Strategic growth framework for black owned construction companies of KZN province in South Africa.

Abstract

This research study uses a mixed method approach to investigate the nature of strategic growth and growth-related challenges faced by Black Owned Construction Companies in KwaZulu-Natal one of the nine provinces in South Africa. The study was based on the industrial organization framework of analysis, which formally proposes that strategy is a function of the internal business environment, the market environmental parameters and the macroeconomic environment. This mixed method study involved a total of 15 black owned construction companies from the greater Durban Metropolitan Area and uMgungundlovu district in KwaZulu-Natal selected using purposive sampling. Data was collected using an interview questionnaire with open ended and closed questions. Descriptive analytical methods using SPSS were used for quantitative data, while thematic analysis was used for qualitative data. Firstly, the results show that black owners of small construction companies view the nature of growth as complex and multi-dimensional, comprising primarily of four dimensions, namely (1) variations in physical assets, employee numbers, expansion into other provinces; (2) organic business growth in terms of size and value of service portfolio; (3) improvement of internal and management processes; and (4) financial growth. Secondly, the nature of strategic growth reflect both internal and external dimensions which interact to shape the strategic fit between the resources and capabilities and the dynamic external environment in which black owned construction companies operate. Thirdly, there are four key challenges to the strategic growth of black owned construction companies which include competitive pressure in the industry, rapid changes in the industry demands and needs, low levels of infrastructure investment, and government regulations in South Africa. Lastly, access to finance and capital, market access strategies, and good management systems to ensure effective internal processes, costing and revenue projection are key to enhance strategic growth of black owned construction companies. A framework for strategic growth, recommendations and areas for future research are all proposed in this exploratory study.