The Asian financial crisis has adversely affected many of the domestic construction organizations in Malaysia, bringing some organizations to the brink of insolvency. It demonstrates that a construction organization's performance is sensitive to the prevailing economic conditions. This paper seeks to model the dynamic performance of a publicly listed construction organization in Malaysia. First, a diagrammatic model consisting of two interconnected causal loop diagrams is developed to represent the organization's capacity and its financial balance sheet. The diagrams provide a clearer understanding of the interactions between the country's construction market and the organization's financial, technical and managerial capabilities. Next, the causal loop diagrams are converted into a mathematical model using specialized software. Simulation results from the model are validated against historical time series data. Graphical plots of the simulation model and results from sensitivity analysis indicate that the model is capable of replicating the general behaviour of the organization.Construction Company, Performance Modelling, System Dynamics, Malaysia,
The changing trends in the Asian construction sector are creating both new opportunities for and threats to the domestic construction organizations. To improve the competitiveness of these organizations, senior managers are tasked with the responsibility of selecting and implementing improvement policies to enhance organizational performance. This study utilizes the system dynamics methodology to provide a careful and holistic evaluation of the policies. A model is built to represent an average performing construction organization listed on the Kuala Lumpur Stock Exchange. Long-term simulation of the validated model produces the forecasted organization performance. Three improvement policies recommended by CIDB (2000) that have different cost and benefit impact profiles are selected for evaluation. Taking into consideration the impact of the economy on the construction industry, simulated results of the policies and combination of the policies indicate that the implementation of short-term improvement policies produces superior improvement in organization performance when compared with other policies.Construction Company, Performance Evaluation, System Dynamics, Malaysia,
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