Determining strategic clusters and performance of construction organizations in South Africa

Abstract

This study examines the linkage of strategic clusters and performance of South African organizations, using Porter’s generic strategies to determine whether differences exist between clustered organizations in terms of performance, characteristics, resources and capability and how the companies achieve strategic fit within different environments. A questionnaire survey was used to collect data from construction companies registered in Grades 7–9 on the cidb contractor register. The study results show that four clusters of construction organizations exist in the South African construction industry; that the four strategic groups exhibited the characteristics of Miles and Snow’s Taxonomy of Strategies; and that human resource capabilities were significantly different across the groups. However, the results show no statistically significant differences among the clusters in terms of performance. It emerged that all the respondents’ organizations placed a high premium on employee satisfaction as a measure of achieving success. This study thus proved empirically that different clusters of organizations exist within the South African construction industry, and that they exhibit the characteristics of defenders, prospectors, analysers and reactors.