Survival Strategies in the Economic Recession at Firm Level: The Case of Large Scale Construction Companies in Sri Lanka
Chandana Jayalath *
Department of Quantity Surveying, University of Vocational Technology, Sri Lanka.
*Author to whom correspondence should be addressed.
Abstract
As a form of business, construction contracting is heavily sensitive to recessions in the economy. As in many other countries, the Sri Lankan construction industry has also suffered a high proportion of business failures due to the current economic recession. Hence, the aim of this research is to delineate the commercial strategies adopted by construction companies in Sri Lanka to endure short term survival in the recession. A comprehensive literature survey was carried out to reveal these strategies in different contexts. A questionnaire survey was subsequently administered among the large scale contractors to gauge their responses using the Mean Item Score (MIS) and the Relative Importance Index (RII). The study concludes that Cut non-essentials and dispense the indispensable, De-scaling/De-scoping, Minimizing wastage, Getting clear on basic costs and adjust the profit margin with a sense and Slowing down the progress are among the first five strategies found to have been prioritized at contracting firms. Along with 43 strategies, the study recommends that there is a need for firms to network and collaborate to share resources, in order to survive in business during the fierce conditions of the economy.
Keywords: Construction contracting, economic recession, survival strategies