Factors affecting performance of local road construction companies in Kenya

Abstract

Infrastructure development (including road projects) constitutes an integral part of public policy on economic development for any country. However, to realize optimal performance of a road project, performance of construction companies involved ought to be measured and managed. Local construction companies in developing countries are internally weak and severely affected by problems confronting construction industries in their respective countries. Moreover, they face a dilemma on how to evaluate and manage performance and therefore have mainly relied on financially focused performance at the project level which have failures because of 'lagging metrics'. Consequently, this study evaluates performance of local road construction companies in Kenya in four broad areas namely: Financial, customer, internal business process, and learning and growth; in order to determine predominant factors affecting their performance. This study involved 56 construction companies and 1 road agency in Kenya. The performance of construction companies was measured using pre-determined framework comprising of Key Performance Indicators and analysed through descriptive statistics to establish a cause-and-effect relationship which identified pre-dominant factors affecting performance. The overall performance score was 54.54%; while pre-dominant factors affecting performance was determined as: Poor management of companies, lack of a long term development strategy and lack of deliberate investment in training of employees. This study is useful in improving performance of local construction companies as well as growth of construction industry. It can also inform government policy in developing blueprint for development of contractors in Kenya.