Orr, S and Jadhav, A (2024) The effect of construction sustainability system interactions on financial performance: A sociotechnical perspective. Engineering, Construction and Architectural Management, 31(5), pp. 1923-1946. ISSN 0969-9988
Abstract
Purpose: Construction sustainability (CS) is a strategic reaction to the sustainability expectations of the construction industry's external stakeholders. The extant literature has viewed the environmental, social and economic dimensions of CS as having independent effects on financial performance. Due to the influence of common stakeholders, however, interactions in these dimensions will be present in their effect on financial performance. Accordingly, this study identifies the mechanisms of the interactions between the three CS dimensions and how they jointly affect financial performance. Design/methodology/approach: Content analysis of GRI reports of 60 large construction organisations, followed by a hierarchical regression analysis was used to identify the interactions between environmental, social and economic CS in their effect on financial performance. Findings: Economic CS was found to indirectly, and not directly, affect financial performance, the effect being mediated by both environmental and social CS. Environmental CS was found to have a strong negative effect on financial performance, whilst social CS was found to have a strongly significant positive effect on financial performance. Practical implications: The motivation for engaging in CS is that investment in economic CS will have a positive effect on both environmental and social CS outcomes, which, in turn can have a combined effect on financial performance. Originality/value: This is one of the first studies investigating the effect of interactions between the environmental, social and economic CS dimensions on the financial performance of construction organisations. It is also one of the first studies that applies a sociotechnical framework to this relationship.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | construction sustainability; financial performance; global reporting initiative |
| Index terms: | construction organization, large construction organization, regression analysis, interaction, construction industry, dimension, motivation, content analysis, external stakeholder, methodology, financial performance |
| Subjects: | psychology, economic analysis, health monitoring assessment and metrics, data analysis and analytics, organization, sociology, behavioral psychology, statistical analysis, industry analysis, business analysis, research methods |
| Topics: | Human Resources, Stakeholder Management, Health and Safety, Business Strategy, Research Practice |
| Descriptive scope: | 4 PCTA |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here