Critical success factors for managing construction small and medium-sized enterprises in developing countries of Middle East: Evidence from Iranian construction enterprises

https://doi.org/10.1016/j.jobe.2021.103152Get rights and content

Highlights

  • Construction SMEs in developing countries struggle to be competitive and profitable.

  • A mixed research design helped in identifying the key factors that can reverse the trend.

  • Use of technology, technical capability, and stakeholders upskills are considered very critical.

  • Practical blueprints, recommendations, and implications of the study are discussed.

Abstract

The study aims to study the critical success factors (CSFs) for managing construction small and medium-sized enterprises (SMEs) in the developing countries of the Middle East. The statistical population included active experts in the field of construction in the study area. The sample size was determined using the Cochrane formula, and purposive and convenience sampling was used to select 118 participants as the primary sample. The questionnaire used in this study was based on 63 CSFs items derived from the extant literature, which were categorised into eight CSFs categories. The findings indicated that the mean rank score of the CSFs for managing construction SMEs for the CSFs categories and each CSFs item ranged between medium and high, and all CSFs items and areas can be considered significant CSFs for managing construction SMEs in developing countries of the Middle East. Furthermore, in the ranking of the CSFs categories, technology with an average (MS) of 6.38 was rated the most significant CSFs category, followed by human resource management aspect (MS = 5.48), dynamic capabilities (MS = 5.30), and organisational management (MS = 4.76). It is expected that the study findings and recommendations would significantly contribute to improving project success and efficiency of construction SMEs in developing countries while deepening stakeholders’ awareness of critical variables for prioritisation in order to remain competitive in the construction industry.

Introduction

The construction industry makes up a significant portion of the gross domestic product of each country, and its success can result in long-term economic success [1]. According to international reports regarding the status of projects in various countries, a massive part of budgets in countries is dedicated to the construction industry [2]. Therefore, the success of construction companies and the successful completion of their projects is important for the governments [3].

A project is a combination of events and occurrences which could be planned or unplanned, which continue during the project's life cycle and influences some changes in the environment [4]. defined success factors as a set of environmental factors, realities, and other influential factors that can affect projects' output. These factors can facilitate the implementation of a project or create problems during its execution but cannot be used to evaluate the project. Among these factors, some have a more significant influence on the success or failure of the project [5].

The results of various studies [[6], [7], [8]] indicated that along with the success factors of each project, other factors such as comprehensive project management, scope management, time management, cost management, quality management, human resource management, communication management, risk management, and support management could play important roles in the success of construction enterprises. Furthermore, four areas of project safety management, environmental management, financial management, and demand management are the main areas of special importance in the construction industry [9,10]. Other factors that can also affect the success of construction projects and companies include the implemented construction system, type of materials, implementation method, building application, resource allocation, and other similar factors [11].

Furthermore, it is worth mentioning that today's markets face a higher amount and variety of competition than in the past. Therefore, achieving a suitable strategy for expanding the activities of construction SMEs to complete more projects and gain more profit is one of the main concerns of managers in these companies. In this environment, many companies attempt to create new comparative strategies and gain comparative advantages to facilitate their development through their products and services [12]. It is evident that in this intense competition, successful companies are those who pay special attention to factors such as project management methods, organisational structures, organisational resources, comparative strategies, relations within the company, tenders, marketing methods, use of novel technologies, cost management, support, and supply chain, as well as management processes [13].

Furthermore, companies require a more comprehensive knowledge regarding their status and their competitors and other environmental factors to make better decisions when faced with every situation [14]. Without sufficient understanding of their competition or incomplete analysis of their business environment, companies would fail to provide suitable strategies for their dynamic environment, resulting in decline and damage over time [15]. Based on these factors and because the construction industry is one of the most dynamic industries in developing countries [16], especially in the Middle East region, it is necessary for companies active in this field to understand factors affecting their success and failures over their competition.

Therefore, the current study aims to answer the following questions: (i) What factors affect the success of construction SMEs in the Middle East developing countries? (ii) What are the levels of importance of factors affecting the success of construction SMEs in Middle East developing countries?

The current study aims to identify and rank critical success factors (CSFs) for construction SMEs in Middle East developing countries. Since the majority of previous studies [17,18] have investigated the success of civil or construction projects or have analysed the opportunities, threats, weaknesses, and strengths of these projects, very few studies have specifically investigated the CSFs for construction companies. Therefore, the current study can fill the gap in previous studies in this regard. Furthermore, a review of previous literature indicates that only a small number of studies have investigated CSFs in civil projects [19,20], introducing factors such as customer satisfaction, time, income and profit, quality, costs, project management satisfaction, suitable budget allocation, experienced and multidisciplinary team, and accessible resources among CSFs of construction projects.

However, the success of civil and construction companies, which can, in turn, result in the success of civil projects, has been rarely investigated in previous studies. The current study aims to fill this existing gap in the current knowledge. The results of the current study can be used by employers, contractors, and other participants in civil projects. Attention to these CSFs can help companies achieve better results in their future projects and become one of the more active companies in their industry. Furthermore, the results of the current study can create a suitable environment and conditions for the growth and development of SMEs active in civil and construction projects.

Section snippets

Definition of small and medium-sized enterprises (SMEs)

The definition of SMEs differs from one country to the next [21]. However, despite different definitions, these companies share similar characteristics. Table 1 shows the number of employees and total cash flow of companies in developed and developing countries. In general, and according to various sources, it can be said that the most common criterion used to distinguish SMEs is the number of their employees. Other criteria include total capital, total assets, annual cash flow or sales, and

Research methodology

A mixed research method was employed in the study to identify and rank the CSFs for construction SMEs in developing countries of the Middle East. Available options for collecting data from respondents are qualitative, quantitative or a combination of both using mixed methods [67]. Of these, the mixed-methods approach is regarded as the most effective for conducting research in the fields of management and organisational studies, as argued by Ref. [67]. As illustrated in Fig. 1, the design of

Results and discussions

In this section, the study findings based on each research question are presented.

Conclusions

The current study was undertaken to identify and rank CSFs for managing construction SMEs in developing countries of the Middle East. To this end, CSFs were extracted from the extant literature and were evaluated using three Delphi rounds. Finally, 63 CSFs were identified from the extant literature. The researcher-made questionnaire based on the 63 identified CSFs were categorised under eight CSFs categories: project management, financial management, competitive advantage, organisational

Declaration of competing interest

The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.

References (133)

  • R.Y.Y. Hung et al.

    Dynamic capability: impact of process alignment and organisational learning culture on performance

    J. World Bus.

    (2010)
  • K. Davis

    An empirical investigation into different stakeholder groups perception of project success

    Int. J. Proj. Manag.

    (2017)
  • Y. Lin et al.

    Exploring the role of dynamic capabilities in firm performance under the resource-based view framework

    J. Bus. Res.

    (2014)
  • M.L. Juhari et al.

    Validating measurement structure of materials and equipment factors model in the MRT construction industry using confirmatory factor analysis

    Saf. Sci.

    (2020)
  • T.O. Olawumi et al.

    Concomitant impediments to the implementation of smart sustainable practices in the built environment

    Sustainable Production and Consumption

    (2020)
  • S.O. Olatunji et al.

    Nigeria's public procurement law- puissant issues and projected amendments

    Publ. Pol. Adm. Res.

    (2016)
  • Shaping the Future of Construction A Breakthrough in Mindset and Technology

    (2016)
  • H. Sarvari et al.

    Completing abandoned public facility projects by the private sector: results of a Delphi survey in the Iranian Water and Wastewater Company

    J. Facil. Manag.

    (2020)
  • F. Khosravi et al.

    Factors affecting project success in perlite construction company

  • M. Albert et al.

    Evaluation of project success: a structured literature review

    Int. J. Manag. Proj. Bus.

    (2017)
  • J. Rengamani

    Achieving project success for construction professionals to categorise significant project management innovations and expertise

    Int. J. Supply Chain Manag.

    (2018)
  • A. Gemino et al.

    Agile, traditional, and hybrid approaches to project success: is hybrid a poor second choice?

    Proj. Manag. J.

    (2021)
  • M. Stanitsas et al.

    Integrating sustainability indicators into project management: the case of construction industry

    J. Clean. Prod.

    (2020)
  • F. Harris et al.

    Modern Construction Management

    (2021)
  • E. Noorzai et al.

    Selecting a proper construction system in small and medium mass housing projects, considering success criteria and construction volume and height

    J. Eng. Des. Technol.

    (2020)
  • D. Kryscynski et al.

    Charting a path between firm‐specific incentives and human capital‐based competitive advantage

    Strat. Manag. J.

    (2021)
  • W. Lu et al.

    Critical success factors for competitiveness of contractors: China study

    J. Construct. Eng. Manag.

    (2008)
  • A. Carneiro

    How does knowledge management influence innovation and competitiveness?

    J. Knowl. Manag.

    (2000)
  • C. Bartlett et al.

    Translation Management: Text, Cases & Readings in Cross-Border Management

    (2013)
  • L. Luo et al.

    Investigating the relationship between project complexity and success in complex construction projects

    J. Manag. Eng.

    (2017)
  • J.C. Alvarenga et al.

    The project manager core competencies to project success

    Int. J. Manag. Proj. Bus.

    (2020)
  • Y. Li et al.

    Review of critical success factors (CSFs) for green building projects

    Build. Environ.

    (2019)
  • M.M. Thneibat et al.

    Critical success factors for value management techniques in construction projects: case in Jordan

    International Journal of Construction Management

    (2021)
  • J. Shelton et al.

    Implementation of innovative technologies in small-scale construction firms: five Australian case studies

    Eng. Construct. Architect. Manag.

    (2016)
  • A. Dainty et al.

    BIM and the small construction firm: a critical perspective

    Build. Res. Inf.

    (2017)
  • A.B. Saka et al.

    Adoption and implementation of building information modelling (BIM) in small and medium-sized enterprises (SMEs): a review and conceptualisation

    Eng. Construct. Architect. Manag.

    (2021)
  • E. Poirier et al.

    Embedded contexts of innovation: BIM adoption and implementation for a specialty contracting SME

    Construct. Innovat.

    (2015)
  • M. Enjolras et al.

    Are high-tech companies more competitive than others? An empirical study of innovative and exporting French SMEs

    Technology Innovation Management Review

    (2019)
  • T.T. Lam et al.

    A framework to assist in the analysis of risks and rewards of adopting BIM for SMEs in the UK

    J. Civ. Eng. Manag.

    (2017)
  • Small and Medium-Sized Enterprises: Characteristics and Performance

    (2010)
  • A.W. Furry et al.

    The challenges of implementing building information modeling in small-medium enterprises architecture firms in Indonesia

  • SMEinfo

    Official national SME definition

  • B. Oyelaran-Oyeyinka

    SME: issues, challenges, and prospects

  • Enhancing the Competitiveness of SMEs in Turkey Country Report

    (2012)
  • J. Tamošaitienė et al.

    Assessing the barriers and risks to private sector participation in infrastructure construction projects in developing countries of Middle East

    Sustainability

    (2021)
  • V. Sanvido et al.

    Critical success factors for construction projects

    J. Construct. Eng. Manag.

    (1992)
  • A. de Wit

    Measuring Project Success: an Illusion

    (1986)
  • J. Bhamu et al.

    Lean manufacturing: literature review and research issues

    Int. J. Oper. Prod. Manag.

    (2014)
  • U. Dombrowski et al.

    Adaptive configuration of a lean production system in small and medium-sized enterprises

    J. Inst. Eng. Prod.

    (2010)
  • A.D. Rymaszewska

    The challenges of lean manufacturing implementation in SMEs

    Benchmark Int. J.

    (2014)
  • View full text