A system for assessing and communicating contractors' competitiveness

Pao Yue-kong Library Electronic Theses Database

A system for assessing and communicating contractors' competitiveness


Author: Lu, Weisheng
Title: A system for assessing and communicating contractors' competitiveness
Degree: Ph.D.
Year: 2006
Subject: Hong Kong Polytechnic University -- Dissertations
Construction industry -- China -- Hong Kong
Contractors -- China -- Hong Kong
Department: Dept. of Building and Real Estate
Pages: xvii, 241 leaves : ill. ; 30 cm
Language: English
InnoPac Record: http://library.polyu.edu.hk/record=b2069686
URI: http://theses.lib.polyu.edu.hk/handle/200/2123
Abstract: Today's business environment for construction has been fundamentally changed to one characterized as increasing globalization and intense competition. To improve competitiveness continuously is like the law of the jungle for contractors who wish to survive in the market and outperform their rivals. This need is particularly urgent for China, which provides one of the biggest construction markets in the world but whose contractors are relatively less competitive. Competitiveness is a powerful thinking which can lead a contractor to gaining competitive advantage. Nevertheless, it is a concept that is neither well understood nor easy to communicate to people, despite widespread acceptance of its importance. During this study, an IT based decision-support system has been developed which enables contractors' competitiveness to be easily understood and communicated. A mathematical model has been developed to calculate indexes of contractor competitiveness. Based on this index model, an IT system has been devised to facilitate the calculations and to communicate the competitiveness of contractors. Literature review reveals that competitiveness is an abstract concept, embracing almost everything that leads to long-term performance of a firm. A direct assessment of contractor competitiveness is not feasible. Alternatively, it can be assessed by measuring factors that formulate competitiveness of a given contractor. Two dominant theories on competitiveness, Porter's competitive strategy and competitive advantage model, as well as the resource-based and core competence approach, were revisited. The two theories, although each has its inherent limitations in explaining contractors' competitiveness, by complementing each other secure a solid theoretical ground for this study. The theories postulate that contractors' competitiveness derives from three generic sources: competitive strategy, value activities, and resources possessed by a firm. Given that these generic sources for contractors' competitiveness are laid down, different market conditions might generate different factors that formulate competitiveness of a given contractor. This study, therefore, investigates characteristics of the Chinese construction industry as well as its enterprises. In general, China's construction industry is undergoing a fast transition towards an increasing integration into the world community. Meanwhile, the particular profile of China has caused the industry to possess a variety of distinguishing characteristics. Similarly, Chinese construction firms have reformed themselves to fit international conventions, but possessing some unique features as they have evolved from a particular social/economic background. All these characteristics require market conditions and construction activities to be carefully examined before reliable methods for assessing contractors' competitiveness in China can be formulated. The research efforts have been devoted to developing a mathematical model for assessing competitiveness. A survey was conducted to identify Critical Success Factors (CSFs) that contribute to a contractor's competitiveness. Research activities including ranking analysis, factor analysis, interviews, and discussions, led to the identification of 33 CSFs. These CSFs were classified into 8 categories which were called competitiveness ATTRIBUTES. A further questionnaire survey was conducted to identify the Key Competitiveness Indicators (KCIs) needed to assess the performance of these CSFs, and 80 KCIs were identified as a consequence. By integrating the competitiveness Attributes, CSFs, and KCIs in a hierarchical structure, a parameter system for assessing contractors' competitiveness was established. The competitiveness can be calculated based on the parameter system. The Weighted Summation method is at the centre of the model for calculating the competitiveness index. Detailed procedures for computing the competitiveness index based on the parameter system are described. Even though the measurement of contractors' competitiveness can be easily understood with the assistance of the index model, the calculation procedures are complex, and the assessment results also need to be effectively communicated to people. This study incorporates the latest development in the IT industry, and develops an IT system called the Contractor Competitiveness Assessment and Communication System (C-CACS). The system was developed by using the Borland Delphi, and was released as a WindowsXP standard software package after undergoing a series of validation exercises such as workshops, seminars, promotion activities, and conferences. The C-CACS can be applied in three typical construction activities: for contractors to self-diagnose their competitiveness, for administrative departments to rank contractors in order of competitiveness, and for clients to pre-qualify contractors that are bidding for a contract. The academic contributions of this study include not only the enriched knowledge on the subject of competitiveness, but also the introduction of a new methodology for investigating competitiveness issues. Furthermore, the findings revealed during this study provide a framework of reference against which the competitiveness of contractors in other regions can be compared.

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