Omopariola, E D; Windapo, A; Edwards, D J and Thwala, W D (2020) Contractors’ perceptions of the effects of cash flow on construction projects. Journal of Engineering, Design and Technology, 18(2), pp. 308-325. ISSN 1726-0531
Abstract
Purpose: This paper aims to evaluate Nigerian contractors’ perceptions regarding the effects of positive and negative cash flow during construction projects, with a view to establishing effective strategies for cash flow management. Design/methodology/approach: A desktop-based literature review is used to develop a cross-sectional questionnaire survey which uses Likert items to elicit responses from construction professionals on: the reasons for cash flow problems; the impacts of negative and positive cash flow; and the potential solutions for improving cash flow on construction projects. Findings: The study finds that delay in payments, difficulty in obtaining financial aid and inadequate budgetary control are the causes of cash flow problems during construction projects. Cumulatively, these issues result in project delays, reduced profit margins and in the worst scenarios, abandoned projects. Originality/value: There has been limited research into the effects of positive and negative cash flows on construction projects in Nigeria and indeed, the wider geographical location of West Africa. This study addresses this observed dearth and consequently advances methods and solutions to deal with the problem of poor cash flow management in the Nigerian construction industry.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | cash flow; construction industry; construction projects; contractors; project management |
| Index terms: | project delay, construction project, methodology, questionnaire, strategy, literature review, profit, survey, cash flow, construction industry, project management, construction professional, abandoned project, Nigeria, cash flow management, West Africa |
| Subjects: | research methods, physical geography and landforms, management, financial management, professional development, project management theory and practice, production management, Geography, project controls, completion, industry analysis, data collection methods, economic analysis, data analysis and analytics |
| Topics: | Information Management, Geographical Context, Project Management, Research Practice, Business Strategy, Cost Management, Time Control |
| Descriptive scope: | 5 PCTEA |
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