The strategic management of construction companies during recessionary cycles

Abstract

This article reports on the results from a study done on the strident economic times in the construction industry following the FIFA Soccer World Cup – from August 2010 to December 2012. The research was conducted among Grade GB7, GB8 and GB9 main contractors in the Eastern Cape Province, South Africa, to identify the key strategies that are able to keep construction entities in operation. The study further investigated the key elements of a successful turnaround strategy, as well as the most effective methods of implementing strategies in construction organisations. A survey among twenty-two construction companies was conducted, using a questionnaire in which a 5-point Likert scale was used to assess the opinions of the respondents.

Results from the study showed that companies tendered on more than one type of work (residential, commercial and/or industrial projects) during recessionary times, whereas they usually tendered on one type of work only. It was also noted that not only did the majority of the companies tender on different types of work (residential/commercial/industrial) during the recessionary period (2010-2012), but this was also found to be the most effective means of ‘keeping their doors open’.

Construction industry companies are also advised that they should revise their short-term strategic plans on a quarterly basis, while the long-term vision should be assessed and adapted annually, whenever necessary.

Keywords: Strategic management, survival strategies, turnaround strategies

Hierdie artikel doen verslag oor resulte uit navorsing wat gedoen is oor swak ekonomiese toestande in die konstruksienywerheid na afloop van die FIFA 2010 Sokker Wêreldbekerkompetisie tussen Augustus 2010 en Desember 2012. Die navorsing is gedoen onder Graad GB7, GB8 en GB9 hoofkontrakteurs in die Oos-Kaap, Suid Afrika, om die belangrikste strategieë om in moeilike tye staande te bly, te identifiseer. Die doel van die navorsing was ook om die sleutelelemente van ’n omkeerstrategie te bepaal, asook die mees doeltreffende metodes om dit te implementeer. ’n Opname deur middel van ’n vraelys aan twee-en-twintig hoofkontrakteurs is gedoen, en hul opinies is hoofsaaklik verkry deur gebruik te
maak van ’n vraelys met ’n 5-punt Likertskaal.

Die resultate van die ondersoek het aangedui dat kontrakteurs meestal op meer as een tipe werkkontrak (residensiële, kommersiële, nywerheid) getender het, in plaas van slegs die normale tipe kontrak. Behalwe dat kontrakteurs op meer as een tipe kontrak getender het, was dit ook die mees effektiewe metode om staande te bly gedurende hierdie moeilike ekonomiese tydperk (2010 tot 2012).

Konstruksiemaatskappye word gemaan om hul korttermyn-strategieë kwartaalliks, en hul langtermynvisie jaarliks te hersien, en aanpassings te maak indien nodig.

Sleutelwoorde: Strategiese bestuur, oorlewingstrategie, omkeerstrategieë