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1 Chapter Introduction This chapter presents an overview of previous research on construction.3 provides overview of the concepts of critical success factors in general and for the most part in the field of construction industry. . Section 2. and finally this section discusses connection between Somaliland construction industry and economy.4 Conclusion Section 2. and critical success factors of construction industry in generally and particularly in Somaliland. it also provides information available about the situation and issues in Somaliland construction industry. 2.2 Construction Industry 2.CHAPTER 2: LITERATURE REVIEW 2.1 Chapter Introduction 2. It summarizes what is known about the aforementioned topics and also introduces the contents and the map of this chapter which are illustrated in the below Figure 2. Section 2.2 introduces and defines construction and construction industry in general.1 which is the introduction provides an overview of the contents of the chapter and short description on each section.1. construction industry.3 Critical Success Factors 2.

2 Construction Industry in Somaliland Somaliland cities were destroyed by two times for the past three decades. streets. 2. railways. Somaliland worked to build peace and stability and the country economy began to grow significantly after 2003 Somaliland presidential election. office buildings. industrial facilities. sports facilities etc.2. bridges.2. Those conflicts created the need for repairing and building new infrastructure and housing but the barriers were the economic depression caused by the conflicts. This unprecedented act in the history of African conflicts resulted almost the complete destruction of cities in Somaliland. After 1997.2.. farm buildings etc. Also another civil war broke 1994 and continued until 1997 which again damaged the infrastructure of the major cities.2 Construction Industry 2. sewerage systems. for instance up to 90% of Hargeisa (The second largest city of the Somali Republic (1960 – 1991) and now the capital city of Somaliland) was destroyed at that time. in 1988 the major cities in Somaliland have been destroyed by large-scale artillery shelling and aerial bombardment by the ruling regime government at that time. tunnels. airfields. harbors and other water projects. or the construction of civil engineering works such as motorways. the election was democratic milestone and great victory which attracted the attention of Somaliland Diaspora and international community as Mark Bradbury (2003) wrote . pipelines and electric lines.1 Definition of Construction Industry The International Standard Industrial Classification (ISIC2008) defined general construction as: General construction is the construction of entire dwellings. the unrecognized country political status and low level of stability and security. irrigation systems. stores and other public and utility buildings.

Investment in the construction industry is found to have a long-term impact on GDP (Gross Domestic Product) while GDP was found to have short-term impacts on investment in the construction industry (Dakhil2013).5 percent share of GDP and construction sector was 3. From 2003 until now. the notable ones are Daryeel.7%. Al Baraka. Table 2. among freest and most transparent democratic exercises ever staged in the Horn of Africa”. Somaliland authorities involved in construction industry don’t have their own building regulations and standard and they don’t respect. . Also Todaro (2013) explained that economic growth has a short-term orientation that aims at quantitative changes in the economy like increases in production or job creation.“International observers of the Somaliland elections were fairly unanimous in their views that the elections were. economic development has a long-term orientation that aims at qualitative changes in the society in general such as improvements in the quality of life. although it is not that high but it is increasing year after year and contributing a lot to the economy. on the whole. currently there are number of construction companies.3 Construction Industry and Economy in Somaliland Many studies have shown the casual relationship between construction industry and national economic growth. 2. and Haboon. The largest sector was livestock comprising a 29.2. Unfortunately. many people are willing to invest in Somaliland business sector and the construction business is among the sectors which are growing faster and stronger. pay attention and enforce the international standards for construction operations. Najah. On the other side.1 below is showing World Bank (2012) report on the contribution of different private sector industries to the GDP of the country.

2 Real estate activities 6.4 Forestry 5. Addition to that construction industry is a source of job opportunities which tackles the extensive unemployment issues in Somaliland.5 Crops 8. Table 2.7 Information and Communication 2.4 The table shows that the construction industry is significantly contributing to the country’s economy.5 Wholesale and retail trade 19. . Figure 2.2 shows Somaliland business license growth 2004 – 2010 (World Bank2016).1 Somaliland private sector contribution to the GDP 2012 Sector Share of GDP (%) Livestock 29.2 Construction 3.2 Others 17.

3.7). critical success factors are "The limited number of areas in which satisfactory results will ensure successful competitive performance for the individual. It was later transferred to the field of business strategy research.The construction has been increasing year after year and still growing in number generating employment. 2. and registering property (World Bank and IFC2012). These can also affect all competitors within an industry. Hargeisa ranks above average for Sub-Saharan Africa on dealing with construction permits. in press. product characteristics etc. Mintzberg. 1981. demand characteristics. There it is used in different ways.2 Sources of Critical Success Factors Rockart and Bullen (1981) presented five sources of critical success factors:  Industry: e. Also. 1981). Critical success factors are the few key areas where 'things must go right' for the business to flourish and for the manager's goals to be attained.3 Critical Success Factors 2. department or organization." (Bullen & Rockart 1981.1 Definition of Critical Success Factors The concept of CSF’s was first introduced by Daniel (1961) and was refined by Rockart (1979). . According to Bullen and Rockart. technology employed. Jemison.. 2. 1990a). Historically. but their influence will vary according to the characteristics and sensitivity of individual industry segments. the concept originated in the field of management information systems.g.3. getting electricity. ((Bullen & Rockart. corresponding to the different schools of thought that can be found in that area (Grunert. p.  Organization’s Competitive strategy and industry position: This is determined by the history and competitive positioning in the industry.

e. if the mission is performed and if there is a high level of satisfaction concerning the project outcome among key people”.  Managerial position: i. Nguyen. Ogunlana & Lan (2004) identify and group success factors under four categories which are referred to as the ‘four COMs’.e. economic and government legislative policies etc.3 Critical Success Factors in Construction Industry Construction industry mainly involves projects. e. so the success of the industry comes from the success of the projects. lack of managerial expertise or skilled workers. Freeman and Beale (1992) suggested seven main criteria for measuring the success of projects.  Environmental factors: are the macroeconomic influences that affect all competitors within an industry. commitment and communication. five of them are more frequently used than others:  Technical performance  Efficiency of execution  Managerial and organizational implications (mainly customer satisfaction) . On the other hand. comfort.  Temporal factors: which are areas within a business causing a time-limited distress to the implementation of a chosen strategy.. 1987). competence. According to de Wit (1986).3.. if the project meets the technical performance specifications. 2.g.g. “a project is considered successful. demographics.. the various functional managerial positions in a business have each their generic set of associated critical success factors. Most projects have multiple stakeholders with different views on the project's purpose and different expectations of what the project must achieve (Lyytinen & Hirschheim. and over which the competitors have little or no influence.

.  Personal growth  Manufacturability and business performance. Li (2008) suggested that uniqueness of construction project is the key of the success of the project.