Interrelationships among Critical Success Factors

of Construction Projects Based on the Structural

Equation Model
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Yong Qiang Chen1; Yang Bing Zhang2; Jun Ying Liu3; and Peng Mo4

Abstract: Clearly identifying the critical success factors (CSFs) of construction projects and a good understanding of the interrelationships
among CSFs will help project managers focus on the control of key factors and allow them to make reasonable resource allocations. To
explore the interrelationships among CSFs, this research established a CSFs system by first identifying 62 CSFs of construction projects
through a literature review, and then refining them to produce 46 CSFs by expert discussions. On the basis of the CSFs system, which
consisted of three categories and ten subcategories, this study applied the structural equation model (SEM) to explore the interrelationships
among the CSFs. One hundred twenty-four project data that were collected from a questionnaire survey were used to determine the hypo-
thetical model. A detailed evaluation and modification was then performed to revise the model. On the basis of the revised model, which was
verified through evaluating the goodness-of-fit (GOF) indexes, this paper makes a thorough discussion of the interrelationships among the
CSFs. Interrelationships that were identified and verified in the model reveal the influence mechanism among these CSFs. For example, the
factor “riot, revolution, and war” negatively influences the factor “price fluctuation of labor,” whereas the factor “price fluctuation of labor”
negatively influences the factor “time expectation.” Therefore, “riot, revolution, and war” can positively influence “time expectation.”
This indicates that if an owner’s time expectation is a determinant of the time performance of an emergency project, maintaining a
stable political environment would be a critical control point for accomplishing the project. Thus, the interrelationships discovered in this
paper will make it easier to take better control over CSFs and contribute to a project's success. DOI: 10.1061/(ASCE)ME.1943-5479
.0000104. © 2012 American Society of Civil Engineers.
CE Database subject headings: Construction management; Project management; Models.
Author keywords: Construction projects; Critical success factors; Interrelationship; Structural equation model.

Introduction
Various factors influence project performance to varying degrees,
with certain factors more critical to a project's success than others
(Sanvido et al. 1992). It is important for project managers to focus
on these key factors so as to allocate more resources to them. The
term “critical success factor ” (CSF) was first used in the context of
information systems and project management (Rockart 1982).
Sanvido et al. (1992) then brought the term in to the construction
field. They defined CSFs as factors that could predict a project's
success. The last two decades have witnessed a great development
in CSFs. Relevant studies developed the conceptual definition
1
Professor, Dept. of Construction Management, Tianjin Univ., Tianjin
300072, P. R. China. E-mail: symbolpmc@vip.sina.com
2
Research Student, Dept. of Construction Management, Tianjin
Univ., Tianjin 300072, P. R. China. E-mail: zhangyangbing89@yahoo
.com.cn
3
Associate Professor, Dept. of Construction Management, Tianjin
Univ., Tianjin 300072, P. R. China (corresponding author). E-mail:
liujunying@tju.edu.cn
4
Graduate Student CRGP, Collaboratory for Research on Global
Projects, Dept. of Civil and Environmental Engineering, Stanford Univ.,
Stanford, CA 94305. E-mail: mpmopeng@yahoo.com.cn
Note. This manuscript was submitted on September 3, 2010; approved
on October 31, 2011; published online on November 3, 2011. Discus-
sion period open until December 1, 2012; separate discussions must be
submitted for individual papers. This paper is part of the Journal of Man-
agement in Engineering, Vol. 28, No. 3, July 1, 2012. ©ASCE, ISSN
0742-597X/2012/3-243–251/$25.00.
of CSFs (Baker et al. 1983; Pinto and Slevin 1987) to the more
specific identification of CSFs (Terry 2002; Chan et al. 2004).
Research has been undertaken to generally identify CSFs for whole
project success (Sanvido et al. 1992) to separating CSFs for differ-
ent aspects of project performance (Chua 1999; Iyer and Jha 2005,
2006; Aksorn and Hadikusumo 2008) or for projects of different
types (Songer and Molenaar 1997; Ling et al. 2004; Li et al.
2005; Dvir et al. 2006; Chan et al. 2010). Since 2000, more and
more researchers have employed different statistical techniques
to explore the correlations among CSFs (Li et al. 2005; Toor
and Ogunlana 2008; Chan et al. 2010) or to explore the relation-
ships between CSFs and project performance (Han et al. 2007;
Cho et al. 2009).
However, Fortune and White (2006) conducted a study of 63
publications on CSFs and showed that little agreement on
CSFs existed. This will lead to more repetitive work and inhibit
more in-depth studies. In addition, because of the limitation of
many statistical techniques, the interrelationships among CSFs
are not easily identified (Li et al. 2005; Toor and Ogunlana 2008),
which makes it difficult for managers to take better control
over the CSFs. Therefore, this paper aims to (1) identify the
CSFs comprehensively and systematically by putting forward
a relatively complete CSFs system for further study, and (2) ex-
plore the underlying interrelationships among CSFs for a
better understanding of the influence of mechanisms that are
at play and to encourage innovation in construction project
management.

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J. Manage. Eng., 2012, 28(3): 243-251

 Methodology
The authors first undertook an extensive literature review to inden-
tify the CSFs commonly considered in the construction field. To
establish a relatively comprehensive and systematical CSFs system,
the authors further refined and reworded a preliminary list through
interviews with academic experts and practicing professionals in
the construction industry in China. On the basis of the CSFs sys-
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tem, the structural equation model (SEM) method was employed to
explore the interrelationships among the CSFs. To collect projects
information for the model, a questionnaire survey was distributed to
experienced contractors involved in various construction projects
in China. The interrelationships discovered from the model are
analyzed in the Discussion section of this paper.
Critical Success Factors
In the 1990s, Chan et al. (2004) summarized the research of CSFs
and divided 44 identified factors into five categories: project-related
factors; project procedures; project management actions; human-
related factors; and external environment. Li et al. (2005) studied
CSFs related to public-private partnership (PPP) projects. Eighteen
factors were identified and classified into five categories: effective
procurement; project implement ability; government guarantee;
favorable economic conditions; and available financial market. Iyer
and Jha (2006) identified 55 attributes responsible for schedule
performance and grouped them into six critical success factors
and seven critical failure factors. The six CSFs were project man-
ager’s competence; supportive owners and top management; mon-
itoring, feedback, and coordination; favorable working condition;
commitment of all project participants; and owner’s competence.
Han et al. (2007) selected 64 CSFs and identified 14 groups, which
included contractors’ ability and experience, project condition, and
project environments. Lam et al. (2008) identified 42 CSFs that
were grouped into effectiveness of project management action,
nature of the project, and 10 other categories. Park (2009) identified
10 common factors such as the type of project and 188 individual
factors such as clarity of the contract, fixed construction period
(in time), and precise project budget estimate (in cost). Chan et al.
(2010) identified 18 CSFs as necessary to conduct PPP projects
and from them they refined five underlying factors, which were
a stable macroeconomic environment, shared responsibility
between public and private sectors, a transparent and efficient pro-
curement process, stable political and social environment, and
judicious government control.
On the basis of an analysis of previous research, the authors
grouped CSFs into different categories. It was inappropriate to
follow a certain method of classification. This paper categorized
the CSFs into participant-related factors, project-related factors,
and environment-related factors because these three categories
represent the three aspects of subject, object, and environment
of a project.
Project participants refer to the owner and the contractor, which
have been widely accepted as CSFs (Ling et al. 2004; Han et al.
2007; Cho et al. 2009), and the consultants, subcontractors, suppli-
ers and manufacturers, which more and more researchers are find-
ing have a great effect on project performance (Chua et al. 1999;
Ling and Liu 2004; Yu et al. 2006). Project-related factors reflect
the characteristics of a project intrinsically and have always been
deemed as critical factors for a project's success (Kumaraswamy
and Chan 1999; Chan et al. 2004; Cho et al. 2009). Many scholars
believe that environment-related factors in the process of project
construction may have a huge effect on project performance and
can also become CSFs (Kaming et al. 1997; Chua et al. 1999;
244 / JOURNAL OF MANAGEMENT IN ENGINEERING © ASCE / JULY 2012
J. Manage. Eng., 2012, 28(3): 243-251
Walker and Vines 2000; Chan et al. 2004; Fortune and
White 2006).
Among the CSFs that were used in previous research, only the
factors appearing more than two times were accepted into the au-
thors' preliminary list for formulating the CSFs system. As a result,
62 CSFs were identified with 30 participant-related factors,
12 project-related factors, and 20 environment-related factors.
Because the CSFs were identified through a literature review, it
is possible that different authors described the same factors from
different aspects with different words. It is also possible that some
important CSFs were missed because only CSFs that appeared two
or more times in previous research were listed. Therefore, this pa-
per employed an expert discussion method to combine some CSFs
in the list and add some other CSFs to the list to establish a refined
CSFs system. Three academic experts with an abundant knowledge
of construction management and two practicing professionals with
a rich experience in the construction practice were involved in the
discussion. After recombination and addition, 46 CSFs were gained
and further divided into 10 subcategories to constitute the CSFs
system. Project-related factors were divided into two subcategories
as the project characteristics and project delivery characteristics.
One was related to the inherent feature of a project and the other
was related to controllable factors in the process. Participant-related
factors were first divided into three subcategories, according to the
different subjects of “owner,” “contractor,” and “subcontractor.”
The three different aspects of the owner’s characteristics were then
further divided into independent subcategories because of the own-
er’s great importance in project management. Environment-related
factors were divided into three subcategories on the basis of
different types of environment (i.e., natural environment, political
environment, and economic environment). Table 1 shows the final
CSFs system.
Structural Equation Model
The structural equation model (SEM) is a multivariate technique
used to estimate simultaneously a series of interrelated dependent
relationships (Hair et al. 2006). It is superior to the multiple regres-
sion method because it takes into account measurement errors
that occur when a large number of variables are involved (Molenaar
et al. 2000). Furthermore, the SEM is more helpful in understand-
ing performance algorithms because users can visually and
systematically recognize complex relationships (Kim et al.
2009). Its ability to explore relationships, as several studies in
construction management show, makes it the perfect choice for
discovering the underlying interrelationships among CSFs
(Cho et al. 2009; Kim et al. 2009; Ng et al. 2010).
The SEM method consists of measurement components and
structural components (Byrne 1994). The former incorporates a
confirmatory factor analysis that is concerned with how well latent
variables (which cannot be observed directly) are represented
by the observed variables (which can be evaluated directly). The
latter includes multiple regression analysis and path analysis,
and models the relationships among latent variables.
The SEM is usually developed in the following steps:
1. Define the structural and measurement components (e.g.,
measured variables and latent variables) to set up a hypothe-
tical model;
2. Assess the verification of hypothetical model and develop
it with modifications, if necessary; and
3. Assess the verification of the final model and interpret it.
 Table 1. Critical Success Factors System for Construction Projects
Category Subcategory Critical success factor
Participant-related factors Owner’s ability Owner’s experience of similar projects
Ability of owner’s project manager
Ability of owner’s employees
Owner’s financial status
Ability of consultant
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Cooperation experiences between owner and contractor

Project-related factors
Environment- related factors
Cooperation experiences between owner and consultant
Owner’s preference Owner’s preference of involvement
Owner’s preference of risk sharing
Owner’s preference of utilizing own resources
Owner’s acceptable degree of change
Owner’s expectations Cost expectation
Time expectation
Quality expectation
Health, safety, and environment (HSE) expectation
Contractor’s characteristics Contractor’s experience of similar projects
Contractor’s financial status
Contractor’s reputation
Ability of contractor’s project manager
Ability of contractor’s employees
Contractor’s technique and equipment advancement
Cooperation experiences among contractor, subcontractors, and suppliers
Communication mechanism
Subcontractors’ characteristics Ability of subcontractors
Ability of material suppliers
Ability of equipment suppliers
Project characteristics Project nature
Project location
Project confidentiality
Design complexity
Construction complexity
Project delivery characteristics Project delivery system
Tendering method
Completion ratio of design before tendering
Completion ratio of design before construction
Number of contractors available in tender
Economic environment Inflation
Price fluctuation of labor
Price fluctuation of material and equipment leasing
Adoption of new technology/technique/material
Political environment Laws, regulations, and tax policy
Trade union
Riot, revolution, and war
Trade sanction and embargo
Natural environment Weather condition
Geological condition

Establishment of a Hypothetical Model
To set up the hypothetical model, this study selected the 10
subcategories as the latent variables and the 44 CSFs as the
measurable variables. The measurable variables used in the
SEM need to be continuous variables and easily measured. There-
fore, the factors “project nature” and “project location” were not
adopted.
Three professionals in the construction management field were
interviewed on the basis of their knowledge (and because of pre-
vious study on these factors) to make assumptions about the inter-
relationships among the 10 subcategories. A series of literature
analysis were conducted to improve the assumption-making pro-
cess. Fifteen assumptions were used to construct the hypothetical
structural model in Fig. 1. The arrows represent the direction of the
hypothesized influence (Bollen and Long 1992; Hoyle 1995).

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J. Manage. Eng., 2012, 28(3): 243-251


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Fig. 1. Hypothesized interrelationships among the CSFs subcategories
For example, “project characteristics ” is believed to have a direct
influence on “owner’s preference.” Hence, the arrow originates
from “project characteristics” to “owner’s preference.” This
study hypothesized the following 15 relationships for the structural
model:
H 1 : Project characteristics have a direct influence on an owner’s
preference;
H 2 : Project characteristics have a direct influence on an owner’s
expectation;
H 3 : Economic environment has a direct influence on an owner’s
preference;
H 4 : Economic environment has a direct influence on an owner’s
expectation;
H 5 : Owner’s ability has a direct influence on an owner’s
preference;
H 6 : Owner’s ability has a direct influence on an owner’s
expectation;
H 7 : Political environment has a direct influence on an owner’s
preference;
H 8 : Political environment has a direct influence on an owner’s
expectation;
H 9 : Natural environment has a direct influence on an owner’s
preference;
H 10 : Natural environment has a direct influence on an owner’s
expectation;
H 11 : Owner’s preference has a direct influence on the project
delivery characteristics;
H 12 : Owner’s expectation has a direct influence on the project
delivery characteristics;
H 13 : Project delivery characteristics have a direct influence on
the subcontractors’ characteristics;
H 14 : Project delivery characteristics have a direct influence on
the contractors’ characteristics; and
H 15 : Contractors’ characteristics have a direct influence on the
subcontractors’ characteristics.
On the basis of the hypothetical structural model, the observed
variables, which were used to measure the latent variables, were
added to produce the hypothetical model (Fig. 2).
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Data Collection
A questionnaire was designed to collect data for the model. Each
CSF was to be assessed on a nine-point Likert scale. Table 2 shows
an example of how the factors were scored in the questionnaire.
The questionnaire survey was first performed face to face for the
sake of a good response rate and quality. A postal questionnaire
survey was then conducted to get more data. Between April and
June 2010, questionnaires were sent to 250 construction industrial
practitioners in companies that were derived from a list of the top
100 contractors in China; 149 replies were received. To ensure the
reliability of the received responses, the questionnaires were not
used from respondents with less than 5 years experience on proj-
ects. One hundred twenty-four valid questionnaires were ultimately
adopted and analyzed, and represented an overall response rate
of 49.6%.
Cronbach’s alpha reliability test was employed to analyze the
appropriateness of the grouping of the CSFs and the reliability
of the data (Peter 1979; Sharma 1996). The alpha value ranges
from 0 to 1. In reliability testing, values ranging from 0.6 to 0.7
are regarded as sufficient; a value more than 0.7 is regarded as good
(Sharma 1996). As Table 3 demonstrates, all groupings in the
hypothetical model have Cronbach’s alpha values greater than
0.6. This indicates that the internal consistency reliability of the
hypothetical model is sufficient.
Model Development and Verification
The SEM is verified by evaluating its appropriateness. If its appro-
priateness is not good, it needs to be developed and revised.
The appropriateness is assessed from the results of the covariance
structural analysis, which is indicated by the goodness-of-fit (GOF)
indexes. Various GOF indexes can measure the appropriateness of a
model from different aspects. Four indexes were therefore used in
this study to measure comprehensively the model's goodness of fit:
(1) the X 2 ∕df (degrees of freedom) index, which can compare the
observed covariance matrix with the covariance matrix estimated
by assuming that the tested model is true; (2) the nonnormal fit
index (NNFI) or the Tucker-Lewis index (TLI), which considers
a correlation for model complexity; (3) the comparative theit index
(CFI), which represents the relative improvement in the fit of the
hypothesized model; and (4) the root-mean-squared error of
approximation (RMSEA), which estimates the discrepancy be-
tween the observed and the estimated covariance matrices in the
population. Hair et al. (2006) provide detailed information on
the GOF measures. Table 4 shows the results of GOF measures
of the hypothetical model. The ratios for X 2 ∕df (which was
1.735), TLI (0.644), CFI (0.621), and RMSEA (0.078) show that
the hypothetical model was not sufficiently appropriate to explain
the interrelationships among the CSFs. Therefore, the hypothetical
model needed revision.
Two methods were used to revise the model. The first method
used the modification index provided by the computing tool
Amos in SPSS (SPSS 18) to add the causal relationships among
the CSFs; it is the most widely used method of refining the
SEM (Molenaar et al. 2000; Wong and Cheung 2005; Islam and
Faniran 2005). The second method involved deleting the path
showing a low causal relationship that had been statistically signifi-
cant in the parameter test. The hypothetical model was revised a
few times before it performed well with the GOF and the theoretical
expectations (Molenaar et al. 2000). Fig. 3 shows the revised
model.
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Fig. 2. Hypothetical model of the interrelationships among the CSFs

Table 2. Example of Scoring Instruction in the Questionnaire

Category
Participant-related factors
Project-related factors
Environment- related factors
Critical success factor
Owner’s experience of similar projects
Ability of owner’s project manager
Owner’s financial status
Project confidentiality
Design complexity
Construction complexity
Adoption of new
technology/technique/material
Laws, regulations, and tax policy
Riot, revolution, and war
Level (1–9)
1, Very little experience; 9, very much experience
1, Very low ability; 9, very great ability
1, Very bad status; 9, very good status
1, No confidentiality required, 9, high confidentiality required
1, Very simple; 9, very complex
1, Very simple; 9: very complex
1, The innovation is very easy to adopt; 9, the innovation
has many difficulties
1, Legal environment is good for the project; 9, legal environment
is bad for the project
1, Riot, revolution, and war are very much present; 9, riot, revolution,
and war are rare

Table 3. Results of Reliability Test Discussion

Cronbach’s alpha Number of items
In Fig. 3, the authors extracted the interrelationships among
Project characteristics 0.694 3 the CSFs subcategories and among the CSFs in Fig. 3. Figs. 4
Owner’s characteristics 0.646 15 and 5 show these separately.
Environment characteristics 0.721 10
Subcontractors’ characteristics 0.764 3 Interrelationships among the CSFs Subcategories
Contractor’s characteristics 0.838 8
Among the hypothesized relationships, five relationships were
Project delivery characteristics 0.674 5 confirmed, whereas the other 10 relationships were proved
as unacceptable. The data verified only the hypotheses that
“owner’s ability,” “economic environment,” and “political environ-
The last column in Table 4 shows that the model’s level ment” directly influence “owner’s expectations,” and that “natural
of appropriateness improved significantly with the ratios for environment” and “economic environment” directly influence
X 2 ∕df equal to1:450; TLI, 0.768; CFI, 0.786; and RMSEA, “owner’s preference.” The model denied the 10 hypotheses, which
0.061. This indicates that the improved model is relatively true were believed not true, or at least not consistent with the relation-
and acceptable for interpretation. ships underlying the collected data.

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 Table 4. Results of GOF Measures
Goodness-of-fit (GOF) measure Recommended level of GOF measure Hypothetical model Revised model
X 2 ∕df Recommended level from 1 to 2 1.735 1.450
NNFI or TLI 0 (no fit) to 1 (perfect fit) 0.644 0.768
CFI 0 (no fit) to 1 (perfect fit) 0.621 0.786
RMSEA < 0:05, very good fit; 0.05–0.08, fairly good fit; 0.08–0.10, 0.078 0.061
acceptable fit; > 0:1, unacceptable fit
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Fig. 3. Revised model of the interrelationships among the CSFs

Furthermore, the authors discovered many other relationships

among the latent variables. “Owner’s ability” positively influences
“contractor’s characteristics.” This can be interpreted as better
owners have a greater chance in selecting a capable contractor.
“Owner’s expectations” positively influences “subcontractors’
characteristics,” which often happens when the owner appoints
the subcontractors. However, the model reveals that “natural envi-
ronment” has a positive influence on “owner’s preference.” This
indicates that as the natural environment worsens, the owner’s
preference for risk will be greater. This needs further study for
validation.
“Political environment,” “economic environment,” and “natural
environment” have positive correlations with one another. This can
lead to a situation in which an unsatisfactory natural environment
gives rise to the instability of a political environment and economic
environment. However, a stable political environment and eco-
nomic environment can alleviate the negative effects created by
an unsatisfactory natural environment. This suggests that a stable
political environment and economic environment can create a
virtuous cycle. “Project characteristics” and “owner’s ability” also
have a positive correlation because the nature of the project is
Fig. 4. Interrelationships among the CSFs subcategories
determined when the owner chooses the project. Therefore, the

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J. Manage. Eng., 2012, 28(3): 243-251

 owner’s experience and capability on such projects is relatively de-
termined. The correlation differs from a causal relationship because
the change of one variable does not necessarily lead to a change in
the other variable.
Interrelationships among the CSFs
“Riot, revolution, and war” factor negatively influences the “price
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fluctuation of labor” factor. This indicates that the labor price
increases as the political situation becomes less stable. “Price fluc-
tuation of labor” negatively influences “time expectation.” There-
fore, when the price of labor rises, the time expectation should
decrease accordingly, given that total cost is constant. “Time
expectation” has a negative influence on “tendering method,” This
indicates that the greater the time expectation, the greater will be the
possibility of the owner using limited competitive selected bidding
to prevent wasting any time in the bidding procedure and to select a
well-informed contractor that the owner believes has the capability
to complete the project on time. “Tendering method” has a positive
influence on “number of contractors available in tender,” but it has a
negative influence on “cooperation experiences between owner and
contractor.” This suggests that contractors can more greatly partici-
pate in the competition with a more open tendering method, but the
owner will have less of a chance to choose a familiar contractor.
“Health, safety, and environment (HSE) expectation,” “design
complexity,” and “time expectation” have positive influences on
“owner’s preference of involvement.” This suggests that with either
greater HSE expectation, a very complex project, or a tight time
frame increases an owner's desire to get involved in the project
to have better control of the risks and to ensure that everything goes
according to expectation.
“Adoption of new technology/technique/material” is positively
influenced by “law, regulation, and tax policy” and by “riot,
revolution and war,” but it is negatively influenced by “ability
of contractor’s employees.” This indicates that adopting new
technology/technique/material is less needed when the law, regu-
lation, and tax policy is more favorable for the project, when
the political situation gets more stable, and when the selected con-
tractor is more capable. The interpretation of this is that adopting
new technology/technique/material can bring new risks; therefore,
if the environment is favorable or the contractor is excellent, adopt-
ing new technology/technique/material may be unnecessary. This
finding still needs further validation, although it is statistically true.
“Adoption of new technology/technique/material” has a negative
influence on “owner’s preference of risk sharing,” which suggests
that the risks increase when new technology/technique/material is
used and the owner tends to avoid such risks.
“Law, regulation, and tax policy” positively influences “quality
expectation.” This indicates that the owner’s expectation will rise
as the law, regulation, and tax policy become more unfavorable for
the project. This relationship is drawn from the collected data
of the surveyed projects; however, its universality still needs further
study for validation. “Project delivery system” is negatively influ-
enced by “construction complexity,” but positively influenced by
“quality expectation.” This demonstrates that the traditional project
delivery system is more suitable for simple projects, and that alter-
native project delivery systems, such as design-build (DB) and
engineering-procurement-construction (EPC), are less reliable for
projects with a high-quality expectation. “Construction complex-
ity” negatively influences “communication mechanism,” but “co-
operation experiences among contractor, subcontractors, and
suppliers” has the opposite effect. This suggests that communica-
tion will be worse when greater project complexity and a record of
poor cooperation exist among a contractor, subcontractors, and sup-
pliers. “Cooperation experiences between owner and consultant”
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J. Manage. Eng., 2012, 28(3): 243-251
has a positive influence on “ability of consultant.” This shows that
the experience of the owner and the consultant’s cooperation will
help the owner select a capable consultant. Therefore, “ability of
consultant,” and “cooperation experiences among contractor, sub-
contractors, and suppliers,” have a positive influence on “ability of
subcontractors” because the subcontractors are often selected by
the owner with the help of the consultant or by the contractor
on the basis of the cooperation experiences.
“Owner’s experience of similar projects” positively influences
“contractor’s experience of similar projects” and negatively
influences “owner’s preference of utilizing own resources.” This
indicates that if owners have had a good experience on similar
projects, they will be able to choose experienced contractors, and
use less of their own resources. The latter needs further study for
confirmation.
“Contractor’s reputation” is positively influenced by “contrac-
tor’s financial status” but negatively influenced by “project confi-
dentiality.” It is commonly accepted that a contractor’s reputation
will be considered worse as the financial status worsens, with little
or no guarantee that the contractor will complete the project
satisfactorily. From the data, the model reveals that the lower
the “project confidentiality,” the better will be the “contractor’s rep-
utation.” However, this needs further study for confirmation.
“Ability of equipment suppliers” can positively influence
“contractor’s technique and equipment advancement,” because a
capable equipment supplier is able to supply high-quality equip-
ment to the contractor and improve a contractor’s equipment
advancement.
“Owner’s financial status” has a negative influence on “cost
expectation.” This shows that the worse the owner’s financial
status, the more demand the owner will make on cost control.
Conclusion
This paper established a critical success factors system for construc-
tion projects and explored some interrelationships among the CSFs.
The revised SEM developed in this paper verified five relationships
and denied 10 relationships proposed in the hypothetical model. The
authors furthermore discovered many underlying relationships
among the CSFs subcategories and among the CSFs such as “own-
er’s ability” having a positive influence on “contractor’s character-
istics” and “tendering method” having a positive influence on
“number of contractors available in tender” but a negative influence
on “cooperation experiences between owner and contractor.”
Interrelationships identified and verified in the model reveal the
mechanism of influence among these CSFs, making it easier to
have greater control over the CSFs. For example, the revised model
reveals that “riot, revolution, and war” negatively influences
the “price fluctuation of labor ,” whereas “price fluctuation of la-
bor” negatively influences “time expectation”; therefore, “riot, rev-
olution and war” can positively influence “time expectation.” If it is
proved that the owner’s time expectation is a determinant
of the time performance of a project, then maintaining a stable
political environment would therefore be a critical control point
for accomplishing an emergency project. Such relationships can
be easily located in the path diagram in Fig. 5.
This paper discovered some relationships that were not realized
previously. The findings will draw new attention to these CSFs and
their relationships, and may encourage innovation in related man-
agement. For example, the authors discovered that “adoption of
technology/technique/material” is negatively influenced by “ability
of contractor’s employees.” If its universality is proved with further
study, this relationship could be used to control better the adoption
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Fig. 5. Interrelationships among the CSFs
of new technology/technique/material through the selection of a
contractor. Validating such relationships can be a new research
topic in the future.
This research developed a model for general types of construc-
tion projects because of the limited amount of sample data; there-
fore, the accuracy of the model cannot be guaranteed. Despite the
appropriateness of the revised SEM, the authors regarded all
environment-related factors as one (namely, the environment
characteristics) when conducting the Cronbach’s alpha reliabi-
lity test. However, the factors belong to different subcategories
in the SEM, some of which had values as low as 0.50 in the
Cronbach’s alpha reliability test. The same happened with the own-
er’s characteristics. This can be regarded as a limitation of this
study and could be improved by collecting more high-quality data.
Because of the limitation of the SEM method in its requirement of
continuous variables, some CSFs such as the project type were not
included in the model.
Therefore, further research is required to develop a more appro-
priate SEM method that uses more sample data with higher quality
to explain better the interrelationships among the CSFs, and to
pay more attention to the interrelationships among the CSFs for
different project types.
Acknowledgments
The authors would like to acknowledge the support from the
National Natural Science Foundation of China, which funded
project (Project Number 70772057), and all respondents of the
questionnaire survey.
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