IMPACT OF ENTREPRENEURIAL ORIENTATION ON FINANCIAL PERFORMANCE OF CONSTRUCTION COMPANIES IN FEDERAL CAPITAL TERRITORY ABUJA, NIGERIA

Abstract

ABSTRACT In today’s highly competitive and uncertain business environment, achieving superior performance is one major problem most companies are saddled with especially in a developing country like Nigeria where a majority are either underperforming or poorly performing. Problem of abandoned projects, underfunding, incessant collapse of buildings resulting to loss of lives and properties among others have significantly affected the performance of the construction sector. In recent times, entrepreneurial orientation has become an imperative tool for enhancing firm performance, success and survival. . It is on this basis that this study examined the impact of entrepreneurial orientation on the financial performance of construction companies in Federal Capital Territory (FCT) Abuja, Nigeria. Prior studies on entrepreneurial orientation were reviewed to identify the gaps. This study was based on Schumpeterian theory of innovation and Resource Based View (RBV) theory. A survey was conducted on 132 construction companies in the Federal Capital Territory (FCT), Abuja. Structured closed-ended questionnaire were used to collect the study data in order to test the research hypotheses formulated to determine the relationship between innovativeness, risk-taking and proactiveness and financial performance measured by profit and turnover at 95% confidence level. A total of 118 questionnaire were properly filled and found useable while a total of 14 questionnaires were discarded due to incomplete information. The data collected were analysed using descriptive analysis, Pearson Moment correlation and Linear Regression Model. The study found that innovativeness had a statistical significant impact (β =0.519; p value = 0.000) on financial performance. Risk-taking was found to have positive and statistical insignificant impact (β =0.008; p value = 0.921) on financial performance. Proactiveness was also found to have positive and statistical insignificant impact (β =0.148; p value = 0.068) on financial performance. The study thus recommended that construction companies should adopt more innovative construction technologies such as modular construction, Artificial Intelligence (AI), 3D printing construction, Building Information Modelling (BIM) and robotic bricklaying and drones which will help improve speed, safety and quality, boost efficiency and reduce waste and labour cost . It was also recommended that construction companies should efficiently invest resources in order to minimize major construction risks which can affect project planning, scheduling and budget. Furthermore, it was suggested that construction companies should be more proactive in identifying project schedule and cost issues in order to avoid losses and claims as well as unnecessary delays in project completion which has remain a major problem with most construction companies in Nigeria. The study concluded that construction companies should continuously innovate in order to enhance their financial performance. The study also concluded that construction companies should minimize major construction risks as well as address the causes of project delays which can have major impact on their financial performance. This study has contributed to existing literature on entrepreneurial orientation. The study has also open up some avenues for future studies.