Factors Influencing the Viability of MSMSCFs: History
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Contributor:
Olubimbola Oladimeji
,
Mohammad K. Najjar
,
Carlos A. P. Soares
,
Assed N. Haddad

Identifying factors influencing the viability of medium, small, and micro scale construction firms (MSMSCFs) is a crucial precursor in positioning such firms to aid economic and infrastructural development, especially in developing countries.

  • medium, small and micro scale construction firms (MSMSCFs)
  • building information modelling (BIM)
  • viability

1. Introduction

BIM can be used for many different things, including project management, facilities management, design and construction integration, optimization, risk evaluation, cost estimation, scheduling, communication, coordination, and documentation [1][2][3]. BIM is widely regarded as a valuable tool for minimizing fragmentation in the construction sector, increasing productivity, and cutting the high costs attributed to poor interoperability [3]. BIM is both a process and a technology. BIM’s technological component aids project stakeholders in simulating the construction site and what is to be built to find any potential issues with the design, construction, and future operation. All project stakeholders’ functions are integrated through the close collaboration made possible by the BIM process component.
BIM helps with virtually all the processes involved in the construction of building structures. All facets of a building’s design, construction, use, and maintenance are covered by BIM [2][4][5][6]. Due to its potential to improve construction firm performance, BIM has been embraced by the construction industry more frequently in recent years. Although it is generally accepted that greater BIM competency will increase business performance and subsequently viability, no study has likely been able to determine which factors impacting construction firms’ viability are enhanced by the various BIM benefits.
Owing to the strategic benefits of BIM, studies have shown that large firms, especially in developed countries, are increasingly utilizing BIM technology and processes to optimize their building production capacity [7]. On the other hand, micro- and small-scale construction firms in all countries are yet to comprehend and utilize these gains in growing their construction business [7]. Identifying BIM benefit factors in factors influencing the viability of medium-, small-, and micro-scale construction firms (MSMSCFs) is a crucial precursor in positioning such firms to aid the economic and infrastructural development of developing countries. Underutilization of BIM technology is particularly poor in developing countries as there are construction professionals who are not aware of BIM and some who are still making use of traditional drawing tools or at best the popular two-dimensional computer-aided design [8].

2. Factors Influencing the Viability of MSMSCFs

Research has shown that viability in the construction contracting industry goes beyond financial profitability, even though financial profitability is a critical performance indicator that determines a company’s viability [9][10]. Factors that affect a contractor’s viability, aside from financial factors, include quality of service and work [11]; cash flow [12]; and growth and financial stability [9]. Numerous studies on how construction enterprises operate, forecasting failures and losses, macroeconomic policies, important success and failure criteria, and similar topics have emphasized and reached conclusions on numerous factors determining the viability of construction businesses. Numerous studies on how construction enterprises operate, forecasting failures and losses, macroeconomic policies, important success and failure criteria, and similar topics have emphazised and reached conclusions on numerous factors determining the viability of construction businesses [10][13]. Studies on construction businesses’ financial management have identified several factors that place a strong emphasis on managing the organization’s financial activities in the realization of the business’s overall strategy as well as on achieving the strategic plans and objectives of such organizations. Such factors include construction profit margin [14]; building construction loan accessibility [15]; Cash for construction work [9]; credit purchase of construction materials [15]; interest on loans [16]; cost of plant and equipment purchase, maintenance, and hiring [17]; cost of construction labor [18]; prompt payment of work certificates [19][20]; and cost of construction materials [21].
Construction firms’ success and failure are best assessed over time, according to studies on construction business evaluation and market environment, by factors such as successful tender rates and construction work turnover [22]; firm size [23]; bad weather and natural disaster [24]; tax [25]; inflation [26]; tendering practices [22]; corruption [27]; government policy [28]; the firm’s impact on the community [29], and the age of the operation [30].
Technical capability, depth, structure, and robustness are all hallmarks of technical competence in the construction industry. High-performance contractors are known for having a lot of expertise, which reduces technical risk and allows them to handle the only remaining risk that can reduce their profit. Due to their technical knowledge, they provide high quality at the lowest possible price. The technical viability of a construction firm is influenced by the following factors: specialization of construction work [31]; availability of skilled craftspeople [32]; use of cutting-edge technology in building [33]; technical know-how in construction [34]; and availability of high-performing personnel [35].
The significance of managerial ability and competence within the construction industry has been highlighted in studies on construction operations and company organization. Employee contentment [36]; credibility of good client-contractor relationships [37], management of construction site materials [38]; reliability of construction cost and time [39]; organizational competency customer satisfaction [34]; the quality of service and work [39]; and factors related to labor, plant, and equipment management on construction sites [40][41] were identified.
The number of accidents and fatalities in the construction sector is incredibly high around the world and construction safety has become a major concern [42]. When compared to other industries, the construction sector has a six-fold higher risk of workplace fatalities [42]. The viability of the health and safety of the construction sector is influenced by these performance factors and metrics [43]: accessibility to safety gear; rate of accident; and accident cost.
Recent research suggests that psychosocial- and organizational culture, professional ethics and conduct, and the COVID-19 epidemic are amidst factors influencing the viability of construction enterprises [44][45][46]. Psychosocial- and organizational culture have a significant impact on the growth and financial performance of construction enterprises [47]. To promote greater construction business performance, Goulding et al. [48] advocated for the integration of psychosocial diffusion indicators into the Turkish construction industry. Previously, Takim et al. [49] assessed psychological environmental factors in the context of private construction businesses in the event of disasters. All these studies considered various influencers of construction firms’ viability.
Recently, the COVID-19 pandemic’s effect on all sectors of the local and world economy is being researched, and micro-, small-, and medium-scale enterprises (MSMEs), of which MSMSCFs are a significant part [50], were among the hardest hit [51]. Findings revealed the strategic role of digital activities in various firms’ marketing and operations to improve their performance and by implication their viability in the COVID-19 pandemic era [52]. Coincidentally, the drive and call for the adoption of BIM had occurred before the outbreak of the pandemic. BIM Open Source software facilitates access to a common data environment in the construction sector and it is expected to be established at the outset of the construction project, following international standards. This can aid in successful project management by giving quick insights into the performance of construction projects and by removing wasteful activities such as rework and defects [53]. The great benefits of the digitization of construction activities offered by the adoption of BIM can be received at no better time than now given the threats to public health. To this end, it is important to emphasize and elaborate the benefits of BIM and evaluate its place in the viability of MSMSCFs.

This entry is adapted from the peer-reviewed paper 10.3390/buildings13041087

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