap between green building practice and legislation requirements in South Africa

2015 ◽  
Vol 4 (1) ◽  
pp. 67-96 ◽  
Author(s):  
Abimbola Olukemi Windapo ◽  
Jack Steven Goulding
Keyword(s):  
South Africa ◽  
Construction Industry ◽  
South African ◽  
Health And Safety ◽  
Green Building ◽  
Western Cape ◽  
Western Cape Province ◽  
Content Type ◽  
Construction Company ◽  
Management Staff

Purpose – The purpose of this paper is to examine green building legislation requirements and practices in the construction project execution stage within the context of the South African construction industry. The rationale for this examination rests with the perception that the implementation of green practices (per se) has been recognised as being “behind” the legislation enacted to control the design and construction of green buildings. Design/methodology/approach – The research process consisted of a literature review to identify existing green building legislation and practices applicable to the project execution phase. This was supported by a sequential mixed-method research approach, which involved a survey of contracting companies based in the Western Cape Province of South Africa. Purposive sampling was used to undertake focused interviews with management staff and site operatives. Findings – Research findings established a number of issues, not least: a gap between green building practices and legislation requirements; a high degree of unawareness of green building legislation/practices by construction company stakeholders; selective implementation of health and safety legislative requirements; that management staff had a more “positive” attitude to green building practices than site-based staff who tended to be less motivated and open to such practices. Research limitations/implications – Results from this study are considered generalisable with the sample frame only. Research inference and projections should therefore only be made within this set, and not to the wider population of South African contractors (as this study was limited to the Western Cape Province). Practical implications – Implications from this research are applicable to construction company stakeholders within the population set. Practical considerations include the need to acknowledge a formal commitment to developing a sustainable built environment – especially cognisant of the gap between practices on site and green building legislation requirements. Moreover, this lack of awareness in respect of green building practices and legislation requirements impinges upon several wider areas, not least: construction company stakeholders’ positioning, health and safety practices; managerial and operational staff perceptions, and stakeholders’ willingness and motivation to proactively address these gaps. Social implications – Government bodies and allied professionals in charge of construction industry development are encouraged to consider the implementation of green building legislation requirements on construction sites. This reflection should encourage engagement through formative legislative provision and transparent awareness campaigns. Originality/value – This work is original insofar as it directly addresses the alignment of legislation to current practices within the context of the South African construction industry. However, similar exercises have been undertaken on green building legislation in other countries such as USA, UK and Australia.

Improving construction sector resilience

2016 ◽  
Vol 7 (2) ◽  
pp. 173-185 ◽  
Author(s):  
Suzanne Wilkinson ◽  
Alice Yan Chang-Richards ◽  
Zulkfli Sapeciay ◽  
Seosamh B. Costello
Keyword(s):  
Construction Industry ◽  
Construction Sector ◽  
Content Type ◽  
Role Construction ◽  
Construction Company ◽  
Construction Companies ◽  
Resilience Management ◽  
The Impact ◽  
Post Disaster ◽  
Practical Implications

Purpose Improving the resilience of the construction sector helps countries recover quicker from crises and can assist with improving community resilience and recovery. This study aims to explore ways in which the construction sector might improve its resilience. Design/methodology/approach This paper examined past disasters and the role construction plays to understand what and how better construction resilience can be built, and the impact this will have on recovery and reconstruction. Findings The findings showed that after a crisis, the construction sector is called upon to manage building and infrastructure recovery and reconstruction. Construction organisations are needed by the community, as they provide physical resources, people, materials, logistics, management and technical expertise and rebuilding. To ensure that recovery and reconstruction programs are successfully implemented, it is necessary for the construction sector to be resilient. To achieve improved resilience in the construction industry, disaster resilience management needs to become mainstreamed into construction processes. Research limitations/implications Although larger organisations have some preparation to respond to crises, including having emergency or disaster plans, smaller companies struggle to achieve a reasonable level of resilience. It appears that senior management and key people in construction organisations are familiar with the procedures but that the majority of staff in organisations lack knowledge and skills. Practical implications Understanding the role the construction sector plays in disasters and providing directions for improving construction sector resilience will ultimately improve recovery and reconstruction outcomes. Social Implications This paper discusses how communities rely on services provided by construction organisations to enable them to recover from emergencies and crises. Pre-disaster construction company resilience impacts on the ability of construction companies to function post-disaster. Originality/value This paper focuses on a number of cases and shows where and how the construction sector has worked in disasters and provides a new analysis of the role the industry plays, and the various disaster stages where the industry has maximum impact.

scholarly journals Examining the implementation of ISO 9001 in Indonesian construction companies

2015 ◽  
Vol 27 (1) ◽  
pp. 94-107 ◽  
Author(s):  
Debby Willar ◽  
Vaughan Coffey ◽  
Bambang Trigunarsyah
Keyword(s):  
Quality Management ◽  
Construction Industry ◽  
Current Practice ◽  
Iso 9001 ◽  
Quality Management Systems ◽  
Content Type ◽  
Construction Companies ◽  
Main Motive ◽  
Research Findings ◽  
Management Attitude

Purpose – The purpose of this paper is to examine the implementation of quality management systems (QMSs) of Grade 7 (G-7) Indonesian construction companies. This includes the initial motives that have driven the development of QMSs, barriers to effective QMS implementation, the current practice and integration of QMS-ISO 9001 principles and elements, and the performance of contractors implementing such QMSs. Design/methodology/approach – A survey was conducted involving 403 respondents (Quality Management Representatives, Managers, and Project and Site Engineers) from 77 G-7 as well as ISO 9001 certified Indonesian construction companies. Findings – The main motive for G-7 contractors in establishing and implementing ISO 9001 based QMSs are identified as being to effectively and efficiently control project activities. Respondents apparently do not often experience problems related to QMS implementation. However, issues of management attitude and purpose are identified as barriers that may affect effective QMS implementation. The study highlights the ISO 9001 principles and elements that still require to be more critically applied by G-7 contractors in order to fully implement and improve their current QMS effectiveness. The findings also suggest that, although certified, many G-7 contractors have not yet achieved a satisfactory level of performance to be truly competitive in global markets outside Indonesia. Originality/value – To date, only limited research has been conducted into the application of ISO 9001 in the Indonesian construction industry. The research findings reinforced the value of pursuing more effective QMS implementation. They also support current attempts to introduce ISO 9001 QMSs to a much wider base of Indonesian construction companies, particularly small and medium sized contractors and builders.

Operational process stages of brand alliances

2015 ◽  
Vol 27 (4) ◽  
pp. 389-408
Author(s):  
Chung-Ju Tsai ◽  
Tzong-Ru (Jiun-Shen) Lee ◽  
Szu-Wei Yen ◽  
Per Hilletofth
Keyword(s):  
Construction Industry ◽  
Brand Alliances ◽  
Content Type ◽  
Operational Process ◽  
Construction Companies ◽  
Reinforcing Bar ◽  
Brand Alliance ◽  
Interview Survey ◽  
Alliance Partners ◽  
Development And Management

Purpose – The purpose of this research is to investigate how companies in the reinforcing bar industry and the construction industry operate and implement brand alliances. Design/methodology/approach – This research uses a qualitative interview survey and the grounded theory method to extract key factors of brand alliance development and management in the targeted industries. The interview survey included six managers from different construction companies in Taiwan. Findings – This research identifies four common firm-level operational process stages (core categories) of brand alliances including different multidimensional factors, and proposes a conceptual model based on these identified core process stages. The four common core process stages include selection of brand alliance partners, communication with brand alliance partners, enforcement of brand alliances and assessment of brand alliances. Originality/value – The proposed model offers a tentative explanation of the development and management of brand alliances between the reinforcing bar industry and the construction industry. This study represents an initial research attempt in this field and explains how reinforcing bar and construction companies operate and implement brand alliances.

scholarly journals Framework of performance measurement practices in construction companies in Egypt

2018 ◽  
Vol 10 (2) ◽  
pp. 7-14 ◽  
Author(s):  
Krzysztof Dziekoński ◽  
Omar Hesham Mohamed Fawzy Ibrahim ◽  
Abdul-Majeed Mahamadu ◽  
Patrick Manu
Keyword(s):  
Performance Measurement ◽  
Performance Assessment ◽  
Performance Management ◽  
Construction Industry ◽  
Dominant Role ◽  
Holistic Approach ◽  
Company Performance ◽  
Construction Company ◽  
Construction Companies ◽  
Performance Measurement Systems

Abstract Construction industry is considered as one of the most important sectors in Egypt. One of the major challenges faced by the industry, however, is the unavailability of suitable performance measurement systems for assessing companies’ performance. Modern performance assessment systems adopt a more universal approach to the measurement of construction company performance as opposed to the traditional project triangle. This paper aims to examine the practice of performance measurement in the Egyptian construction industry. Results show dominant role of in-house developed performance management systems as well as the use of KPIs as a method of performance assessment. The study further reveals that the highest importance is given to measures related to the time of project delivery, quality of works, clients’ satisfaction and profitability. Hence, the traditional project triangle of project’s success is the most prevalent approach to performance evaluation in the construction industry in Egypt. However, a shift towards a more holistic approach to performance assessment in larger companies was observed.

Developing a predictive model of construction industry-university research collaboration

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Monty Sutrisna ◽  
Dewi Tjia ◽  
Peng Wu
Keyword(s):  
Data Collection ◽  
Predictive Model ◽  
Construction Industry ◽  
Research Collaboration ◽  
Ann Model ◽  
Data Set ◽  
Content Type ◽  
Construction Companies ◽  
Likelihood Model ◽  
Artificial Neural Network Ann

Purpose This paper aims to identify and examine the factors that influence construction industry-university (IU) collaboration and develop the likelihood model of a potential industry partner within the construction industry to collaborate with universities. Design/methodology/approach Mix method data collection including questionnaire survey and focus groups were used for data collection. The collected data were analysed using descriptive and inferential statistical methods to identify and examine factors. These findings were then used to develop the likelihood predictive model of IU collaboration. A well-known artificial neural network (ANN) model, was trained and cross-validated to develop the predictive model. Findings The study identified company size (number of employees and approximate annual turnover), the length of experience in the construction industry, previous IU collaboration, the importance of innovation and motivation of innovation for short term showed statistically significant influence on the likelihood of collaboration. The study also revealed there was an increase in interest amongst companies to engage the university in collaborative research. The ANN model successfully predicted the likelihood of a potential construction partner to collaborate with universities at the accuracy of 85.5%, which was considered as a reasonably good model. Originality/value The study investigated the nature of collaboration and the factors that can have an impact on the potential IU collaborations and based on that, introduced the implementation of machine learning approach to examine the likelihood of IU collaboration. While the developed model was derived from analysing data set from Western Australian construction industry, the methodology proposed here can be used as the basis of predictive developing models for construction industry elsewhere to help universities in assessing the likelihood for collaborating and partnering with the targeted construction companies.

Competition or reciprocity? A study on the symbiosis of effective knowledge management between MNCs and non-MNCs

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yelin Hu ◽  
Qiwang Zhang ◽  
Zhen Yang ◽  
Sujian Huang
Keyword(s):  
Knowledge Management ◽  
Financial Performance ◽  
Structural Equation ◽  
Corporate Performance ◽  
Organizational Ecology ◽  
Multinational Companies ◽  
Equation Model ◽  
Symbiotic Interaction ◽  
Content Type ◽  
Negative Effect

Purpose The purpose of this paper is to explore the relationship between effective knowledge management and corporate performance, to explore the dynamic symbiosis phenomenon of effective knowledge management based on organizational ecology with multinational companies (MNCs) and non-multinational companies (non-MNCs) and to explore the symbiosis strategy of knowledge management between multinational and non-multinational companies (non-MNCs) in China. Design/methodology/approach To measure effective knowledge management, this paper first uses structural equation model to measure knowledge management, based on the evolution dynamics equation in organizational ecology to measure the effectiveness of knowledge management, and studies the symbiosis of effective knowledge management between MNCs and non-MNCs based on ecological perspective. Findings Effective knowledge management can promote the financial performance of enterprises, but different degrees of effectiveness have different effects. In addition, the coupling and collaboration between knowledge management and corporate performance can reflect the value of effective knowledge management. The results show that effective knowledge management plays a positive moderating effect between knowledge management and corporate performance. Finally, the effective knowledge management system of MNCs (non-MNCs) has negative effect on non-MNCs (MNCs), showing the exclusive relationship between MNCs and non-MNCs in China. Research limitations/implications The effectiveness of knowledge management is only based on the measurement of financial performance coupling. For other types of performance, it needs to be tested. The samples may not cover symbiosis relationship of effective knowledge management in other countries. Practical implications This paper provides practical and theoretical reference for confirming the symbiotic interaction and identifying the opportunities and challenges of knowledge management among different types of corporation groups. Originality/value The paper is one of the pioneering studies to explore the pattern of symbiotic evolution of effective knowledge management between MNCs and non-MNCs. From completely new perspectives, this study advances the research of knowledge management to a new and promising area.

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