BY

Dr. Siti Haryati Shaikh Ali
Norudin Mansor
Zalinawati Abdullah
3

May 14 DR CT Yati
 Contractors can be defined as a body or
independent business people who are hired to
perform specific tasks (Gunawan & Kleiner, 2005)
 They are very much involved in labor-intensive
industry and responsible for implementing ideas
that are translated in the form of drawings and
specifications to the actual shape of a building.
 In the construction industry, effort are put in
forming teams in running the project by
combining intellectual effort and devoting
individual capability in completing the project
within the specified period.


May 14 DR CT Yati
 However, in Terengganu the
growth development is quite slow.
 Put the contractors in “cautious”
state.
 Currently, the number of
registered contractors has
currently outnumbered the total
existing projects in Terengganu.
 In order to continue surviving and
remain strategically relevant in
the industry, they need to equip
themselves with the right
competitive advantage over their
competitors.

May 14 DR CT Yati
 Only 10% of them will
be awarded with the
contracts and earning
high capital capacity
 Another 40% of
contractors could only
survive
 The remaining 50% are
not capable of
sustaining their ability
to remain competitive
in the industry.

May 14 DR CT Yati
 They need to equip themselves
with the right competitive
advantage over their
competitors.
 This paper investigate strategic
determinants of the contractors
in Terengganu and their
relationships with competitive
advantage
May 14 DR CT Yati
STRATEGIC FACTORS
INTERNAL
Human Resources
Technology
Financial Management Competitive
EXTERNAL
Government Advantage
New Market Entrant
Supplier
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 Sampling frame - based on sampling frame by
Contractor Services Centre (PKK) (February 2011).
 Population – 3331
 Sample selected – 349 (based on Krejcie and
Morgan,1970)
 Method used to select sample -stratified
sampling technique
 Respondents – contractors (ranging from A to F
of contractors registered under Contractor
Services Centre (PKK).
 Method of data collection – structured
questionnaire
May 14 DR CT Yati
 Stratified sampling technique

MARANG SETIU KEMAMAN
32 32 36

K.TERENGGANU DUNGUN
136 32

HULU TERENGGANU BESUT
51 30
May 14 DR CT Yati
 Factor analysis was performed on all questionnaire
items to establish their suitability for performing
the subsequent multivariate analysis.


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FACTORS ITEMS (BEFORE
F.ANALYSIS)
AFTER
INT – Human Resource 9 3
INT - Finance 9 3
INT - Technology 9 7
EXT - Government 9 7
EXT – New Market Ent. 9 0
EXT - Supplier 9 8
COMPETITIVE ADV 15 10
 After a few rounds of analysis, finally, the
remaining 38 items loaded well on six
(excluding demographics) dimensions with
scores over 0.50.

 It is noted that the dimension of new market
entrance was abolished during factor analysis
due to high cross-loadings.


May 14 DR CT Yati
STRATEGIC FACTORS
INTERNAL
Human Resources
Technology
Financial Management Competitive
EXTERNAL
Government Advantage
Supplier
May 14 DR CT Yati
 To test the association of strategic
dimensions with competitive advantage.
(using Pearson Correlation)



**Correlation is significant at 0.01 level (2-tailed)
• Correlation is significant at 0.05 level (2 – tailed)

May 14 DR CT Yati
HUMAN
RESOURCE
FINANCIAL
MANAGEMENT

TECHNOLOGY

GOVT

SUPPLIER
0.529** 0.379** 0.650** 0.122* 0.407**
 To check on each item individually and to
determine (among the five factors) which is
the strongest factor contributing to
competitive advantage
(using regression analysis)


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Summary of Regression Analysis

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β t- value P
Human Relation 0.352 8.525 0.000
Financial Man. -023 -0.527 0.598 ***
Technology 0.445 10.651 0.000
Government 0.93 2.334 0.020 ***
Supplier -0.246 -6.082 0.000
 Overall, all the five dimensions contribute
significantly to competitive advantage
 Looking at the variables individually – two are
not significant
 Financial Management (p = 0598)
 Government (p= 0.020)
 The biggest impact on competitive advantage
is technology (β = 0.445)
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Further analysis on the role of technology
The study wish to determine whether
technology is

a strong variable/ dimension by itself
OR
is it a strong mediating variable that enhance
the role of other variables
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 Using regression analysis


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REGRESSION
Stage 1 Stage 2
Technology Technology as a
mediating factor
β
(p value)
β
(p value)

TECHNOLOGY
0.650 (0.000)
HUMAN RESOURCE
0.646 (0.000)
FINANCIAL MGT
0.035 (0.51)
GOVERNMENT
0.167 (0.02)
SUPPLIER
-0.199 (0.000)
R2= 0.423 R2=0.541
 It is clear the importance of TECHNOLOGY in
promoting competitive advantage in
construction companies.
May 14 DR CT Yati