Bajracharya, A; Ogunlana, S; Tan, H C and Siew, G C (2021) Understanding the performance of construction business: A simulation-based experimental study. Construction Economics and Building, 21(4), pp. 60-88. ISSN 2204-9029
Abstract
Higher failure rates of construction business have been observed as a recurring phenomenon in the construction industry. This research focuses on the causes behind a range of performance modes of construction business. The growth and capacity under-investment archetype has been used as the main systems archetype to develop a causal structure for understanding the business performance. A system dynamics model was developed to create a simulation platform for the causal structure. A context of a typical small and medium construction company has been used in the simulation model. This research considered and experimented with a set of selected managerial policies and practices that can lead the construction business to failure, sustenance, or growth. In order to achieve the expected growth or sustenance, it is found that a certain level of balance needs to be secured on how much emphasis is to be given to win new projects, how much profit margins to work with, and how much capacities to be arranged and deployed for project operations, management, and execution.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | capacity; construction business performance; finance; simulation experiment; system dynamics |
| Index terms: | construction industry, business performance, archetype, system dynamics, profit, experiment, construction company, simulation experiment, construction business performance, platform, causal structure |
| Subjects: | structural engineering, performance measurement, digital design, industry analysis, organization, data collection methods, computing systems, modelling and simulation, economic analysis |
| Topics: | Quality Management, Digital Applications, Engineering Principles, Research Practice, Business Strategy |
| 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