Koksal, A and Arditi, D (2004) An input/output model for business failures in the construction industry. Journal of Construction Research, 5(1), pp. 1-16. ISSN 1609-9451
Abstract
An input/output model is proposed to explain business failures in the construction industry. The proposed input/output model argues that organizational and environmental factors are the determinants of failure/survival in that they solely or jointly affect the performance of an organization, whose components in turn constitute the symptoms of failure/survival. Dun and Bradstreet's US business failure data are used in the study to populate the input/output model. The proposed input/output model is generated by two processes. In the initial process, environmental and organizational determinants (i.e. inputs) are transformed into performance symptoms (i.e. outputs). According to the results of the study, environmental factors account for 60.7% and organizational factors for the remaining 39.3% of all the determinants of failure. In the final process, performance factors (i.e. symptoms) are considered to be indicators of failure. The study indicates that the most important symptoms of failure are insufficient profits, heavy operating expenses and burdensome institutional debt. Based on the symptoms and in the light of prevailing environmental conditions, company executives can adjust organizational factors, among which the most conducive to failure appear to be insufficient capital and lack of business, managerial and line experience.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | business failures; construction companies; organizational decline |
| Index terms: | executive, determinant, construction industry, survival, organizational factor, environmental factor, environmental conditions, business failure, profit, construction company |
| Subjects: | risk assessment, business, industry analysis, environmental science, economic analysis, practitioner, organization |
| Topics: | Roles and Professions, Research Practice, Business Strategy, Organizational Design, Sustainability, Risk Management |
| Descriptive scope: | 3 PCT |
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