South Asian Journal of Management

Open Access Open Access  Restricted Access Subscription Access
Open Access Open Access Open Access  Restricted Access Restricted Access Subscription Access

Key Factors Contributing to Revenue-based Growth of Small Construction Firms in India:An Empirical Study


Affiliations
1 School of General Management, National Institute of Construction Management and Research, Pune, India
2 National Institute of Construction Management and Research, Pune, India
     

   Subscribe/Renew Journal


This study aimed to identify the key factors that contribute to the revenue-based growth of small construction firms in India for analyzing their impact on growth performance parameters, namely, job creation, productivity, output and customer satisfaction. In two phases, the total number of 500 questionnaires was administered to small construction firms who are less than five years old. In the first phase, 218 questionnaires were returned usable to perform exploratory factor analysis for establishing key factors. In the second phase, 230 questionnaires were returned usable from an independent sample to perform multiple linear regression analysis. The findings have shown that human factor, management factor, business environment factor, technological factor and competition factor are the key factors in the revenue-based growth of small construction firms in India. Further, significant influencers pertaining to the growth performance parameters are identified. The findings of this study are limited to the Indian context only.

Keywords

Construction, Customer Satisfaction, Job Creation, Output, Productivity.
User
Subscription Login to verify subscription
Notifications
Font Size

  • Anderson, D. (1982). Small industry in developing countries: A discussion of issues, World Development, 10(11), 913-948.

  • Anyadike-Danes, M., Hart, M., & Du, J. (2015). Firm dynamics and job creation in the United Kingdom: 1998-2013. International Small Business Journal, 33(1), 12-27.

  • Ayyagari, M., Demirgüç-Kunt, A., & Maksimovic, V. (2011). Small vs. young firms across the world: contribution to employment, job creation, and growth. World Bank Policy Research Working Paper 5631. [Online] available at: https://openknowledge.worldbank.org/bitstrea/handle/10986/3397/WPS5631.pdf?sequence=1 (accessed on 28 August 2016).

  • Bakar, A. H. A. (1993). Growth trend for construction companies: a Malaysian experience. in Proceedings of CIB Symposium 93: Organization and Management of Construction: The Way Forward, Port of Spain, Trinidad, 1 of 3, 524-43.

  • Bakar, A. H. A., Razak, A. A., Yusof, M. N., & Karim, N. A. (2011). Factors determining growth of companies: A study on construction companies in Malaysia. African Journal of Business Management, 5(22), 8753- 8762.

  • Bakar, A. H. A., Tabassi, A. A., Razak, A. A., & Yusof, M. N. (2012). Key factors contributing to growth of construction companies: A Malaysian experience. World Applied Sciences Journal, 19(9), 1295-1304.

  • Banaitienë, N., Banaitis, A., & Lauèys, M. (2015). Foreign direct investment and growth: analysis of the construction sector in the Baltic States. Journal of Civil Engineering and Management, 21(6), 813-826.

  • Barkham, R., Gudgin, G., & Hanvey, E. (2002), Determinants of small firm growth: An inter-regional study in the United Kingdom 1986-90 (Vol. 12), Routledge, London and New York.

  • Barrett, R., & Mayson, S. (2007). Human resource management in growing small firms. Journal of Small Business and Enterprise Development, 14(2), 307-320.

  • Behera, P., Mohanty, R. P., & Prakash, A. (2015). Understanding construction supply chain management. Production Planning & Control., 26(16), 1332-1350.

  • Beverelli, C., Fiorini, M., & Hoekman, B. (2017). Services trade policy and manufacturing productivity: The role of institutions. Journal of International Economics, 104, 166-182, DOI: 10.1016/j.jinteco.2016.11.001.

  • Birch, D L, 1987, Job creation in America: How our smallest companies put the most people to work, The Free Press, New York.

  • Bon, R., & Hutchinson, K. (2000). Sustainable construction: some economic challenges. Building Research & Information, 28(5-6), 310-314.

  • Brixy, U., & Kohaut, S. (1999). Employment growth determinants in new firms in Eastern Germany. Small Business Economics, 13(2), 155-170.

  • Budayan, C., Dikmen, I., & Birgonul, M. T. (2011). Hybrid strategic groups in construction. Engineering Project Organization Journal, 1(3), 183-196.

  • Çetiner, O. (2004). A proposal model for material management in computer media– small construction firm example, Doctoral dissertation, YT Ü. Department of Architecture Construction Programmed, Ðst.

  • Chakrapani, A. (2014). The progressive economy of India. Progressive, 3(4), 626-638.

  • Chiang, Y. H., Tao, L.,& Wong, F. K. (2015). Causal relationship between construction activities, employment and GDP: The case of Hong Kong. Habitat International, 46 1-12, DOI: 10.1016/j.habitatint.2014.10.016.

  • Construction Federation of India. (2005). Gearing construction for growth, Paper submitted to Deputy Chairman, Planning Commission of India, New Delhi.

  • Davidsson, P., & Henrekson, M. (2002). Determinants of the prevalance of startups and high-growth firms. Small Business Economics, 19(2), 81-104.

  • Davidsson, P., Achtenhagen, L., & Naldi, L. (2007). What do we know about small firm growth?”, in Parker, Simon. (Ed.). The life cycle of entrepreneurial ventures (Vol. 3, pp. 361-398), Springer Science + Business Media, Inc., Springer US: New York.

  • De Jong, J. P., & Vermeulen, P. A. (2006). Determinants of product innovation in small firms a comparison across industries. International Small Business Journal, 24(6), 587-609.

  • Dhammika, K. A. S., Ahmad, F. B., & Sam, T. L. (2012). Job satisfaction, commitment and performance: Testing the goodness of measures of three employee outcomes. South Asian Journal of Management, 19(2), 7-22.

  • Gan, X., Zuo, J., Ye, K., Skitmore, M., & Xiong, B. (2015). Why sustainable construction? Why not? An owner’s perspective. Habitat International, 47, 61-68. DOI: 10.1016/j.habitatint.2015.01.005.

  • Gherhes, C., Williams, N., Vorley, T., & Vasconcelos, A. C. (2016). Distinguishing micro-businesses from SMEs: a systematic review of growth constraints. Journal of Small Business and Enterprise Development, 23(4), 939-963.

  • Gray, C. (2002). Entrepreneurship, resistance to change and growth in small firms. Journal of Small Business and Enterprise Development, 9(1), 61-72.

  • Gudgin, G. (1996). Determinants of Small Firm Growth: An Inter-Regional Study in the United Kingdom 1986-90 (Vol. 12), Jessica Kingsley Publishers, London.

  • Hart, M., McGuinness, S., O’Reilly, M., & Gudgin, G. (2000). Public policy and SME performance: the case of Northern Ireland in the 1990s. Journal of Small Business and Enterprise Development, 7(1), 27-41.

  • Hervas-Oliver, J. L., Sempere-Ripoll, F., & Boronat-Moll, C. (2014). Process innovation strategy in SMEs, organizational innovation and performance: A misleading debate?. Small Business Economics, 43(4), 873-886.

  • Hodson, M., Marvin, S., Robinson, B., & Swilling, M. (2012). Reshaping urban infrastructure. Journal of Industrial Ecology, 16(6), 789-800.

  • Huang, K. F., Dyerson, R., Wu, L. Y., & Harindranath, G. (2015). From temporary competitive advantage to sustainable competitive advantage. British Journal of Management, 26(4), 617-636.

  • Izogo, E. E., & Ogba, I. E. (2015). Service quality, customer satisfaction and loyalty in automobile repair services sector. International Journal of Quality & Reliability Management, 32(3), 250-269.

  • Jethoo, A. S., Poonia, M. P., & Pandel, D. (2012). Potential for reducing green house gas emissions and energy consumption by recycling the construction waste materials. Bulletin of Environment, Pharmacology and Life Sciences (Online-ISSN 2277-1808 © Academy for Environment and Life Sciences, India), 1(5), 16-20.

  • Laskar, A., & Murty, C. V. R. (2004). Challenges before construction industry in India. Available at: http://www.iitk.ac.in/nicee/RP/2004_Challenges_Construction_Industry_Proceedings.pdf (accessed on 24 August, 2016).

  • Li, Y., & Rama, M. (2015). Firm dynamics, productivity growth, and job creation in developing countries: The role of micro-and small enterprises. The World Bank Research Observer, 30(1), 3-38.

  • Lopez-Garcia, P., & Puente, S. (2012). What makes a high-growth firm? A dynamic probit analysis using Spanish firm-level data. Small Business Economics, 39(4), 1029-1041.

  • Mahalingam, A., & Delhi, V. S. K. (2012). A contested organizational field perspective of the diffusion of public–private partnership regimes: evidence from India. Engineering Project Organization Journal, 2(3), 171-186.

  • Mazri, I. A. (2005). Critical success factors for the construction organization. Doctoral dissertation, Universiti Teknologi Malaysia, Faculty of Civil Engineering.

  • Mohanty, D. (2012). Global capital flows and the Indian economy: Opportunities and challenges. Reserve Bank of India Bulletin, 56(February), 317-326.

  • Mohanty, R. P., & Prakash, A. (2013). Green supply chain management practices in India: an empirical study. Production Planning & Control, 25(1), 1322-1337.

  • Nunnally, J. C. (1988). Psychometric Theory, McGraw-Hill, Englewood Cliffs: New Jersey.

  • Ofori, G., & Chan, S. L. (2000). Growth paths of construction enterprises in Singapore 1980-98. Engineering Construction and Architectural Management, 7(3), 307-321.

  • Othman, A., & Owen, L. (2001). The multidimensionality of CARTER model to measure customer Service Quality (SQ). In Islamic banking industry: a study in Kuwait Finance House’. Int. J. Islamic Financial Services, 3(4), 12.

  • Oyekunle Oyewobi, L., Olukemi Windapo, A., & Cattell, K. S. (2013). Impact of business diversification on South African construction companies’ corporate performance. Journal of Financial Management of Property and Construction, 18(2), 110-127.

  • Pamulu, M. S. (2010). Strategic Management practices in the construction industry: A study of Indonesian enterprises, Doctoral dissertation, Queensland University of Technology.

  • Panda, S. (2015).Factors affecting capital structure of Indian venture capital backed growth firms. South Asian Journal of Management, 19(1), 98-123.

  • Phadtare, M. T. (2010). Developing balanced scorecard: Case of three construction firms of small size. Journal of Asia-Pacific Business, 11(2), 135-157.

  • Phadtare, M. T., Gosavi, A. D., & Ganguli, T. K. (2018). Risk management in small and micro construction firms undertaking repairs and modernization of residential houses: A case of India. International Journal of Risk Assessment and Management, 21(3), 184-204.

  • Picot, G., & Dupuy, R. (1998). Job creation by company size class: The magnitude, concentration and persistence of job gains and losses in Canada. Small Business Economics, 10(2), 117-139.

  • Pohler, D., & Luchak, A. (2015). Are unions good or bad for organizations? The moderating role of management’s response. British Journal of Industrial Relations, 53(3), 423-459.

  • Prakash, A., & Mohanty, R. P. (2013). Understanding service quality. Production Planning & Control, 24(12), 1050-1065.

  • Prakash, A., Jha, S. K., Prasad, K. D., & Singh, A. K. (2017). Productivity, quality and business performance: an empirical study. International Journal of Productivity and Performance Management, 66(1), 78-91.

  • Prakash, A., Mohanty, R. P., & Kallurkar, S. P. (2011). Service quality modelling for life insurance business using neural networks. International Journal of Productivity and Quality Management, 7(3), 263-286.

  • Prasad, K. D., Jha, S. K., & Prakash, A. (2015). Quality, productivity and business performance in home based brassware manufacturing units. International Journal of Productivity and Performance Management, 64(2), 270-287.

  • Rode, M. S. (2017). Customer satisfaction led growth in banking sector. TRANS Asian Journal of Marketing & Management Research (TAJMMR), 6(10), 5-9.

  • Satyajit, M. (2013). Growth strategy in entrepreneur managed small organizations: A study in auto component manufacturing organization in Central India. South Asian Journal of Management, 20(4), 31-55.

  • Sexton, M., & Barrett, P. (2003). A literature synthesis of innovation in small construction firms: insights, ambiguities and questions. Construction Management and Economics, 21(6), 613-622.

  • Singh, J., & Singh, H. (2015). Continuous improvement philosophy-literature review and directions. Benchmarking: An International Journal, 22(1), 75-119.

  • Singh, R. K., Garg, S. K., & Deshmukh, S. G. (2007).Comparative Study on Strategies of Indian Small, Medium and Large Scale Organizations. South Asian Journal of Management, 14(3), 44-65.

  • Stasiowski, F. (2001). Staying Small Successfully: A Guide for Architects, Engineers, and Design Professionals, John Wiley & Sons, New York.

  • Swarup, P. R. (2007). Indian construction industry (2006-07). available at: http://www.asiaconst.com/past_conference/conference/13th/AC13India.pdf (accessed on 15 August, 2016).

  • Walker, E., & Brown, A. (2004). What success factors are important to small business owners?. International Small Business Journal, 22(6), 577-594.

  • Williams, P., & Naumann, E. (2011). Customer satisfaction and business performance: A firm-level analysis. Journal of Services Marketing, 25(1), 20-32.

  • Woodward, H. N. (1976). Management strategies for small companies. Harvard Business Review, 54(1), 113-121.

  • World Bank. (2008). India - Indian road construction industry: capacity issues, constraints and recommendations. Policy Note Report No. 46326 dated 2008/11/ 01 of ID: P096071. 1818 H Street, N.W., Washington, DC 20433: Washington, DC: World Bank, available at: http://documents.worldbank.org/curated/en/2008/11/10200987/india-indian-road-construction-industry-capacity-issues-constraints-recommendations (accessed on 15 July, 2016).

  • Yadav, I. S., & Goyari, P. (2014). The profitability and size of Indian companies: An empirical analysis. South Asian Journal of Management, 21(1), 32-48.


Abstract Views: 160

PDF Views: 0




  • Key Factors Contributing to Revenue-based Growth of Small Construction Firms in India:An Empirical Study

Abstract Views: 160  |  PDF Views: 0

Authors

Anand Prakash
School of General Management, National Institute of Construction Management and Research, Pune, India
Milind Phadtare
National Institute of Construction Management and Research, Pune, India

Abstract


This study aimed to identify the key factors that contribute to the revenue-based growth of small construction firms in India for analyzing their impact on growth performance parameters, namely, job creation, productivity, output and customer satisfaction. In two phases, the total number of 500 questionnaires was administered to small construction firms who are less than five years old. In the first phase, 218 questionnaires were returned usable to perform exploratory factor analysis for establishing key factors. In the second phase, 230 questionnaires were returned usable from an independent sample to perform multiple linear regression analysis. The findings have shown that human factor, management factor, business environment factor, technological factor and competition factor are the key factors in the revenue-based growth of small construction firms in India. Further, significant influencers pertaining to the growth performance parameters are identified. The findings of this study are limited to the Indian context only.

Keywords


Construction, Customer Satisfaction, Job Creation, Output, Productivity.

References