Failure factors–a comparative study of private and government construction firms

Abstract

PurposeThe purpose of the present study is to examine the failure factors for the construction firms in a developing nation. Furthermore, the comparison of failure factors for private and government firms are evaluated.Design/methodology/approachIn the present study, comparison between private and government construction firms is done in the context of a construction firm failure. About 60 construction firms were selected in and around the Nashik region for the investigation, where a simple multi-attribute rating technique (SMART) is used for analysis purpose.FindingsIt is found that for private firms (private contractors and builders) lack of experience is the major factor for failure of the business as against lack of managerial experience is a critical factor in case of a government contractor.Practical implicationsThe outcome of the present study will be used to guide the policymakers during the implementation of governmental and private projects in order to lessen the construction project failures.Originality/valueConstruction company failure is an important aspect in developing countries like India. The limited studies were available in literature which shows failure factors for government and private firms and distinguished them. Hence, the present study extends the construction company failure literature by focusing on government and private firms. Also, the study provides some theoretical guidelines for management to avoid construction company failure in India.