Hutchings, D M and Eggett, D L (2006) Management practices as predictors of success for small-volume home builders in the United States. International Journal of Construction Education and Research, 2(3), pp. 217-230. ISSN 1557-8771
Abstract
The literature is replete with ratio-based accounting models that attempt to explain the success of home building companies based on the analysis of their financial statements. However, to date, only a few scientific studies have attempted to identify specific management practices as non-financial predictors of success in construction companies. This study seeks to explain correlations between specific management practices and the profitability of small-volume home builders in the United States. A questionnaire, designed to measure the level of selected management practices, was mailed to more than 1,100 randomly selected members of the National Association of Home Builders that reportedly produced 25 or fewer new homes per year. More than 475 companies responded to the survey. Three statistical tools - correlation coefficients, chi-squared analysis, and stepwise regression - were used to facilitate the statistical analysis of correlations between the management practices employed and company profitability. Statistically significant findings from these tests show that small-volume home builders tended to be more profitable when a good portion of their homes were built on speculation, when they utilized professional real estate brokers to help sell their homes, or when they did not build on lots provided by owners. A few other management practices, including written business plans and formal start-up training for employees, were also found to be important predictors of success.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | management practices; non-financial predictors; profitability; small-volume home builders; success |
| Index terms: | accounting, questionnaire, management practice, builder, survey, construction company, broker, United States, home building, profitability, real estate, statistical analysis, owner |
| Subjects: | data science, real estate economics, profession, data collection methods, sociology, management, economic analysis, practitioner, construction type, organization, Geography |
| Topics: | Stakeholder Management, Roles and Professions, Construction Technology, Business Strategy, Research Practice, Urban Studies, Geographical Context |
| Descriptive scope: | 4 PCEA |
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