EFFECT OF FACTORS INFLUENCING THE SMALL SIZES CONSTRUCTION COMPANY COMPETENCY

1.1 Introduction

Building construction is the process of assembling materials to form a building; it is generally performed by labourers and craft people engaged by an individual or organization called a contractor (Chudley and Greeno, 2010). The construction industry is made up of an organized formal sector of foreign companies and unorganized sector which comprises indigenous companies. They are classified into small, medium and large scale according to their levels of capitalization and annual turnover. Indigenous construction firm is one that is established under the Nigerian decree and has no other home base but Nigeria. Factors affecting construction labour productivity are rarely independent of the others; some factors may be the result of the same cause, or one factor may trigger the occurrence of others (Dai et al., 2009).

As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Research hypothesis and questions, Limitations of the Study and Definition of technical terms.

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1.2 Background of Study

Construction materials planning and management influence site productivity (Doloi, 2007) because, as some authors reported, performance of construction works depends on material quality, adaptation, transportation difficulties within site, time and delivery methods (Crawford and Vogl, 2006, Dai et al., 2007, Navarro-Astor, 2008). Supplier’s timing is one of the elements frequently causing problems to building firms (González et al., 2010). This situation might happen because material suppliers follow the just in time philosophy, avoiding stock costs and forcing clients to place their orders in advance, prior to the date when material is needed on site (Carvajal, 2001).

According to McGarvey, Booker and Stafford (2013), the size of building construction firm is determined by the number of employees. The small building firms have employees less than 10, while medium sized contractors have workers ranging between 10 and 499 while large sized contractors have above 500 workers on their payroll.

Foci Report (2012) defined performance as the execution or accomplishment of work, acts or feats. Project performance is a critical issue for the construction industry and success of construction projects depends mainly on success of performance. Performance is related to many topics and factors. It is important to recognize the factors that affect performance in the construction industry particularly small indigenous companies. There are several factors from financial management to material and equipment and so on. A lot of small indigenous companies have been subject to these factors in terms of cost, inadequate infrastructure, absence of motivation, and so on.

Zulu and Chileshe (2008) investigated contactor performance in Zambia and found it below expectations, arguing that nothing can be learned from local ongoing projects that have not been completed or have been delayed. They concluded that contractors’ poor performance has huge implications on competitiveness.

Enshassi et al. (2009) found that the construction industry is complex, as it includes large numbers of parties as owners (or clients), contractors, consultants, stakeholders, and regulators. In a study conducted in Palestine, UNRWA (2006) found that local construction projects suffered from poor performance especially poor contractor performance for many reasons, such as the unavailability of materials, excessive amendments to designs and drawings, poor coordination among respondents, ineffective monitoring and feedback, and lack of leadership skills.

Therefore, in Nigeria where the research was carried out, the activities that was conducted is to know the Effect of Factors Influencing the Small Sizes Construction Company Competency in Building Project Delivery.

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1.3 Statement of Problems

Investigation revealed that several factors affect contractor performance in Small Sizes construction industry. Contractor performance is often responsible for either a successful project that reflects strong contractor skills and site management or a failure that reflects the contractor’s lack of experience and weak communication skills among the workers. Any factor affecting contractor performance either negatively or positively can be avoided or enhanced using several engineering techniques.

The indigenous contractor is faced with the problems of working capital, poor management and lack of good Organization

Finance: Finance is very important in the Building and Construction Industry. The contractor has to invest on plant which is expensive in the case of civil engineering Jobs, and requires cash for payment of workers’ salaries, purchase of materials, etc. Inadequate finance can severely limit the scope of activities of a contractor. In recent years the problem of finance has become soluble. The commercial banks are under considerable pressure from the Government to assist indigenous companies and any contractor who has demonstrated a good sense of responsibility and shows some creditable construction record should not have much problem in attracting funds from the banks.

Personnel: Nigerian labour is extensively used by both expatriate and indigenous construction companies even though the industry is capital intensive. By European Standards, the Output of labour on building and civil engineering sites is very low. Labour wages are relatively low and for civil engineering projects, the overall labour cost is small in relation to the total Output. One interesting point is that expatriate contractors always get better productivity out of Nigerian workers, this can only be ascribed to better supervision.

Management: The question of Organisation is rather more serious. The most common complaint against Nigerian contractors is that they do-not complete Jobs on schedule. Most of the problems that arise come from bad planning and inefficient Organisation. It is the efficient Organisation of men and equipment that makes for good results in terms of Job quality, completion time and profit margin. People often assumed that labour is cheap and they put workers on site without proper supervision that ensures productivity. This is wasteful; when one talks of cheap labour, it is in relation to labour costs elsewhere. The lesson here for the indigenous construction Company is that contracting is not a field in which one-man enterprise can succeed. Contractors should form proper companies with trained technical personnel and managers.

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1.4 Aim and Objectives of Study

The aim of the study is to investigate the Effect of Factors Influencing the Small Sizes Construction Company Competency in Building Project Delivery. In achieving this aim, the following specific objectives were laid out as follows:

1. To determine the factors affecting competencies and project delivery of small-sized construction firms;
2. To determine how the factors affect project cost, time and quality of small-sized construction firms;
3. To highlight the challenges small-sized indigenous construction firms are facing in Lagos State; and
4. To show the relevance of management in construction project and recommended solutions.

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1.5 Research Questions

The study came up with research questions so as to be able to ascertain the above stated objectives. The specific research questions for the study are stated below as follows:

• What are those factors that may affect the project cost, time and quality of constructions firms in Lagos?
• What challenges do small-sized indigenous construction firms are facing in Lagos State?
• What are the factors likely to affect competencies and project delivery of small-sized construction firms in Lagos State?

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1.6 Research Hypothesis

In order to pursue the objective of this study, the following generalized statements have been designed to guide and aids in obtaining the result for the experiment to be conducted. For this work, the null hypothesis will be represented with H0 while the alternative hypothesis will be represented with hypothesis H1.

Hypothesis One

• H0: There are no significant factors that affect the project cost, time and quality of constructions firms in Lagos State
• H1: There are significant factors that affect the project cost, time and quality of constructions firms in Lagos State

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1.7 Significance of Study

This study will be of immense benefit to other researchers who intend to know more on this study and can also be used by non-researchers to build more on their research work. This study contributes to knowledge and could serve as a guide for other study.

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1.8 Scope of Study

The scope of the research is focused on the Effect of Factors Influencing the Small Sizes Construction Company Competency in Building Project Delivery.

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1.9 Limitations of the Study

During the course of this study, many things militated against its completion, some of which are:

1. Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
2. Research material: availability of research material is a major setback to the scope of the study.
3. Frequent power failure: This made the researcher append more money on fuel to ensure sustainable power.
4. Financial Constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

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1.10 Definition of Terms

Contract Planning: It is a process of systematically and efficiently managing contract creation, execution and analysis for the purpose of maximizing financial and operational performance and minimizing risk.

Monitoring Intensity: This is measurable concentration of regular observation and recording of activities taking place in a project.

Project Performance: This is an ongoing review of the efficiency and importance of a given project. It is used as a means of understanding and improving company, department and personnel performance.

Stakeholders: Those persons and entities that have an interest in the strategy of an entity. Stakeholders normally include shareholders, customers, staff and the local community.

Strategy: This is the determination of the basic goals and objectives of a firm and the adoption of courses of action including the allocation of resources necessary for carrying out these goals. Structure: the means by which the organization seeks to achieve its strategic objective and implement strategies and strategic change.