The effect of networking on contractors' business competitiveness

Abstract

The construction industry is perceived as adversarial and fragmented. Contractors are typically involved in intricate project environments and suffer from a highly competitive construction market. Thus, there is a pressing need for contractors to explore effective ways of enhancing their competitive edge. Establishing a collaborative network has emerged as an important strategy for business practice in many industries and stimulated enormous contemporary interest in network study. Research studies have been increasingly promoting organisations as networks and the use of networking as a strategy to improve competitiveness. The construction industry is commonly considered a highly competitive arena in which contractors must outperform their competing firms for survival. While the literature has analysed competitiveness in the construction field, it has not yet provided a solution for improving competitiveness effectively, particularly at the construction project level, where the business of contractors is significantly affected. Further, little research has examined such business competitiveness from a networking perspective. In the light of new insights, this study aims to show how network deployment can produce gains in business competitiveness. Both qualitative and quantitative methodologies are used in this study. The results suggest that network strategies can contribute to the successful improvement of business competitiveness by encouraging cooperation between project network members. The results further prove that business competitiveness and networking are intimately related. The network approach can provide better insights into contractors' business competitiveness than other perspectives. This study makes three main contributions. First, at the conceptual level, it shows the highly correlated relationship between a contractor's network performance and business competitiveness level. Second, it establishes a framework and propositions that enhance the understanding of how network techniques relate to network outcomes. It develops a network model to show that network techniques significantly support contractors' network performances, and that network outcomes give rise to competitiveness attributes that in turn stimulate contractors' business competitiveness levels. Third, it offers a strategy for contractors to improve their business competitiveness from a networking perspective. A comprehensive set of performance indicators is developed to evaluate contractors' network performances. The identification of performance indicators could help contractors improve their business competitiveness effectively by managing their network techniques strategically. This thesis adds to the knowledge of how a firm can successfully use a network strategy in its pursuit of improved business competitiveness.