- Title
- The performance of small construction firms in South Africa under the cost leadership strategy
- Creator
- Karambakuwa, Ngonidzashe
- Subject
- Construction industry
- Subject
- Construction industry -- Management
- Subject
- Small business -- Management
- Date Issued
- 2024-04
- Date
- 2024-04
- Type
- Doctoral theses
- Type
- text
- Identifier
- http://hdl.handle.net/10948/64577
- Identifier
- vital:73768
- Description
- Small construction firms in South Africa have been experiencing poor performance over the years. They have not been cost-efficient, resulting in profitability and viability challenges. These challenges have emanated from the firms’ lack of strategic focus. They have not consciously implemented appropriate strategies to enhance their performance. The cost leadership strategy is therefore a viable option for firms to address their viability challenges because winning contracts depends on submitting the lowest tender bids. This research sought to establish how small construction firms in South Africa could best implement the cost leadership strategy to improve their performance through developing a partial least squares structural equation model (PLS-SEM) to implement identified significant financial, human capital, innovation and technology strategies. The research followed a quantitative research approach. Data was collected through questionnaires, which were distributed to a sample of owners and managers of small construction firms in the provinces of South Africa. The population of the study consisted of small construction firms in grades 2 to 4 on the Construction Industry Development Board’s (CIDB) contractors register. The respondents, who were selected through stratified random sampling, were requested to rate the importance of finance, human capital, innovation and technology strategies in supporting the performance of their firms. A total of 155 usable questionnaires were returned. The data was analysed using the software SPSS Statistics - Version 28. Chi-square tests were used to identify the statistically significant financial, human capital, innovation and technology strategies for the performance of the firms. Furthermore, Mann-Whitney U and Kruskal-Wallis tests were used to determine the statistically significant differences in the respondents’ perceptions of the importance of the strategies due to demographics. Thereafter, a structural model was developed through SEM modelling to determine the relationship between the significant strategies and performance. The results established that increasing the available finance, creating higher incomes compared to costs, increasing contracts per annum and supporting the budget for innovation, significantly contributed to the performance of the construction firms. In addition, prioritising skills development, offering basic salaries with incentives, fostering a strong work ethic, and effective coordination of work were significant strategies. Recognising innovations in technology and human resources cost reductions and carefully promoting innovative ideas through the right support infrastructure were the most significant innovation strategies for performance. It was further established that the acquisition and effective use of computer software and hardware, with the relevant technical knowledge and technical tools, were significant technology strategies for firm performance. The study also established the existence of statistically significant differences in the perception of the importance of innovation and technology strategies due to types of work, and differences in the perception of financial strategies due to age (generation). A PSL-SEM implementation model consisting of statistically significant strategies and demographics was developed and presented graphically. It is recommended that small construction firms should adopt the model to strengthen value chain activities for better performance. The government, the CIDB and other stakeholders should fully support the implementation of the model.
- Description
- Thesis (DPhil) -- Faculty of Engineering, the Built Environment and Technology, School of Built Environment and Civil Engineering, 2024
- Format
- computer
- Format
- online resource
- Format
- application/pdf
- Format
- 1 online resource (xix, 325 pages)
- Format
- Publisher
- Nelson Mandela University
- Publisher
- Faculty of Engineering, the Built Environment, and Technology
- Language
- English
- Rights
- Nelson Mandela University
- Rights
- All Rights Reserved
- Rights
- Open Access
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NMU School of the Built Environment
| Thumbnail | File | Description | Size | Format | |||
|---|---|---|---|---|---|---|---|
| View Details Download | SOURCE1 | Karambakuwa, N.pdf | 10 MB | Adobe Acrobat PDF | View Details Download |