Evaluation of the impact of organisational contingency factors on firm performance

Abstract

This paper examines and proposes a model for improving the performance of construction organisations. The purpose of this study is to evaluate the relationship between organisational characteristics, competitive strategies and performance of construction organisations. The study investigates a sample of large construction firms listed in both civil and general building class of works on the Construction Industry Development Board (cidb) register of contractors in South Africa using quantitative approach. The analysis conducted on sample of 72 construction organisations reveal that differentiation strategy influences firm performance in complex and dynamic environment while cost-leadership is advantageous in less dynamic or stable environments. In addition, it was revealed that organisational structure only has a direct impact on performance when moderated by competitive strategy. This study is investigative in nature and focuses on large construction organisations; therefore, the results may not be generalizable to a larger population of SMEs in the industry. Further research is required to complement this study with larger sample size, and cluster the firms to identify different strategic groups that exist in the industry.