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Construction business failure: conceptual synthesis of causal agents

Gary D. Holt (The Centre for Business, Innovation and Enterprise, Birmingham City University, Birmingham, UK)

Construction Innovation

ISSN: 1471-4175

Article publication date: 11 January 2013

6428

Abstract

Purpose

Business failure has evolved a major research domain, both of corporate finance generally and of construction management, equally. Much of this attention has focused on assessing business “health” to predict longevity, but less so, on causal agents of failure. The aim of this study is to synthesise published knowledge in the subject domain to explore construction failure agents.

Design/methodology/approach

Extant literature drawn from both corporate finance and construction management disciplines are synthesised. Subjective, textual analysis is undertaken and causal agents thematically grouped. A failure relationship model is derived that conceptualises construction business failure in relation to its operating universe.

Findings

Generic failure agents (GFA) (ordered, based on percentage frequency among the literature observed) are shown to be: managerial, financial, company characteristics, and macroeconomic. The first three are proffered to reciprocally interact within a “universe” defined by the latter. Numerous sub‐causal agents (SCA) are attributed to each generic agent. The role of innovation is suggested to hold potential negative (as well as positive) impacts on mitigating GFA and SCA.

Research limitations/implications

Limitations relate to synthesis of contemporary published evidence, so a progressive iteration would be empirical study of identified agents within live construction environments. An implication is the call for research realignment; from emphasis on business health assessment, to that of root causal agents.

Practical implications

Advancement of theory relating to business failure has significant implications for construction management research.

Originality/value

The failure relationship model and its linkage to innovation is novel.

Keywords

Citation

Holt, G.D. (2013), "Construction business failure: conceptual synthesis of causal agents", Construction Innovation, Vol. 13 No. 1, pp. 50-76. https://doi.org/10.1108/14714171311296057

Publisher

:

Emerald Group Publishing Limited

Copyright © 2013, Emerald Group Publishing Limited

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