A Framework for Enhancing the Organizational Performance of Local Contractors in Kenya

Abstract

Foreign construction firms have increasingly dominated the Kenyan construction industry over the last couple of years. The main reason for the continued foreign dominance in the local construction industry has been attributed to poor organizational performance by the local contractors. Some of the weaknesses associated with local contractors include; poor workmanship, below-par management capability, deficient planning, inadequate mechanization, and project abandonment among others. Whilst it is generally agreed that the organizational performance of local contractors is insufficient, such a notion is arbitrary and most of the time based on anecdotal evidence. This study, therefore, sought to evaluate the organizational performance of local contractors, establish its determinants, and propose a framework for enhancing it, to ensure they compete favorably with their international counterparts. Reviewed literature established ten major dimensions of organizational performance and ten determinants drawn from both the internal and external environment of the contractor. Philosophically, this research was anchored on objectivism and positivism. While a quantitative research strategy was adopted, a survey research design was selected. Questionnaires were chosen as the data collection instruments. A sample size of 612 drawn from NCA1, NCA2, and NCA3 local contractors and registered consultants who had worked with these contractors in current or previous projects was adopted. Quantitative data was analyzed using descriptive statistics, bivariate correlations, multiple regression, and structural equation modeling. Qualitative data was analyzed thematically. Based on ten dimensions drawn from both financial and non-financial aspects, the overall level of organizational performance of local contractors in Kenya was established to have a mean of 6.374 when measured on a scale of 1 to 10. Such performance was described as suboptimal. The determinants which represent the environmment in which local contractors operate were found to have a mean of 6.468. Further results indicated there were significantly strong positive relationships between the determinants and dimensions of organizational performance. It was therefore concluded that the organizational performance of local contractors can be improved by enhancing the internal and external environment in which they operate. A framework for achieving such was formulated and validated. It was recommended that there was a need for local contractors to constantly evaluate their organizational performance regularly and continuously seek to improve their internal environment while at the same time adapting to the prevailing external environment