Tansey, P and Spillane, J (2016) From crisis to opportunity: Turnaround strategies of large Irish construction contractors during the period 2007-2015. In: Chan, P W and Neilson, C J (eds.) Proceedings of 32nd Annual ARCOM Conference, 5-7 September 2016, Manchester, UK.
Abstract
The sudden change in environmental munificence level in the construction sector during the period 2007 – 2015 provides a natural experiment to investigate strategic and operating actions of firms, particularly during an environmental jolt. In such a turnaround scenario, even firms that accumlate valuable assets or position themselves in nascent and emerging markets, may still not be doing enough to support a significant competitive advantage. Statistics on business failures corroborate that neither academics nor practitioners have succeeded in guiding strategic action during periods of environmental jolt, where the environmental munificence falls precipitously. Despite the recent increase of turnaround research in the general management domain, its use in the construction management realm remains underexplored; hence the emergence of this topic. To address this research gap, five exploratory case studies of an ongoing PhD study were used to examine the turnaround responses of construction firms during a period of economic contraction and growth. The results show that during the early stages of the 2007 recession, the majority of firms undertook operational actions, including cost and asset retrenchment; while mid-way through the recession, all firms endorsed strategic actions, such as adjusting their domains and diversifying into new markets, both nationally and internationally. The case studies further reveal, that due to a lack of work at a local level, the UK (United Kingdom) market proved to be the most attractive for all firms; while those that expanded into Eastern European markets, failed. Most of the strategic and operational practices tended to resonate with the Practice-Based View (PBV), given that none of these practices are technologically complex or secret. The findings provide valuable assistance for construction contractors in dealing with organisational decline and in developing a successful turnaround response. Additionally, this research provides an axiom for academic researchers in their future studies in this field.
| Item Type: | Conference Paper (Paper) |
|---|---|
| Uncontrolled Keywords: | contemporary strategy; internationalization; organisational decline; retrenchment; turnaround strategies. |
| Index terms: | practitioner, statistics, markets, construction contractor, construction sector, future study, emergence, competitive advantage, business failure, retrenchment, recession, emerging market, case study, strategy, internationalization, United Kingdom, falls, experiment, construction firm |
| Subjects: | economic analysis, practitioner, mathematical modelling, organization, research design and methodology, data collection methods, systems engineering, industry analysis, market analysis, Geography, management, health risk and incident analysis |
| Topics: | Roles and Professions, Engineering Principles, Research Practice, Geographical Context, Health and Safety, Business Strategy, International Construction |
| 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