Performance, resources and capabilities of construction organisations: The mediating role of competitive strategies

Abstract

This study examines the relationships between competitive strategies, resources/capabilities and organisational performance in construction organisations. The main objective is to establish the mediating role of competitive strategies on the strength of relationship between resources, capabilities and performance of large construction business organisations in South Africa. A survey instrument was administered to Grades 7, 8 and 9 construction organisations listed in the Construction Industry Development Board (cidb) database. 72 usable questionnaires were analysed using descriptive statistics and correlations. The results show that organisational resources and capabilities do not exert a direct impact on performance of construction organisations, but technological resources showed significant relationship, when mediated by competitive strategy. This implies that performance of large construction organisations is contingent upon their competitive strategies and organisational capabilities, for them to achieve performance excellence. Furthermore, differentiation strategy influences an organisations’ financial performance negatively whereas cost-leadership strategy has a positive impact. It provides empirical evidence on the relationship between competitive strategy and organisational resources/capabilities in a new setting.