Journal of Engineering, Project, and Production Management, 2017, 7(1), 33-44
Effects of Organisational Characteristics on Contractors’ Construction Cash Flow Forecasting Capabilities
1Lecturer, Department of Quantity Surveying, Ahmadu Bello University, Zaria, Nigeria, E-mail: abdullahimohammad@abu.edu.ng (corresponding author).
2Associate Professor, Department of Quantity Surveying, Ahmadu Bello University, Zaria, Nigeria.
3Professor, Department of Quantity Surveying, Ahmadu Bello University, Zaria, Nigeria.
4PhD student, Department of Quantity Surveying, Ahmadu Bello University, Zaria, Nigeria.
Project Management
Received November 10, 2016; received revision December 28, 2016; accepted January 9, 2017
Available online January 23, 2017
Abstract: Inadequate cash resources resulting from poor cash flows have been among the fundamental causes of construction project failures. Despite the panoply of cash flow forecasting (CFF) tools, the cash flow performance of many construction firms have been reported to be poor due weak Cash flow forecasting (CFF) process capabilities influenced by a couple of organisational characteristics. Although these organisational characteristics have been reported to significantly influence firms’ CFF process capabilities, the underlying mechanisms of how these organisational features and characteristics exhibit their specific influences on the cash flow forecasting capabilities of construction firms still remains underexplored. Therefore, this study aims at empirically exploring the influence of some organisation characteristics on the CFF process capabilities of construction firms. Best practices in CFF identified from the Royal Institute of Chartered Surveyors (RICS) Cash Flow Forecasting (CFF) guide were used to develop an assessment criteria used to assess the CFF capabilities of construction firms. The assessment was conducted through a questionnaire survey involving contracting organisations involved in both building and civil engineering works in Nigeria. The key best practices in CFF were ranked based on arithmetic mean value scores and averages were also determined for each of the four CFF components assessed (Knowledge and understanding CFF concepts and principles, Practical application, Practical considerations, and other Managerial issues). Hierarchical regression analysis was then used to examine the relationships between contractors’’ CFF process capabilities and some organisational characteristics. Results of the study reveals that organisational characteristics are strongly associated to firms’ abilities to prudently manage cash flows. The results of this study could serve as a basis for the strategic planning and improvement of Cash Flow Forecasting process by contractors in Nigeria.
Keywords: Cash flow forecasting, hierarchical regression, process capabilities, RICS.
Copyright © Journal of Engineering, Project, and Production Management (EPPM-Journal).
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 4.0 Unported License.
Requests for reprints and permissions at eppm.journal@gmail.com.
Citation: Abdullahi, M., Ibrahim, Y. M., Ibrahim, A. D., and Ahmadu, H. A. (2017). Effects of Organisational Characteristics on Contractors’ Construction Cash Flow Forecasting Capabilities. Journal of Engineering, Project, and Production Management, 7(1), 33-44.
DOI:
10.32738/JEPPM.201701.0005
Full text
