International Research Journal of Engineering and Technology (IRJET)
e-ISSN: 2395 -0056
Volume: 04 Issue: 07 | July -2017
p-ISSN: 2395-0072
www.irjet.net
Growth Trend of Local Building Contractors for the Period of 20052015 in Dar Es Salaam, Tanzania. Dennis N.G.A.K. Tesha1, Valentine G.M. Luvara2, Mwavita Samizi3, Deogratius Lukansola4. 1,2,4 Dept
of Building Economics, Ardhi University(ARU), P.O Box 35176, Dar-Es-Salaam, Tanzania. of Civil Engineering, Ardhi University(ARU), P.O Box 35176, Dar-Es-Salaam, Tanzania. ---------------------------------------------------------------------***--------------------------------------------------------------------3Dept
development depends very much on the firms' growth, which can have two different meanings as per, Penrose & Pitelis,(1959); Hagstedt & Thideman,(2013)(41)(17) i.e.; growth as change in volume or size, or growth referring to a quality improvement as a result of process developments. This study focuses on growth, in relation to the size of the firm, where size is the result of one of the two factors; firm capital resources (i.e. labour, equipment, assets, financial status), and/or the financial output (i.e. turnover and profit). Furthermore, it is argued that without growth, the society will experience inertia, and consequently there will be nor company, economic development or progress, (24)(17).
Abstract - The construction industry is one of the engines of socio-economic growth and thus why, it's growth is important. The growth of construction industry is simultaneously to the growth of large, medium and small construction firm. The growth of these firms is not always easy nor risk free, hence making their growth interesting to study. This study intends to assess the growth trend of local building contractors for the period of 2005-2015 in Dar-Es-Salaam, Tanzania. The methodology employed during data collection was descriptive field survey, which involved physically administering questionnaires to local construction firms. Purposive and Disproportionate stratified sampling were used as sampling techniques, by selecting building contractors located in DarEs-Salaam. Simple Microsoft Word and Excel were used in analyzing the collected data and its presentation was done by tables and charts. Findings reveal that local building contractors lack sustainable growth particularly in terms of upgrading their firms to higher class levels. It also revealed the factors hindering their competitiveness, which includes; Limited access to finance and works; Stiff competition; Low turnover; Delays in payment; Bureaucratic in procurement procedure, National preference etc. The strategies used to improve their firms' growth, are; Participating in tendering; Acquiring new equipments; Employing right personnel; Cooperation with stakeholders; Training on procurement procedure; Joint ventures with other contracting firms, etc. It was concluded and recommended that, CRB; should review their upgrading criteria as current criteria do not promote the growth of local firms, taking into consideration the technical capacity and development in the industry with regard to plant and equipment. Furthermore, the government should ensure a more conducive environment for the growth of local building contractors through advocacy for affirmative government policies and initiatives on building the local capacity.
(Penrose & Pitelis,1959); Antonsson,(2002); Hagstedt & Thideman,(2013)(41)(2)(17), reports that; almost all of the large companies today have once been small companies, and conversably many of the large companies in the future are small companies today; thus why most construction firm owners keep wanting their firms to grow, and actively work towards expanding their firms in terms of size, revenue and profit. There are number reasons why companies want to grow. Firstly, shareholders and other investors want to get an increasing return on their invested capital, meaning their construction firm must generate more profit each year. Other reasons include all the positive effects that companies can receive while they grow larger, such as potential economics of scale and scope, network effects, and the possibility to defend the company towards competitors (46).
Keywords: Growth, Construction Industry, Local Building Contractor, Tanzania.
1.0. INTRODUCTION The construction industry is a sector of the economy which is, and has always been, an important industry, transforming diverse resources into constructed necessary physical economic and social infrastructure, hence creating and maintaining the built environment, which is the foundation for the socio-economic development for any nation, and a reflection of a nation’s development. The importance of construction industry's' contribution in the socio-economic Š 2017, IRJET
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Indicators of construction firms' growth have been discussed in various literature reviews, which in turn are used as contractor key competitiveness indicators. According to Hatush & Skitmore,(1997), in Yang-Tao at el,(2007)(53); the proposed five criteria for assessing competitiveness of a construction firm, includes; financial soundness, technical ability, management capability, health and safety, and reputation. Moreover, the study by Holt at el.,(1994)(19) adds more competitiveness indicators by including; contractor’s organization, management resource, financial considerations, past experience, and past performance. For the purpose of this study, the following indicators were used to measure the growth of local building contractors; these are, Annual turnover; Technical ability (capacity of construction equipment and plants); Market ability (geographical regions of business activities); Number of employees; and Number of projects carried by a particular firm within a specified period.
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