FACTORS CAUSING CONSTRUCTION COMPANY FAILURE

Abstract

In a competitive business environment, companies have to consider some critical issues to prevent business failures and continue to survive. There have been many factors that can cause business failures in the construction industry. Poor management practices, unqualified subcontractors, and lack of communication are some of the critical reasons that can negatively affect the business in construction and thus result in failure. The aim of this study is to investigate the critical factors causing construction company failure. Within this context, a survey was conducted among 40 small-medium sized Turkish construction companies. Top-level managers of the companies were interviewed and a questionnaire was administered during face-to-face interviews. The interviews took place over a five month period between January and May 2007. The ranking of the critical failure factors has been determined by using the Simple Multi Attribute Rating Technique (SMART). Based on the results, lack of business experience and country’s economic conditions were found to be the most important factors to company failure.

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