Performance measurement of construction firms in developing countries

Abstract

Many large contractors in Vietnam are lacking an effective method to measure their performance and identify weaknesses and threats. The integration of the balanced scorecard (BSC) and strengths‐weaknesses‐opportunities‐threats (SWOT) matrix is described to evaluate the strategic performance of large contractors in Vietnam. The AnGiang Construction Company (ACC) was used as an example to validate the approach. The BSC‐oriented SWOT matrix is developed to formulate the short‐ and long‐term strategies of ACC. The benchmarking approach was adapted to evaluate the ACC's performance and expose its competitors' best practices for improvement. The results indicated that only the financial perspective is at a poor level on the performance scale whereas the customer, learning and growth, and internal process perspectives are at a moderate level on the performance scale. The effective evaluation matrix uncovered 11 effective solutions that could be grouped under four categories: (1) innovating organizational structure; (2) effectively managing processes at construction sites; (3) stepping up cost control; and (4) improving equipment management. The findings may benefit not only Vietnamese construction firms but also firms in other developing countries to identify their strategies, quantify the strategic performance, and improve their competitive advantages.

Keywords:

• Balanced scorecard (BSC)
• construction companies
• SWOT analysis
• performance measurement
• Vietnam