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Tansey, P and Spillane, J (2016) From Crisis to Opportunity: Turnaround Strategies of Large Irish Construction Contractors During the Period 2007-2015. In: Chan, P W and Neilson, C J (Eds.), Proceedings 32nd Annual ARCOM Conference, 5-7 September 2016, Manchester UK. Association of Researchers in Construction Management, 269–278.
- Type: Conference Proceedings
- Keywords: Contemporary strategy, internationalization, organisational decline, retrenchment, turnaround strategies.
- ISBN/ISSN: 978-0-9955463-0-1
- URL: http://www.arcom.ac.uk/-docs/proceedings/fd1ce1cd5b63637881b0f306dc1258ac.pdf
- Abstract:
The sudden change in environmental munificence level in the construction sector during the period 2007 – 2015 provides a natural experiment to investigate strategic and operating actions of firms, particularly during an environmental jolt. In such a turnaround scenario, even firms that accumlate valuable assets or position themselves in nascent and emerging markets, may still not be doing enough to support a significant competitive advantage. Statistics on business failures corroborate that neither academics nor practitioners have succeeded in guiding strategic action during periods of environmental jolt, where the environmental munificence falls precipitously. Despite the recent increase of turnaround research in the general management domain, its use in the construction management realm remains underexplored; hence the emergence of this topic. To address this research gap, five exploratory case studies of an ongoing PhD study were used to examine the turnaround responses of construction firms during a period of economic contraction and growth. The results show that during the early stages of the 2007 recession, the majority of firms undertook operational actions, including cost and asset retrenchment; while mid-way through the recession, all firms endorsed strategic actions, such as adjusting their domains and diversifying into new markets, both nationally and internationally. The case studies further reveal, that due to a lack of work at a local level, the UK (United Kingdom) market proved to be the most attractive for all firms; while those that expanded into Eastern European markets, failed. Most of the strategic and operational practices tended to resonate with the Practice-Based View (PBV), given that none of these practices are technologically complex or secret. The findings provide valuable assistance for construction contractors in dealing with organisational decline and in developing a successful turnaround response. Additionally, this research provides an axiom for academic researchers in their future studies in this field.