ADDIS ABABA UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

SCHOOL OF COMMERCE

FACTORS AFFECTING CONSTRUCTION PROJECT

PERFORMANCE: THE CASE OF ETHIOPIAN INSTITUTE OF
AGRICULTURAL RESEARCH

By: EYOB SISAY METAFERIA

ADVISOR: TEKLEGIORGIS ASSEFA (PH.D.)

JUNE 2022

ADDIS ABABA, ETHIOPIA

 ADDIS ABABA UNIVERSITY
COLLEGE OF BUSINESS AND ECONOMICS
SCHOOL OF COMMERCE

FACTORS AFFECTING CONSTRUCTION PROJECT

PERFORMANCE: THE CASE OF ETHIOPIAN INSTITUTE OF
AGRICULTURAL RESEARCH

BY: EYOB SISAY

ADVISOR: TEKLEGIORGIS ASSEFA (PH.D.)

A RESEARCH PROJECT WORK SUBMITTED TO SCHOOL OF COMMERCE IN

PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF
MASTER OF ARTS DEGREE IN PROJECT MANAGEMENT

ADDIS ABABA, ETHIOPIA

JUNE 2022
 DECLARATION
I, the undersigned, hereby declare that this project work entitled “Factors Affecting
Construction Project Performance: The Case of Ethiopian Institute of Agricultural
Research” is my original work with the guidance of the research advisor and all sources of
materials used for the project work have been acknowledged as complete reference. I further
confirm that the study has not been submitted in full or partial fulfillment in any other
recognized University/Institution for the purpose of earning any degree.

Signature Date

Eyob Sisay ______________ _______________

 STATEMENT OF CERTIFICATE
This is to certify that Eyob Sisay has completed her project work entitled “Factors Affecting
Construction Project Performance: The Case of Ethiopian Institute of Agricultural
Research ". In my opinion, her project is appropriate to be submitted as a partial fulfillment
of the requirements for the award of Degree in Masters of Project Management.

Research Advisor Signature Date

Teklegiorgis Assefa (Ph.D.) ________________ _______________

 ADDIS ABABA UNIVERSITY
SCHOOL OF COMMERCE
DEPARTEMENT OF PROJECT MANAGEMENT

FACTORS AFFECTING CONSTRUCTION PROJECT PERFORMANCE: THE

CASE OF ETHIOPIAN INSTITUTE OF AGRICULTURAL RESEARCH

By: Eyob Sisay

APPROVED BY THE BOARD OF EXAMINERS

Teklegiorgis Assefa,Ph.D. ________ ___________

Advisor Signature Date

Bahran Asrat, Ph.D ________ ___________

Internal Examiner Signature Date

Mulatu Takele, Ph.D. ________ ___________

External Examiner Signature Date
 Acknowledgment

First and for most, I would like to express my heart-felt gratitude to the almighty God for
listening to my prayers and being on my side whenever I need help.

I would like to thank my advisor, Dr. Teklegiorgis Assefa, as he was generous with his time to
share his knowledge and wisdom from the conception of the project work. His advice, insightful
criticism, and friendly character have been very valuable and helpful.

Secondly, I would like to express my deepest appreciation and gratitude to all organizations and
individuals that have aided and provided the required information, without which this paper
would not have been possible.

In special regards, I would like to thank my best supporters, Planner Berket Aklilu, Instructor
Tewdros Getahun, Instructor Tesfaye Moges, and Engineer Waleligne Tefera, who aided and
provided unreserved support for the realization of this work.

I
 Abstract

The construction industry is a significant contributor to economic growth and plays an

indispensable role in the Ethiopian economy. However, despite its importance, the sector is
beset by a multitude of factors. The same is true for the construction projects of the Ethiopian
Agricultural Research Institute (EIAR). This study, therefore, aims at identifying factors
affecting the performance of the construction project in the EIAR. To this end, a questionnaire
survey was conducted involving 31 factors categorized into 7 themes. A total of 92 respondents,
of which, 80 respondents (60 from the EIAR staff and 20 from contractors) returned complete
questions. The data was analysed using the Relative Importance Index rank method (RII) to
determine the perceptions of contractors and EIAR staff towards the pre-identified performance
factors affecting construction projects. Besides descriptive analysis, correlation and regression
models were used to identify relationships and the extent of these relationships on the
performance of EIAR construction projects. The analysis revealed that material price
escalation, the economic and political environment, shortage of materials, and inadequate site
management and supervision were found to be the most important factors negatively impacting
project performance. Hence, proactive abutment measures such as including clauses for
potential revision of construction contract agreements would likely improve project
performance. Furthermore, encouraging and supporting contractors to improve forecasting of
economic trends, assessing the external environment, especially the political and business
environment, in line with continuous site supervision, could improve the performance of
construction projects

Key words: Performance Analysis, Relative Importance index and regression

II
 Table of Contents
Acknowledgment ....................................................................................................................... I
Abstract ..................................................................................................................................... II
Table of Contents ..................................................................................................................... III
List of Tables ...........................................................................................................................VI
List of Figures ..........................................................................................................................VI
ACRONYMS ......................................................................................................................... VII
Chapter One ............................................................................................................................... 1
Introduction ................................................................................................................................ 1
1.1 Background of the Research ............................................................................................. 1
1.2 Organizational over view of EIAR .................................................................................... 3
1.3. Statement of the Problem ................................................................................................. 3
1.4. Research Questions .......................................................................................................... 4
1.5. Objectives of the Study .................................................................................................... 5
1.5.1. General Objective ..................................................................................................... 5
1.5.2. Specific Objectives ................................................................................................... 5
1.6. Scope of the Study ........................................................................................................... 5
1.7 Limitations of the Study.................................................................................................... 5
1.8. Significance of the Study ................................................................................................. 5
1.9 Definition of Key Terms ................................................................................................... 6
1.10. Structure of Research ..................................................................................................... 6
CHAPTER TWO ....................................................................................................................... 8
LITERATURE REVIEW ........................................................................................................... 8
2.1. Introduction ..................................................................................................................... 8
2.2 Theoretical review ............................................................................................................ 8
2.2.1. Over view of Project ................................................................................................. 8
2.2.2. Over view Performance ............................................................................................. 9
2.2.3 Performance Measurement Theory ........................................................................... 10
2.2.4 Project Success ........................................................................................................ 11
2.2.5. Construction............................................................................................................ 12
2.2.6 Performance Management in Construction ............................................................... 13
2.3 Empirical Reviews .......................................................................................................... 14
2.3.1 Factors Affecting Performance of Construction Projects .......................................... 14
2.3.2 Factors affecting performance related to project procedures ..................................... 17

III
 2.3.3. Factors affecting performance related to the Contractor/ Supplier............................ 19
2.3.4 External and Work Environment Related Factors ................................................... 19
2.3.5 Performance indicators in construction projects........................................................ 21
2.3.6 Conceptual Framework ............................................................................................ 21
2.3.7 Research gaps .......................................................................................................... 22
2.4 Summary of the Chapter ................................................................................................. 22
CHAPTER 3 ............................................................................................................................ 23
RESEARCH METHODOLOGY .............................................................................................. 23
3.1. Introduction ................................................................................................................... 23
3.2. Research Approach ........................................................................................................ 23
3.3. Research Design ............................................................................................................ 23
3.4. Research Methods.......................................................................................................... 23
3.4.1 Target population ..................................................................................................... 23
3.4.2. Sampling method .................................................................................................... 24
3.4.4 Data Source and data collection ............................................................................... 25
3.5 Data Measurement .......................................................................................................... 25
3.6 Research Instruments ...................................................................................................... 25
3.6.1 Reliability of Research Instruments .......................................................................... 26
3.6.2 Validity of research instruments ............................................................................... 26
3.6.3. Ethical considerations ............................................................................................. 27
3.7 Method of Data Analysis ................................................................................................ 27
CHAPTER 4 ............................................................................................................................ 28
RESULTS AND DISCUSSION ............................................................................................... 28
Introduction .............................................................................................................................. 28
4.1 Questionnaire.................................................................................................................. 28
4.2 Background Information of Respondents ........................................................................ 29
4.2.1 Position in the Organization or Company ................................................................. 29
4.2.2 Work Experience in Projects .................................................................................... 29
4.2.3 Educational Background .......................................................................................... 30
4.3 Descriptive Analysis of Factors Affecting the Performance of Construction.................... 32
4.4 Statistical Assumption testing ......................................................................................... 38
4.5.Correlations ................................................................................................................ 39
4.6 Research discussion and Findings ....................................................................................... 45
CHAPTER 5 ............................................................................................................................ 52
CONCLUSION AND RECOMMENDATIONS....................................................................... 52
IV
 5.2 Summery of finding ........................................................................................................ 52
5.3. Conclusion..................................................................................................................... 53
5.4. Recommendation ........................................................................................................... 53
5.5 Suggestion for Future Research ................................................................................... 54
References ................................................................................................................................ 55
Questionnaires .......................................................................................................................... 61
Part One: General Information ............................................................................................. 62
Part Two: Factors Affecting the Performance of Construction Projects ..................................... 63
Part Three: Overall performance of Construction Projects Executed in the EIAR ................... 65
Appendix.................................................................................................................................. 66

V
 List of Tables
Table 1 List of identified procurement related factors ............................................................... 18
Table 2 List of identified contractor/ supplier related factors .................................................... 19
Table 3 List of identified external and work environment related factors .................................. 20
Table 4 Rating scale for significance level of factors on project performance ........................... 25
Table 5 Reliability Statistics of collected data........................................................................... 26
Table 6 Summary of the response rate of the study ................................................................... 28
Table 7 Experience of respondents ........................................................................................... 30
Table 8 Respondents’ level of education ................................................................................... 30
Table 9 Overall performance of cons. Cross tabulation ............................................................. 31
Table 10 The relative importance index (RII) and rank of factors ............................................ 32
Table 11 Clients related factors ................................................................................................ 33
Table 12 Material related factors .............................................................................................. 33
Table 13 Contractor related factor ............................................................................................ 34
Table 14 Project procedure method .......................................................................................... 35
Table 15 External environment of sites ................................................................................... 35
Table 16 Equipment Related factor ........................................................................................... 36
Table 17 The RII &Top five factors affecting the construction performance ............................. 37
Table 18 : The relative importance index (RII) and rank of major groups ................................. 37
Table 19 . Kolmogorov-Smirnov& Shapiro-Wilk Tests of Normality ..................................... 38
Table 20 Case Processing Summary ......................................................................................... 41
Table 21 Pseudo R-Square........................................................................................................ 43
Table 22 The relative importance index (RII) and rank of factors ............................................ 66

List of Figures
Figure 2Normal Q_Q plot 39

VI
 ACRONYMS

ADRRI Africa Development And Resource Research Institute

AHP Analytical Hierarchical Process

BPM Building Project Management

CTP Construction Time Performance

EARS Ethiopian Agricultural Research System

ECI Early Contractor Involvement

EIAR Ethiopian Institute of Agricultural Research

ESI Early Supplier Involvement

GDP Growth Domestic Product

GNP Growth National Product

IJRAE International Journal of Innovative Research in Advanced Engineering

KPIs Key Performance Indicators

NSTC National Science and Technology Council

PM Project Management

PMBOK Project Management Body of Knowledge

PPE Project Performance Evaluation

PPI Project Performance Indicators

RII Relative Importance index

SPI Schedule Performance Index

SNNPR South thern Nation, Natinalites, and Peoples Region

SPSS Package or Social Science

UK United Kingdom
VII
 Chapter One

Introduction

1.1 Background of the Research

Construction project management involves directing and organizing each part of the
project life cycle, from conception to completion. It’s a holistic practice with the goal of
delivering projects on time and under budget. Construction project management is a
complex discipline that requires addressing many important concerns, including cost
control, scheduling, procurement, and risk assessment. Project managers interact with all
team members involved in a construction project, from architects to owners to
contractors.

The term "construction" refers to the entire economic activity of creating, modifying,
repairing, or extending fixed assets, such as buildings, engineering-related land
improvements, and other engineering-related structures .The progress of nations depends
on the construction industry. It is one of the biggest industries and makes up roughly
10% of the GDP in industrialized nations, Navon (2005).

Construction is complex in its nature. As Carpenter (2014) described, dramatic changes

have affected the construction industry over the past several decades. Every construction
project is unique and has its own operating environment and set of technical
requirements.As a result; the execution of construction projects is subjected to numerous
constraints that limit the progression of field operations, which have a significant impact
on project performance.

In Africa, construction project delivery is also a common reality. According to Omran,

Abdulrahman, and Pakir (2012) in Sudan and Gaba (2013) in Ghana, research show that
cost overruns, completion delays, and unsatisfactory and missed project objectives are on
the rise in the majority of construction projects. According to Hiwot (2012), due to
subpar contractor performance and limited stakeholder commitment, the majority of
construction projects in Ethiopia are characterized by schedule delays, cost overruns, and
subpar construction

1
The building sector has an important contribution to the Ethiopian economy. It involves
substantial financial and human resources and plays a vital role in the national economy
and has a wide range of applications to different major sectors, like health, education,
and agriculture. Agriculture is the backbone of the Ethiopian economy. Since Ethiopia is
endowed with abundant agricultural resources and has diverse ecological zones,
agriculture plays a large role in the country’s economy. The agricultural sector in
Ethiopia contributed about 35%of GDP in 2017-18 (Government of Ethiopia 2019 b) and
65% of employment in 2019 (World Bank 2019a). Although agriculture is one of
Ethiopia’s most promising resources, overgrazing, deforestation, and high population
density have led to massive soil degradation leading to low productivity. Therefore, to
alleviate the mentioned difficulties, the Ethiopian agricultural research institute has made
its vital contribution.

Construction projects' performance, how well, how quickly, and at what cost buildings
and infrastructure can be constructed directly affects the cost of projects and contributes
to the national output, and stimulates the growth of other sectors through a complex
system of linkages. The same is true for the Ethiopian Agricultural Research Institute
(EIAR). Currently, the EIAR is implementing different types of construction projects
(laboratories, administrative offices, green hose, and so on) for the realization of its
goals. Others are under construction to achieve its mission.

The governmental budget allocated during the study time for EIAR is more than 300
million Birr. In most programs, there are small to large construction projects undertaken
as part of their plan. As per the engineering unit of the institute, the total annual budget
of these constructions ranges between 130 and 150 million Birrs. This study focus on
identifying the main construction performance factors for EIAR during this study period.
However, most projects fail to be completed on time, causing cost overruns and, at times,
complete abandonment. This can be seen in the same building projects which stand
unfinished. Even more, there are projects that are finished at a date later than agreed in
the project schedule. Therefore, assessing factors affecting the project performance of
EIAR projects is a current issue and testing how they affect overall performance helps
improve the performance of future construction projects.

2
 1.2 Organizational over view of EIAR
The Ethiopian Agricultural Research Institute is a governmental research institute and a
foundation for agricultural growth in Ethiopia. Ethiopian Agricultural Research (EIAR)
is one of the largest agricultural research systems in Africa. It works with the ambition of
conducting research that will provide market competitive agricultural technologies that
will contribute to increased agricultural productivity and nutrition quality, sustainable
food security, economic development, and conservation of the integrity of natural
resources and the environment.

The Ethiopian Agricultural Research System (EARS) has evolved through several stages
since its first initiation in the late 1940s. In 1993, a number of Institute of Agricultural
Research centres were transferred to the regional governments and became independent
research centres. During this time, the Ethiopian Agricultural Research Organization was
established with a new set up in 1997 by Proclamation number 79/1997, and later it was
renamed the Ethiopian Institute of Agricultural Research on 25th October 2005. The
EIAR is now organized into a decentralized structure in which a head office is based in
Addis Ababa and 22 main research centres and lots of sub-centres throughout the
country. Fentahun . (2015)

1.3. Statement of the Problem

Successful projects play an important role in the country's development. For the past few
years, construction projects have grown in size, complexity, and high demand by
customers, causing construction projects to become more difficult to achieve the project
objectives of time, cost, and quality to be achieved. In general, most construction
projects experience time overruns and cost overruns during their execution phase. An
examination of the records of more than four thousand construction projects by Morris et
al. (1998) showed that projects were rarely finished on time or within the allocated
budget.

The construction industry is a significant contributor to economic growth and plays an

indespensible role in the Ethiopian economy. However, various challenges have been
recognized as influcing the performance of construction projects. The same is true for the
Ethiopian Agricultural Research Institute (EIAR) construction projects.

3
Assessing the factors of performance problems is vital. The study conducted by Memon.
(2012) revealed that 92% of construction projects in Malaysia were facing time overruns
and only 8% of the projects could achieve completion within the contract duration. 89%
of respondents agreed that their projects were facing cost overruns, with an average
overrun of 5-10% of the contract price. The same is true for Nigeria and Kenya. The
research conducted by Auma (2014) is evidence that the performance of construction in
Kenya is poor. The majority of the projects escalated by a magnitude of over 50% and
over 50% of the projects are likely to escalate in cost by a magnitude of over 20%.

According to a report by the Federal Democratic Republic of Ethiopian, Ministry of

Urban Development, Housing and Construction (2014), project performance status
evaluation stated that among 14 public building projects under construction, 8 projects,
i.e. 57%, have failed to meet the planned percentage (MOUDHD, 2014). Additionally, a
few supportive studies were conducted in the Ethiopia context: Fetene, (2008), Tadesse,
(2009), Abera and Fekadu (2018), Merid, (2016), Aschalew (2017), Behailu (2018),
Shambel, (2018), Blen, (2019), Mesfin (2019) and none on specific projects
implemented by agricultural research projects.

For several reasons, construction projects in the EIAR challenge their performance
instead of achieving their planned goals. Most of these challenges are related to what we
call project performance problems. This research focuses on identifying factors affecting
the performance of construction projects in selected EIAR construction projects in order
to assist the institute, consultants, and contractors to overcome performance problems,
and improve the performance of future construction projects

1.4. Research Questions

 What are the significant factors affecting the performance of the EIAR construction
projects?
 What extent do these factors affect the performance of the EIAR construction
projects?
 What is the relationship between these factors and the performance of construction
projects in EIAR?
 How these factors affect the performance of EIAR construction projects?

4
 1.5. Objectives of the Study
1.5.1. General Objective
To determine the major factors that affects the performance of construction projects in
the EIAR.

1.5.2. Specific Objectives

 To identify the significant factors affecting the performance of construction projects in
the EIAR.
 To determine the extent of these performance affecting factors in the EIAR
construction projects
 To identify the relationship between these factors in the performance of EIAR
construction projects
 To identify how these factors affect the performance of EIAR construction projects.
1.6. Scope of the Study
The scope of this project is bounded by geographical boundaries and project years.
Although there are different construction projects in EIAR, this study is limited to
assessing EIAR construction project performance in Addis Ababa (head office),
Amhara, Oromia, SNNPR, and Sidama regions.

The study focused on projects under-construction or completed between 2018 – 2021

GC (2010 and 2013 EC) for the sake of easily accessing the targeted respondents and
getting relevant information.

1.7 Limitations of the Study

The study was limited to covering all construction projects' performance regarding
project cost overrun, project schedule delays, and project quality by external project
funds using inferential statistics.

1.8. Significance of the Study

This research is critical for identifying and analyzing the elements that influence
construction project performance in the EIAR. In primary, it is very beneficial for several
stakeholders, including EIAR, contractors, consultants, donors, and project managers, to
know the causes and effects of performance problems in the EIAR construction projects.

5
 Hence, it informs the management of EIAR on necessary alleviation strategies to handle
their effects. It also informs the institute of future planning and strategy developments for
existing and newly established agricultural research centers. Finally, the study would be
important in the suggestion of areas requiring further research to build on the topic of
factors affecting performance of projects.

1.9 Definition of Key Terms

Project: Construction projects under-construction or completed between 2018 – 2020
GC (2010& 2012 EC)

Construction: Construction of any buildings and infrastructure projects undertaken by

the EIAR

Performance: The accomplishment of a given construction project against the

contractual cost, time, and quality standards

Owner: Organization for whom the construction project is being undertaken. In the case
of EIAR Research centres & sub-centers.

Contractor: A natural or juridical person under contract with an owner (EIAR) to

construct the construction projects.

A key performance indicator (KPI): is a type of performance measurement which

evaluates the success of an organization or of a particular activity in which it engages.

Time overruns: is defined as the extension of time beyond planned completion dates.

Cost overrun: is the difference between the original cost estimate of the project and the
actual construction cost on completion of works.

1.10. Structure of Research

This research consists of five main chapters as follows:

 Chapter one: Introduction: this chapter shows the background of the study, statement of
the problem, research questions, objectives of the research, scope, and limitations,
significance, and Definition of Key Terms.
 Chapter two: Literature review: this chapter shows a detailed review of concepts and
definitions to identify the main factors affecting the performance and key performance
indicators in Building construction projects.
6
 Chapter three: Research methodology: this chapter shows the methodology used in this
research in order to achieve the required objectives and to answer the research
questions.
 Chapter Four: The collected data from the subject of the study are carefully analyzeed
and interpreted.
 The fifth chapter presents summary, conclusions and recommendations on the findings
of the study. Reference and appendix which include questionnaire are also part of this
study paper.

7
 CHAPTER TWO
LITERATURE REVIEW

2.1. Introduction
This chapter presents a literature review of the research work that was done by various
scholars in the field of performance of construction projects. This includes Theoretical
review, conceptual framework, empirical review, and critique of the existing literature
relevant to the study, summary, and research gaps.

2.2 Theoretical review

Construction project management focuses on addressing the scope and characteristics of
projects with the sole aim of ensuring that events conform to plans and standards. Yet the
problem of the project could face several challenges confronting its performance in the
areas of low productivity ADRRI JOURNAL February, 2014. Project management practices,
in combination with numerous different elements, have an impact on project success and
not all project management equipment and strategies are immediately related to project
success. Although, even an intensive literature assessment couldn't discover any
efficaciously completed project without having applied basic project management
practices. As a consequence, (Carden & Egan, 2008) highlight that effectively carried out
equipment and techniques may undoubtedly contribute to project success

2.2.1. Over view of Project

A project is a sequence of unique complex, and connected activities that have one goal or
purpose and that must be completed by a specific time, within budget, and according to
specification” Wysocki,( 2014)

A project can be considered to be any series of activities and tasks that have a specific
objective to be completed within certain specifications, defined start and end dates,
funding limits, consume human and nonhuman resources and is multifunctional (i.e., cut
across several functional lines) Kerzner, (2013). Merna and Al-Thani (2008) also defined
a project as a unique investment of resources to achieve specific objectives, such as the
production of goods or services, in order to make a profit or to provide a service.

8
A project is an irreversible change with a life cycle and defined start and completion
dates. “A project is a temporary endeavor undertaken to create a unique product, service,
or result” PMI, (2013).

Turner and Müller, (2003also states that project is an endeavor in which human, material
and financial resources are organized in a novel way, to undertake a unique scope of
work, of given specification, within constraints of cost and time, so as to achieve
beneficial change defined by quantitative and qualitative objectives.

Construction project refers to a high-value, time - bound and special construction

mission with predetermined performance objectives Chitkara, (1998). He further explains
that the project mission is accomplished within complex project environments, by putting
together human and nonhuman resources into a temporary organization. The major
construction projects can be grouped into building construction, infrastructure
construction, industrial construction and special-purpose projects.

2.2.2. Over view Performance

Performance has been described as the degree of execution of a certain task. It is related
to the prescribed objectives which form the project considerations. Performance can be
considered as an evaluation of how well individuals, groups of individuals, or
organizations have done in pursuit of a specific objective.

Juran McCabe, (1998) defines performance as "the fitness of the project". This is broken
down into four categories: quality of design, quality of conformance, availability and
field service. The quality of design focuses on market research, the product concept and
design specifications. Quality of conformance includes technology, manpower, and
management. Availability focuses on reliability, main ability, and logistical support.
Field service quality comprises promptness, competence, and integrity.

Various literatures have revealed that performance should not be considered only as the
achievement of the project schedule, time and quality. It is a broader concept that can be
assessed using different parameters relating to the objectives of different stakeholders for
a particular project. Customer satisfaction, meeting specifications, health and safety, and
environmental responsiveness are some of the concerns when evaluating successful
achievement of project objectives.

9
From a project management perspective, it is all about meeting stakeholders’ needs and
expectations from a project. It invariably involves placing consideration on three major
project elements, i.e. time, cost, and quality. PMI, (2004).In construction, because of the
numerous participants who contribute towards the achievement of project objectives,
performance has been defined in one sense as a participant’s (client, consultant, or
contractor) contribution to the execution of the task required to complete the project,
Mullins, (1995).

2.2.3 Performance Measurement Theory

Performance measurement can be defined as a comparison between planned and actual

performance. Furthermore, "you can’t improve what you don’t measure." Cain, (2004).
When a deviation is detected, the construction management analyses the reasons for it.
The reasons for deviation can be schematically divided into two groups: (a) unrealistic
target setting (i.e., planning) or (b) causes originating from the actual construction
process. In many cases, the causes of deviation originate from both sources. Navon
(2005) stated that performance measurement is needed not only to control current
projects but also to update the historic database. Such updates enable better planning of
future projects in terms of costs, schedules, labor allocation, etc.

One of the methods used by industries to measure changes in performance is to compare

actual with planned goals. Performance measurement is a systematic way of evaluating
the inputs and outputs of manufacturing operations or construction activities and acts as a
tool for continuous improvement (Sinclair and Zairi, 1995; Mbugua et al., (1999). Also,
they have identified a distinction between performance indicators, performance measures
and performance measurement.

According to Mbugua et al. (1999), Performance indicators specify the measurable

evidence necessary to prove that a planned effort has achieved the desired result. In other
words, when indicators can be measured with some degree of precision and without
ambiguity, they are called measures. Performance measures are enablers of innovation
and of corrective actions throughout a project’s life cycle. They can help policy and
decision-makers, and different concerned stakeholders, understand how processes or
practices lead to success or failure, improvements in inefficiencies, and how to use that
knowledge to improve methods, processes, and the outcomes of active projects.
10
In response to calls for continuous improvement in performance, many performance
measurements have emerged in management literature. Some examples include financial
measures. Kangari, (1992),client satisfaction measures. Walker, (1984), employee
measures Abdel-Razek, (1997), project performance measures. Belassi et al., (1996) and
industry measures Egan, (1998). Rene Cordero, (1990) classifies performance
measurement based on the method of measurement and area of measurement.

The methods of measurement of performance can be in terms of technical performance,

commercial performance, and overall performance. The areas of measurement are at the
planning & design level, the marketing level, and the manufacturing level, etc., and the
overall performance is at the level of a firm or strategic business unit. Project
performance can be measured and evaluated using a large number of performance
indicators that could be related to various dimensions (groups) such as time, cost, quality,
client satisfaction, client changes, business performance, health and safety. Cheung et al.
(2004). Saleh, (2009).

Performance measurement allows maximizing the results that are meaningful to

organizations by adjusting products or services, using the capabilities and funding
available. It enhances the development of a learning organization by capturing and
analyzing what is happening in the firm or industry environment, especially through its
customers, employees, suppliers, partners, and new technologies. Mbugua (1999).

Performance measurement has two main aims: to connect company goals and objectives
to improvements and to set targets for improvement activity. Grunberg, 2004). Outputs
are measured to determine whether they help to accomplish objectives (effectiveness)
and resources are measured to determine whether a minimum amount of resources are
used in the production of outputs (efficiency).

2.2.4 Project Success

Ideally, a project be considered totally successful if it is completed on time, within
budget, and performs exactly to the designer‘s specifications. Harvey A. Lev, (2002).
These three variables define the overall goals of a project. Any project that is on time, on
budget, and of high quality is declared a success. The difficulty, however, exists in their
relationship with one another. Achieving the proper balance of cost, schedule, and
quality is beyond the control of the project manager alone.
11
All stakeholders, particularly those involved in project selection, influence the choices
and trade-offs that make up the triple constraint. Erik Versuh, (2003). For a project to be
successful, it is essential to understand the project requirements right from the start and
project planning which provides the right direction to project managers and their teams
and executes the project accordingly (Nader Sh. Kandelousi, Ooi. J., Abdollahi, 2011). A
successful project is one that is delivered on time and managed within the budget
2.2.5. Construction
The construction industry is the sector involved in the erection, repair, and demolition of
buildings and civil engineering structures in the economy. A definition typical of
national income accounts in use in most advanced industrialized countries is as follows:

The assembly of building materials and/or components on-site; the materials and
components are supplied by a variety of industries in the manufacturing sector; they are
delivered to the site by the transportation and trade sectors; the assembly proceeds in
accordance with plans, designs, and management procedures supplied mainly by the
business services industry in the service sector; most of the funds required for
construction are supplied by the financial services industry in the service sector, and a
significant part of the output supplied by the construction sector delivered to the real
estate industry in the service sector" Bon (1992)
The construction process consists of construction inputs, construction processing, and
construction outputs. Construction inputs are defined as all resources and parties
involved in the construction process. Abdel-Razeq, (2001). It is the execution process,
which can be defined as activating construction inputs for executing construction
activities. The construction output is the construction facility.Construction projects, have
a predetermined duration with a beginning and an end. The life cycle of a typical
construction project can be broadly divided into three phases: the formulation phase,
mobilization phase, and the construction phase.

The formulation phase includes the conception of the project idea, feasibility studies,
investment appraisal, and project definition. The mobilization phase covers the
preparation of the project preliminary plan, designs and drawings, contracts, resource
mobilization, and earmarking funds. The construction phase includes planning and
controlling execution, inducting resources, construction and commissioning, and finally,
handing over to the client. Chitkara, (1998).

12
Despite this complexity, the construction industry plays a major role in the development
and achievement of goals in society. The pace of the economic growth of any nation can
be measured by the development of physical infrastructure such as buildings, roads, and
bridges. Takin and Akintoye, (2004).Construction contributes to the economic
development of any country by satisfying some of the basic objectives of development,
including output generation, employment creation, and income generation and
redistribution. It also plays a major role in satisfying basic physical and social needs,
including the production of shelter, infrastructure, and consumer goods. Moavenzdadeh
F. (1976). The same is true for the least developed countries, like Ethiopia.

2.2.6 Performance Management in Construction

Developing a best performance system is the first step towards improving performance in
the construction industry. A building construction project, like any other project, also
faces different risks throughout the life of the project. According to Nafishah B., (2006),
this is due to the uniqueness of every project, the uncertainties introduced by the project
stakeholders, regulatory protocols, and other intrinsic and extrinsic constraints. He
further discusses how risk can constrain the achievement of key project objectives, time,
cost, and quality. Inability to achieve the project objectives has great consequences for all
project stakeholders involved in the construction. For the client, it could mean extra cost
and less return on investment. For the consultants, it could result in loss of confidence
placed in them by the clients. For the contractor, it could mean loss of profit and a bad
reputation etc.

Project success is almost the ultimate goal for every project. The success of construction
projects depends mainly on the success of performance. Many previous researches have
been studied on the performance of construction projects. Dissanayaka and
Kumaraswamy (1999) remarked that one of the principal reasons for the construction
industry's poor performance has been attributed to the inappropriateness of the chosen
procurement system. Thomas (2002) identified the main performance criteria of
construction projects as financial stability, progress of work, standard of quality, health
and safety, resources, relationships with clients, relationships with consultants,
management capabilities, claim and contractual disputes, relationships with
subcontractors, reputation and amount of subcontracting.

13
Construction performance affects the outcomes of national efforts to renew existing
infrastructure systems; to build new infrastructure for power from renewable resources;
and to remain competitive in the global market. Changes in building design, construction
and renovation, building materials and materials recycling are essential to the success of
national efforts. NSTC (2008).

2.3 Empirical Reviews

The success of construction projects depends mainly on the success of performance.
Many previous research studies have studied the performance of construction projects.
Dissanayaka and Kumaraswamy (1999) remarked that one of the principal reasons for
the construction industry's poor performance has been attributed to the inappropriateness
of the chosen procurement system. Reichelt and Lyneis (1999) remarked three important
structures underlying the dynamic of project performance, which are: the work
accomplishment structure, feedback effects on productivity and work quality, and effects
from upstream phases to downstream phases.

Cheung et al (2004) identified project performance categories such as people, cost, time,
quality, safety and health, the environment, client satisfaction, and communication. It is
found by Navon (2005) that a control system is an important element for identifying
factors affecting construction project effort. For each of the project goals, one or more
Project Performance Indicators (PPI) are needed. Cheung et al (2004) found that human
factors played an important role in determining the performance of a project. Ugwu and
Haupt (2007) remarked that both early contractor involvement (ECI) and early supplier
involvement (ESI) would minimize constructability-related performance problems,
including costs associated with delays, claims, wastages, and rework, etc.The most
important practices relating to scope management are controlling the quality of the
contract document, quality of response to perceived variations, and extent of changes to
the contract.

2.3.1 Factors Affecting Performance of Construction Projects

Different studies have identified different factors that affect the performance of
construction projects. The elements affecting the performance of the construction process
are the components of both construction inputs and construction processing. Cost, time
and quality are the three common parameters of project performance.

14
It has been stressed that in today’s highly competitive and uncertain business
environment, clients are demanding better value for their investment. They want their
project to be completed on time, within the estimated cost, and with the right quality.
Padang (2006).

Owusu Tawiah, (1999) identified two main factors affecting contractor performance. The
two factors were the financial and managerial capacities of the firm. Under the financial
factors, the contractors’ financial stability in terms of access to credit was questionable
and that has gone a long way to affecting their performance over the years. Managerial
capacities, site management practices, lack of technical expertise, among others, as
factors influencing contractor performance in Ghana.

Ankrah N.A. (2007) classifies the factors that influence project performance into
uncontrollable and controllable. From a project perspective, uncontrollable factors
include external constraints and industry factors. These are beyond the control of project
participants and hence may be difficult, if not impossible, to influence at a project level
in trying to improve performance, whereas the controllable factors include project and
organization-related factors. The controllable factors include procurement route,
contracts, variations, project complexity, project duration and cost, design time, plant and
equipment, personnel, the interaction between project participants, some process-related
issues, skills and capability, health and safety, quality, and specific company
programmers.

The performance of the project team members can be assessed by their technical and
managerial skills, working relationships and attitudes, and support from their parent
companies. Chua. (1999) found that project performance is influenced by four main
project aspects, namely, project characteristics, contractual arrangements, project
participants, and interactive processes.

According to Enshassi et al. (2009) the most important factors agreed upon by the
owners, consultants, and contractors were: average delay because of closure and
materials shortages, availability of resources as planned throughout the project duration,
leadership skills for the project manager, escalation of material prices, availability of
personnel with high experience and qualifications, and the quality of equipment and raw
materials.

15
Iyer and Jha (2005) did research on factors affecting cost performance evidence from
Indian construction projects and found out that the project manager’s competence and
top management support are found to contribute significantly to enhancing the quality
performance of a construction project. Nyangilo (2012) did an assessment of the
organization structure and leadership effects on construction projects' performance in
Kenya. He found out that lack of appropriate project organization structures, poor
management systems and leadership are the major causes of poor project performance.

Mallawaarachchi & Senaratn (2015) identified factors that affect the quality of the
housing projects, such as a lack of technical and professional expertise and resources to
perform tasks, a lack of employee commitment and understanding, and a lack of
education and training to drive the improvement process. According to Mane & Patil,
(2015), other factors affecting the performance of construction projects include project
managers' competence, poor monitoring and feedback, lack of an on-site project
manager, inadequate project team capability, poor planning and control techniques,
poor/insufficient information and communication channels, lack of early and continual
client/consultant consultation by contractors, and insufficient project manager
experience.

Teena (2014) identified the factors that affect the process quality of construction projects
by collecting data from consultants and contractors through a questionnaire. According
to the study, the most important factors that affect the quality of projects are financial
problems, the quality of raw materials in the project, the availability of personnel with
high qualifications, and conformance to codes and standards.

Adnan & Sherif (2009) identified the factors affecting the performance of local
construction projects and their relative importance. The most important factors agreed by
the owners, consultants, and contractors as the main factors affecting the performance of
construction projects were: material prices, availability of resources as planned through
project duration, average delay because of closures leading to materials shortages,
availability of personnel with high experience and qualifications, quality of equipment
and raw materials in projects, and leadership skills for project managers.

16
According to Ajayi (2010), the choice of the contractor (s) is a critical factor for the
project manager and usually has a significant impact on the success or failure of a
project. The performance of contractors definitely correlates with the performance of the
contract. Several models and methods have been proposed by researchers for the
evaluation of project performance. However, most of these procedures, according to
Ajayi et al. (2010), limit their analysis to selected measures such as cost, schedule, or
labour productivity. Construction performance embraces client satisfaction, time
performance, cost performance, construction quality, and sustainable development.

Ayodeji (2017) examined various factors affecting the performance quality of

construction projects by collecting data questionnaires from contractors, architects,
engineers, quantity surveyors, and construction managers. The study identified that
major factors affecting the performance quality of construction projects are related to the
use of unskilled and incompetent contractors, poor on-site supervision and lack of
commitment by the supervising team, poor planning and scheduling, and inadequate
knowledge, training, and skills of construction workers. To minimize the impact of these
factors and improve the performance quality of construction projects, the study
recommends proper and modern construction equipment, techniques, and methods
should be adopted by construction firms. There should be proper site management and
supervision to ensure conformance with drawings and specifications, and adequate
project duration should be allocated and stated in the contract documents.

Puspassari (2005) identified 46 possible factors responsible for the poor performance of
construction contracts. He further categorized these factors into eight groups; factors
caused by clients, factors caused by contractors, factors caused by consultants, factors
related to subcontractors, factors related to materials and labour, contractual relationship
factors, project procedures, and external environmental factors.

2.3.2 Factors affecting performance related to project procedures

The notion of procurement form and the method of tendering are both part of the project
procedure. The selection of the most appropriate organization for the design and
construction of the project demands early and careful consideration to assure success.
Generally, the construction team is appointed under competition through a competitive
tendering process. Sometimes, the head contractor may be appointed by negotiation on
the basis of a fee.
17
When the design and construction are done as a complete package, both may be let by
competition. The selection procedures applied to the members of the project team are
therefore by no means always the same. It is noted from research that competitive
tendering can adversely affect the outcome of major projects and the number of separate
contracts is related to the chances of achievement. Different selection methods pose
different levels of risk to the project team members.

A number of researchers identified the importance of procurement factors, such as

procurement method (selection of the organization for the design and construction of the
project), tendering method (procedures adopted for the selection of the project team and,
in particular, the main contractor), contract formulation and contract administration, and
project Aligned supply chain of goods/materials and services and contract close out.

Table 1 List of identified procurement related factors

Procurement and contract

related success factors Reference Literature

Osorio, et al. (2014),

Muhammad, et
al. (2008), Els, et al.
(2012), Tsiga, et
1 Procurement and tendering methods

al. (2016), Chan, et al.

(2004),

Hyvari (2006), BMG

Research
Contract formulation and contract
2
administration
(2014), Ejaz, et al. (2013)

Gunduz M. (2015) and

3 Contract close out Silva Susi.(2015)

18
 2.3.3. Factors affecting performance related to the Contractor/ Supplier
When the project enters the construction stage, the main contractor and subcontractors
begin their primary responsibilities. Contractor experience, site management, subcontractor
supervision and involvement, contractor cash flow, and the success of the cost control
system are all factors to consider. Behailu 2018 identified four (4) contractor/supplier
related factors from different works of literature.

Table 2 List of identified contractor/ supplier related factors

Contractor/
supplier related
success factors Reference Literature
Contractor’s/ supplier’s
1 competence and
commitment

2 Contractor experience Belassi and Tukel (1996),

Contractor’s effective site Hwang,(2013), Ejaz, et al.
3 management, control and (2013) and Gunduz M.
Coordination (2015)

Contractor’s/ supplier’s
4 cash flow/ financial
capabilities
Four (4) contractor/ supplier related factors
2.3.4 External and Work Environment Related Factors
The construction environment, according to R. Youker (1992), is the aggregate of
surrounding things, conditions, or influences. He describes this environment as all
external influence on the construction process. Thus, the environment includes virtually
everything outside the project; its technology, the nature of its products, customers, and
competitors, its geographical setting, and the economic, political, and even metrological
climate in which it must operate. Bennett (1991), in a major review of project
management theory, established that the environment interferes with the planned
progress of construction projects. The less predictable the environment is and the greater
its potential effects, the more it must be taken into account in managing the development
of construction projects.

19
Ankrah N.A. (2007) classifies the factors that influence project performance into
uncontrollable and controllable. From a project perspective, uncontrollable factors
include external constraints and industry factors. These are beyond the control of project
participants and hence may be difficult, if not impossible, to influence at a project level
in trying to improve performance, whereas the controllable factors include project and
organization-related factors.

Belassi and Tukel (1996) classify factors affecting the performance of construction
projects as political environment, economic environment, social environment,
technological environment, nature, client, competitors, and sub-contractors.

Akinsola (1997) described the "environment" as all external influences on the

construction process, including social, political, and technical systems. The attributes
used to measure this factor are the economic environment, social environment, political
environment, physical environment, industrial relations environment, and the level of
technology advanced.

Table 3 List of identified external and work environment related factors

Factors relating to the external environment Reference Literature

Political environment, economic environment,

Ssocial environment, technological environment, Belassi and Tukel (1996)
onature, client, competitors, sub-contractors.
u
r Economic related factors (e.g. exchange rate, Belassi and Tukel (1996),
c inflation, price escalation etc.).
e Political related factors (e.g. political interference,
: political conflicts, vandalism etc.). Muhammad, et al. (2008),

BSocio-cultural related factors (e.g. customs,

e norms, values, languages, educational level, Tsiga, et al. (2016),
hattitude towards social responsibility etc.)
a
Technical and technological environment Chan, et al. (2004)
i
l Physical environmental factors Hyvari (2006)
u
Site related factors (access road, ground conditions Fortune and White (2006),
2
Source: Behailu 2018
20
2.3.5 Performance indicators in construction projects.
A performance indicator is composed of a number and a unit of measure. The number
gives us a magnitude (how much) and the unit gives the number a meaning (what). The
purpose of the Key Performance Indicators (KPIs) is to enable measurement of project
and organizational performance throughout the construction industry. UK working
group, (2000).

The success of construction projects is determined by a number of distinct indicators that

are available throughout the project's life cycle, from conception to operation and
commissioning. Construction projects are typically judged successful if they are
completed on schedule, on budget, according to technical requirements, and to the
satisfaction of the client. Baker (1983). However, the criteria for success are in fact much
wider, incorporating the performance of the stakeholders, evaluating their contributions
and understanding their expectations. Atkinson (1997).

Salleh (2009) cited the work of Chan and Kumarswamy (1997) and presented the results
of a survey undertaken to determine and evaluate the relative importance of the
significant factors causing time and cost overruns in Hong Kong construction projects.
The factors were grouped into eight major categories: project-related, client-related,
design-related, contractor-related, materials, labour, equipment, and external factors.

Chan et al. (2004) reviewed seven international journals and summarized and grouped
the factors into five categories: human-related, project-related, project procedures,
project management actions, and external environment. Under each group, there are a
number of identified factors listed that have a direct effect on the success of a project

2.3.6 Conceptual Framework

A conceptual framework is a set of broad ideas and principles taken from relevant fields
of analysis used to illustrate the fundamental relationships between dependent and
independent variables.

The various variables affecting the performance of projects are identified from different
works of literature. These factors can be grouped as project characteristics-related
factors, material-related factors, contractors’ related factors, project procedures, external
environment, and equipment related factors. A variable in one group can influence a
variable in the other and vice versa. It is graphically presented as shown below.
21
 Conceptual Frame work

Independent Variables Dependent Variable

Own Survey

2.3.7 Research gaps

The reviewed literatures revealed various studies in different parts of the world that have
largely touched on factors relating to determining project performance. These studies
have been carried out and published. However, there is no literature available on the
factors affecting the project performance of construction projects in agricultural research
institutes like EIAR. This study, therefore, aimed to establish the actual influencing
factors affecting construction projects performance in the EIAR.

2.4 Summary of the Chapter

Chapter two discusses the literatures relevant to the objectives of the study. Project
characteristics related factors, Type of project (Infrastructure or Building), material
related factors, Contractor related factor, Project procedures, External environment
(Political environment, economic environment, social environment, and physical
environment), and Equipment factors. These are discussed in detail and how they
influence construction project performance which is the dependent variable.

22
 CHAPTER 3
RESEARCH METHODOLOGY
3.1. Introduction
This chapter sets out the various stages and phases to complete the study. The
methodology adopted in this research provides the procedures that are necessary for
obtaining the information needed to structure the research questionnaire, collect data,
analyse the collected data, and interpret and present the results. The methodologies
followed in this survey are outlined in the following sections.

3.2. Research Approach

This study used quantitative research approaches. The three methods that are commonly
implemented in research are quantitative, qualitative, and mixed, Creswell (2005).
Quantitative research is a research strategy that focuses on quantifying the collection and
analysis of data. Additionally, it is a type in which the researcher decides what to study,
asks specific, narrow questions, collects numeric (numbered) data from participants,
analyzes these numbers using statistics, and conducts the inquiry in an unbiased,
objective manner. Therefore, in this research, a quantitative approach was used.

3.3. Research Design

This study was explananatory & descriptive in terms of research purpose. The major
purpose of descriptive research is to explain and interpret the state of affairs as it exists at
present. According to Cooper and Schindler (2003), a descriptive study is concerned with
finding out the what, where, and how of a phenomenon. Thus, this study has tried to
explain and describe the factors affecting the performance of construction projects in the
case of the EIAR for the past three years

3.4. Research Methods

3.4.1 Target population
The study's target populations are the EIAR staff in the selected 20 research centres
(with planning, construction management teams, related program managers, and
procurement team members) and contractors involved in 46 construction projects over
the study period.

23
 3.4.2. Sampling method
A two-step process is used in which the population is partitioned into strata as owner
(EIAR) and contractors. The strata are mutually exclusive and collectively exhaustive in
that every population element should be assigned to only one stratum and no population
elements should be omitted. A purposive sampling technique was used to select the staff
among 20 research centres of the Ethiopian Institute of Agricultural Research. Based on
this sampling technique, the researchers used proportional sampling from each of the
research centres.

3.4.3 Sample size

A sample design is a definite plan for obtaining a sample from the sampling frame
(Kothari, 2004). Different authors tend to give different guidelines concerning the
number of cases required for multiple regressions. Tabachnick and Fidell (2001, p. 117)
give a formula for calculating sample size requirements, taking into account the number
of independent variables that you wish to use:

N > 50 + 8m (where m = number of independent variables).

The target groups in this study are EIAR selected centres construction projects and their
participants are owners (EIAR professional staff who know the concerned construction
projects during the specified time.) and contractors.

The sample size is determined based on the following Slovin’s sampling formula
(Yemane, 1967).

2
n= N / [1+ N*e ] ……………………………….………………. Equation 1

Where:

N = Total number of populations (85+23=108)

n = number of sample size =92

e = error margin / margin of error, a 95% confidence level is taken and e = 0.05

24
Therefore, 70 of the EIAR professional staff who know the concerned construction
projects during the specified time, and 22 from contractor’s organizations were selected.

3.4.4 Data Source and data collection

There are two types of research data collection: primary and secondary data collection.
The researchers used primary sources of data. A questionnaire was designed from a
literature review of various factors affecting the performance of construction projects and
from secondary data sources to identify the most important factors that influence
construction projects implemented by the EIAR.

3.5 Data Measurement

In order to be able to select the appropriate method of analysis, the level of measurement
must be understood. In this research, ordinary was used. An ordinal scale is a ranking or
rating data that normally uses integers in ascending or descending order. The numbers
assigned to the agreement or degree of influence (1, 2, 3, 4, 5) do not indicate that the
interval between scales is equal, nor do they indicate absolute quantities. Based on this
scale, the researcher has the following table

Table 4 Rating scale for significance level of factors on project performance

Significance Extremely Very Moderately Slightly Not

Level Significant Significant Significant Significant Significant

Scale 5 4 3 2 1

3.6 Research Instruments

The questionnaire designed for this study utilizes the information sourced from the
extensive literature review, the global nature of the construction industry, and relevance
to the EIAR construction projects context. The questionnaires are divided into three
sections: Part A, which seeks to establish general details of the respondent, Part B, which
contains factors affecting the performance of construction projects grouped into seven,
includes project characteristics related factors, material related factors, contractor related
factors, project procedures, external environment, and equipment related factors. Part C
contains the respondent’s judgment on the overall performance of the executed
construction projects on the above factors.

25
 3.6.1 Reliability of Research Instruments
The statistical measure Cronbach's Coefficient Alpha reliability is used to make sure the
questions are properly reliable in advance of data analysis

Table 5 Reliability Statistics of collected data

Reliability Statistics

Cronbach's Cronbach's Alpha Based

N of Items
Alpha on Standardized Items

0.891 0.902 7

Alpha if item deleted: This represents the Cronbach’s alpha reliability coefficient if the
individual item is discarded from the scale. This value is then compared to the value of
Cronbach’s alpha present above to see if anyone wants to delete the item. A value of 0.7
reliability coefficient or higher is acceptable in the social sciences (Jugdev . 2007). The
result of reliability measure was good α=902 in the study and it were concluded that all
items in the survey were internally consistent and reliable

3.6.2 Validity of research instruments

Validity is the degree to which the sample of the test item represents the content that is
designed to measure. Creswell (2003) notes that validity is considered if one can draw
consequential and valuable inferences from scores on the instrument. The statistical
requirements have to be achieved in the research study by determining the required
sample size. Sutton and Staw (1995) concluded that, “a good construct must explain why
particular sets of variables are interconnected and are strong predictors of the results”.
This study’s questionnaire was designed based on a set of variables that were listed by a
group of knowledgeable construction industry specialists, published books and different
articles that support the study topic. Additionally, the research adopted content validity,
which refers to the extent to which a measuring instrument provides adequate coverage
of the topic under study. To ensure content validity, the instruments were reviewed to
enable the content to address the purpose and avoid ambiguity. This ensured that all
respondents understood the content of the questionnaire.

26
 3.6.3. Ethical considerations
By adhering to the following ethical research guidelines, the researcher ensures that the
research is conducted in an ethical manner. (Respondents' anonymity, confidentiality,
and voluntary involvement). Prior to data collection, letters were sent from EIAR's
concerned administrative agencies to a number of research centers and private companies
where important information for the research may be obtained.

3.7 Method of Data Analysis

The data was analysed using the relative importance index rank method (RII) to identify
the identified performance factors affecting the performance of construction projects.

The relative importance index is computed using the following formula; (Cheung et al,
2004; Iyer and Jha, 2005; Ugwu and Haupt, 2007):

∑ (W)
RII= - - - - - - - - -
AxN
Where;

 W is the weight given to each factor by the respondents and ranges from 1 to 5

 A = the highest weight = 5

 N = the total number of respondents

The RII values have a range of 1 to 5. The higher the RII, the more important the factor
for the performance of construction projects. The RIIs is ranked, and the results are
shown by using tables. In addition to this RII, the analysis used both descriptive and
inferential statistics (correlation and regression) to identify the relationship between
these factors and to assess the extent of the performance of EIAR construction projects.
In addition to the RII, the factors were analysed using ordinal regression analysis.
Ordinal regression is a member of the family of regression analyses. As a predictive
analysis, ordinal regression describes data and explains the relationship between one
dependent variable and two or more independent variables. In ordinal regression
analysis, the dependent variable is ordinal (statistically it is polychromous ordinal) and
the independent variables are ordinal or continuous-level.

27
 CHAPTER 4
RESULTS AND DISCUSSION

Introduction
This chapter displays the discussion of the final results and the process through which
the results were obtained. The data was collected through questionnaires from the
contractors and staff of the EIAR who directly participated in the projects, and
discussion about the results. The data was analyzed using both SPSS and Excel
worksheets, after which meaningful results were derived from the percentages arrived
at in this process. The purpose of the data analysis was to determine the factors that
affect construction project performance in the EIAR.

4.1 Questionnaire Response Rate

The study targeted a sample size of 92 respondents and, accordingly, a total of 92
questionnaires were distributed, out of which 70 respondents were EIAR staff, and 22
contractors. On the other hand, out of 92 distributed questionnaires, a total of 80
questionnaires were collected, having been filled completely, resulting in a response
rate of 85.37% as shown in table 8 below.

Table 6 Summary of the response rate of the study

Name of Questionnaire Questionnaire Response Rate
Respondents Distributed Returned by %

Contractor 22 20 90.9%
Owner 70 60 85.7%

Total 92 80 86.96%
Own Survey, SPSS output

The unsuccessful response rate (13.04%) consisted of those questionnaires that were
not filled out. This response rate was excellent for the analysis.

28
 4.2 Background Information of Respondents

4.2.1 Position in the Organization or Company

The questionnaires were distributed and responses were received from various
professionals by virtue of their designation.

Table 8 Respondents Designation

Respondents Designation
Frequency Percent

Engineer/Designer 5 6.25%

Supervisor 13 16.25%

Project Manager 6 7.50%

Finance & Procurement 44 55.00%

Planning 2 2.50%

Program/Center Director 10 12.50%

Total 80 100.00%

Sources: Own Survey, SPSS output

It was evident that the majority of the respondents were Finance & Procurement staff
(55%) followed by Supervisors (16.25%). This is because the EIAR merged its
engineering & maintenance directorate into finance & recalled its procurement. While
the rest are Program/Center Directors (12.5%), Project Manager (7.5),
Engineer/Designers (6.25%) and Planning (2.5%) as shown in table 10. This shows
that everybody in the construction firm had the opportunity to respond to the
questionnaire.

4.2.2 Work Experience in Projects

The information about the respondents’ years of work experience in a project was also
asked and summarized on table 10.

29
 Table 7 Experience of respondents
Frequency Percent

Less than 5 years 7 8.75%

Between 5 to 10 years 14 17.50%

Between 10-15years 39 48.75%

Between 15-20 years 13 16.25%

Above 20 years 7 8.75%

Total 80 100.00%

Sources: Own Survey, SPSS output

Accordingly, 39 (48.75%) indicated that they had been working between 10-15 years,
followed by 14 (17.5%) who had been working between 5-10 years, 13 (16.25%) had
been working between 15-20 years, and 7 (8.75%) had been working below 5 years
and 7 (8.75%) had been working above 20 years. This shows that most of the
respondents are capable of providing relevant data on factors affecting construction
performance.

4.2.3 Educational Background

The study also sought to establish the respondents ‘highest level of education and thus
information relating to the level of education attained by the respondents was also
analysed.

Table 8 Respondents’ level of education

Frequency Percent
Diploma 3 3.75%
Bachelor’s degree 52 65.00%

Masters 19 23.75%

PHD 6 7.50%

Total 80 100.00%

Sources: Own Survey, SPSS output

30
As indicated in the above table 11, the majority of the respondents’ 52 (65.0%) had a
bachelor's degree, 19 (23.75%) had a Masters, while 6 (7.0%) of the respondents had
a PHD, and the rest 3 (3.75%) had a Diploma. This shows that the respondents are
capable and reliable of exploring the fundamental issues related to the study.

Generally, the finding regarding the characteristics of respondents confirms that the
respondents are qualified to understand the questions concerning factors affecting
project performance at the EIAR. So, the researcher believes that the response
obtained from them is reliable and trustworthy. That enables the researcher to move
towards the intended research finding.

Table 9 Overall performance of cons. Cross tabulation

Overall performance of construction projects

Not Slightly Moderately Very Extremely

Significant Significant Significant Significant Significant Total

EIAR 1 8 10 28 13 60

Contractor 1 2 12 3 2 20

2.5% 12.5% 27.5% 38.8% 18.8% 100.0%

Sources: Own Survey, SPSS output

As indicated in the above table 12, from 60 EIAR respondents, 13, (21. %), from 20
contractors 2 (10%), from a total of 80 respondents, 15 (18.8%) of them believed
project performance factors extremely affect the overall EIAR executed construction
projects.

Additionally, 28 (46.67%) from EIAR and 3, (15. %) from contractors, a total of 31

(38.8%) of respondents believed project performance factors are very significant to
the overall EIAR executed construction projects. From the total, 12.5% of respondents
replied that project performance factors are slightly significant, while the remaining
2.5% of respondents responded that project performance factors are not significant to
the overall EIAR executed construction.

31
 4.3 Descriptive Analysis of Factors Affecting the Performance of Construction
The results of this part of the study show the rank of all factors affecting the
performance of construction projects in the EIAR that have been investigated in this
research from contractors and the EIAR staff viewpoints. A total of 31 factors which
influence construction performance have been studied and discussed. The rank was
based on the relative importance index of the factors ranking according to the type of
target group.

Table 10 The relative importance index (RII) and rank of factors

From
All
Groups/Factors EIAR Contractor
Respon From
se Group

RII Rank RII Rank RII Rank

Project characteristics related factors Rank

Type of project (Building or infrastructure) 0.57 17 0.41 23 0.53 21 3

Nature of project 0.593 14 0.49 14 0.568 19 2

Size of project 0.507 28 0.37 28 0.473 29 5

Complexity of project 0.543 22 0.42 21 0.513 24 4

Shorter completion period given for the

0.567 19 0.73 7 0.608 12
contract 1

Sources: Own Survey, SPSS output

Table 13 shows project characteristics related factors ranked by their combined

value of relative importance index (RII). The rank of PCR factors agreed by all
stakeholders is shorter completion period given for the contract, nature of
project, type of project (building or infrastructure), complexity of project, and
size of project with the value of RII of 0.608, 0.568, 0.53, 0.513, and 0.473
respectively. The shorter completion period given to the contractor is the most
critical factor for parities of the project. Activity delays are a common issue in
the EIAR construction projects and increase project schedules and costs.

32
Table 11 Clients related factors

Groups/Factors EIAR Contractor From All From

Response Group

RII Rank RII Rank RII Rank

Rank
Clients related factors

Delay of progress payment to contractors 0.527 26 0.39 26 0.493 27 2

Client’s in ability to make project decisions 0.473 30 0.22 31 0.41 31 4

Client’s emphasize on low construction cost 0.617 8 0.7 8 0.638 7 1

Client’s interference during construction 0.443 31 0.38 27 0.428 30 3

Sources: SPSS Own Survey,

Table 14 shows clients' related factors ranked by their combined value of the relative
importance index (RII). The first four most important CLR factors agreed by all
stakeholders are delay in progress payment to contractors, client’s ability to make project
decisions, client’s emphasis on low construction costs, and client’s interference during
construction, with the value of RII of 0.493, 0.41, 0.638 and 0.428 respectively. The
client’s emphasis on low construction costs is the most critical factor for both parties of
the project.

Table 12 Material related factors

From
Groups/Factors EIAR Contractor
From All Group
Response

Ran RI Ran Ran Ran

Material related factors RII RII
k I k k k

Shortage of material 0.7 4 0.75 5 0.713 5 2

Material change 0.597 12 0.66 10 0.708 6 3

Low quality material selection 0.577 16 0.53 12 0.625 9 5

Lack of project material management

0.597 12 0.54 11 0.628 8
system 4

Escalation of material price 0.753 2 0.94 1 0.95 1 1

Sources: SPSS Own Survey,

33
Table 15 shows material related factors ranked by their combined value of the relative
importance index (RII). The first five MAR factors agreed by all stakeholders are
shortage of materials, material change, low quality material selection, lack of project
material management system, and escalation of material price, with the value of RII
of 0.713, 0.708, 0.625, 0.628, and 0.95 respectively. The shortage of materials is the
most critical factor for both parties of the project. According to Public procurement
agencies’ manual article 4.2.5.12, escalation is not considered for projects whose
project duration is less than 18 months.
Table 13 Contractor related factor
Groups/Factors EIAR Contractor From All From
Response Group

Contractor related factor RII Rank RII Rank RII Rank Rank

Contractor experience 0.543 22 0.48 18 0.62 10 2

Shortage of labour force 0.52 27 0.53 12 0.59 15 4

Site management & supervision 0.67 5 0.77 4 0.725 4 1

Competence and commitment 0.633 6 0.49 14 0.598 13 3

Contractor cash flow 0.617 8 0.49 14 0.585 16 5

Sources: SPSS Own Survey,

Table 16 shows contractor related factors ranked by their combined value of relative
importance index (RII). The five COR factors RII agreed by all stakeholders are
Contractor experience, Shortage of labour force, Site management & supervision,
Competence and commitment, and Contractor cash flow, with the values of 0.62, 0.59,
0.725, 0.598, and 0.585respectively. Site management & supervision is the most critical
factor for both parties of the project.

34
Table 14 Project procedure method

Groups/Factors EIAR Contractor From

From All Group
Response

Project procedure method RII Rank RII Rank RII Rank Rank

Procurement method, 0.57 17 0.74 6 0.6125 11 1

Contract administration 0.583 15 0.37 28 0.5325 19 2

Contract close out 0.567 19 0.42 21 0.53 20 3

Sources: SPSS Own Survey,

Table 17 shows project procedure method related factors ranked by their combined
value of relative importance index (RII). The three PPR factors RII agreed by all
stakeholders are procurement method; contract administration and contract close out,
with the value of RII of 0.6125, 0.5325 and 0.53 respectively. The procurement
method is the most critical factor for both parties of the project.

Table 15 External environment of sites

Groups/Factors EIAR Contractor From

From All Group
Response

External environment of site RII Rank RII Rank RII Rank Rank

Political environment 0.717 3 0.78 3 0.733 3 2

Economic environment 0.757 1 0.81 2 0.77 2 1

Social environment 0.533 24 0.41 23 0.503 25 4

Physical environment of sites 0.613 10 0.46 19 0.575 17 3

Sources: SPSS Own Survey,

Table 18. External environment related factors ranked by their combined value of
relative importance index (RII). The four EER factors RII agreed by all stakeholders
are the political environment, economic environment, social environment, and
physical environment of sites, with a value of RII of 0.733, 0.77, 0.503, and 0.575
respectively. The economic and political environments are the most critical factors for
both parties of the project with the highest RII.
35
Table 16 Equipment Related factor

Groups/Factors EIAR Contractor

From All Response

Equipment factor RII Rank RII Rank RII Rank

Shortage 0.56 21 0.49 14 0.567 20

Efficiency 0.6 11 0.68 9 0.593 14

Break down 0.49 29 0.41 23 0.503 25

Poor planning 0.627 7 0.46 19 0.575 17

Wrong selection 0.53 25 0.35 30 0.485 28

Sources: SPSS Own Survey,

Equipment related factors are ranked by their combined value of the relative
importance index (RII). Typically, construction equipment is used to perform
essentially repetitive operations, and can be broadly classified according to two basic
functions: first, operators, such as cranes, graders, etc.

In both cases, the cycle of a piece of equipment is a sequence of tasks which are
repeated to produce a unit of output. For example, install a wall panel.

The five EQR factors RII agreed by all stakeholders are shortage, efficiency, break
down, poor planning, and wrong selections, with a value of 0.567, 0.593, 0.503,
0.575, and 0.485respectively. Efficiency is the most critical factor for both parties of
the project in the EQR factors.

The table below shows the top ten individual factors from all groups that affect the
performance of construction projects in the EIAR

36
 Table 17 The RII &Top five factors affecting the construction performance
All
EIAR Contractor
Response
Groups/Factors

RII Rank RII Rank RII Rank

Escalation of material price 0.753 2 0.940 1 0.950 1
Economic environment 0.757 1 0.810 2 0.770 2
Political environment 0.717 3 0.780 3 0.733 3
Site management & supervision 0.670 5 0.770 4 0.725 4
Shortage of material 0.700 4 0.750 5 0.713 5
Sources: Own Survey,

Generally, results from the RII indicated that the factor Escalation of material price
has been ranked in the first position by contractors & the EIAR staff with a mean
score of 0.950. This result indicates the high importance of managing the escalation of
material prices to complete the project planned. This agreement of opinions proves
the importance of these factors in completing the project planned.

Table 18 : The relative importance index (RII) and rank of major groups

All
EIAR Contractor
Response
Factors

RII Rank RII Rank RII Rank

Material related factors 0.645 2 0.684 1 0.725 1

External environment of sites 0.655 1 0.615 2 0.645 2

Contractor related factor 0.597 3 0.552 3 0.577 3

Equipment factor 0.561 5 0.478 6 0.544 4

Project procedure method 0.573 4 0.510 4 0.538 5

Project characteristics related factors 0.556 6 0.484 5 0.538 5

Clients related factors 0.515 7 0.423 7 0.492 7

Sources: SPSS Own Survey

37
As shown in the table, material-related factors, the external environment of sites, and
contractor-related factors are the top three ranked factor groups that affect the
performance of construction projects in the EIAR.

4.4 Statistical Assumption testing

A normality test was conducted in order to assure the appropriateness of the data.
Normality tests are used to determine if a data set is well-modelled by a normal
distribution and to compute how likely it is for a random variable underlying the data
set to be normally distributed. A normality test was conducted to determine whether
sample data had been drawn from a normally distributed population (within some
tolerance) before applying the regression analysis.

Table 19 . Kolmogorov-Smirnov& Shapiro-Wilk Tests of Normality

Tests of Normality

Kolmogorov-Smirnova Shapiro-Wilk

Statistic df Sig. Statistic df Sig.

Overall performance
of Construction
.233 80 .000 .893 80 .000
Projects

a. Lilliefors Significance Correction

Sources: SPSS Own Survey,

To determine the data distribution, the p-value at the significance level was checked.
Usually, a significance alpha level (denoted as α or alpha) of 0.05 works well. A
significance level of 0.05 indicates a 5% risk of concluding that the data does not
follow a normal distribution when they actually do follow a normal distribution. From
the above, SPSS Tests of normality output interns of Shapiro-Wilk test probabilities
are less than 0.05 (the typical level), so these data are significantly different from
normal.

38
 Figure 1Normal Q_Q plot

Sources: SPSS Own Survey,

Above (fig2) shows that dots are not despersed along with the line. This indicates that
the data is not normally distributed. Having checked the remaining skewness and by
Kolmogorov-Smirnov & Shapiro-Wilk Tests, Visual Kurtosis inspection of their
histogram, normal Q-Q plots and box plots showed that their factor scores were not
normally distributed.

4.5.Correlations
To examine the presence of a relationship among the factors, correlation analysis was
done. Correlation Analysis is used to measure the association or relationship between
two or more variables (Marczyk, Dematteo & Festinger, 2005). The result of the
correlation measures the strength and direction of the relationship. Spearman’s
correlation method was preferred for this study.

Spearman’s correlation is a nonparametric variation of Pearson’s product-moment

correlation, used most commonly for measurements that do not follow a normal
distribution pattern. The correlation coefficient varies between +1 and -1, where +1
implies a perfect positive relationship (agreement). While-1 results from a perfect

39
 negative relationship (disagreement). As the relationship gets weaker, the correlation
gets closer to zero.

To examine the presence of a relationship and the level of correlation between the
dependent variable (overall performance of construction projects) and independent
variables (Project characteristics related factors, Clint related factors, material related
factors, and contractor related factors, Project procedures, external environment, and
equipment factors), Spearman correlation was done.

Among the seven factors, the correlation of EER factors to the overall performance of
construction projects is shown below.

Table 23 Correlation EER factors

Correlations
Overall
EER4 Physical performance of
EER1 Political EER2 Economic EER3 Social environment of Construction
environment environment environment sites Projects
Spear EER1 Political environment Correlation Coefficient 1.000 0.184 0.051 0.210 .259*
man's
Sig. (2-tailed) 0.103 0.654 0.062 0.020
rho
N 80 80 80 80 80
EER2 Economic Correlation Coefficient 0.184 1.000 .409** 0.048 -.621**
environment
Sig. (2-tailed) 0.103 0.000 0.674 0.000
N 80 80 80 80 80
** ** **
EER3 Social environment Correlation Coefficient 0.051 .409 1.000 .356 -.323
Sig. (2-tailed) 0.654 0.000 0.001 0.004
N 80 80 80 80 80
EER4 Physical environment Correlation Coefficient 0.210 0.048 .356** 1.000 0.215
of sites
Sig. (2-tailed) 0.062 0.674 0.001 0.055
N 80 80 80 80 80
Overall performance of Correlation Coefficient .259* -.621** -.323** 0.215 1.000
Construction Projects
Sig. (2-tailed) 0.020 0.000 0.004 0.055
N 80 80 80 80 80

Sources: SPSS Own Survey,

40
As shown in the table above, it is found that, there is very strong significant
correlation between test samples of EER1 (Economic environment) with (p= 0.000
and r=--0.621.So, there is a moderate negative relationship between independent
variables. Among the seven factors, MAR to the overall performance of construction
projects is shown below.

As exhibited in the table above, there is a moderate negative correlation between test
samples of MAR1 (Shortage of material) and MAR5 (Escalation of material price)
with (p=0.000 and r=-0.474**) and (p= 0.000 and r=-0.402**). So, there is a
moderate negative relationship between independent variables.

Table 20 Case Processing Summary

Marginal
N Percentage

Overall performance of Not Significant 2 2.5%

Construction Projects
Slightly
10 12.5%
Significant
Moderately
22 27.5%
Significant
Very Significant 31 38.8%
Extremely
15 18.8%
Significant
Valid 80 100.0%
Missing 0
Total 80

Sources: SPSS Own Survey,

Table 24 represents the summary of the overall performance of construction projects.

The result from this table shows that among the respondents, only 2.5% of them said
that construction projects were not affected. However, 97.5% believed that
construction performance is affected negatively by the study factors considered in this
study.

41
Table25 Model Fitting Information

Model -2 Log Likelihood Chi-Square df Sig.

Intercept Only 220.759

Final 0.000 220.759 14 0.000

Sources: SPSS Own Survey,

Table 25 shows the model fitting information, i.e., it contains the result of the
comparison between the intercept only model (base model) and the final model which
contains all explanatory variables. The significance of the difference between the "-2
Log Likelihood" between the final and intercept only models is tested using a chi-
square test.

The smallest sig. value indicates that the final model gives a better improvement than
the intercept only model. The p-value of less than 0.001 shows that the model is a
very good finding on how well the model fits the data.

The next table in the output is the Goodness-of-Fit. This table contains Pearson's chi-
square statistic for the model (as well as another chi-square statistic based on the
deviance).These statistics are intended to test whether the observed data is consistent
with the fitted model. If we do not reject this hypothesis (i.e. if the p value is large),
then we conclude that the data and the model predictions are similar and that we have
a good model.

Table26 Goodness-of-Fit

Chi-Square df Sig.

Pearson 215.072 298 1

Deviance 129.263 298 1

Sources: SPSS Own Survey,

The above Table 26 indicates the Pearson chi-square and deviance. It helps to test the
hypothesis H0: the fit is good vs H1: the fit is not good. The large sig. value (P=1)
implies we do not reject H0, which implies that our model fit is good.
42
In linear regression, R 2 (the coefficient of determination) summarizes the proportion
of variance in the outcome that can be accounted for by the explanatory variables,
with larger R 2 values indicating that more of the variation in the outcome can be
explained up to a maximum of 1. For logistic and ordinal regression models, it is not
possible to compute the same R2 statistic as in linear regression, so three
approximations are computed instead.

Table 21 Pseudo R-Square

Pseudo R-Square

Cox and Snell 0.937

Nagelkerke 0.999

McFadden 0.994

Sources: SPSS Own Survey,

The table above contains the values of three pseudo R-square values. High values of
R2 indicate that the model well explains the data. All the pseudo R-square values
considered in this study (Cox and Snell, Nagelkerke, and McFadden) have R 2 values
greater than 0.9. This indicates that the explanatory variables considered in this study
explain most of the variations, or, in other words, the explanatory variables in this
study are a good predictor of the outcome variable.

43
Table 28 Parameter Estimates

95% Confidence
Interval

Std. Lower Upper

Estimate Error Wald df Sig. Bound Bound

Threshold [OVAP =
-61.128 95.847 0.407 1 0.524 -248.985 126.729
1]
[OVAP =
-38.459 59.452 0.418 1 0.518 -154.984 78.065
2]
[OVAP =
-19.447 31.323 0.385 1 0.535 -80.838 41.945
3]
[OVAP =
13.869 25.785 0.289 1 0.591 -36.670 64.408
4]

Location PCR -10.363 15.803 0.430 1 0.512 -41.335 20.610

CLR 6.162 9.733 0.401 1 0.527 -12.915 25.239

PPR -4.043 6.486 0.388 1 0.533 -16.755 8.670

EQR 12.221 18.718 0.426 1 0.514 -24.466 48.907

MAR 6.718 11.012 0.372 1 0.542 -14.865 28.302

EER -3.951 6.505 0.369 1 0.544 -16.701 8.799

COR
-12.796 19.997 0.409 1 0.522 -51.989 26.396

Scale PCR 1.195 0.483 6.108 1 0.013 0.247 2.142

CLR -0.845 0.420 4.047 1 0.044 -1.668 -0.022

PPR -1.102 0.271 16.589 1 0.000 -1.632 -0.572

EQR 0.051 0.432 0.014 1 0.905 -0.796 0.899

MAR 1.254 0.635 3.899 1 0.048 0.009 2.499

EER 0.905 0.354 6.533 1 0.011 0.211 1.599

COR -1.156 0.430 7.226 1 0.007 -1.999 -0.313

Sources: SPSS Own Survey,

From the above table, a statistically significant result for MAR score (p-value =
0.048). We also have a statistically significant result for variable "EER" (p-value =
0.011).Additionally, we also have a statistically significant result for "PCR (p-value =

44
0.013). On the other hand, the result of analysis indicated that CLR scores (p-value =
0.044). PPR scores (p-value = 0.000) and COR scores (p-value = 0.007)

The negative parameter estimates imply that as sores increase on an independent

variable, there is decreased probability of falling at a higher level of dependent
variable. This is true for CLR, PPR and COR due to their negative parameters. The
Material Related factor is ranked as the most significant independent variable with an
estimated result of 1.254. Which means a 1unit increase in MRF result affects project
performance by 125%. The same is true for EER, EQR, and PCR respectively due to
their positive variable estimates. The ordered analysis result indicates that MAR,
PCR, COR, PPR, EER, and CLR respectively.
In another way, instead of interpreting the odds of being in the jth category or less, we
can interpret the odds of being greater than the jth category by exponentiating itself.
By this method, the results in Table 20 indicate that the parameter estimated values
and the relationships between the explanatory variable and the outcome variable
(performance of construction projects). The odds of the overall performance of
construction projects being affected increased by a factor of 3.54 and 3.30 for MAR
and PCR, respectively. For CLR, PPR and COR, the odds decreased by a factor of
0.43, 0.33 and 0.32, respectively.
4.6 Research discussion and Findings
The perceptions of the respondents about factors affecting construction project
performance in the EIAR were analysed using the relative importance index method.
Based on the overall rankings of groups’ material related factors, these factors are
ranked as the main factors that affect project performance of the EIAR. The external
environment of sites, contractor related factors, equipment factors, and project
procedure methods, project characteristics related factors, and client related factors
are other listed factors that affect project performance in the EIAR following the
major factors.
In addition to the group rank, the major variables within the group were also analysed.
According to the RII analysis, the most important top two external environment
related factors were the economic environment, with RII equals 0.770, and the
political environment, with RII equals 0.730. This agreement is traced to the difficult
political situation from which the EIAR research centres suffered.
45
The most important top two contractor related factors were site management &
supervision with RII equals 0.725 and contractor experience, competence, and
commitment of contactors with RII equal to 0.620 and 0.598 respectively.

Appropriate site management & supervision are perceived to have a significant

influence on construction project performance.. This finding supports the generally
accepted view that poor management control significantly impacts the contractor’s
ability to overcome unforeseeable challenges in site-related construction activities and
results in additional costs to the project budget (Akintoye 2000). Through proactive
planning and good development of management competencies, the contractor is
generally the appropriate party to provide effective site management practices on-site.
However, given that proactive decision approval by the clients significantly
empowers the contractor’s management ability, the overall site is well managed with
a shared responsibility between both parties.

Project procedure related factors are also among the factors that affect the project
performance of the EIAR construction projects with the RII equals 0.613 and 0.533
are procurement method and contract administration respectively. The most important
top two project characteristics related factors that affected project performance of the
EIAR were the shorter completion period given for the contract with RII equals to
0.608 and the nature of the project with RII equals to 0.568.

Equipment factors also affect the performance of the EIAR construction projects.
Their top two influential factors were efficiency (RII equals 0.593) and poor planning
for equipment (RII equals 0.575 respectively. Finally, the clients' related factors that
affected the project performance of the EIAR construction projects were the client’s
emphasis on low construction costs and the delay in progress payment to contractors
with RII equals 0.638 and 0.493 respectively.

The main factors from all listed variables were analysed. Based on this, the top ten
most significant factors affecting construction project performance in the EIAR were
discussed in detail below.

46
The escalation of material prices has been ranked in the first position by contractors &
the EIAR staff with a mean score of 0.950. The result is in line with Enshassi et al
(2009), Wiguna and Scoot (2005). The escalation of material prices was one factor
that contributed and had a significant impact on construction performance. All
construction bids in the EIAR are based on a fixed price. These prices are determined
by material prices which are estimated prior to the beginning of the project. It is not
uncommon for material prices to fluctuate dramatically from the time of bid to the
time of completion. Over the past year, the volatility of construction materials prices
has wreaked havoc on construction budgets and caused many disputes between
contractors and the EIAR.

In addition to this, the shortage of materials and material changes, which ranked (5th)
and 6th, led to difficulty anticipating and managing the cost of materials for the
project and made group material related issues rank as the 1st major factor affecting
project performance of the EIAR? This rank was supported by the ordinal regression
results.

The economic environment has been ranked in the 2nd position by contractors and the
EIAR staff with a mean score of 0.770. Construction is naturally volatile and it is
highly responsive to the fluctuation in both customer and business confidence.
Sustained low economic growth typically leads to a construction recession and high
economic growth leads to a rapid acceleration of construction activity. The result is in
line with (odeh and Battaaineh). A challenging task for any project manager is to
ensure that a project is financially viable in a fluctuating economic environment.
Since the periodic economic cycle significantly affects the performance of
construction, accurate forecasting of economic trends, both local and global, is
important. In an economic downturn, fewer construction jobs mean less business for
suppliers, which could drive prices higher or force suppliers out of business. When
suppliers are out of business, construction companies may be forced to pay more for
suppliers, making it more difficult for them to stay afloat.

The political environment has been ranked 3ed.with a mean score of.733. The
political environment is concerned with government policy and the effect of political
decisions on construction projects.

47
The significant roles played by the government in the construction industry are
regulators of the national economy, and regulators of the construction environment
and construction practices, among many others. In its capacity as regulators of the
construction environment, governments influence the development and building
approval processes and enforce compliance with Acts and Regulations. As observed
by Mansfield (1994), governments may also invoke their powers to initiate or stop
projects on political, social, and environmental grounds. Political stability, national
unity and good political leadership are thus crucial to national development. Uncertain
environment, such as unstable government, unpredictable shifts in the economy, and
unexpected changes in consumer demand.

The main reason associated with this is that in the last two to three years, the country's
unstable political environment has affected the free flow of people and materials as
needed. This result agrees with Saleh Samir Abu Shaban (2008) as this factor affects
the schedule & cost performance of projects. A review of the results of hundreds of
World Bank projects by Youker (1992) indicated that success or failure often depends
on factors in the general environment outside the control of the project manager.

Site management & supervision has been ranked 4th with a mean score of 0.713. This
agrees with Akawak Endale, (2020). Sambasivan and Soon, (2007) identified that site
management and supervision are highly contribute to construction project
performance. Site management & supervision is a key to ensuring project
performance successfully. When there is good supervision, projects are done to the
design specifications and, therefore, work is not repeated due to incorrect installations
which have to be re-done. The gap in managing the project activities is reflected in
either poor quality of work, or unnecessary additional costs to the project. This result
is in agreement with Adnan Enshassi, (2010) that it affects strongly the project
performance.

The client’s emphasis on low construction costs is ranked 6th and the procurement
method is ranked 7th with a mean score of 0.6375 and 0.6125 respectively. Even
though the variables are groped in different groups, they are highly related.

48
Mostly, the preferred biding option of EIAR is the ‘traditional working process',
which always involves the lowest price. This procurement process has been working
for many years, so everyone knows how it works because it has been tried and tested.
However, this method forces contractors to price work at unrealistically low levels.
As it is impossible to maintain standards and make profits, the quality of work falls
and contractors become more eager to engage in legal battles to recover their ‘losses’.
Additionally, it does not deliver cost savings, but in fact, is more likely to result in
cost and time overruns, leading ultimately to poor value for money and greater whole-
life costs in the maintenance and operation of assets.

The shortest completion period given for the contract has been ranked 8th with a
mean score of 0.6025. This is in line with the study by Long (2004). He identified that
inaccurate time estimating contributes to the causes of delays in construction projects.
Time estimates are important as inputs into other techniques used to manage and
structure all projects. An inaccurate time estimation technique may cause a project
delay. For instance, in some delayed projects, the contractor does not allow time for
some common problems that always happen during the construction stage, such as
breakdown of equipment, missing deliveries of supplies, accidents and emergencies,
and so on. Because of this problem, the actual time run out from the estimated. So, the
whole project performance is affected.

Competence and commitment of the contractor has a mean score of 0.5975. The
presence of competent and experienced project managers ensures the leading of a
process of construction project implementation. This also guarantees a proper
program of work which should be followed by the commitment of contractors. Due to
their close involvement with site activities, supervisors’ management efforts impact
directly on the productivity and final quality of the work they are responsible for.
Their performance is thus of particular importance for achieving a project’s
objectives.

Poor planning for acquiring and using project machinery and equipment has a mean
score of 0.595. The term planning is being used in many ways and different contexts,
but here it is explained as planning for acquiring and using project machinery and
equipment. This is in line with the study of Ogunlana (1998), who mentioned that
frequent breakdowns and poor planning are the most significant factors that contribute
49
to the performance of construction. Once machinery breaks down, the work stops
immediately and cause some work delays. Finally, the whole project performance is
affected.
From the result of ordinary regression case processing summary, the selected factors
are extremely significant for EIAR construction projects (12.5%). A total of 97.5% of
respondents believed that the construction performance of EIAR was affected
negatively by the selected factors.

Additionally, the model fitting information showed a p-value of less than 0.001. This
demonstrated that the model was a very good finding in how well it fits the data
factors considered in this study.

The output is the Goodness-of-Fit These statistics are intended to test whether the
observed data is consistent with the fitted model. Pearson's chi-square statistic for the
model from the result showed that the data and the model predictions were similar and
that we have a good model. The three pseudo high values of R2 indicate that the
model well explained the data. All the pseudo R-square values considered in this
study (Cox and Snell, Nagelkerke, and McFadden) have R2 values greater than 0.9.
This indicates that the explanatory variables considered in this study explain most of
the variations, or, in other words, the explanatory variables in this study were a good
predictor of the outcome variable.

From the Parameter Estimates of the Ordinal Regression Analysis, statistically

significant results for MAR score (p-value =-0.048), "EER" (p-value = 0.011).
Additionally, we also have a statistically significant result for "PCR (p-value = 0.013).
On the other hand, the result of analysis indicated that CLR scores (p-value = 0.044).
PPR scores (p-value = 0.000) and COR scores (p-value = 0.007)

The odds of the overall performance of construction projects being affected increased
by a factor of 3.54, 3.30, 2.47, and 1.05 for MAR, PCR, EER, and EQR, respectively.
For CLR, PPR and COR, the odds decreased by a factor of 0.43, 0.33 and 0.32,
respectively.

50
The negative parameter estimates imply that as sores increase on an independent
variable, there is a decreased probability of falling at a higher level of dependent
variable. This is true for CLR, PPR and COR due to their negative parameters.

The Material Related factor is ranked as the most significant independent variable
with an estimated result of 3.54.. Which means

1 unit of increase in material related factors affects project performance by 3.54 The
same is true for EER and PCR, respectively, due to their positive variable estimates.

1 unit of increase in external environmental related factors affects project

performance by 2.47

1unit of increase in project characteristics related factors affects project

performance by 3.35

1unit of increase in contractors' related factors. There is a prediction of a decrease of

0.32 percent in project performance.
1unit of increase in project procurement related factors. There is a prediction of a
decrease of 0.33 in project performance results. Their values indicate the order of
their odd value despite the singe.

51
 CHAPTER 5
CONCLUSION AND RECOMMENDATIONS
5.1 Introduction

This chapter explained the discussion of key findings, conclusion drawn from the
findings and recommendation made regarding the study. The conclusions and
recommendations drawn were focused on addressing the objective of the study.

5.2 Summery of finding

This research was conducted on EIAR construction projects that have been
undertaken for since 2018 with the prime intent of identifying factors affecting the
performance of construction projects, ranking these factors and seeing their
relationship with the performance of construction projects. Based on the objectives
and findings of the study, the following conclusions are drawn.

From a literature review under seven independent variables, 31 factors were selected
and distributed to respondents. Based on the perceptions of the respondents, factors
were analysed and ranked using the relative importance index (RII) method to identify
the most influential factors that affect the performance of construction projects. Based
on the overall RII rankings, material related issues are the key factors that affect the
project performance of the EIAR. The external environment of sites and contractor
related factors are other major factors that affect project performance in the EIAR.
These RII ranks were supported by the ordinal regression results.

To examine the presence of a relationship between the factors, correlation analysis

was done. It was found that there is a very strong significant correlation between test
samples of EER1 (Economic environment) and (p=0.000 and r=-0.621**).
Additionally, it was found the correlation between test samples of MAR1 (Shortage of
material) and MAR5 (Escalation of material price) with (p= 0.000 and r=-0.474**)
and (p= 0.000 and r=-0.402**). So, there is a moderate negative relationship with
independent variables.

52
 5.3. Conclusion
Conclusion of the study can be made based on the results found, their interpretation
and discussion of the questionnaire and statistical analysis in accordance of the
research question.

In relation to the objective of this research, it was shown that the factor escalation of
material price has been ranked in the first position by contractors and the EIAR staff
with a mean score of 0.950. This result indicates the high importance of managing the
escalation of material prices to complete the project as planned. This agreement of
opinions proves the importance of these factors in completing the project as planned.

In relation to the problem stated in the research, the results showed that the top five
crucial factors influencing the success of the EIAR construction projects are the
following: increasing material prices, the political and economic climate, a shortage
of materials, site management, and supervision. As a result, the escalation in material
prices, which has a RII of 0.95, stands out as one of the material-related factors that
had the greatest impact on the EIAR projects' performance to complete projects on
time and on budget.

5.4. Recommendation
Based on the conclusions reached, the following recommendations are provided to
improve the performance of construction projects in the EIAR. Changes in material
prices pose a significant risk to the parties involved in any construction project. In any
event, the better practice is to specifically address price escalations going forward to
mitigate these risks.
Proactively including cost adjustment for an escalation clause in the EIAR
construction contract agreements is vital. Mitigating the effects of price escalations
should start in the bidding process. During the bidding phase of a project, identifying
materials most susceptible to price volatility and considering possible changes will set
aside contractors from the small risk of escalated material prices. Therefore, it is
better to address price escalations during the bidding process and include for price
escalation adjustments clauses in the construction contracts going forward to mitigate
these risks. Following price adjustment clauses, an adequate contingency allowance`

53
has to be allocated on the EIAR side in order to cover escalation for certain specified
material costs.

A good understanding of the different features and factors within the environment that
can have an effect on the project is essential. Therefore, contractors should need the
most accurate forecasting of economic trends both locally and globally. This is
important in their cost estimation in order to overcome gaps caused by materials
shortages. Due to intertwined security problems that require being resolved, political
decisions and considerations of the ongoing external environment, especially the
political and business environment, are important to improve the performance of the
construction projects.

The successful delivery of projects is hinged on proper supervision of work..

Therefore, encouraging and supporting contractors to improve forecasting of
economic trends, assess the external environment, especially the political and business
environment.

Further study should be conducted into the factors affecting project performance in
the EIAR construction projects regarding project cost overrun, project schedule
delays, and project quality by the capital & external project funds using inferential
statistics in order to enhance generalizability of factors affecting projects across the
sector. The built environment, in line with continuous site supervision, could improve
the performance of construction projects.

5.5 Suggestion for Future Research

Further study should be conducted into the factors affecting project performance in
the EIAR construction projects regarding project cost overrun, project schedule
delays, and project quality by the external project funds using inferential statistics.

54
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60 | P a g e
 Questionnaires

Dear Respondents,

This questionnaire is of Master of Business Administration in Construction Management of

Addis Ababa Science and Technology University.

To successfully undertake this research, it is mandatory to look into the issues from different
perspectives by involving professionals who have involvement in the construction projects. In
this respect, you are the one who can give the correct and necessary information. Hence, I
kindly request you to take time and give your honest answers to the questions listed below.

I would like to confirm you that your response designed to gather information on the research
title “Factors Affecting project performance in the case of Ethiopian Agricultural Research
Institute. The study is being carried out for a research project in partial fulfilment of the
requirements for the award of degree will be kept strictly confidential. The result shall be used
for academic purposes and the final recommendation and finding shall be forwarded to the
respective office of EIAR for their preventive measure and actions. Besides, your quick
response is vitally important in order to complete the research timely and I would appreciate if
you return the completed questionnaire within a week of your receipt of the same.

Thank you very much for your time and cooperation and looking forward to receiving your
response.

Yours Sincerely,

Eyob Sisay

Mobile No -0913141485 Email Address - eyobshe @gmail.com

Post Graduate Candidate, Master of Business Administration in Construction Management

Addis Ababa Science and Technology University

Addis Ababa

61 | P a g e
Part One: General Information of the Respondent Please tick ( √) the appropriate box
to indicate your answer.

1. Kindly indicate your gender? Male [ ] Female [ ]

Male [] Female [ ]

2. State the type of your organization or company.

Engineer/ designer [ ] Supervisor [ ]

Project manager [] Program/center Director [ ]

Finance &Procurement team [ ] Planning [ ]

Others []

4. How many years of experience do you have in EIAR

Less than 5 years [ ] between 5 to 10 years [ ] between 10-15years [ ]

Between 15-20 years [ ] above 20 years [ ]

5. Kindly indicate the level of your education?

Less than diploma [ ] Diploma [ ] Bachelor’s degree [ ]

Masters [ ] PHD

62 | P a g e
 Part Two: Factors Affecting the Performance of Construction Projects

1. There are a number of factors affecting the performance of construction projects. From
your experience, please express your opinion on the importance of the following factors.
To what extent do they affect the performance of construction projects in the EIAR?

Please tick (√) the appropriate answers to indicate your

reactions to the following Groups/Factors
Groups/Factors Extremely Very Moderately Slightly Not
Significant Significant Significant Significant Significant
(5) (4) (3) (2) (1)

1.Project characteristics related factors

Extremely Very Moderately Slightly Not
Lists of Factors Significant Significant Significant Significant Significant
(5) (4) (3) (2) (1)

Type of project (Building or

infrastructure)
Nature of project
Size of project
Complexity of project
Shorter completion period
given for the contract
2.Clients related factors
Very Moderately Slightly Not
Extremely
Lists of Factors Significant Significant Significant Significant
Significant (5)
(4) (3) (2) (1)

Delay of progress payment to

contractors
Client’s ability to make project
decisions
Client’s emphasize on low
construction cost
Client’s interference during
construction

63 | P a g e
 3.Material related factors
Extremely Very Moderately Slightly Not
Lists of Factors Significant Significant Significant Significant Significant
(5) (4) (3) (2) (1)

Shortage of material
Material change
Low quality material selection
Lack of project material
management system
Escalation of material price

4. Contractor related factor

Extremely Very Moderately Slightly Not
Lists of Factors Significant Significant Significant Significant Significant
(5) (4) (3) (2) (1)

Contractor experience
Shortage of labor force
Site management & supervision
Competence and commitment
Contractor cash flow

5.Project procedure method

Extremely Very Moderately Slightly Not
Lists of Factors Significant Significant Significant Significant Significant
(5) (4) (3) (2) (1)

Procurement method,
Contract administration
Contract close out

6.External environment of sites

Extremely Very Moderately Slightly Not
Lists of Factors Significant Significant Significant Significant Significant
(5) (4) (3) (2) (1)

Political environment
(political interference, political
conflicts &instabilities, vandalism etc.

64 | P a g e
 Economic environment
exchange rate, inflation, price
escalation etc.

Social environment
Diversity with employees, customs,
norms, values, educational level,
attitude towards social responsibility
etc. of the society within which the
projects undertake

Physical environment of sites

access roads, ground conditions, right
off way, challenging terrains, other
unforeseen conditions etc.

7.Equipment factor
Extremely Very Moderately Slightly Not
Lists of Factors Significant Significant Significant Significant Significant
(5) (4) (3) (2) (1)

Shortage
Efficiency
Break down
Poor planning for acquiring &
using of project equipment
Wrong selection

Part Three: Overall performance of Construction Projects Executed in the EIAR

Very Good Good Moderately Low Poor

Performance Performance Performance Performance Performance
Description (5) (4) (3) (2) (1)

Perceived Overall
executed construction
project performance
considering the above
factors

65 | P a g e
 Appendix

Table 22 The relative importance index (RII) and rank of factors

From
All
Groups/Factors EIAR Contractor
Respon From
se Group

For Project characteristics RII Rank RII Rank RII Rank Rank

related factors
Type of project (Building or infrastructure) 0.57 17 0.41 23 0.53 21 3

Nature of project 0.593 14 0.49 14 0.568 19 2

Size of project 0.507 28 0.37 28 0.473 29 5

Complexity of project 0.543 22 0.42 21 0.513 24 4

Shorter completion period given for the

0.567 19 0.73 7 0.608 12
contract 1

MAR Correlations with OVP

Overall
MAR3 MAR4 Lack MAR5 performan
Low of project Escalatio ce of
MAR1 MAR2 quality material n of Constructi
Shortage Material material manageme material on
of material change selection nt system price Projects
* * **
Spearman's MAR1 Correlation 1.000 0.176 0.020 .252 .220 -.474
rho Shortage of Coefficient
material
Sig. (2- 0.118 0.860 0.024 0.050 0.000
tailed)

N 80 80 80 80 80 80

66 | P a g e
 MAR2 Correlation 0.176 1.000 0.063 0.048 -0.008 -0.174
Material Coefficient
change
Sig. (2- 0.118 0.578 0.669 0.942 0.124
tailed)

N 80 80 80 80 80 80

MAR3 Low Correlation 0.020 0.063 1.000 .604** 0.123 -0.015

quality Coefficient
material
selection Sig. (2- 0.860 0.578 0.000 0.275 0.898
tailed)

N 80 80 80 80 80 80

MAR4 Lack Correlation .252* 0.048 .604** 1.000 0.056 -0.182

of project Coefficient
material
management Sig. (2- 0.024 0.669 0.000 0.619 0.106
system tailed)

N 80 80 80 80 80 80

MAR5 Correlation .220* -0.008 0.123 0.056 1.000 -.402**

Escalation of Coefficient
material price
Sig. (2- 0.050 0.942 0.275 0.619 0.000
tailed)

N 80 80 80 80 80 80

Overall Correlation -.474** -0.174 -0.015 -0.182 -.402** 1.000

performance Coefficient
of
Construction Sig. (2- 0.000 0.124 0.898 0.106 0.000
Projects tailed)

N 80 80 80 80 80 80

*. Correlation is significant at the 0.05 level (2-tailed).

67 | P a g e