Critical success factors for small and medium sized construction contractors in Pietermaritzburg.
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Date
2015
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Abstract
In the construction industry it has been observed that some of the contractors have changed their business activities while others have continued to suffer, and many have experienced business failure. This high rate of failure is common within the small and the medium sized contractors and is due mainly to constraints brought about by the critical success factors. The aim of this study was to use the critical success factors approach to identify vital but manageable factors that contribute to the overall success of small and medium sized contractors and identify creative solutions to deal with these factors. Solutions for policy makers to mitigate these factors or challenges were also identified in this study. In this study, factors were classified into two categories, internal and external critical success factors. A probability sample of 110 small and medium sized contractors was drawn from a data base of the Msunduzi Municipality with a population of 158 contactors. A response rate of 51% was achieved using self-administered questionnaires tailored for directors and managers of the companies. A Statistical Package for Social Science was used to complete the data analysis process. The data analysis revealed that 84% of the samples were male and 58% of the samples were between the age of 30 and 44 years. 43% were African followed by Indians at 29%. Most of the participants were directors of the company followed by project managers. 41% of the participants had matric as their highest qualification. The statistical analysis revealed that most contractors had problems marketing themselves and were lacking financial and human resources skills. Project management was found to be the most important skill for contractors followed by financial skills, pricing of tenders then technical skills. Late payment, fraud, competition, access to finance were the top ranked external critical success factors that affect the success of small and medium sized contractors. On the other hand, effective management, financial management, pricing of contracts, lack of skill and resources were the most ranked internal factors. It was recommended that contractors address these internal factors and continue to review and identify other internal factors that may contribute to their failure. An intervention from government, the public and private sectors and policy makers is required to address external factors with the contribution of these contractors.
Description
Master of Business Administration. University of KwaZulu-Natal, Durban 2015.
Keywords
Construction contracts--South Africa--Pietermaritzburg., Construction industry--South Africa--Pietermaritzburg., Theses--Business administration., Construction contractors.