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Presentation For MOC
Presentation For MOC
By;
Sara D.
September 2021 1
1. INTRODUCTION
1.1 Background of the study
1.2 Statement of the problem
1.3 Objectives of study
1.3.1 Generally Objectives
1.3.2 specific Objectives
1.4 Basic research question
1.5 Significance of the study
1.6 Scope and limitation of the study
2. RESEARCH METHODOLOGY
2.1 research Area
2.2 Target population
2.3 sampling techniques
2.4 data collection methods
2.5 data analysis
2.6 validity and reliability
3. RESULT AND DISCUSSION
3.1 Summary of survey response
3.2 contribution factors
3.3 performance factors
3.4 challenges factors
3.5 challenges improvement mechanism
4. Conclusion and Recommendation
2
1. INTRODUCTION
1.1 Background of the study
Small and micro enterprise (SME s) are one of the most important forces for the
development of construction industry around the world (Drbie & Kassahun,
2013).
Study conduct by (Goshu Fufa MBA, 2015) revealed that SMEs are an important
contributor to economic growth and employment creation in Ethiopia.
The construction industry dominated by SME s who face an emerging trend of
unique challenges in the implementation of projects(Kulemeka et al., 2015).
The Majority of local entrepreneurs establishing micro businesses are susceptible
to failure that is attributed to both internal factors (wrong pricing, negative cash
flows, poor record keeping, management problems, lack of planning and faulty
products) and external factors government taxation, load shading, in adequate
capital, poor markets and high rents )in construction industry.
Cont.…
The main factors that affect the performance of SMEs in developing countries is not
their small size but their isolation, which hinders access to markets, as well as to
information, finance and institutional support(Chowdhury et al., 2013).
The argument that small businesses in Africa are crucial in the role they play in
employment creation and general contribution to Construction industry development.
Therefore, the study is to assess the contribution "small and SME “in the construction
industry and the challenges, and to develop improvement strategies
1.2 Statement of the Problem
SMEs have an important role to play in the development of the construction industry
(Africa, 2016).
SMEs are considered as the engine of growth in most economies due to their significant
contribution in terms of employment creation (Arthur-aidoo, 2018) .
study conducted by (Dinku, 2013) revealed that SMEs contractors in Ethiopia are
instruments to generate greater employment .
Concerning the capacity building needs and how their successes can be achieved, so that
SMEs can be assisted in a way that is truly able to build their capabilities in today’s
construction sector (Lee et al., 2020).
There is no adequate industry that contribute job opportunity and capacity of
employment in West Guji since it recently established as one of Oromia zone. However,
now it found on growing in aspect of construction industry that SMEs have been
participating as stakeholder.
Cont.…
Performance of SME s in cost, time and quality aspect are factors that needed
sustainability of construction industry.
The projects executed by SME s firms achieved the desired cost and time
performance level, as contended by Uduak (2006: 2) and Ibrahim et al. (2014).
The challenges that face stakeholders such as the Small and micro enterprise
(SME s) during construction phase are the one of construction industry
development obstacle.
Study conducted by (Ali et al., 2020),revealed that critical factors challenges
SMEs are financial indiscipline by contractors, lack of experience and track
records, corruption, poor design and specifications, lack of entrepreneurship skills
and delay in payment for work done.
Cont.…
The reason of this study was conducted is to assess the contribution and
performance of SMEs contractors in this construction industry development.
In addition, the study was identify the challenges of SME s and improvement
mechanism to overcome such problems and make them progress while being
active participants of the construction industry.
1.3 Objective of study
In order to assess the contribution and impact of "small and micro enterprise (sme)
“development and the challenges in construction industry, the study were attempt
to answer the following basic research question.
What are the contribution of Small and Micro Enterprises on construction
industry development?
What are the performance of Small and Micro Enterprises on construction
industry in quality, cost and time aspects?
What are the challenges of Small and Micro Enterprises in construction
industry?
What are the ways to mitigate problems and challenges of Small and Micro
Enterprises in construction industry
1.5 Significance of the study
Conducted a pilot study revealed that fixed rate for different site
location , cement availability problem, delay of document evaluation
and need of corruption by admiration body are the main challenges that
SMEs face
The questionnaire has five section
2.5 Data analysis methods
The term analysis refers to the computation of certain measures along
with searching for patterns of relationship that exist among data-groups
(Kothari, 2004 p.122). A descriptive statistical method was used to
analyses the questionnaire surveys.
Cont.…
Reliability Statistics
.810 73
Table 4. 1 Summary of survey response
Sig. (1- .
tailed)
N 128
**. Correlation is significant at the 0.01 level (1-tailed).
Cont.…
Result from the correlation analysis show that positive significant associations
exists between Employment creation , Building employee capacity and
Incubator for growth of companies variables (p < 0.01).
This implies that an increase in one variable was strongly associated to an
increase in another significantly correlated variable and vice-versa.
This implies that an increase in one variable was strongly associated to an
increase in another significantly correlated variable and vice-versa.
In other words, an increase in the Employment creation is strongly associated
to an increase in the corresponding Building employee capacity and vice-
versa.
Cont.…
Performan
ce
Time 2 2 2 2 Medium
2.75 3.21 3.20 3.12
Cont.…
Correlations
Quality Cost Time
Sig. (1-tailed) .
N 128
**. Correlation is significant at the 0.01 level (1-tailed).
Cont.…
among the technical factors listed in questionnaire, lack of software and poor
record keeping skill were ranked in first and second position with mean scores
3.88 and 3.81respectively as technical factors in which SMEs highly challenged in
WGZ .
The purpose of a software is to enhance the quality of output with minimal effort,
which cannot be achieved through manual means.
poor; scheduling performance, contractual understanding ,work methodology ,cost
break down, quantity estimation and drawing understanding skill were also
ranked beside to poor record keeping respectively and expressed as high SMEs
technical challenges with mean ranges from 3.80 to 3.58
Others technical factors such as Poor; resource allocation, skilled labor,
entrepreneurial, employees motivation and communication skill are moderately
challenged SMEs contractors..
Cont.…
3
Argument of members on profit sharing 3.76 High
1
Argument of members on tools/equipment 2.86 Medium
division after work finished
4
Conflict with labor on their salary payment 3.70 High
2
Cont.…
Finding revealed that conflict of interest between SMEs members on profit and
labor salary payment are highly challenged SMEs in construction industry and
were ranked in first and second position with mean scores 3.76 and 3.70
respectively.
conflict of SMEs members on sharing of advance and tools/equipment after
work finished are moderately challenged SMEs and were ranked in third and
fourth position with mean scores 3.14 and 2.86 respectively.
Any conflict between stakeholders leads failures of contractors’ performance in
construction industry.
This finding supported with research conducted by (Jha & Iyer, 2006) that
noted conflicts among team members is high-ranking failure of SMEs.
Cont.…
Finding respondents perceived that poor management of; risk, Wastage, working
environment and cash flow are top factors with which SMEs highly challenged in
construction industry
Poor Practicing of risk , Wastage, working environment and cash flow management
are resulting in fatalities which may also be costly to the firms and project profits.
Reduced risk ,wastage on site such as reinforcement, formwork and concrete and
others are important factors for SMEs success in construction industry.
This result is supported by (Ankomah et al., 2021) who found that Notwithstanding
SMEs significant contributions, they face fundamental problems such as huge
material wastages among others.
Poor equipment and labor management were ranked in fifth and position with mean
scores 3.27 and 3.15 respectively as management factors that moderately challenged
SMEs in construction industry.
Cont.…
Procurement factors
Procurement factors Overall respondents
Mean score Ranks Challenges
Level
Negotiate bid 4.02 1 High
Focus on lowest bidder 3.76
2 High
Inaccuracy of Engineer quantity estimation 3.31
5 Medium
Delay of Bid document evaluation by clients 3.13
6 Medium
Incompleteness of contract document 3.05
7 Medium
Delay for variation approval 3.63
3 High
Inaccessibility of site information 2.99
8 Medium
Suspension of projects due to drawing modification period 2.85
9 Medium
Delay of submitted claim responses 3.41
4 Medium
Cont.…
Negotiate bid, least bidder strategies and Delay for variation approval are top
factors that were ranked in first, second and third position with mean scores
4.02, 3.76 and 3.63 respectively as high challenges of SMEs contractors in
construction industry.
Negotiated tendering is directing appointment of a selected bidder based on
relativeness or performance of bidder that did not create equal chance for SMEs
bidder in competition to get job opportunity.
claim responses delay, Engineer quantity estimation Inaccuracy and bid
document evaluation delay, contract document incompleteness, site information
inaccessibility and projects suspension which challenged SMEs moderately and
Cont.…
10 Medium
4.08
Cont.…
Working capital shortage, payment delay for work done, non-consideration for
cost of remove and replace underground installation not specified in contract, and
Lack of cash flow statement are others financial related factors were ranked in
sixth, seventh , eighth and ninth with mean value 3.86,3.85,3.77 and 3.59
respectively and expressed as high challenges of SMEs contractors.
Working capital and Owner‘s equity are essential resource that helps SMEs for
their business sustainable in construction industry. If SMEs face shortage of these
resource, they not launching their business and expand a company.
Overall respondents perceived that high percent of advance payment deduction
from interim payment and challenges during obtaining advance payment factors
has medium challenges on SMEs success.
Cont.…
3 High
Lack of available market information 3.83
4 High
Availability and distribution problem of cement 4.52
1 Very High
Low profit margin due to competent with general 3.45
contractor
5 Medium
High rate of price escalation 4.23
2 High
Cont.…
2 High
Need of bribes by Engineer for certificate 3.73
approval
3 High
Need of Bribe by finance sector to facilitate 3.71
payment
4 High
Cont.…
clients 6 Medium
Political interference to create job 3.88
opportunity 3 High
Transportation cost due to Remoteness from 3.88
Spearman's rho CiF Correlation 1.000 .096 .139 .092 -.020 .233** .152* .047
Coefficient
Sig. (1-tailed) . .141 .059 .152 .412 .004 .044 .301
N 128 128
a positive relationship was found between CiF and MrtF (r =0.233, p < .05), TF and MgtF
(r = .267**, p < 0.01), PF and FF (r = .438, p < 0.01), FF and EF(r =. 549**, p < 0.01),
MrtF and CoF(r =. 408**, p < 0.01), which are statistically significant at 99% confidence
level.
It implies that increasing of one challenges would increasing other and vice versa.
This means technical factors such as lack of; software, labor,entrepreneurial and resource
allocation skill would leads management challenges such as poor cash flow, labor and
wastage management skill. As result of finding from correlation, indicated increasing of
procurement factor would increasing financial factors that challenged SMEs contractors.
There is also positive correlation between CiF and CoF(r =.152*, p < .05), FF and MrtF (r
=.200*, p < .05), MrtF, EF (r =.188*, p < .05), and CoF and EF(r =.194*, p < .05).
Cont.…
Sig. (1-tailed) .
N 8
*. Correlation is significant at the 0.05 level (1-tailed).
**. Correlation is significant at the 0.01 level (1-tailed).
3.4 Challenges improvement mechanism in
Construction Industry
Developing technical skill through training and sharing from others 1.66 High
advanced company
Developing management skill through training and sharing from 1.67 High
others advanced company
Promoting ethical practices 2.10 High
Facilitate financial accessibility for SMEs 1.66 High
Working and make discussion with team on any issue to hinder 1.63 High
conflict will occur between members
Facilitate market information for SMEs 1.63 High
Improving procurement strategies 1.71 High
Improving environmental related condition that challenges SMEs 1.98 High
Cont.…
4.1 Conclusion
Results of the finding revealed that SMEs’ contribution in West Guji Zone is
not as expected, it is average in terms of employment creation, building
employ capacity and being incubator for future larger company and similar
result were found in terms of performance, average level of quality, time and
cost performance of projects.
Concerning the challenges, the results implies that marketing, corruption,
financial and environmental related factors are the top four challenge
categories with which SMEs highly challenged in construction while
technical ,management conflict of interest and procurement related factors
were found to impact at medium level.
Cont.…
5.2 Recommendation
SMEs contractors should be adapted practice of sharing experience and training
from other experienced company to improved their technical skill such as
software performance, rate analysis, quantity estimation, record keeping, resource
allocation, work scheduling and methodology skill and drawing and contract
understanding performance
clients should be using competitive tendering strategies to create job opportunity
for an eligible bidder , paid for work done on time and consider interest for
delayed payment deserved for SMEs contractors.
Result of finding responded by overall respondents revealed, need have bribe by
administration to create job opportunity is extremely challenged SMEs
contractors in West Guji Zone. Therefore, administration should be create job
opportunity for SMEs fairly and based on their performance without any
corruption.
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