Developing an assessment model for the implementation of market orientation in Saudi construction organisations

Hashmi, A

Abstract

Rapid evolution in the internationalisation of developing construction markets (along with increased global competition, technological innovation, and economic and political issues) has led organisations to become more efficient and effective. This has in turn enabled construction organisations to adapt and survive in today’s highly competitive business environment. Dealing with such challenges while carrying out ongoing construction work requires the adoption of suitable strategic business approaches, such as the market orientation approach. Market orientation focuses on understanding customers’ conflicting desires and needs, staying up-to-date with competitors’ activities, and reforming organisational policies and procedures accordingly. Several conceptual and empirical studies have investigated the relationship between market orientation and firm performance. These studies found strong support for the positive impact of market orientation on firm performance in a number of different environments and contexts, especially in developed countries such as the United States, the United Kingdom, and Australia. Studies set in developing countries, such as Saudi Arabia, are still limited.

In recent years, the Saudi economy has experienced marked improvements in many industries, including the construction industry. This reflects Saudi Arabia’s successful economic development. In order to retain these improvements, however, the Saudi construction industry has to face a number of economic, cultural, global, and market challenges. Bhuian (1995; 1997; 1998; 2012) has investigated the relationships between such factors and business performance in Saudi industries; however, examining these effects in the Saudi construction sector may yield different results. All of these considerations have motivated the present research project, which aims to develop a model for assessing the implementation of market orientation in Saudi construction organisations.

In order to achieve this aim, a comprehensive review of the literature was undertaken. This literature review focused on factors that prompted Saudi construction companies to become market-orientated. These factors were divided into two categories; namely, internal factors (e.g., top management characteristics, interdepartmental dynamics, and organisational structure and systems) and external factors (e.g., competitiveness, market characteristics, and governmental regulations). These factors were then drawn upon to form a number of hypotheses. Accordingly, a survey, in the form of an Internet-based quantitative questionnaire, was designed in order to investigate these hypotheses. In particular, the questionnaire sought to identify factors affecting market orientation in Saudi construction companies. After administering the survey, only 220 usable questionnaires (out of 334 responses received) were analysed using factor analysis.

The findings of this study support the proposed hypotheses. In particular, the study indicated that the market orientation of Saudi construction companies is determined by 15 factors across the following four dimensions: Communication and Interaction, Risk-Taking, Competition, and Organisational Systems. On the basis of these findings, an assessment model for market orientation in Saudi construction companies was developed. Subsequently, a supplementary model was built in order to help company managers to implement the market orientation concept using the interpretive structural modelling (ISM) technique, which is an effective qualitative method for developing such models.
Fulfilling the aim of this research offers both academic and practical contributions to the study of market orientation. Researchers, for example, will be able to use this research to identify initial indicators and tools for further in-depth studies related to market orientation, while managers will gain added insight into and guidance on market orientation. This will ultimately help managers evaluate, reframe, and prioritise their managerial practices.

Citation

Hashmi, A. (in press). Developing an assessment model for the implementation of market orientation in Saudi construction organisations. (Thesis). University of Salford

• Thesis Type: Thesis
• Acceptance Date: Jun 12, 2015
• Deposit Date: Nov 9, 2015
• Publicly Available Date: Nov 9, 2015