Emerging contractor's management and planning skills to overcome business risk factors

Abstract

PurposeEmerging construction companies often liquidate due to their inability to institute strategies to handle their business risks. This study investigated the skills and strategies adopted by emerging contractors to overcome business risk factors to make their businesses sustainable.Design/methodology/approachA qualitative research approach was adopted for the study. Semi-structured interview questions were used to solicit information from emerging contractors within the Construction Industry Development Board (CIDB) Grade one (1) to four (4) in the Gauteng Province of South Africa. The data gathered were analysed using qualitative content analysis to identify the main themes.FindingsThe study's findings indicate that emerging contractors face business risk factors that impact their project execution hugely. Thus to overcome these risk factors, they implement various strategies to curtail the risk they encounter in their businesses. These strategies include; human resource management (employing experienced and skilled labour and training of staff); communication management (with other employees about set goals); financial management (effective pricing of tender documents); procurement management (ensuring materials are available as and when necessary in their projects) and quality management (ensuring effective work supervision); among others.Research limitations/implicationsAlthough the study concentrated on the emerging construction firms in the Gauteng Province of South Africa, the findings may be applicable in other provinces and beyond South Africa.Practical implicationsIn order for emerging contractors to prevent the collapse of their businesses, there is the need to be educated on effective project risk management to identify potential business risk, the mirage associated with the notion of the construction business profitability, effective tender pricing and strategic business partnership. These strategies, if well thought, will help sustain their businesses and growth in the construction industry.Originality/valueThe study has identified the management strategies used by emerging contractors to sustain their businesses in the construction industry. Thus, the finding will guide both emerging contractors who are already in the construction business and those planning to enter the construction market.