Basic Business-Forces behind the Surviving and Sustainable Organizations: The Case of Medium Scale Contractors in South Africa
The objective of this study is to uncover the basic business-forces that necessitated the survival and sustainable performance of the medium scale contractors in the South African construction market. This study is essential as it set to contribute towards long-term strategic solutions for combating the incessant failure of start-ups construction organizations within South African. The study used a qualitative research methodology; as the most appropriate approach to elicit and understand, and uncover the phenomena that are basic business-forces for the active contractors in the market. The study also adopted a phenomenological study approach; and in-depth interviews were conducted with 20 medium scale contractors in Port Elizabeth, South Africa, between months of August to October 2015. This allowed for an in-depth understanding of the critical and basic business-forces that influenced their survival and performance beyond the first five years of business operation. Findings of the study showed that for potential contractors (startups), to survival in the competitive business environment such as construction industry, they must possess the basic business-forces. These forces are educational knowledge in construction and business management related disciplines, adequate industrial experiences, competencies and capabilities to delivery excellent services and products as well as embracing the spirit of entrepreneurship. Convincingly, it can be concluded that the strategic approach to minimize the endless failure of startups construction businesses; the potential construction contractors must endeavoring to access and acquire the basic educationally knowledge, training and qualification; need to acquire industrial experiences in collaboration with required competencies, capabilities and entrepreneurship acumen. Without these basic business-forces as been discovered in this study, the majority of the contractors gaining entrance in the market will find it difficult to develop and grow a competitive and sustainable construction organization in South Africa.
[1] W. Shakantu, “Contractor development. In G. Ofori”, New Perspective on Construction in Developing Countries, Oxon: Spon Press, 2012, pp. 253-276.
[2] F. Orozco, A. Serpell, and K. Molenaar, “Competitiveness factors and indexes for construction companies: findings of Chile. Revista de la Construcción”, Volumen 10 No 1, pp.71-109, 2011
[3] Egmond,. “Construction Technology Development and Innovation. In G. Ofori”, New Perspectives on Construction in Developing Countries Oxon: Spon Press, 2012, Pp. 185-228.
[4] B. Ntuli, and D. Allopi, “Impact of Inadequate Experience and Skill on the Construction Sector in KwaZulu-Natal, South Africa,” Engineering, Technology & Applied Science Research, 4(1), pp.570-575, 2014.
[5] ECORYS SCS Group. FWC Sector Competitiveness Studies N° B1/ENTR/06/054 – Sustainable Competitiveness of the Construction Sector. Rotterdam: European Commission, 2011.
[6] National Research Council U.S, “Advancing the Competitiveness and Efficiency of the U.S. Construction Industry”, Washington: National Academy of Sciences, 2009.
[7] Statistics South Africa, “Gross Domestic Product: Third Quarter 2014”, Pretoria: Stats SA publications, 2014.
[8] W. Thwala, and M. Phaladi, “An Exploratory Study of Problems Facing Emerging Contractors in the North West Province of South Africa,” in Proceedings 4th Built Environment Conference, Johannesburg: University of Johannesburg, 2009, pp.195-205.
[9] D. Doane, and A. MacGillivray, Economic Sustainability - The business of staying in businesss. The Sigma Project: R & D Report, 2001
[10] L. Martin and D. Root, “Emerging contractors in South Africa: interactions and learning” Journal of Engineering, Design and Technology, Vol. 8 No. 1, pp. 64-79, 2010.
[11] Partnership for 21st Century Skills, “21st Century Skills, Education & Competitiveness: A Resource and Policy Guide,” Tucson: Partnership for 21st Century Skills, 2008.
[12] P. Burns, Entrepreneurship and Small Business, (2 ed.), New York: Palgrave Macmillan, 2007.
[13] S. McCabe, Corporate Strategy in Construction: Understanding today’s theory and practice, United Kingdom: Wiley-Blackwell, 2010.
[14] A. Kates, and J.R. Galbraith. Designing Your Organization: Using the STAR Model to Solve 5 Critical Design Challenges. New York: Wiley, 2007.
[15] M. Augier, and D. Teece, Fundamental of Business Strategy. London: SAGE Publications Ltd, 2008
[16] World Economic Forum, The Global Competitiveness Report 2014-2015. Geneva: World Economic Forum, 2014.
[17] L. Martin, “Social Capital of South African Emerging Contractors - Implications on Learning,”. Journal of Construction Volume 5 Number 2, pp.17-25, 2012.
[18] W. Dlungwana, and P. Rwelamila, “Contractor Development Models that Meet the Challenges of Globalisation – A Case for Developing Management Capability of Local Contractors,” In S. Ogunlana, C. Charoenngam, H. Pannapa, & H. B. W. (Ed.), International Symposium on Globalisation and Construction: CIB W107 (Construction in Developing Economies) and CIB TG23 (Culture in Construction), CIB-SCE, AIT, Bangkok, Thailand, 2004, pp. 348-358.
[19] R. Esler, FMI's Speech Topics: Strategy Development & Business Management: http://www.fminet.com/speech-topics, 2015.
[20] D. Cadden, and S. Lueder, Small Business Management in the 21st Century. Minneapolis: Flat World Knowledge, 2012
[21] A. Werner, “Leadership and Followership,” In A. Werner, Organisational Behaviour: A Contemporary South African perspective, 3rd ed. Pretoria: Van Schaik Publisher, 2011a, pp. 351-379.
[22] N. Sewdass, and A. Du Toit, “Current state of competitive intelligence in South Africa,” International Journal of Information Management, vol. 32, pp.185-190, 2014.
[23] N. Churchill, and V. Lewis, “The Five Stages of Small Business Growth,” Harvard Business Review, vol 1-12, 1983
[24] M. Scott, and M. Bruce, “Five Stages of Growth in Small Business”. Long Range Planning, vol. 20(3), pp.45-52. 1987
[25] CIDB, Guidelines for Contractor Registration. Pretoria: cidb Construction Contract Centre, 2011
[26] W. Nickels, J.M. McHugh, and S. McHugh, S Understanding Business (11 ed.). New York: McGraw-Hill Companies Inc, 2010.
[27] U. Hana, “Competitive Advantage Achievement through Innovation and Knowledge,” Journal of Competitiveness, vol. 5(1), pp. 82-96, 2010.
[28] L. Megginson, M. Byrd, and W. Megginson, Small Business Management: An Entrepreneur's Guidebook (4 ed.). New York: McGraw-Hill/Irwin, 2003.
[29] A. Werner, “An Introduction to Organisational Behaviour,” In A. Werner, Organisational Behaviour: A Contemporary South African Perspective, 3rd ed, Pretoria: Van Schaik, Publisher, 2011b, pp. 1-28.
[30] W. Nadim,(2012). “Modern methods of construction. In A. Akintoye, J. Goulding, & G. Zawdie, Construction innovation and process improvement (pp. 209-227). West Sussex: Wiley-Blackwell.
[31] J. Fahy, “The resource-based view of the firm: some stumbling-blocks on the road to understanding sustainable competitive advantage,” Journal of European Industrial Training, Vol. 24 iSS 2/3/4, 94-104, 2000.
[32] C. David, and C. Montgomery, "Competing on Resources: Strategy in the 1990s,” Harvard Business Review, Vol. 73 (July-August), 118-128, 1995.
[33] G. Johnson, R. Whittington, and K. Scholes, Exploring Strategy: Text & Cases (11 ed.), London: Pearson Education, 2011.
[34] P.Vorasubin, and C. Charoenngam, “Concept of Strategic Asset for Sustainability of Thai Consulting Firm,” In S. Ogunlana, C. Charoenngam, H. Pannapa, & H. B. W. (Ed.), International Symposium on Globalisation and Construction: CIB W107 (Construction in Developing Economies) and CIB TG23 (Culture in Construction), CIB-SCE, AIT), Bangkok, Thailand, 2004, pp. 1041-1048.
[35] G.J. Crafford, and J.J. Smallwood, “Clients’ views on quantity surveying competencies” Journal for the physical and development sciences, Vol.12 (1), pp.36-55.
[36] J. Cripe, and S.R. Mansfield, 31 Core Competencies Explained. The Value-Added Employee, 2002.
[37] Business-Dictionary, Enterpreneurship. Web Finance, Inc, (Online) Available at: http://www.businessdictionary.com/definition/entrepreneurship.html, (Accessed 25 June 2015), 2014.
[38] C. Brooks. What is Entrepreneurship? Buisness News Daily. (Online) Available at: http://www.businessnewsdaily.com/2642-entrepreneurship.html., 2015 (Accessed 18 October, 2015).
[39] I. Yitmen, and C. Taneri, “The Role of Strategic Leadership in Creating Change for Construction,” In 2ND Specialty Conference on Leadership and management in Construction, Louisville: PM Publishing, 2006, pp.258-266.
[40] E.M. Rankhumise, the Principle of Entrepreneurship and Small Business Management. Cape Town: Oxford University Press, 2013.
[41] N. Scarborough, Essential of Entrepreneurship and Small Business Management. (7th, Ed.) South Carolina: Prentice Hall, 2014.
[42] P. Leedy, and J. Ormrod, Practical Research: Planning and Design (10th ed.). Boston: Pearson, 2013.
[43] Dane, Evaluating Research: Methodology for People Who Need to Read Research. California: SAGE Publications Inc, 2011.
[1] W. Shakantu, “Contractor development. In G. Ofori”, New Perspective on Construction in Developing Countries, Oxon: Spon Press, 2012, pp. 253-276.
[2] F. Orozco, A. Serpell, and K. Molenaar, “Competitiveness factors and indexes for construction companies: findings of Chile. Revista de la Construcción”, Volumen 10 No 1, pp.71-109, 2011
[3] Egmond,. “Construction Technology Development and Innovation. In G. Ofori”, New Perspectives on Construction in Developing Countries Oxon: Spon Press, 2012, Pp. 185-228.
[4] B. Ntuli, and D. Allopi, “Impact of Inadequate Experience and Skill on the Construction Sector in KwaZulu-Natal, South Africa,” Engineering, Technology & Applied Science Research, 4(1), pp.570-575, 2014.
[5] ECORYS SCS Group. FWC Sector Competitiveness Studies N° B1/ENTR/06/054 – Sustainable Competitiveness of the Construction Sector. Rotterdam: European Commission, 2011.
[6] National Research Council U.S, “Advancing the Competitiveness and Efficiency of the U.S. Construction Industry”, Washington: National Academy of Sciences, 2009.
[7] Statistics South Africa, “Gross Domestic Product: Third Quarter 2014”, Pretoria: Stats SA publications, 2014.
[8] W. Thwala, and M. Phaladi, “An Exploratory Study of Problems Facing Emerging Contractors in the North West Province of South Africa,” in Proceedings 4th Built Environment Conference, Johannesburg: University of Johannesburg, 2009, pp.195-205.
[9] D. Doane, and A. MacGillivray, Economic Sustainability - The business of staying in businesss. The Sigma Project: R & D Report, 2001
[10] L. Martin and D. Root, “Emerging contractors in South Africa: interactions and learning” Journal of Engineering, Design and Technology, Vol. 8 No. 1, pp. 64-79, 2010.
[11] Partnership for 21st Century Skills, “21st Century Skills, Education & Competitiveness: A Resource and Policy Guide,” Tucson: Partnership for 21st Century Skills, 2008.
[12] P. Burns, Entrepreneurship and Small Business, (2 ed.), New York: Palgrave Macmillan, 2007.
[13] S. McCabe, Corporate Strategy in Construction: Understanding today’s theory and practice, United Kingdom: Wiley-Blackwell, 2010.
[14] A. Kates, and J.R. Galbraith. Designing Your Organization: Using the STAR Model to Solve 5 Critical Design Challenges. New York: Wiley, 2007.
[15] M. Augier, and D. Teece, Fundamental of Business Strategy. London: SAGE Publications Ltd, 2008
[16] World Economic Forum, The Global Competitiveness Report 2014-2015. Geneva: World Economic Forum, 2014.
[17] L. Martin, “Social Capital of South African Emerging Contractors - Implications on Learning,”. Journal of Construction Volume 5 Number 2, pp.17-25, 2012.
[18] W. Dlungwana, and P. Rwelamila, “Contractor Development Models that Meet the Challenges of Globalisation – A Case for Developing Management Capability of Local Contractors,” In S. Ogunlana, C. Charoenngam, H. Pannapa, & H. B. W. (Ed.), International Symposium on Globalisation and Construction: CIB W107 (Construction in Developing Economies) and CIB TG23 (Culture in Construction), CIB-SCE, AIT, Bangkok, Thailand, 2004, pp. 348-358.
[19] R. Esler, FMI's Speech Topics: Strategy Development & Business Management: http://www.fminet.com/speech-topics, 2015.
[20] D. Cadden, and S. Lueder, Small Business Management in the 21st Century. Minneapolis: Flat World Knowledge, 2012
[21] A. Werner, “Leadership and Followership,” In A. Werner, Organisational Behaviour: A Contemporary South African perspective, 3rd ed. Pretoria: Van Schaik Publisher, 2011a, pp. 351-379.
[22] N. Sewdass, and A. Du Toit, “Current state of competitive intelligence in South Africa,” International Journal of Information Management, vol. 32, pp.185-190, 2014.
[23] N. Churchill, and V. Lewis, “The Five Stages of Small Business Growth,” Harvard Business Review, vol 1-12, 1983
[24] M. Scott, and M. Bruce, “Five Stages of Growth in Small Business”. Long Range Planning, vol. 20(3), pp.45-52. 1987
[25] CIDB, Guidelines for Contractor Registration. Pretoria: cidb Construction Contract Centre, 2011
[26] W. Nickels, J.M. McHugh, and S. McHugh, S Understanding Business (11 ed.). New York: McGraw-Hill Companies Inc, 2010.
[27] U. Hana, “Competitive Advantage Achievement through Innovation and Knowledge,” Journal of Competitiveness, vol. 5(1), pp. 82-96, 2010.
[28] L. Megginson, M. Byrd, and W. Megginson, Small Business Management: An Entrepreneur's Guidebook (4 ed.). New York: McGraw-Hill/Irwin, 2003.
[29] A. Werner, “An Introduction to Organisational Behaviour,” In A. Werner, Organisational Behaviour: A Contemporary South African Perspective, 3rd ed, Pretoria: Van Schaik, Publisher, 2011b, pp. 1-28.
[30] W. Nadim,(2012). “Modern methods of construction. In A. Akintoye, J. Goulding, & G. Zawdie, Construction innovation and process improvement (pp. 209-227). West Sussex: Wiley-Blackwell.
[31] J. Fahy, “The resource-based view of the firm: some stumbling-blocks on the road to understanding sustainable competitive advantage,” Journal of European Industrial Training, Vol. 24 iSS 2/3/4, 94-104, 2000.
[32] C. David, and C. Montgomery, "Competing on Resources: Strategy in the 1990s,” Harvard Business Review, Vol. 73 (July-August), 118-128, 1995.
[33] G. Johnson, R. Whittington, and K. Scholes, Exploring Strategy: Text & Cases (11 ed.), London: Pearson Education, 2011.
[34] P.Vorasubin, and C. Charoenngam, “Concept of Strategic Asset for Sustainability of Thai Consulting Firm,” In S. Ogunlana, C. Charoenngam, H. Pannapa, & H. B. W. (Ed.), International Symposium on Globalisation and Construction: CIB W107 (Construction in Developing Economies) and CIB TG23 (Culture in Construction), CIB-SCE, AIT), Bangkok, Thailand, 2004, pp. 1041-1048.
[35] G.J. Crafford, and J.J. Smallwood, “Clients’ views on quantity surveying competencies” Journal for the physical and development sciences, Vol.12 (1), pp.36-55.
[36] J. Cripe, and S.R. Mansfield, 31 Core Competencies Explained. The Value-Added Employee, 2002.
[37] Business-Dictionary, Enterpreneurship. Web Finance, Inc, (Online) Available at: http://www.businessdictionary.com/definition/entrepreneurship.html, (Accessed 25 June 2015), 2014.
[38] C. Brooks. What is Entrepreneurship? Buisness News Daily. (Online) Available at: http://www.businessnewsdaily.com/2642-entrepreneurship.html., 2015 (Accessed 18 October, 2015).
[39] I. Yitmen, and C. Taneri, “The Role of Strategic Leadership in Creating Change for Construction,” In 2ND Specialty Conference on Leadership and management in Construction, Louisville: PM Publishing, 2006, pp.258-266.
[40] E.M. Rankhumise, the Principle of Entrepreneurship and Small Business Management. Cape Town: Oxford University Press, 2013.
[41] N. Scarborough, Essential of Entrepreneurship and Small Business Management. (7th, Ed.) South Carolina: Prentice Hall, 2014.
[42] P. Leedy, and J. Ormrod, Practical Research: Planning and Design (10th ed.). Boston: Pearson, 2013.
[43] Dane, Evaluating Research: Methodology for People Who Need to Read Research. California: SAGE Publications Inc, 2011.
@article{"International Journal of Business, Human and Social Sciences:72148", author = "Iruka C. Anugwo and Winston M. Shakantu", title = "Basic Business-Forces behind the Surviving and Sustainable Organizations: The Case of Medium Scale Contractors in South Africa", abstract = "The objective of this study is to uncover the basic business-forces that necessitated the survival and sustainable performance of the medium scale contractors in the South African construction market. This study is essential as it set to contribute towards long-term strategic solutions for combating the incessant failure of start-ups construction organizations within South African. The study used a qualitative research methodology; as the most appropriate approach to elicit and understand, and uncover the phenomena that are basic business-forces for the active contractors in the market. The study also adopted a phenomenological study approach; and in-depth interviews were conducted with 20 medium scale contractors in Port Elizabeth, South Africa, between months of August to October 2015. This allowed for an in-depth understanding of the critical and basic business-forces that influenced their survival and performance beyond the first five years of business operation. Findings of the study showed that for potential contractors (startups), to survival in the competitive business environment such as construction industry, they must possess the basic business-forces. These forces are educational knowledge in construction and business management related disciplines, adequate industrial experiences, competencies and capabilities to delivery excellent services and products as well as embracing the spirit of entrepreneurship. Convincingly, it can be concluded that the strategic approach to minimize the endless failure of startups construction businesses; the potential construction contractors must endeavoring to access and acquire the basic educationally knowledge, training and qualification; need to acquire industrial experiences in collaboration with required competencies, capabilities and entrepreneurship acumen. Without these basic business-forces as been discovered in this study, the majority of the contractors gaining entrance in the market will find it difficult to develop and grow a competitive and sustainable construction organization in South Africa.", keywords = "Basic business-forces, medium scale contractors, South Africa, sustainable organisations.", volume = "10", number = "2", pages = "522-8", }
