Management efficiency performance of construction businesses: Australian data

Balatbat, Maria C. A.; Lin, Cho‐Yi; Carmichael, David G.

doi:10.1108/09699981111111120

Cited by 18 publications

(18 citation statements)

References 23 publications

(33 reference statements)

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“…Other researchers yielded the same findings in different countries (Abdul-Rasheed and Tajudeen 2006). On the contrary, Balatbat et al (2011) reported that the performance of thirty Australian Securities Exchange (ASX) listed construction firms operating in civil infrastructure, residential and non-residential sectors over a 10 year period performed better than the All Ordinaries Index and a pool of blue chip companies. This was due to construction companies' higher efficiency in the utilisation of assets for revenue generation.…”

Section: Introductionmentioning

confidence: 70%

“…Recent studies (Abdul-Rasheed and Tajudeen 2006, Chen 2009, Balatbat et al 2010, Balatbat et al 2011 have excluded building material suppliers and real estate investment trusts (REITs) in the review of financial performance, ignoring their importance within the building construction industry. An industry report estimates about 6,100 establishments to be operating in the materials supply sector in 2010-11 generating an estimated AUD20.5 billion in annual revenues (IBISWorld 2011b).…”

Section: Introductionmentioning

confidence: 99%

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The effects of the global financial crisis on the Australian building construction supply chain

Thangaraj

Chan

2012

CEB

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This study involves a financial analysis of 43 publicly listed and large private companies in the building and construction supply chain from 2005 to 2010; straddling the period of the global financial crisis (GFC); and examines the impact of the GFC on the performance of these companies. The construction supply chain was divided into four sectors – material suppliers, construction companies, property developers and real estate investment trusts (REITs). The findings indicate that the impact was minimal for both material suppliers and construction companies, but especially severe for the more leveraged property developers and REITs. Building material suppliers and construction companies have benefitted substantially from the building economic stimulus package provided by the Australian government to mitigate the effects of the GFC. Decreases in the valuation of assets have, to a large extent, reduced the profitability of property developers and REITs during the GFC but these companies have recovered quickly from these adverse conditions to return to a sound financial position by the end of the 2010 financial year. The results will inform investors, managers and construction professionals in devising strategies for prudent financial management and for weathering future financial crises.

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Section: Introductionmentioning

confidence: 70%

Section: Introductionmentioning

confidence: 99%

The effects of the global financial crisis on the Australian building construction supply chain

Thangaraj

Chan

2012

CEB

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“…This study, therefore, intends to employ another perspective to organisational characteristics other than culture or leadership style in construction, which has received appreciable research attention (Chan and Chan, 2005;Limsila and Ogunlana, 2008;Ankrah et al, 2009). Construction industry today like all other industries is facing increasingly intense competition in their business environment (Balatbat et al, 2011). Competition stems from improved information systems and globalisation, coupled with the turbulent nature of the construction niche market.…”

Section: Introductionmentioning

confidence: 99%

Relationship between competitive strategy and construction organisation performance

Oyewobi

Windapo

Rotimi

et al. 2016

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Purpose The purpose of this paper is to examine the possible moderating role of organisational characteristics (organisational structure, management style and decision-making style) in the relationship between strategy and organisational performance among large construction organisations in South Africa. Design/methodology/approach The study adopted a quantitative research approach using a questionnaire survey to obtain data from 72 large construction organisations in South Africa. Using hierarchical multiple regression, the paper examines the relationship between the constructs discussed in the study. Findings The internal characteristics of the organisation form the vital basis for achieving optimal performance. The results obtained from the analysis revealed that decision-making style directly influences the measure of organisational effectiveness, while it could also be inferred that organisational characteristics partly moderate the relationship between competitive strategy and organisational performance. The findings indicate that internal characteristics is one of the means through which organisational strategic factors and contextual aspects are organised to achieve greater organisational performance levels. Originality/value The findings have theoretical implications for strategic management literature in construction as it extends the scope of research on strategic management from assessing a set of individual management practices to evaluating a complex mechanism that connects internal characteristics and competitive advantage. It is believed that this study will contribute positively to the role of organisational characteristics in the competitive strategy-performance relationships in large construction organisations in South Africa and to the ongoing discussion on emerging strategic management issues in construction.

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“…The research indicated that Indonesian construction companies earned high profits as a result of a high leverage ratio reaching, in some cases, to three times their equity. Balatbat et al (2011), in a study of 30 construction companies, listed in the Australian Stock Exchange, found that these firms performed better than the All Ordinaries Index and 25 per cent higher than blue chips companies. Contrary to common perception that construction companies are strongly leveraged, debt ratios were more favourable than that of blue chip companies, indicating that these companies were better placed to weather unexpected fluctuations or industry contractions.…”

Section: The Malaysian Construction Industrymentioning

confidence: 99%

Effect of the global financial crisis on the financial performance of public listed construction companies in Malaysia

Lai

Aziz

Chan

2014

Journal of Financial Management of Property and Construction

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Purpose – The aim of this case study is to characterize the impact of the 2008 global financial crisis on the financial performance of public listed construction companies. Design/methodology/approach – Financial analysis was conducted on 32 public listed construction companies in Malaysia. Twelve financial ratios were examined to determine the profitability, liquidity, activity, leverage and solvency of these companies over the period between 2005 and 2010. This was complemented by a distress analysis using Altman’s Z-index. The study also used a content analysis of the Chairman’s or Managing Director’s statement to shareholders to uncover the responses and strategic initiatives undertaken by the management in response to the financial crisis. Findings – The only direct impact of the financial crisis was a reduction in profitability. Total revenues and total assets of these companies continue to grow due to increased demand for construction from year 2007 following two large capital investment programs initiated by the Malaysian Government to mitigate the potential effects of the financial crisis. Net profits rebounded back to 5 per cent by year 2010. These companies immediately responded to the crisis with more prudent financial management; curtailing expenses, cutting dividends, reducing bank borrowings, increasing equity; and to the extent of disposing of assets to mitigate losses. Research limitations/implications – The sample of only 32 public listed companies out of a total of more than 60,000 construction companies may be considered small, but these 32 companies represent nearly 20 per cent of the total construction volume for 2010. Practical implications – The study documents the effects of increased capital spending by the government to mitigate the loss of investor confidence followed by a slowdown in economic growth during a period of global financial distress. Key findings will inform on prudent financial management to withstand future financial crises. Originality/value – The responses and strategies adopted by the management to mitigate the effects and to enhance future performance of these companies have been uncovered. These are important considerations in managing construction companies; the analysis and observations will be invaluable to researchers intending to study how the construction industry responds to a future slump in demand.

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Management efficiency performance of construction businesses: Australian data

Cited by 18 publications

References 23 publications

The effects of the global financial crisis on the Australian building construction supply chain

The effects of the global financial crisis on the Australian building construction supply chain

Relationship between competitive strategy and construction organisation performance

Effect of the global financial crisis on the financial performance of public listed construction companies in Malaysia

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