Most construction industries (CIs) from less-developed countries (LDC) have been overwhelmed with many construction project’s challenges. The challenges have always been leading to prolonged unimproved performance of small and medium firms (SMFs). This study aimed to develop a prioritization model of strategies for performance improvement of SMF. Business process re-engineering (BPR) is adopted to facilitate the identification of the re-engineering core process as value activities and develop a conceptual framework for the study. The study used the questionnaire and interview survey to collect data from 253 respondents sampled through purposive sampling. Respondents were obtained from twenty-eight firms obtained through a systematic approach that helped to get firms practicing BPR. Data were analyzed using SPSS 24-AMOS to create structural equation modelling. Findings have revealed twelve (12) weakness indicators, seven (7) performance measure indicators, eleven (11) construction core process strategies, and sixteen (16) organizational strategies. Strategies were clustered into the seven-cluster matrix, namely: resources, capacity building, operational, government policy, design, procurement, and construction management, having a positively significant correlation on SMF’s performance improvement. The study findings revealed that the BPR technique has globally become a useful tool for many organizations seeking to attain an improved performance since it provides a chance to re-engineer the organization process. Thus, for the firm(s) to enhance performance improvement, it is recommended for LDC’s construction firm(s) to adopt re-engineering process management techniques to identify and prioritize the construction core process and organizational strategies to attain improved performance.
The current era we live in differs expressively from that of past decades. Nowadays, different firms are struggling to respond to the increasing demands of clients’ needs. The need has brought to an intensive global competition of which domestic firms in less-developed countries (LDCs) can no longer escape from it. In the local competitive environment, competitors attempt to identify and improve competitive market features aiming to perform better in terms of lower cost and quality, and within reasonable delivery time [
Over the past decades, SMC in LDC has been documented to play a fundamental role in economic growth through constructed infrastructure facilities. The facilities have provided physical shelter, offered employment, and generated income that has accelerated productivity and quality standard life and acts as a basis for social-economic development [
Most firms in LDC are still being faced with a commission of mapping and developing a new strategy and a holistic process approach to guarantee the SMC construction performance improvement [
Small and medium enterprises (SMEs) are sometimes recognized by various international organizations such as the World Bank (WB), European Union (EU), United Nations (UN), and World Trade Organization (WTO) as micro, small, and medium enterprises having a fundamental contribution to the economy of any country. Despite its recognition, the literature review has acknowledged the absence of a standard definition of small and medium enterprises (SMEs). The often-referred definition was grounded on commonly and most used criteria such as annual turnover, number of employees, and the amount of investment [
SME definitions used by multilateral institutions.
Institution | Number of employees | Turnover (euro) | ||||
---|---|---|---|---|---|---|
Micro | Small | Medium | Micro | Small | Medium | |
World Bank | 1–9 | <50 | 50–249 | Maximum 15,000,000 | ||
Asian Development Bank | No official definition, apply, only definitions of individual national governments. | |||||
African Development Bank | 1–9 | ≤50 | Nil | Nil | ||
EU | Nil | <50 | 50–249 | <€2 million | <€10 million | <€50 million |
SADC & ECOWAS | 0–9 | 10–49 | 50–249 | Nil | ||
Developed countries | 0–9 | 10–49 | 50–249 | ≤€2 million | ≤€10 million | ≤€43 million |
Note: 1euro = 1822.32USD, 2008; source: the authors have extracted from BED.
Moreover, the Organization for Economic Co-operation and Development (OECD) recognized that the definition of SME depends mainly on the country legislature, which considers the economy of a particular country in stating the dimension of “small and medium.” In the same vein, the Asian Development Bank Institute coined that, under developing countries’ perspective, the definition of SME could vary by country, by firm size as well as by statistical definition. Furthermore, in developing countries, the definition extends from general to specialty depending on specialization, local, regional, international, or multinational depending on the operational scope as well as permanent to temporary. In most sub-Saharan and southern African countries, including Tanzania, the classification varies from class one that ranges from medium-large to class six or seven, the smallest. When defining small and medium contractors (SMCs) as enterprises under construction industry viewpoint, the categorization of SMC is determined based on the contract category under the bid tendered which involves financial capacity and technical capability of the contractor to execute a particular task (the size of the projector or contract) [
Tanzania is historically recognized to adopt the socialism and self-reliance strategy path immediately after its independence in 1961 intended for its national development. The policy was set to follow the way for the direct state capture, and the governor of all means of production resulted in the nationalization of all key private previously owned businesses ventures by government parastatals [
In Tanzania, the acronym SMEs describes the small-, micro-, and medium-scale enterprises. It is seldom used synonymously with micro, small, and medium enterprises. The Tanzania government describes SME with respect to the sector, the capital invested, and the number of employees. Subsequently, SMEs are defined as micro-, small-, and medium-sized enterprises in nonfarm activities, including manufacturing, mining, commerce, and services. A small microenterprise comprises 5 to 49 employees exemplified to include small shops in the cities; a medium enterprise occupies 50 to 99 employees consisting of a manufacturing firm and an exporting company. Furthermore, a large enterprise has equal to or more than 100 employees. However, capital investment ranges from less than 5 Tshs million (2160.17USD) to over 100 Tshs million (43,230.37USD). Tanzania has an inaugurated SME policy aiming for capacity building to exploit various opportunities of a vibrant SME sector. Multiple agencies and institutions such as Small Industries Development Organization (SIDO), Tanzania Trade Development Authority (TAN-TRADE), Weights and Measures Agency (WMA), Tanzania Bureau of Standards (TBS), and Tanzania Private Sector Foundation (TPSF) to mention a few have been established to support SME advancement [
In Tanzania, construction industry contextual, the small and medium contractors are classified based on the limits of the work as contract value to be tendered (Table
Classification of contractor enterprises in Tanzania.
Class of registration | Class limit for single contract (million TZS) | ||||
---|---|---|---|---|---|
Civil | Building | Electrical | Mechanical | Specialist firm | |
One | Unlimited | Unlimited | Unlimited | Unlimited | Unlimited |
Two | 8000 | 5000 | 3000 | 3000 | 800 |
Three | 4000 | 3000 | 1500 | 1500 | 300 |
Four | 2000 | 1800 | 900 | 900 | |
Five | 1100 | 900 | 450 | 450 | |
Six | 500 | 400 | 250 | 250 | |
Seven | 200 | 200 | 150 | 150 |
Note: 1USD = 2200 Tshs; sources: CRB, 2020.
SME is acknowledged globally to play a significant role in enhancing sustainable industrialization. It promotes income distribution and poverty reduction, supports large-scale enterprises, and provides a broader ecosystem of enterprises for social-economic stability and well-being [
In many developing economies, many SMCs are characterized to operate within an inadequate infrastructure facility environment, which affects performances. Most rural and regional areas have insufficient infrastructure facilities, which hinder SMC growth. Firms have to bear an extra cost to obtain such an infrastructure service, which tends to reduce the profit of the firm. It can generally be summarized that SMC shares many common attributes. However, Sexton and Barrett [
Most Tanzanians make their living in small- and medium-scale agriculture enterprise activities which have occupied a pivotal position and estimated to contribute 27% to the GDP and 23.4% of the total labor force [
SME as a basis for private sector growth has been acknowledged to play a fundamental role in developing and growth of Tanzania national economy through the creation of employment and helps individuals to mobilize and find avenues for investment and generate income, providing equally income distribution that has significantly contributed to alleviate poverty. Similarly, the SMC in Tanzania has played an essential social-economical role. They directly influence and stimulate the everyday lives of most citizens. They provide the physical infrastructures, which encompass constructed commercial and residential building, and communication networks involving roads, airport, and Standard Gauge Railway (SGR), to mention a few which have contributed a high economic growth averaging 6–7% annually in the past decade.
Tanzania is characterized by having large informal and underperforming SMEs with leading low economic value trading commodities including fish, tea, cotton, salt, and maize textile products with very little export commodities left to neighbor countries. However, selling low-value product has made Tanzania continue being less competitive that leads to a low capacity for economic growth [
Moreover, SMEs in Tanzania are faced with poor and inaccessible infrastructure facilities which involve inadequate and highly cost working premises, communication and transportation network facilities, serviced land warehouses, power problems with insufficient supply, and unreliable and unrealistic cost [
Despite the Tanzanian government-led initiative undertaken to empower SME which includes formulation of SME policies, creating a better financial environment for SME to reach the financial institution such as FINCA, PRIDE, SACCOS, SELF, and VICOBA, simplifying the licensing and tax-collection procedures and processes, inviting development partners to support SME, promoting rural industrialization such as SIDO, encouraging joint venture and capacity building, and strengthening institutions and establishment of the University of Dar es Salaam Entrepreneurship Centre in 2001. Also, provision of various business training through vocational education training centers and establishment of the SME department in the ministry responsible for industry and trade in 2003 capacitate entrepreneurs by removing bureaucracy during registration and establishment of the SME credit guarantee scheme managed by the Bank of Tanzania in 2005; to mention a few, SMEs have failed to expand as most of them have remained at the microlevel [
Selected studies on SME predominant challenges in Tanzania.
Topic of research | Presented challenges | Authors |
---|---|---|
Business constraints and the potential growth of small and medium enterprises in Tanzania: a review | Insufficient business training, capital constraints, and an antientrepreneurial culture | Mashenene and Rumanyika, 2014 |
The role of microfinance in promoting small and medium enterprises (SMEs) in Tanzania: empirical evidence from SME holders who have received microcredit from financial institutions in Morogoro | Lack of capital, lack of access to finance, inadequate business training, weak demand for products, lack of raw materials, and poor infrastructure | Makorere (2014) |
Social-cultural determinants and enterprise financial sources among the Chagga and Sukuma small and medium enterprises in Tanzania | Poor partnership, capital constraints, lack of funding, and lack of collateral | Mashenene, Macha, and Donge, 2014 |
Nonfinancial constraints to scaling-up small- and medium-sized energy enterprises: findings from field research in Ghana, Senegal, Tanzania, and Zambia | Inadequate human capacity | Haselip, Desgain, and Mackenzie, 2015 |
Constraints of accessing debt financing from commercial banks among small and medium enterprises in Tanzania: a literature review | Poor access to debt finance, lack of collateral, bureaucratic loan procedures, business informality, poor repayment habits, and corruption | Mashenene, 2015 |
Obstacles towards adoption of mobile banking in Tanzania: a review | Inadequate network coverage, lack of knowledge of m-banking users, lack of enough float of mobile money agents, and ATM breakdown and theft | Rumanyika, 2015 |
The challenges confronting small-scale businesses in accessing microfinance services from MFIs case study: rural Tanzania | Lack of access to finance | Kimathi, 2015 |
Examining the factors affecting export performance for small and medium enterprises (SMEs) in Tanzania | Export competencies, inadequate and unstable financial capital, reduced production, poor technology, ICT and information, the standard of the products produced by the SME, and complicated business laws/regulations | Mpunga, 2016 |
Factors influencing business succession planning among SMEs in Tanzania | Lack of business successors | Magasi, 2016 |
Challenges facing food processing MSEs in Tanzania: a qualitative case study of the sunflower oil industry in Babati, Manyara | Lack of capital, lack of raw materials, equipment and electricity for processing, tight regulations, poor market accessibility, and competition | Ekblom, 2016 |
The lack of business dispute resolution in East Africa: an unresolved impediment to SME development? | Lack of access to finance, corruption, and a lack of business training | Tillmar, 2016 |
Challenges to entrepreneurship development in Tanzania | The motivation of the business owners | Isaga and Musabila, 2017 |
Factors affecting small and medium enterprises (SMEs) startup and growth in Tanzania | Inborn individual attributes, changing business environments, competitive activities and location, inadequate finance, inadequate human and social resources, and a lack of technical and management skills | Anderson, 2017 |
Financial barriers and how to overcome them: the case of women entrepreneurs in Tanzania | Lack of capital | Lindvert, 2017 |
Social capital in selected business associations of food processing SMEs in Tanzania and Rwanda: a synthetic based approach | Lack of social capital | Gamba, 2017 |
Social-economic constraints towards women business growth in Tanzania | Poor access to market information, technology and finance, weak linkages with support services, and unfavourable policy and regulatory environment | Nyangarika, 2017 |
A structuration analysis of small and medium enterprise (SME) adoption of e-commerce: the case of Tanzania | Poor technology adoption | Kabanda and Brown, 2017 |
Microfinance traps and relational exchange norms: a field study of women entrepreneurs in Tanzania | Lack of access to capital | Lindvert et al., 2018 |
Startup motives and challenges facing female entrepreneurs in Tanzania | Lack of access to finance, gender-related problems, and social and cultural commitments | Isaga, 2019 |
SME globalization-Tanzania case study | Bureaucracy, poor physical infrastructures, inferior products, poor services, inadequate business training and skills, little access to information and limited admission to technological developments, marketing difficulties, a lack of business training, and inadequate business skills | Juma and Said, 2019 |
A review of factors affecting the growth of small and medium enterprises (SMEs) in Tanzania | Financial constraints, capital constraints, poor technology, and tight regulations | Nkwabi J.M. and Leodger B.,2019 |
Source: Nkwabi J.M. and Mboya L.B, 2019.
From Table
Previous studies have recognized performance as a hard concept to define, to describe systematically, and to measure. And because of its long-time divergent perception of what constitutes performance in the business arena, researchers have conventionally adopted interchangeably terms such as efficiency, effectiveness, improvement, growth, and success to describe performance. Regardless of that, its interpretative meaning has still not clearly understood to CI stakeholders, such as clients, consultants, contractors, policymakers, employees, firm owners, and investors. Despite the misperception of the term, the weak performance of SMC has been widely reported in various literature studies. Traditionally, the successful performance of SMC was evaluated based on adherence to construction time, budget, quality, safety, and environment to satisfy the client only [
The current global construction competitiveness occupied by a continuously changing environment has necessitated the small and medium contractor to struggle to improve the competitive performance advantage of the firms. However, only firms that have attempted to plan, remove unnecessary, identify the proper performance measurement variables, and innovate the remained strategic value processes can enhance improved performance. Performance measurement is defined as a management system of quantifying the efficiency and effectiveness of a project and or an organization. As coined by Chaubey and Subramanian [
Financial constraints have remained the most critical challenges for SMC creation, survival, and growth. The extent of the financial constraints extends from financial management skills and cash flow problems, loan inaccessibility, and high-interest rates imposed, shortage of technical and competent human resources, nonaccess to plant and equipment, and limited skills in information and technology. In addition, it includes management-related challenges include lack of human resource training, inadequate strategic planning and management knowledge, inexperience, and lack of exposure. Professional and ethical considerable challenges were also identified to hinder performance and growth. These involve changes in design and sparse estimation, lack of accountability, transparency, and prevalence of corruption. However, other noted challenges incorporate lack of infrastructures, weather changes, project suspension by the previous government, political instability and technical performance interference, weak and unrealistic government policy, fragmented or incapacitated institution, and lack of active government policy and strategy [
A strategy is a firm process involving the mobilization of its resources and capabilities following the external environment needs to achieve a competitive advantage. It can also be defined as the determination of the long‐term goals and objectives of the firm that involves the adoption of sequences of action and the allocation of necessary resources to accomplish the intended targets [
However, a hybrid approach (integration of both cost leadership and differentiation element) technique can be embraced to attain competitive advantage. The effectiveness of the hybrid approach can be recognized as a combination of multiple factors that do not easily allow another competitor to identify the potential one and hence reproduce. Thus, this approach is advantageous for a firm to recognize improved performance and become competitive. Various theories of competitive advantages have been detailed. Formerly, the theory considered the market-based view embracing industry factor and external market orientation as the primary and dominant determinant of firm performance. Under an industry perspective, the firm’s performance could be determined only by the industry structure and the competitive market environment within which it operates. Later, the focus of strategic management analysis changed from the industry structure to the firm’s internal structure paradigm considering resources and capabilities as the fundamental features of the resource-based view (RBV) theory [
Researchers have acknowledged various competitive advantage strategies that can empower the construction firm for adequate performance. Olson [
Moreover, in their study, Abd et al. [
Selected organizational strategies (OSs) considered in the current study.
S/N | Organizational strategies |
---|---|
OS1 | Establish and provide support to firms to access finance and loan |
OS2 | Adopt a low bidding price strategy |
OS3 | Adhere to small firm operational cost |
OS4 | Invest in technology and establish technology transfer centre |
OS5 | Optimize available local quality construction materials |
OS6 | Facilitate training for capacity building |
OS7 | Adopt joint venture and partnership with an overseas firm |
OS8 | Policy formulation of construction bank establishment |
OS9 | Implement a policy on tax reduction of imported construction equipment and materials |
OS10 | Enhance networking to share experience |
OS11 | Ensure resource availability, allocation, and utilization |
OS12 | Training certification by government |
OS13 | Ensure employee’s right working environment |
OS14 | Ensure resources upgrading or improving |
OS15 | Timely strategy review |
OS16 | Ensure client satisfaction |
OS17 | Policy on compulsory joint venture |
OS18 | Establish construction equipment centre |
OS19 | Employ competent and technical employees |
The effect of globalization caused intensive local-global competition and the change in technology have forced various firms to adopt the BPR management technique. The technique has enabled the elimination of some processes and finding not only new but also an innovative and strategic process to attain more success [
BPR is a dramatic, radical redesign that focuses on strategic processes aiming to attain substantial improvements in terms of cost, time, and quality of service. It incorporates the envisaging of new strategic processes, re-design, and implementation of the changes in all its complex technological, human, and organizational diminutions. Various BPR definitions have been provided. The best-adopted definition encompasses three fundamental issues. The first issue involves rethinking, which describes an understanding of the SMC business, including the characteristics, current nature of the operation, and the future changes required to attain competitive advantage for business survival. The second describes the radical redesign, which makes the firm forget the usual way of working and think critically only on the innovative and strategic business processes. The last one reflects on critical aspects of pursuing a process’s perspective. Various major components were identified as fundamentals for change in an organization including organization’s structure, culture, management process, people, strategy, and information technology (IT) as an enabler and essential ingredients for change [
Selected strategies for construction core process (SCP) considered in this study.
S/N | Strategic core process |
---|---|
SCP1 | Employ a competent design expert |
SCP2 | Integrate design team with related department |
SCP3 | Abide to design standard and specification |
SCP4 | Allocate a balanced design resource |
SCP5 | Develop a design process management protocol |
SCP6 | Adopt constructability concept to avoid reworks |
SCP7 | Adherence to procurement ethics and code of conduct |
SCP8 | Information, communication, and record management |
SCP9 | Contract, risk, and dispute management |
SCP10 | Ascertain to proper resource (finance, schedule, material, and equipment) management |
SCP11 | Adopt an electronic-tendering system to reduce a bidding cycle time |
SCP12 | Select a competent, experienced, and accessible contractors |
SCP13 | Categorize works to identify appropriate contract type, negotiation, and management |
SCP14 | Provide enough information on contact conditions |
SCP15 | Review the conflicting procurement policy and regulations |
SCP16 | Adoption of modern construction technique |
SCP17 | Healthy, safety, and welfare management |
SCP18 | Quality assurance (standard, specification, or codes) |
SCP19 | Reduce waste and adopt a sustainable construction |
SCP20 | Recognize and motivate the design expert |
SCP21 | Gather a complete design requirement for client and stakeholders |
Note: SCP = strategic core process representing design, procurement, and construction management; source: researchers.
BPR was adopted in this study to help to identify various strategic construction processes. It also assisted in indicating the chronological phase of the research and helped to develop the conceptual framework aiming to improve SMC performance. Kwakye [
The framework has adopted the business process re-engineering concept that involves analysis, formulation, and implementation of strategies to attain improved performance. The structure (Figure
A framework to prioritize strategies.
A conceptual framework of the study.
This study adopted a survey method comprising a questionnaire tool and an interview. It intends to collect and assess the characteristic opinions of a large population based on a smaller sample of respondents in the case study of Tanzania construction market environment representing LDCs. An interview facilitated the discussion with respondents to understand the model, identify a strategy and strategic construction processes, indicators for SMC weakness, and the potential “To-Be” process, and prioritize strategies for substantial performance improvement.
Because of little knowledge and practice of BPR technique in the local construction market in Tanzania, the reliable option was to adopt a systematic process (SP). A systematic process assisted in getting respondents from the firm with enough experience, the capability to adapt, analyze, measure the performance process, identify the potential “To-Be” strategic construction process, conduct training and research studies, and pay for performance improvement to improve the outcomes. From the Contactors Registration Board (CRB) authority, a list of registered firms was obtained. The prequalification of the systematic process was performed through a preliminary interview. Twenty (20) employees having more than ten years of experience from the different firms were purposively selected based on their unique characteristics, as referred to the same categories of registration. The interview facilitated the identification of twenty-eight (28) firms with a total population of 693 employees. Taro Yamane’s formula was applied in the equation below to compute the minimum sample size for the study resulted in 253 respondents:
A structured questionnaire tool was administered to respondents to collect the cross-sectional data to obtain an opinion on strategies to be established, aiming to attain performance improvement of local against overseas firms. It has been divided into five sections: Section
The binary Likert scale number (from 1 = strongly disagree to 5 = strongly agree) intended to indicate the numerical ranks only. However, a continuous average rating with the proposed ordinal value level was used to help accurately translate the findings of the respondent on a five-point Likert scale. The level of each item was determined using the formula: (highest point − the lowest point in the Likert scale) divide by the number of the levels used [
Furthermore, a pilot study was performed to twenty professionals selected at random from the antecedently identified respondent supported by their seniority and experience. It aimed to test and establish errors as well as wrong, unnecessarily wordy, and unambiguous terms. The study helped to review the questionnaire form and to produce an elaborative and straightforward one to be understood by respondents. The pilot study resulted in a better study tool for further steps. However, later on, the same respondent was contacted for face-to-face and mobile interviews on prioritization strategies to improve performance. A total of two hundred fifty-three (253) copies of questionnaires written in English and translated in local Swahili language were administered (from October 2019 to January 2020) to respondents employed within the identified firms while considering their qualifications, expertise, availability, accessibility, and willingness to participate in the study. To ensure that respondents understand the research well, a brief explanation of the questionnaire contents was provided by the researcher that increased an understanding of the topic and decreased the chance of misinterpretation. However, very few (20) respondents who were absent during face-to-face interviews, their emails, and social media networks such as WhatsApp, WeChat, and calls were used for questionnaire distribution and administration. A total of 203 (80.24%) well-attended questionnaires were used for data analysis.
The respondent of the study comprised 54.4% degree graduate, 33.1% master, and 12.5% PhD levels. Besides, 59.3% of respondents represented engineers, 10.4% architects, 17.8% quantity surveyors, and 12.5% other professionals. High-ranked respondents were involved in the study, with 38.9%, 20.7%, 13.8%, and 26.6% representing general managers, project managers, departmental managers, and site engineers, respectively. Besides, 34.6% of respondents represented a consultancy firm, 52.7% represented contractors, and 8.2% represented clients while the rest (4.5%) represented other CI stakeholders. The analysis of demographic characteristics has demonstrated the presence of experienced, skilled, and knowledgeable respondents from small and medium local construction firms registered in the first-class level who have implied to provide reliable information for the study.
Data coding, entry, editing, and analysis were performed using Statistical Packages for Social Science (SPSS 20). Since the scale and measures of this study were adapted and adopted from the literature, it was crucial to test them with intended collected sample data of this study. Construct validity was performed to measure the extent to which all items on a scale measure the same construct and reduce different errors. Also, data examination was conducted to test the internal reliability of the 5-point Likert scale. The test aimed to check if the questionnaire instrument provides the same results (equivalence) at different sets of tests. The analysis results (Table
Convergent validity test result.
Variables | R | CB | OP | GP | DE | PR | CM |
---|---|---|---|---|---|---|---|
AVE | 0.663 | 0.661 | 0.648 | 0.664 | 0.574 | 0.709 | 0.640 |
CR | 0.903 | 0.853 | 0.879 | 0.888 | 0.754 | 0.879 | 0.742 |
Cronbach’s alpha | 0.883 | 0.752 | 0.814 | 0.831 | 0.773 | 0.800 | 0.811 |
Rho_A | 0.834 | 0.732 | 0.769 | 0.835 | 0.813 | 0.838 | 0.883 |
Result remarks | Recognized | Recognized | Recognized | Recognized | Recognized | Recognized | Recognized |
Furthermore, principle component analysis (PCA) was performed to test for Kaiser–Meyer–Olkin (KMO) as a measure of sampling adequacy for intended strategies. The result of the analysis shows Bartlett’s test of sphericity of approximate chi-square (1966.358), KMO (0.8347), and attaines a (0.000) significant level, which indicates that the correlation matrix is not the identity matrix. The value of KMO obtained has suggested the suitability of the samples for factor analysis [
The response ranked in percentage was used to identify the most significant factor to measure the performance. The findings of the study (Figure
Respondent’s opinion on performance measurement.
Indicator identification that led to weakness in the performance of firms in the local competitive markets was to be identified in this study. The one-sample
Performance weaknesses indicators.
Cluster | Indicators | SD | Mean | 95% CI | ||
---|---|---|---|---|---|---|
Lower | Upper | |||||
R2 | Financial constraints and cash flow problem | 32.29 | 1.00 | 2.49 | 2.33 | 2.64 |
R3 | Lack of local quality materials | 30.75 | 1.02 | 2.41 | 2.26 | 2.57 |
R4 | Shortage of competent human resource | 28.62 | 1.12 | 2.46 | 2.29 | 2.63 |
R7 | Nonaccess to plant and equipment | 30.53 | 1.03 | 2.43 | 2.27 | 2.58 |
O1 | Lack of on-job training | 17.33 | 1.03 | 1.38 | 1.22 | 1.54 |
O4 | Lack of general management knowledge | 18.62 | 0.99 | 1.42 | 1.27 | 1.57 |
O6 | Poor strategy and strategic planning | 15.63 | 1.11 | 1.34 | 1.17 | 1.51 |
P2 | Changes in design | 18.35 | 0.99 | 1.40 | 1.25 | 1.55 |
P3 | Prevalence of unethical conduct | 14.85 | 1.12 | 1.28 | 1.11 | 1.45 |
GP2 | Weak and unrealistic government policy | 18.86 | 0.95 | 1.38 | 1.23 | 1.52 |
GP4 | Lack of government policy and strategy | 17.34 | 1.02 | 1.36 | 1.21 | 1.52 |
GP5 | Lack of infrastructures | 16.26 | 1.15 | 1.44 | 1.27 | 1.62 |
Note: R = resources; OM = operational and management; P = professionalism; GP = government policy.
The first and foremost indicator is a resource that involves absence or inadequateness of essential resources, including finance, materials, competent labor, and plant and equipment. Finance is believed to be the foremost powerful resources and one of the potential competitive advantages for any firms’ growth. The prevailing bureaucracy to local firms in accessing loans has been a critical cause of lack of finance. However, high-interest rates, collateral, and loan processing fee conditions imposed on firms have extended difficulties to access the loan. Besides, a lack of research on quality local materials has hindered the identification of local materials that may assist in reducing cost and increasing profit. On top of that, shortages of skilled labor were also identified as a performance weakness indicator. Since most firm owners have little knowledge of CI, they tend to ignore employing competent and skilled labor. Thus, they opt for cheap work, which always led to inadequate performance.
The second identified indicator was operational and management, which includes lack of training. Thus, it is recommended to implement on-job training that will assist to improve the performance. Professionalism is the third cluster of indicators identified, which frequently involves changes in design during construction activities as well as the presence of malpractices throughout the entire construction processes. Most respondents warned the exceedingly malpractices attitudes which occur throughout the construction process as a whole. Many firms were noted to involve in corruption during the tendering process and design to construction processes, which have always led to poor construction projects. The last group of indicators acknowledged lack and weak unrealistic government policies, strategies, and infrastructures to facilitate performance improvements to local firms compared to foreign firms. However, the government policy was identified to enable the creation of a better business working environment, availability of local materials, certifying training, capacitating the institution, and enforcing policy and strategy implementation.
The identification of the firm attribute intended for BPR was among the vital stage of the study. Respondents were obligatory to give the opinions on ten characteristics provided using five-point Likert scales described in
The survey results of combined organizational and construction core processes related strategies (Tables
Ranking of prioritized strategies for performance improvement.
Code | Strategies | Mean | Std. deviation | Ranking |
---|---|---|---|---|
OS1 | Establish and provide support to firms to access finance and loan | 4.49 | 0.65 | 1 |
SCP10 | Resource (finance, schedule, material, and equipment) management | 4.46 | 0.65 | 2 |
SCP12 | Select a competent, experienced, and accessible contractors | 4.43 | 0.58 | 3 |
SCP1 | Employ a competent design expert | 4.42 | 0.95 | 4 |
SCP4 | Allocate a balanced design resources | 4.41 | 0.62 | 5 |
OS19 | Employ competent and technical employees | 4.40 | 0.62 | 6 |
OS6 | Facilitate training for capacity building | 4.40 | 0.66 | 7 |
OS7 | Adopt joint venture and partnership with overseas firm | 4.39 | 0.72 | 8 |
OS11 | Ensure resource availability, allocation, and utilization | 4.38 | 1.00 | 9 |
SCP21 | Gather a complete design requirement for client and stakeholders | 4.37 | 0.75 | 10 |
SCP7 | Adherence to procurement ethics and code of conduct | 4.35 | 0.71 | 11 |
SCP2 | Integrate design team with another related department | 4.33 | 0.78 | 12 |
OS5 | Optimization of local quality construction materials | 4.31 | 0.65 | 13 |
OS3 | Adhere to low-firm operational cost | 4.30 | 0.58 | 14 |
OS4 | Invest on technology and establish technology transfer centre | 4.29 | 0.80 | 15 |
OS18 | Establish construction equipment centre | 4.27 | 0.71 | 16 |
SCP15 | Reviewing the conflicting procurement policy, laws, and regulations | 4.25 | 0.84 | 17 |
OS13 | Penalizing and blacklist firms engaged in malpractices | 4.24 | 0.95 | 18 |
SCP11 | Adopt an electronic-procurement system to reduce a bidding cycle time | 4.21 | 0.81 | 19 |
SCP18 | Quality assurance (standard and specification) | 4.17 | 1.09 | 20 |
OS17 | Policy on compulsory joint venture | 4.14 | 0.83 | 21 |
OS2 | Ensure employee’s good working environment | 4.14 | 0.92 | 22 |
OS12 | Training certification by government | 4.12 | 0.83 | 23 |
OS9 | Enforce tax reduction policy of imported construction equipment and materials | 4.09 | 0.69 | 24 |
OS8 | Policy formulation of construction bank establishment | 4.05 | 0.73 | 25 |
SCP16 | Adoption of modern construction technique | 4.04 | 0.79 | 26 |
OS10 | Enhance networking to share experience | 4.01 | 0.80 | 27 |
SCP20 | Recognize and motivate the design expert | 3.63 | 0.69 | 28 |
SCP3 | Abide to design standard and specification | 3.63 | 0.85 | 29 |
SCP5 | Develop a design process management protocol | 3.58 | 1.03 | 30 |
SCP6 | Adopt constructability concept to avoid reworks | 3.53 | 0.88 | 31 |
SCP14 | Provide enough information on contract specification and conditions | 3.51 | 0.81 | 32 |
SCP13 | Categorize works to identify appropriate contract type | 3.47 | 0.77 | 33 |
SCP8 | Information, communication, and record management | 3.43 | 1.13 | 34 |
SCP9 | Contract, risk, and dispute management | 3.41 | 0.81 | 35 |
SCP19 | Reduce waste and adopt a sustainable construction | 3.37 | 1.77 | 36 |
OS14 | Ensure resource upgrading or improving | 3.36 | 0.85 | 37 |
OS15 | Timely strategy review | 3.33 | 0.84 | 38 |
OS16 | Ensure client satisfaction | 3.28 | 0.98 | 39 |
SCP17 | Healthy, safety, and welfare management | 3.23 | 0.69 | 40 |
Note: OS1, 4, 19, 5, and 18 represent resources; OS6, 10, and 7 represent capacity building; OS17, 12, 9, and 8 represent government policy; OS11, 3, 13, and 2 represent operational and management; SCP1, 21, 4, and 2 represent design; SCP15, 11, and 7 represent procurement.
The ranking process generated a total of twenty-seven (27) potential strategies for performance improvement. During ranking, none of the reviewed group of strategy dominated. The finding suggests that, for any firm in LDC to attain an improved performance, both organizational strategy and process-related strategies should be considered of paramount importance. Researchers thought significant to discuss only the topmost ten and least five strategies to represent the implication of the findings. However, strategies representing the same practical implication during ranking were thought for generalization during the discussion.
The first six high ranked and the ninth strategies with corresponding mean (OS1; mean = 4.49; SCP10; mean = 4.46; SCP12; mean = 4.43; SCP1; mean = 4.42; SCP4; mean = 4.41; OSC19; mean = 4.40; OS11; mean = 4.38) were fundamentally and importantly resources recognized. It can be seen from Table
Moreover, most contractors who employ labor are small-to-medium firms with limited organizational, technical capacity and capability and lack resources to invest in human capital development [
Training for capacity building (OS6; mean = 4.40) was ranked the seventh strategy compulsory to improve SMC performance. Shortage of appropriate qualified and competent workforce has been identified as one among the persisted critical problems accelerated by the shortage of skills/training. Windapo [
Furthermore, joint venture and partnership with overseas firms (OS7; mean = 4.39) was ranked among the top strategy to enable an improved performance since it enhances resource, knowledge transfer, technology, and experience sharing that creates a competitive advantage to construction firms. Joint venture and partnership comprise a binding contractual relationship between two or more independent firms aiming to share their resources to achieve competitive productivity within the construction market. Most contractual joint venture and partnership between construction firms are faced with various challenges such as misunderstanding and conflict led by poor allocation and management of the fund by either partner, loss of communication and trust among partners, termination of the contract by the client, delay of payment, low experience, and capacity as well as nonadherence to the condition of the contract of either partner. Minja et al. stressed that a suitable joint venture and partnership agreement is an essential strategy for performance improvement. Clear contractual terms and conditions should be concrete, precisely, and specified to be understood by all partner(s) and other stakeholders responsible for the contract [
Other potential strategies highly ranked in the list to facilitate attaining an improved performance include gathering complete design information for client and stakeholders’ requirements (SCP21; mean = 4.37). Design can be defined as a strategic approach for an individual to achieve a different intended expectation. Always, errors in design can cause failure in construction and project progress at large. The misinterpretations during design as a result of lack of thoroughly collected design requirement information may lead to design errors that reduce the quality of construction works and becomes the source of project’s cost overruns and delays. Different design causal factor was recognized in various literature studies. These include lack of skills and experience, schedule pressure, little design completion time, poor communication during design, and lack of client and end-user requirements [
Other strategies including health, safety, and welfare management (SCP17; mean = 3.23), ensuring client satisfaction (OS16; mean = 3.28), timely strategy review (OS15; mean = 3.33), resource upgrading (OS14; mean = 3.36) and reducing waste, and adoption of sustainable construction (SCP19; mean = 3.37) were least prioritized. Surprisingly, health and safety as well as sustainable construction were documented as an essential strategy in different works of the literature since they are fundamental to support human resources [
Strategy prioritization has been noted of essential to realize an improved performance in LDCs’ construction market. Factor analysis was considered the best optional method to facilitate the generation of a small set of a rotated component matrix. Factor analysis is a statistical method applied to describe the variability among observed variables that helps to recognize a relatively lower number of uncorrelated variables called factors. A factor is a set of observed variables that have similar patterns of response. Principal component analysis (PCA) was conducted using SPSS 24.0 to test if the measurement variables can be reduced to a small group. PCA is a well-established statistical approach of variable reduction basing on the correlation of variables. The researcher conducted two tests, including Kaiser–Meyer–Olkin (KMO) and Bartlett’s test of sphericity. As itemized, the KMO statistic varies between 0 and 1, where a value close to 1 indicates that the patterns of correlations are relatively compact and that PCA would yield distinct and reliable factors. However, the calculated KMO measure produced a value of 0.806, and the associated Bartlett test was (2175.445) at a significance level of 0.000. However, the calculated KMO has indicated a good fit of data adequate for factor analysis.
The six-component cluster matrix of 27 prioritized strategies with a factor loading above the recommended value was extracted from principal component analysis (PCA). After varimax rotation, the cluster matrix created a pattern of uncorrelated strategies with eigenvalues greater than one (1) accounting to 73.32% of the total variance explained (Table
Rotated component matrix of prioritized strategies.
Code | Strategies | Component clusters | ||||||
---|---|---|---|---|---|---|---|---|
1 | 2 | 3 | 4 | 5 | 6 | 7 | ||
A: resources (R) | ||||||||
OS1 | Establish and provide support to firms to access finance and loan | 0.814 | ||||||
OS4 | Invest in technology and establish technology transfer centre | 0.838 | ||||||
OS19 | Employ competent and technical employees | 0.861 | ||||||
OS5 | Optimization of local quality construction materials | 0.763 | ||||||
OS18 | Establish construction equipment centre | 0.891 | ||||||
B: capability building (CB) | ||||||||
OS6 | Facilitate training for capacity building | 0.705 | ||||||
OS10 | Enhance networking to share experience | 0.669 | ||||||
OS7 | Adopt joint venture and partnership with an overseas firm | 0.886 | ||||||
C: operational (O) | ||||||||
OS11 | Ensure resource availability, allocation, and utilization | 0.631 | ||||||
OS3 | Adhere to low firm operational cost | 0.787 | ||||||
OS13 | Ensure employee’s right working environment | 0.789 | ||||||
OS2 | Adopt a low bidding price strategy | 0.771 | ||||||
D: government policy (G) | ||||||||
OS17 | Policy on compulsory joint venture | 0.696 | ||||||
OS12 | Training certification by government | 0.595 | ||||||
OS9 | Implement tax reduction policy of imported equipment and materials | 0.741 | ||||||
OS8 | Policy formulation of construction bank establishment | 0.740 | ||||||
E: design (D) | ||||||||
SCP1 | Employ a competent design expert | 0.800 | ||||||
SCP21 | Gather a complete design requirement for client and stakeholders | 0.681 | ||||||
SCP4 | Allocate a balanced design resources | 0.723 | ||||||
SCP2 | Integrate design team with another related department | 0.729 | ||||||
F: procurement (P) | ||||||||
SCP15 | Reviewing the conflicting procurement policy, laws, and regulations | 0.791 | ||||||
SCP11 | Adopt an electronic-tendering system to reduce a bidding cycle time | 0.698 | ||||||
SCP7 | Adherence to procurement ethics and code of conduct | 0.717 | ||||||
G: construction management (CM) | ||||||||
SCP10 | Resource (finance, schedule, material, and equipment) management | 0.903 | ||||||
SCP18 | Quality assurance (standard and specification) | 0.798 | ||||||
SCP12 | Select a competent, experienced, and accessible contractors | 0.789 | ||||||
SCP16 | Adoption of modern construction technique | 0.762 | ||||||
Note: (1) initial eigenvalues | 6.887 | 3.328 | 1.422 | 1.316 | 1.184 | 1.017 | 1.279 | |
(2) Percentage of variance (%) | 31.306 | 15.129 | 6.464 | 5.984 | 5.383 | 4.625 | 4.431 | |
(3) Cumulative percentage of initial eigenvalues | 31.306 | 46.435 | 52.899 | 58.883 | 64.265 | 68.890 | 73.321 |
The correlation coefficients and significance between prioritized strategies.
OS1 | OS4 | OS19 | OS5 | OS18 | OS6 | OS10 | OS7 | OS11 | OS3 | OS13 | OS2 | OS17 | OS12 | OS9 | OS8 | SCP1 | SCP21 | SCP4 | SCP2 | SCP15 | SCP11 | SCP7 | SCP10 | SCP18 | SCP12 | SCP16 | ||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
OS1 | Pearson | 1 | ||||||||||||||||||||||||||
Sig. (2-tailed) | ||||||||||||||||||||||||||||
OS4 | Pearson | 0.508″ | 1 | |||||||||||||||||||||||||
Sig. (2-tailed) | 0.000 | |||||||||||||||||||||||||||
OS19 | Pearson | 0.672″ | 0.336″ | 1 | ||||||||||||||||||||||||
Sig. (2-tailed) | 0.000 | 0.000 | ||||||||||||||||||||||||||
OS5 | Pearson | 0.803″ | 0.442″ | 0.658″ | 1 | |||||||||||||||||||||||
Sig. (2-tailed) | 0.000 | 0.000 | 0.000 | |||||||||||||||||||||||||
OS18 | Pearson | 0.502″ | 0.259″ | 0.612″ | 0.601″ | 1 | ||||||||||||||||||||||
Sig. (2-tailed) | 0.000 | 0.001 | 0.000 | 0.000 | ||||||||||||||||||||||||
OS6 | Pearson | 0.199 | 0.169′ | 0.157′ | 0.152′ | 0.187′ | 1 | |||||||||||||||||||||
Sig. (2-tailed) | 0.026 | 0.028 | 0.041 | 0.049 | 0.015 | |||||||||||||||||||||||
OS10 | Pearson | 0.369 | .441″ | 0.354 | 0.360 | 0.584 | 0.500″ | 1 | ||||||||||||||||||||
Sig. (2-tailed) | 0.004 | 0.002 | 0.006 | 0.003 | 0.003 | 0.000 | ||||||||||||||||||||||
OS7 | Pearson | 0.643 | 0.204″ | 0.038 | 0.407 | 0.045 | 0.558″ | 0.561″ | 1 | |||||||||||||||||||
Sig. (2-tailed) | 0.003 | 0.008 | 0.622 | 0.004 | 0.558 | 0.000 | 0.000 | |||||||||||||||||||||
OS11 | Pearson | 0.006 | 0.124 | 0.121 | 0.057 | 0.090 | 0.151′ | 0.134 | 0.080 | 1 | ||||||||||||||||||
Sig. (2-tailed) | 0.935 | 0.107 | 0.118 | 0.464 | 0.245 | 0.050 | 0.081 | 0.299 | ||||||||||||||||||||
OS3 | Pearson | 0.122 | 0.128 | 0.045 | 0.017 | −0.026 | 0.106 | 0.000 | −0.011 | 0.446″ | 1 | |||||||||||||||||
Sig. (2-tailed) | 0.113 | 0.097 | 0.559 | 0.825 | 0.741 | 0.172 | 0.996 | 0.891 | 0.000 | |||||||||||||||||||
OS2 | Pearson | 0.090 | 0.112 | −0.014 | −0.027 | −0.039 | 0.121 | 0.032 | 0.044 | 0.404″ | 0.865″ | 0.517″ | 1 | |||||||||||||||
Sig. (2-tailed) | 0.240 | 0.015 | 0.134 | 0.436 | 0.231 | 0.005 | 0.023 | 0.452 | 0.000 | 0.000 | ||||||||||||||||||
OS12 | Pearson | 0.138 | 0.093 | 0.088 | 0.066 | 0.044 | 0.106 | 0.201″ | 0.139 | 0.243″ | 0.265″ | 0.279″ | 303″ | 1 | ||||||||||||||
Sig. (2-tailed) | 0.073 | 0.227 | 0.257 | 0.394 | 0.571 | 0.172 | 0.009 | 0.071 | 0.001 | 0.000 | 0.000 | 0.000 | ||||||||||||||||
OS9 | Pearson | 0.285″ | 0.030 | 0.145 | 0.234″ | 0.214″ | 0.154′ | 0.334″ | 0.310″ | 0.312″ | 0.432″ | 0.163′ | 0.239″ | 0.421″ | ||||||||||||||
Sig. (2-tailed) | 0.031 | 0.031 | 0.114 | 0.313 | 0.818 | 0.008 | 0.063 | 0.022 | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |||||||||||||||
OS9 | Pearson | 0.158′ | 0.144 | 0.101 | 0.2974 | 0.256 | 0.173′ | 0.283″ | 0.185′ | 0.367″ | 0.329″ | 0.292″ | 0.353″ | 0.528″ | 0.505″ | 1 | ||||||||||||
Sig. (2-tailed) | 0.024 | 0.182 | 0.073 | 0.001 | 0.004 | 0.001 | 0.027 | 0.273 | 0.004 | 0.004 | 0.008 | 0.006 | 0.006 | 0.009 | ||||||||||||||
OS8 | Pearson | 0.243″ | 0.211″ | 0.191′ | 0.174′ | 0.205″ | 0.226″ | 0.064 | 0.078 | 0.345″ | 0.341″ | 0.334″ | 0.338″ | 0.405″ | 0.466″ | 0.530″ | 1 | |||||||||||
Sig. (2-tailed) | 0.007 | 0.063 | 0.064 | 0.052 | 0.063 | 0.002 | 0.000 | 0.007 | 0.013 | 0.049 | 0.002 | 0.034 | 0.015 | 0.002 | 0.004 | |||||||||||||
SCP1 | Pearson | 0.096 | 0.045 | 0.088 | 0.147 | 0.014 | 0.144 | 0.125 | 0.213″ | 0.346″ | 0.269″ | 0.325″ | 0.226″ | 0.300″ | 0.387″ | 0.268″ | 0.196′ | 1 | ||||||||||
Sig. (2-tailed) | 0.214 | 0.561 | 0.257 | 0.057 | 0.855 | 0.062 | 0.107 | 0.005 | 0.000 | 0.000 | 0.000 | 0.003 | 0.000 | 0.000 | 0.000 | 0.011 | ||||||||||||
SCP21 | Pearson | 0.120 | 0.142 | 0.129 | 0.112 | 0.089 | 0.249″ | 0.162′ | 0.197′ | 0.344″ | 0.416″ | 0.518″ | 0.324″ | 0.458″ | 0.499″ | 0.319″ | 0.378″ | 0.599″ | 1 | |||||||||
Sig. (2-tailed) | 0.121 | 0.065 | 0.095 | 0.146 | 0.251 | 0.001 | 0.035 | 0.010 | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |||||||||||
SCP4 | Pearson | 0.223″ | 0.030 | 0.145 | 0.204″ | 0.204″ | 0.193″ | 0.324″ | 0.200″ | 0.252″ | 0.232″ | 0.175′ | 0.256″ | 0.395″ | 0.289″ | 0.399″ | 0.252″ | 0.495″ | 0.518″ | 1 | ||||||||
Sig. (2-tailed) | 0.004 | 0.699 | 0.059 | 0.008 | 0.008 | 0.012 | 0.000 | 0.009 | 0.001 | 0.002 | 0.023 | 0.001 | 0.000 | 0.000 | 0.000 | 0.001 | 0.000 | 0.000 | ||||||||||
SCP2 | Pearson | 0.096 | 0.091 | 0.075 | 0.067 | 0.061 | 279″ | 0.229″ | 0.273″ | 0.269″ | 0.144 | 0.241″ | 0.111 | 0.148 | 0.208″ | 0.290″ | 0.220″ | 0.148 | 0.194′ | 0.234″ | 1 | |||||||
Sig. (2-tailed) | 0.214 | 0.237 | 0.333 | 0.384 | 0.434 | 0.000 | 0.003 | 0.000 | 0.000 | 0.063 | 0.002 | 0.151 | 0.055 | 0.007 | 0.000 | 0.004 | 0.056 | 0.011 | 0.002 | |||||||||
SCP15 | Pearson | 0.062 | 0.135 | 0.021 | 0.102 | 0.129 | 0.257″ | 0.291″ | 0.298″ | 0.195′ | 0.026 | 0.114 | 0.019 | 0.280″ | 0.263″ | 0.352″ | 0.302″ | 0.215″ | 0.292″ | 0.284″ | 0.524″ | 1 | ||||||
Sig. (2-tailed) | 0.426 | 0.081 | 0.785 | 0.187 | 0.094 | 0.001 | 0.000 | 0.000 | 0.011 | 0.733 | 0.142 | 0.809 | 0.000 | 0.001 | 0.000 | 0.000 | 0.005 | 0.000 | 0.000 | 0.000 | ||||||||
SCP11 | Pearson | 0.126 | 0.046 | 0.080 | 0.197′ | 0.138 | 0.255″ | 0.184′ | 0.096 | 0.266″ | 0.189″ | 0.304″ | 0.133 | 0.239″ | 0.184′ | 0.327″ | 0.250″ | 0.306″ | 0.345″ | 0.387″ | 0.453″ | 0.409″ | 1 | |||||
Sig. (2-tailed) | 0.102 | 0.554 | 0.302 | 0.010 | 0.073 | 0.001 | 0.017 | 0.213 | 0.000 | 0.014 | 0.000 | 0.085 | 0.002 | 0.017 | 0.000 | 0.001 | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |||||||
SCP7 | Pearson | 0.174′ | 0.124 | 0.134 | 0.242″ | 0.205″ | 0.247″ | 0.170′ | 0.085 | 0.185′ | 0.099 | 0.195′ | 0.042 | 0.144 | 0.014 | 0.294″ | 0.293″ | 0.208″ | 0.179′ | 0.271″ | 0.343″ | 0.317″ | 0.854″ | 1 | ||||
Sig. (2-tailed) | 0.024 | 0.109 | 0.083 | 0.001 | 0.007 | 0.001 | 0.027 | 0.273 | 0.016 | 0.199 | 0.011 | 0.589 | 0.062 | 0.858 | 0.000 | 0.000 | 0.007 | 0.020 | 0.000 | 0.000 | 0.000 | 0.000 | ||||||
SCP10 | Pearson | 0.057 | 0.209″ | 0.038 | 0.103 | 0.070 | 0.566″ | 0.575″ | 0.948″ | 0.107 | 0.020 | 0.067 | 0.039 | 0.133 | 0.140 | 0.165′ | 0.067 | 0.194′ | 0.200″ | 0.197′ | 0.280″ | 0.290″ | 0.132 | 0.129 | 1 | |||
Sig. (2-tailed) | 0.459 | 0.006 | 0.619 | 0.181 | 0.368 | 0.000 | 0.000 | 0.000 | 0.164 | 0.797 | 0.388 | 0.617 | 0.085 | 0.070 | 0.032 | 0.386 | 0.011 | 0.009 | 0.010 | 0.000 | 0.000 | 0.088 | 0.094 | |||||
SCP18 | Pearson | 0.041 | 0.173′ | 0.095 | 0.058 | 0.084 | 0.453″ | 0.415″ | 0.638″ | 0.164′ | 0.142 | 0.186′ | 0.175′ | 0.112 | 0.159′ | 0.222″ | 0.255″ | 0.209″ | 0.212″ | 0.165′ | 0.216″ | 0.217″ | 0.087 | 0.112 | 0.662″ | 1 | ||
Sig. (2-tailed) | 0.594 | 0.025 | 0.220 | 0.451 | 0.275 | 0.000 | 0.000 | 0.000 | 0.033 | 0.065 | 0.015 | 0.023 | 0.146 | 0.040 | 0.004 | 0.011 | 0.006 | 0.006 | 0.032 | 0.005 | 0.005 | 0.258 | 0.148 | 0.000 | ||||
SCP12 | Pearson | 0.000 | 0.178′ | 0.073 | 0.069 | 0.022 | 0.530″ | 0.468″ | 0.629″ | 0.177′ | 0.076 | 0.165′ | 0.095 | 0.142 | 0.212″ | 0.276″ | 0.238″ | 0.205″ | 0.307″ | 0.257″ | 0.260″ | 0.248″ | 0.235″ | 0.240″ | 0.643″ | 0.677″ | 1 | |
Sig. (2-tailed) | 0.999 | 0.020 | 0.925 | 0.373 | 0.774 | 0.000 | 0.000 | 0.000 | 0.022 | 0.327 | 0.032 | 0.219 | 0.065 | 0.006 | 0.000 | 0.002 | 0.007 | 0.000 | 0.001 | 0.001 | 0.001 | 0.002 | 0.002 | 0.000 | 0.000 | |||
SCP16 | Pearson | 0.180′ | 0.143 | 0.140 | 0.160′ | 0.142 | 0.600″ | 0.532″ | 0.569″ | 0.194′ | 0.157′ | 0.247″ | 0.163′ | 0.180′ | 0.238″ | 0.304″ | 0.227″ | 0.170′ | 0.252″ | 0.296″ | 0.242″ | 0.342″ | 0.267″ | 0.228″ | 0.607″ | 0.605″ | 0.622″ | 1 |
Sig. (2-tailed) | 0.019 | 0.063 | 0.070 | 0.038 | 0.066 | 0.000 | 0.000 | 0.000 | 0.012 | 0.042 | 0.001 | 0.034 | 0.019 | 0.002 | 0.000 | 0.003 | 0.027 | 0.001 | 0.000 | 0.001 | 0.000 | 0.000 | 0.003 | 0.000 | 0.000 | 0.000 |
Two tests were performed involving convergent and discriminant validity which tested the extent of closeness and divergence between the given latent variables. To determine the convergent validity, the average variance extracted (AVE) and the composite reliability (CR) were computed using SPSS-AMOS.
As suggested by Prudon [
Discriminant validity test result.
RE | CB | GP | OP | DE | PR | CM | |
---|---|---|---|---|---|---|---|
RE | |||||||
CB | 0.526 | ||||||
GP | 0.691 | 0.519 | |||||
OP | 0.512 | 0.647 | 0.733 | ||||
DE | 0.631 | 0.491 | 0.619 | 0.611 | |||
PR | 0.588 | 0.588 | 0.621 | 0.569 | 0.517 | ||
CM | 0.483 | 0.591 | 0.591 | 0.627 | 0.497 | 0.661 |
As shown in Table
Structural equation modelling (SEM) representing the prioritized strategies was drawn using SPSS-AMOS (Figure
A structural modelling diagram; source: researchers.
Model fit indices (MFIs).
S/N | Model fit indices (MFIs) | Acceptable MI limit | Computed result indices (CRIs) |
---|---|---|---|
1 | Absolute model fit | ||
Chi-square indices ( | 2477.3 | ||
Degree of freedom (df) | 535 | ||
2 | Parsimonious fit | ||
Minimum discrepancy ( | <5 better | 4.63 | |
RMSEA | <0.07 good | 0.77 | |
3 | Incremental fit | ||
Tucker–Lewis Index (TLI) | >0.8 good | 0.823 | |
Comparative Fit Index (CFI) | >0.9 better | 0.912 | |
Adjusted Goodness of Fit Index (AGFI) | >0.9 better | 0.987 |
Adequate sample size is required to use SEM. Since this study applied the maximum likelihood method (MLM) to estimate the parameter and compute the model fit, referring the proposed alternative of following the lower bound of 200 sample size validated the adoption of SEM to indicate the correlation between the prioritized strategies. The model generated in this study (Figure
The effectiveness of the model, to a great extent, depends on the measurement of the fitness of the model. The SPSS-AMOS output, which has provided the data comparison and the computed estimates of model indices (MIs) from SEM using maximum likelihood estimate method, has produced an acceptable model fit index (Table
To attain an improved performance of a construction firm is currently a hot topic in LDC since many factors constitute it. However, because of resource scarcity, it is quite hard to satisfy all the required elements. Scores of the literature have revealed that inadequate performance of SMC in LDCs has a huge disadvantage in terms of time, cost, quality, safety, environment, and hence little or no firm growth. Thus, to realize a drastic change on performance, SMC should invest on resources and opt for only potential organizational and CM process as value activities and willingly to effectively prioritize the strategies through re-engineering process to guarantee the satisfaction of the client and other stakeholders as an achievement of the firm’s vision.
The finding from the study can be drawn that, due to the changes in the construction process driven by the change or shift in technology and environment, they have demanded the local firms to adopt the re-engineering process, which necessitates the need for a drastic change on core construction process and strategies. Moreover, local firms need to adapt the technology to a straightforward construction process undertaking to attain improved performance. Besides, the study has argued for local firms to explore and encourage the collaboration and communication approach between local firms and foreign firms in the construction process. This technique intends to improve resource availability and utilization, experience, design technique, construction operations, and management skills, buildability, transparency, and equitable procurement and life cycle quality assurance to attain required flexibility throughout the entire construction process phases. However, the government policy was noted to facilitate capacity building in almost all aspects including but not limited to better construction environment, quality resource availability at a reasonable cost, and enforcement of laws and regulation on joint venture aiming to attain a quality construction with value for money. Thus, the identified twenty-seven (27) strategies in this study clustered into resources, capacity building, operational, government policy, design, procurement, and construction management have found to have a positive significance to improve the firm’s performance.
This study has addressed a model of strategies that can assist stakeholders and construction industry policymakers in identifying the prioritized strategies required to improve the performance. In the course of developing the model under the given specific context of LDC, it was obligatory to recognize the SMC’s weakness, performance measurement indicators, and organizational and construction core process strategies, which are main features where the model dependability relies on. However, awareness of BPR, the presence of the qualified team, resources, and comprehensive government policy were noted of paramount importance for the SMC’s dramatic changes. This study has reflected the LDC environment. However, it is to be accredited that the prioritized strategies reflecting SMC can radically change due to a dynamic and turbulent construction market environment changes.
This study was limited to develop a model of prioritized strategies for small and medium firm’s performance improvement in Tanzania as one of the less-developed countries. The study adopted a business re-engineering process philosophy to study the prevailing SMC’s environment, which helped to identify the performance weakness, the firm’s attributes, and potential strategies of SMC. The study findings can be generalized only to construction firms with similar construction characteristic environments as of LDC. Future research is recommended to study the role of information technology (IT) in facilitating the implementation of BPR for SMC to attain an improved and adequate performance.
The data collected and used for analysis will be available from the corresponding author upon request.
The authors declare that there are no conflicts of interest regarding publication of the article.
The authors are grateful to acknowledge the Chongqing University in China for financing this study under the Fundamental Research Fund for the Central Universities.