Determining Success Factors for a Construction Organization: A Structural Equation Modeling Approach

Abstract

Ensuring success in the construction business is the aim of the owner/top management of the construction organizations. Previous research indicates that the presence of certain factors in an organization make it more successful compared with the organizations without those factors. Because the construction business is one of the riskiest businesses in the world, identification of such factors and adoption of these factors in the work ethic of the company is of vital importance for the owner/top management of the construction organizations. This study aims to test the hypothesis that success factors influence the success of the construction organization and also explores the impact of these factors on the success of the construction organization. The research methodology involved seeks responses from experts in the construction industry through a questionnaire survey. A total of 106 industry experts from 90 different construction organizations operating in India participated in the survey. Structural equation modeling (SEM) was used to test the hypothesized positive relationships between six success factors, and the success of the construction organization is measured against five performance factors. The findings of the study indicate that top management competence is the most important factor followed by “experience and performance.” The study could provide an excellent value addition to the professionals working in the field of construction management. Further, the results would enable professionals to focus on fewer factors rather than attending numerous factors for optimum result.