A framework for improving the strategic management of construction contractors
Strategic management, also described as policy or simply strategy, deals with the long-term direction and success of organisations, and covers issues that are usually of primary concern to senior and top management. Construction organisations have started to embrace a strategic approach as a way of managing their long-term success, in an increasingly turbulent business environment. This shift in managerial approach was necessitated by a need to adopt a total quality philosophy in managing the business enterprise. There is, however, a dearth of information on what construction companies do when planning their long-term future survival. Where such planning is evident, there appears to be no systematic approach for doing it, and the factors involved vary considerably. This research set out to establish the focus and activities undertaken by construction contractors to determine their strategies; with the view to recommending the best practices for the industry, especially to companies where strategic planning does not form a coherent part of their long-term survival considerations. The research therefore centred on the internal activities that contractors undertake to establish their corporate strategies. The research established the framework and focus of the strategy making process in construction companies. The research also assessed the methods of financial evaluation techniques employed by contracting companies as part of their strategic planning. This led to the identification of the need for an effective financial evaluation criteria to be employed for the corporate assessments. An improved approach that links up generic strategy options with classification of evaluation was proposed. This took the form of a sequential financial model. Such a model was developed and tested, and linked up with the generic strategic options available to construction contractors, to be employed for their strategic management.