Critical Success Factors for the Construction Industry in India

Abstract

The dynamic nature of the Indian construction industry significantly impacts economic development by contributing to employment and Gross Domestic Product (GDP), while also playing a pivotal role in fostering infrastructural development that supports various other sectors. In order to effectively manage and enhance the industry’s performance, sustainability, and competitiveness in a global market, it is crucial to identify critical success factors that contribute to the growth and expansion of the industry. Although extensive research has been conducted on success and performance factors at both the construction project and organizational levels, exploration at the industry-wide level remains largely unexplored. This research aims to address this gap by determining and evaluating the critical success factors essential for the construction industry in India. This study seeks to fill this void by providing a comprehensive analysis of these factors within the broader industry context.

This study employs an extensive literature review, identified 30 success and 15 performance attributes through surveys administered to 129 industry professionals averaging 15 years of experience. The study identified key success attributes such as the availability of equipment, materials, and workforce; qualified professionals; higher workforce productivity; and easy finance. In parallel, the key performance attributes highlighted include qualified professionals in the industry, technological development, annual growth rate, labour productivity, and high annual construction demand/market share.

Employing methodologies such as factor analysis, stepwise regression, and structural equation modelling, the research delineated seven pivotal success factors: competent workforce, infrastructure and economic development, financial opportunity and industry image, favourable government policies, regulatory and skill development, market attractiveness and collaboration, and socio-economic stability. Additionally, the study revealed four performance factors: industry competence and societal impact, profitability and stakeholder satisfaction, industry attractiveness, and research and development strategy. The findings highlight a strong positive correlation among the identified factors, placing particular emphasis on the competent workforce, closely followed by infrastructure and economic growth. This study evaluates the relative weights of each success and performance factor using a consistent fuzzy preference relation, based on inputs from 20 experts across various construction organizations. Additionally, a model was constructed using fuzzy synthesis to elaborate on the interrelationships among these factors.

This investigation offers a thorough examination of the interplay between success and performance factors in the construction industry. This study provides invaluable insights for effective resource management and strategic decision-making in the construction industry. It also establishes a solid framework for policymakers aimed at enhancing industry standards and practices. It offers a novel, comprehensive framework for assessing the construction industry’s performance. The findings of the study provide valuable guidelines for stakeholders facilitating the assessment and improvement of the construction industry.