Isik, Z; Arditi, D; Dilmen, I and Talat Birgonul, M (2010) The role of exogenous factors in the strategic performance of construction companies. Engineering, Construction and Architectural Management, 17(2), pp. 119-134. ISSN 0969-9988
Abstract
Purpose – The purpose of this paper is to investigate the role of exogenous factors in the strategic performance of construction companies. A conceptual model is proposed where strategic performance is influenced by a twodimensional construct composed of market conditions and strategic alliances. Design/methodology/approach – A questionnaire survey was administered to 73 construction companies. Structural equation modeling was used to analyze the data and test the hypothesis that strategic performance is impacted by exogenous factors. The individual constructs used in the study passed the internal reliability test, all factor loadings were statistically significant at α=0.05, all goodness of fit indices consistently indicated a good fit, and the hypothesized path coefficient was large and significant at α=0.05. Findings – The hypothesis was supported by the data and analysis. Indeed, macroeconomic, political, legal, sociocultural conditions and the level of competition and demand are expected to impact differentiation strategies, and market/project/partner selection strategies. The quality of the relationships with government agencies and clients is expected to influence client/project/market selection strategies, while the quality of the relationships with labor unions may affect the ability to differentiate by using innovative construction methods, materials and equipment. Research limitations/implications – It is likely that endogenous factors such as company resources, capabilities and project management competencies also impact strategic performance. But the study is confined only to the exogenous factors of market conditions and strategic alliances. Practical implications – The findings of the study benefit construction company executives in that they make the executives more cognizant of the market environment and they draw the executives' attention to the importance of alliances with other parties. While market conditions are beyond the control of construction executives, relationships with other parties are somewhat within their sphere of influence. Originality/value – Only a few studies have ever investigated nonfinancial measures to assess the effectiveness of company strategies. Also, exogenous factors which are unavoidable in a project environment were also rarely discussed in the construction management literature. The originality of this study is that it uses nonfinancial measures to assess the effects of exogenous factors on strategic performance.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | market forces; strategic alliances |
| Index terms: | structural equation modelling, project management competency, strategy, market condition, survey, construction company, government agency, differentiation, methodology, questionnaire, competition, strategic alliance, partner selection, loading, innovative construction method, labour union, executive, effectiveness |
| Subjects: | data collection methods, organization, economic and policy analysis, practitioner, construction operations, management, research methods, economics, performance management, professional development, partnership management, market analysis, building construction, administrative law, statistical analysis |
| Topics: | Quality Management, Legal Issues, Organizational Design, Site Management, Information Management, Research Practice, Business Strategy, Construction Technology, Stakeholder Management, Roles and Professions |
| 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