26th International Association for Management of Technology Conference - IAMOT 2017

Small construction companies in Gauteng, South Africa, have experienced many obstacles in their attempts to successfully complete construction projects. The general failure rate of construction companies, in South Africa, is historically high. This research focuses on investigating reasons as to why construction companies fail in South Africa, specifically Gauteng Province. The South African government has focused resources on contractor development, however only a minority have advanced and developed. Literature indicates that contractors experience challenges from financial, managerial and political barriers. Research indicates the lack of development of Small, Medium and Micro Sized Enterprises (SMMEs) have been viewed as being at globally problematical. This dissertation identifies existing relevant literature reporting on problems relating to the lack contractor development and construction project failure. Furthermore, the research investigates local and international best practices for contractors that have resulted in the success of construction companies. The researcher conducted an analysis of the construction industry focusing on a group of contractors involved in a contractor development program. The participants were subjected to a one-on-one interview, as well as the completion of a detailed questionnaire. All participants involved are part of the First National Bank (FNB) Incubator program. The questionnaire focuses on establishing the financial status, management skills, appropriate staffing, and assessment of technical and contractual skills. The data analysis would benefit the construction industry in providing insight into the contractor’s deficiencies and challenges. The results indicate that the failure of many small construction companies has been due to many factors including certain factors working in combination. Furthermore, the research focuses on revealing key factors resulting in the collapse of construction companies as well as how these factors should be addressed, with the aim of providing a solution to the lack of contractor development and the failure of construction companies. This dissertation compares best practices, for contractors globally, together with details as to potential implementation strategies. The development of contractors is vital to the South African economy [5]. The inability of various parties and the contractors themselves to address key factors has resulted in contractors struggling to develop or sustain their businesses’ long term plans. These plans need to be successfully created and implemented, if there is to be a change in current circumstances.