Arditi, D; Koksal, A and Kale, S (2000) Business failures in the construction industry. Engineering, Construction and Architectural Management, 7(2), pp. 120-132. ISSN 0969-9988
Abstract
The objective of the research presented in this paper is to explore the factors associated with company failures in the context of the construction industry. To that end, the four quadrants of an environment/response' matrix developed by Boyle & Desai (1991. Journal of Small Business Management, 29, 33 42) are populated with Dun and Bradstreet's US business failure data for the construction industry. The study indicates that budgetary and macroeconomic issues represent 83% of the reasons for construction company failures. This implies that firms that take vigorous administrative measures to address budgeting issues and that react promptly to economic conditions by implementing appropriate strategic policies should be able to avoid failure. On the other hand, issues of adaptability to market conditions and business issues appear to have limited effects on company survivability (6% of the reasons for failure). This implies that administrative measures to fend off internal conflicts that originate for reasons beyond management's control and long-term strategic decisions to regulate the firm's adaptation to market conditions can also help to prevent failure. An input/output' model appears to explain the business failure phenomenon better than the environment/response' one.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | bankruptcies; business failures; construction industry |
| Index terms: | construction industry, bankruptcy, adaptation, economic condition, adaptability, small business, construction company, budgeting, journal, market condition, company failure, business failure |
| Subjects: | financial management, industry analysis, user focus, organization, research dissemination and communication, risk assessment, economic and policy analysis, economic analysis |
| Topics: | Design Practice, Business Strategy, Research Practice, 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