Exploring the Impact of Endogenic Factors on the Competency of Small and Medium Contractors in the Ethiopian Construction Industry

Abstract

Small and medium contractors (SMCs) significantly contribute to socio-economic development by creating employment opportunities and establishing inter-sectoral links with other sectors of the economy. Despite their significant contribution, evidence suggests their competency is underdeveloped due to several obscuring factors. As a part of a larger research, this study aimed to explore the endogenic factors affecting the sustainable competency of SMCs in the Ethiopian construction industry (CI). A thorough literature review was conducted to identify 65 endogenic factors arising from seven core sources. A questionnaire survey was used to collect the perceptions of industry stakeholders. Descriptive and inferential statistics were used for analysis. Findings indicated 63 significant factors affecting sustainable competency and the top factors were: employee’s strategic and operational decision- making power, organisational leadership style, the existence of matured and developed entrepreneurial mindsets, the availability of institutional and business relationships, the inability to access financial resources, the lack of project management skills and low-profit margin due to competition. Factor analysis also identified 17 components. The findings from the study indicate the need to prioritise the areas of competitiveness improvement and the practical implications of making informed decisions for entrepreneurs. The findings of this study can also be used to develop a framework to create a conducive business environment.