Optimizing contractor organizational agility in dynamic markets

Over the last twenty years, governments at all levels have made changes to increase their level of accountability and transparency. The researcher proposed that the concepts of organizational agility (OA) (leveraging core competencies, proactively seeking new opportunities, implementation of performance metrics, and strategically planning projects) are well-aligned with the public accountability systems. In the first part of this dissertation, the researcher examined the components of a “Value-Based Model” for public works contractor selection and project delivery, and its propensity to increase public accountability. The researcher studied 415 projects ($561.47M value) delivered with the Value-Based Model at eight different public agencies over a ten-year period.

Next, the researcher analyzed factors affecting contractor organizational agility. In light of the “Great Recession”, the concepts of organizational agility offers insights into companies could have made different strategic decisions to avoid many of the issues faced. Construction was particularly affected: by January 2010, unemployment reached approximately 20 percent. One way to combat declining profits is to adjust general overhead costs (indirect expenses). These costs include items such as home office expenses, business development, and bonuses. The objective of the second part of this research was to conduct a study of how contractors responded to dynamic market conditions and to identify if whether contractors’ company attributes impacted their responses to the market changes. A total of 437 contractors responded to the survey, and 92 percent reported that they reduced overhead costs in five areas, by an average of about 15 percent. Additional analysis suggests that there are distinct categories of overhead flexibility.