Competitive Advantage among Indigenous Construction Firms in Competing with Expatriate Contractors in Nigeria

Abstract

In recent times, the preference for expatriates in the contractual process in Nigeria has become an issue of controversy and general public interest. As a result, the high presence of these foreign expatriates has raised competitiveness in the construction sector, which is partly caused by indigenous enterprises' incapacity to meet the demands placed on them in terms of construction project delivery. This paper, therefore, investigates the factors influencing clients’ choice of contractor, examines the performance index of both expatriate and indigenous construction firms (ICFs), and analyzes the key performance indicators (KPI) for ICFs to increase their competitive advantage. The methodology involved the administration of structured questionnaires to a paper population of 384 construction experts comprising engineers, architects, quantity surveyors, builders, and project managers in Nigeria. With a response rate of 69%, frequencies/percentages, mean values, relative importance index (RII), and regression model were employed for the analysis. The findings revealed that the most important factors influencing clients’ choice are past performance and experience, equipment capabilities, and quality specification/standards. Additionally, this paper used six (6) KPIs (human resource management, financial management practices client-based strategy, organizational culture practices, smart work methods, and quality management practices) to model the performances of ICFs to increase their competitive advantage in Nigeria. This paper concluded that there is a higher performance of foreign expatriates in terms of time, cost, scope, quality, and satisfaction over their indigenous counterparts. This paper recommended that there is a need for ICFs to increase their equipment capacity and ability to undertake mega projects, develop an effective funding strategy to execute projects and collaborate with international partners to boost their level of competitiveness.