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 approachas a way of managing their long-term success, in an increasingly turbulentbusiness environment. This shift in managerial approach was necessitatedby a need to adopt a total quality philosophy in managing the businessenterprise. There is, however, a dearth of information on what constructioncompanies do when planning their long-term future survival. Where suchplanning is evident, there appears to be no systematic approach for doingit, and the factors involved vary considerably.This research set out to establish the focus and activities undertaken byconstruction contractors to determine their strategies; with the view torecommending the best practices for the industry, especially to companieswhere strategic planning does not form a coherent part of their long-termsurvival considerations. The research therefore centred on the internalactivities that contractors undertake to establish their corporate strategies.The research established the framework and focus of the strategy makingprocess in construction companies.The research also assessed the methods of financial evaluation techniquesemployed by contracting companies as part of their strategic planning. Thisled to the identification of the need for an effective financial evaluationcriteria to be employed for the corporate assessments. An improvedapproach that links up generic strategy options with classification ofevaluation was proposed. This took the form of a sequential financialmodel. Such a model was developed and tested, and linked up with thegeneric strategic options available to construction contractors, to beemployed for their strategic management.