Purpose This paper aims to evaluate Nigerian contractors’ perceptions regarding the effects of positive and negative cash flow during construction projects, with a view to establishing effective strategies for cash flow management. Design/methodology/approach A desktop-based literature review is used to develop a cross-sectional questionnaire survey which uses Likert items to elicit responses from construction professionals on: the reasons for cash flow problems; the impacts of negative and positive cash flow; and the potential solutions for improving cash flow on construction projects. Findings The study finds that delay in payments, difficulty in obtaining financial aid and inadequate budgetary control are the causes of cash flow problems during construction projects. Cumulatively, these issues result in project delays, reduced profit margins and in the worst scenarios, abandoned projects. Originality/value There has been limited research into the effects of positive and negative cash flows on construction projects in Nigeria and indeed, the wider geographical location of West Africa. This study addresses this observed dearth and consequently advances methods and solutions to deal with the problem of poor cash flow management in the Nigerian construction industry.
Purpose Construction companies require meticulous and thorough financial planning to ensure business survival in an increasingly competitive global market. Past studies assert that cash flow management is also crucial to meeting project and organisational performance expectations. However, the link between an advance payment system (APS), cash flow and project performance has hitherto received scant academic attention. Therefore, this study aims to investigate the attributes and impact of APS on cash flow, project and organisational performance. This study surveyed all registered contractors listed in Grades 1–9 on the Construction Industry Development Board Register of Contractors in South Africa. Design/methodology/approach This study adopted an empirical epistemological design and deductive reasoning to analyse primary data collated via a questionnaire data collection instrument. Summary statistical and regression analysis were used to explore data garnered. Findings This study found that key significant attributes of APS in South Africa were payment of balance to the contractor upon project delivery; advance payment to contractors before the commencement of the work; and payment to contractors as agreed. This study proffers that project performance in terms of cost, time and quality performance is highly and positively supported by APS. Moreover, APS positively supports the efficiency, competitiveness and profitability of construction organisations. Cumulatively, these findings confirm that APS attributes in South Africa conforms to the global attributes of APS. The research concludes that client use of APS on projects improves the likelihood of attaining improved quality and time performance. This paper concludes with a recommendation that both public and private clients consider the option of an APS as the ideal payment system to support project and organisational performance. Originality/value To the best of the authors’ knowledge, this work constitutes the first attempt to explore the linkages between an APS, cash flow and project performance in South Africa and seeks to engender wider polemic debate and further discussion among industry stakeholders.
Purpose—There is no consensus on the indicators that assess a construction company’s financial performance projects undertaken. There is also a dearth of concepts on the financial performance indicators for construction companies in South Africa and indeed, the wider continent of Africa. This paper proposes novel financial performance indicators for assessing construction organizations and tests these on selected construction companies in the South African construction industry. Design/methodology/approach—This research employed a pragmatic approach. Contractors with financial credibility and capacity of ≥R 40 million, annual turnover of ≥R 20 million, and available capital of ≥R 40 million were purposively selected for this study. Parameters such as total revenue, direct cost of work, total indirect cost and total income were elicited from the sample contractors to assess their financial performance. The assessment was undertaken using formulas that were formulated based on the descriptions provided under the research methodology. Further analysis was conducted using post hoc Tukey’s honest significant difference (HSD). Findings—The study finds that construction companies with a strong structure, multiple areas of specialization, creative and efficient staff members, and access to funding, have a greater chance of experiencing higher: income; positive leverage; positive liquidity; and positive cash flow. Moreover, companies with specialization in civil engineering construction and project management skills experienced higher positive liquidity and profitability. Originality/value—This research is unique through its investigation and formulation of indicators for assessing the financial performance of construction companies. This research is consequently representing the first attempt to analyze financial data using the approaches prescribed and adopted.
Purpose Sustainable construction practices are strongly correlated with a profitable and competitive construction industry, improved client satisfaction and efficient use of resources. However, due consideration is not being given to sustainable construction practices in Nigeria. Therefore, this study aims to identify the unsustainable construction practices on construction sites, the barriers to sustainable construction and possible strategies to improve sustainable construction in Nigeria. Design/methodology/approach A questionnaire survey of 50 construction sites was conducted with construction professionals on the sites as the specific target, out of which only 43 construction sites have at least a construction professional present at the site. Forty-three filled questionnaires from the respondents were used for descriptive (mean score, standard deviation and charts) and inferential analysis (t-test and Kruskal–Wallis) in this study. Findings The study shows that a large percentage (75%) of construction professionals in Nigeria are aware of sustainable construction. The descriptive and inferential analysis showed a disparity in the ranking of the 12 unsustainable practices, 14 barriers and 11 strategies among the respondents. Five unsustainable practices (“negative externalities”, “excess energy”, “unsustainable technologies”, “non-management of health and safety of workers” and “material waste”), six barriers to sustainable construction (“absence of historical data and exemplary projects on which construction professionals can build and learn from”, “lack of professional to handle the task”, “poverty and low urban investment”, “lack of urban and construction policy”, “lack of awareness” and “lack of technical know-how”) and three strategies to improve sustainable construction practices in Nigeria (“cooperation, partnership and participation”, “protection of biodiversity and conservation of natural resources” and “sustainability assessment system”) were found to be significant. Practical implications The study offers significant insights into the construction industry unsustainable practices, barriers to sustainable construction, as well as strategies for improving sustainable construction practices. These insights can be applied to other developing countries with an emphasis on geographical differences. Originality/value To the best of the authors’ knowledge, this is one of the recent studies in Nigeria that explored the context of sustainable construction in the construction industry by providing insights into the unsustainable construction practices, barriers and strategies to improve sustainable construction in Nigeria.
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