The Perceived Effect of Macro Environmental Factors on Project Performance in The Construction Industry: The Case of Tibeb Design and Build Plc.
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Date
2024-09
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Addis Ababa University
Abstract
The construction industry in Ethiopia is crucial for the nation’s economic growth and development. The macro environment in construction projects refers to external factors beyond an organization’s control that influence its success. Economic factors refer to the conditions and trends that impact the overall economy, such as inflation rates, economic growth, exchange rates, and unemployment levels. Technological factors encompass advancements in technology that can impact industries. Political factors involve government policies, regulations, stability, and political events that can affect businesses. This study aimed to analyze and assess how macro environmental factors influence project performance within the construction industry, specifically focusing on Tibeb Design and Build. The study used a descriptive and explanatory research design to accomplish its purpose, with employees of the organization as primary data sources. Questionnaires were used to collect these data. The survey was performed using a census, with 96 employees of Tibeb Design and Build filling out questionnaires. 79 questionnaires were correctly filled out and returned from the distributed questionnaires, accounting for an 82.3% response rate. The data was analyzed using the descriptive method. To model the impact of economic, technological, and political factors on project performance, a multiple linear regression was used. The findings show that project performance is positively affected by both economic and technological factors. The most powerful indicator was technological factors, followed by economic factors. The study proposed that a high value should be given to macro-environmental factors, especially considering economic factors in the organization's operations and incorporating new technologies into its initiatives. The research also found that political factors did not have any effect on project performance.
Key words: Project performance, economic factors, technological factors, political factors