Abstract
M.Tech. (Construction Management)
This research was conducted to investigate the causes of construction
company failure in the Free State Province, for the reason that there are many
risks involved in running a construction company due to the nature of the
construction industry. The study focused on four major factors involved in
common business failures which are Managerial, Financial, Expansion and
Economic environmental factors. The objectives of this research were
achieved by means of a questionnaire that was distributed to 120 small and
medium contractors in the Free State Province. These contractors were
identified in the CIDB website and were listed as expired, suspended or deregistered
then randomly selected. 102 questionnaires were received and 6
questionnaires were spoilt which meant that the total workable questionnaires
were 96 which was at a return rate of 80%. The data analysis that was used
was done by quantitative method. The data gathered include the main four
factors (managerial, financial, expansion and economic environment) of the
study.
Financial factors were found to be amongst the leading causes of company
failures, whereby most respondents said that their companies did not have
adequate cost and accounting practices and systems in place. Delay in
payment from clients was also a amongst the major causes for failure
because the respondents said their companies always had cash flow
problems and had heavy debts to their suppliers.