System Dynamics Approach to Exploring Performance Enhancement in a Construction Organization

Abstract

Governments and firms in developing economies are concerned about ways to improve performance of local firms. A wealth of research has already discussed the reasons for decline in performance and suggested a number of possible improvement strategies. Among these documented strategies, there are many options for developing economies. The selection among these options, however, depends upon the unique organizational set-up and many other local factors. Moreover an implementation scenario of the selected options requires an experimentation period either by actually implementing the option as a policy or simulating the complete process in a model and thus creating a laboratory for learning. The former option is costly while the latter requires dynamic modeling of engineering processes integrated with the local influencing factors on overall performance. The latter approach is adopted in the present research using system dynamics techniques to model the problem. The effects of three strategic policies on the performance of a construction firm have been simulated. A case study is conducted to validate the utility of some selected policies for performance enhancement.