comparison of global is at ion

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A Comparative Study of Globalisation and Specialisation of Global LeadingCompanies

AbstractTodays global construction companies are battling in competitive marketenvironments. This thesis examines competitive strategies of the global leadingconstruction companies in order to suggest some policy implications for aconstruction company striving to obtain competitive advantages. For thisresearch, Engineering News Record (ENR) top 225 contractors for the past 4 yearswas analysed, which is one of the most reliable and accessible sources inidentifying the strategic direction of a company. To analyse the strategicdirection of a company in this research, two classifications were adopted;globalisation (this is when more than 50% of the total revenue comes frominternational market revenue) vs. localisation (when more than 50% of the totalrevenue comes from local market revenue) and specialisation (when a company isnarrowly focused in only working in one or some market area such as only

buildings, or only manufacturing etc.) vs. generalisation (when a company isfocused more on different types of market place.) Accordingly,, this researchanalyses the weight of globalisation and specialisation of the 225 companies. Todraw some valid conclusions, a series of rigorous statistical hypothesis testswere undertaken. These research findings are meaningful in terms of beingutilised as a valuable framework for a construction company to steer itsstrategic direction to gain competitive advantages in the future.

Table of Contents1

Introduction....................................................................

.........................1.1

Background....................................................................................................... 1.2

Objectives.......................................................................................................... 1.3

Scope...........................................................................


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.......................................1.4

Structure.............................................................................................................2 LiteratureReview....................................................................................

2.1 Globalisation andLocalisation.........................................................................

2.1.1 What isglobalisation............................................................................

2.1.2

Globalism.............................................................................................

2.1.3 What islocalisation....................................................................

.........2.1.4 Organising for globalisation and

localisation......................................2.2 Competitive

positioning...........................................................................

2.3 Integrated activities on globalscales..............................................................

2.4 Specialisation andGeneralisation....................................................................

3 ResearchMethodology.............................................................................

3.1 Researchapproach............................................................................................

3.2 Researchstrategy...............................................................................................

3.3 Researchobjectives..........................................................................................

3.4 Researchanalysis..............................................................................................

3.4.1 Measuringglobalisation.........................................................................

3.4.2 Measuringspecialisation........................................................................

3.4.3

Regrouping.............................................................................................


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3.4.4 Hypothesistest.......................................................................................

3.4.5 Type I and type IIerrors........................................................................

3.4.6 One tailed and two tailedtests...........................................................

3.4.7 Performing atest....................................................................................

3.4.8 Statistical interferences about twopopulations.......................................

4 Empirical Findings andAnalysis............................................................

4.1 Analysis based on 225Companies...............................................................

4.2 Analysis based on a particulargroup...............................................................

4.3 Analysis based on the annualdata................................................................

4.4 HypothesisTest.............................................................................................

4.4.1 Case1..................................................................................................

4.4.2 Case2...................................................................................................

4.4.3 Case3.....................................................................................................

4.4.4 Case4................................................................................................... 5 Concluding Discussions

5.1 General conclusion...........5.1.1 Observation result..5.1.2 Rigorous statistical hypothesis test result5.1.3 Box plot distribution result................5.2 Strategic conclusions.......5.2.1 Limitations.......

6

References............................................................................................


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1. IntroductionThis chapter is intended to introduce the background of the role of constructionindustries in general and why analysing engineering construction firmcompetitive behaviour and competitive strategies is such an important issue. Thebackground of the research, the objectives and scope of this thesis arepresented in this chapter. At the end of the chapter the disposition of thethesis is presented.1.1 BackgroundTodays global construction companies are battling in competitive marketenvironments. Recent years have witnessed a growing intensity of competition invirtually all areas of business, whether at home or abroad, in markets upstreamfor way????? materials, components, supplies, capital and technology, as well asin markets downstream for consumer goods and services. This has resulted ingreater attention to analysing competitive behaviour and competitive strategiesunder different environmental conditions. The primary emphasis has been onexamining the link between strategy, environment and performance in an effort toachieve a position of competitive advantage (Yamin et al., 1999).

Ofori raised the issue regarding the importance of construction in nationaldevelopment, such that the construction industry is an important sector of theeconomy which makes a significant contribution to gross domestic product (GDP),capital formation and employment, and has backward and forward linkage effectswith several other sectors.The industry also contributes to capital formation and, hence, its productsrepresent a significant proportion of each nations savings. As it produces thenations physical infrastructure and other productive assets, the industry is ofcritical importance to the national development of developing countries. In mostdeveloping countries, the construction industry has failed to play its expectedrole of providing the basis for socio-economic development and securingimprovements in the living conditions of the citizens. Therefore, backlogs ofconstruction needs continue to accumulate. The industry has not been the engineof growth that it is widely considered to be by stimulating activities in othersectors of the economy.According to Ofori, construction should also create job opportunities, reducecosts, and improve quality to contribute towards making the country anattractive place for foreign direct investment (FDI). Its companies shouldcompete with foreign firms entering the markets in an era of globalisation.The global construction market continues to boom and large internationalcontractors are reaping the benefits of the demand for big-ticket projects, frompetroleum production facilities and power plants to major infrastructureupgrades; and signature building has made the demand intense for world classcontractors with the size and expertise to deliver these projects. As a result,big firms around the world are scrambling to grow, either organically or throughacquisition, to meet this demand (Peter, 2008).The higher the levels of innovation in the construction industry lead to, the

greater the likelihood that it will increase its contribution to economicgrowth. Unfortunately, in most countries there is a perception that the industryis not generally innovative, and that there is much room for improvement.Government reports commissioned in recent years have identified such problems aspoor rates of investment in research and development (R&D), fragmented supplychains, and lack of coordination between academia and industry in researchactivities (Dulaimi et al., 2002). These are not simply issues of relevance topublic policy makers; industry participants need to review their capacity toinnovate.At the bottom line, engineering and construction firms need to innovate to win


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projects and to improve the financial results of these projects. They mustinnovate to compete. Development and effective use of new technology can provideimportant competitive advantages for engineering and construction firms. Theseadvantages stem from distinctive technical capability, improvements inoperations, and image as a technically progressive company. - Tatum (1991,447).

Few firms in the construction industry have the resources or incentives tomaintain a formal research and development programme. This indicates theimportance of effective implementation processes to enable firms to adoptsuccessfully innovations developed elsewhere. It has been shown that thisinvolves, in part, absorptive capacity, champions, culture, knowledgecodification, innovation brokers, and relationships with manufacturers.Effective innovation performance at the firm level requires combining elementssuch as these into a formal innovation strategy. The final form of the strategywill be a function of the quantity and quality of organisational capabilities(Walker et al., 2003).1.2 ObjectivesThe objectives of this thesis are:(1) To identify the weight of globalisation and specialisation percentage of the

225 global leading companies(2) To identify the strategies that construction firms use to gain competitivepositions in international markets(3) To analyse the nature of these strategies to sustain construction firmscompetitive positions in international marketsIt is important in this research to identify the critical factors of successfulglobalisation and specialisation strategy through observing the 225 leadingcompanies by using the Engineering News Record (ENR) as a reference tool.1.3 ScopeA study of a managements issues in construction is generally categorised intothree types: such as industry, firm, and project (Charles et al., 2004).Traditionally, most research efforts and attention are placed at the projectlevel. More recently, Kale and Arditi (2002), correctly pointed out thatempirical research approaches to validate or refute hypotheses are lacking inthe research of competitive positioning of construction organisations.The results allow for the development of generalisations regarding strategicapproaches of construction firms to gain a competitive advantage and sustainthese positions in international markets.According to Moavenzadeh (2006), the Engineering and Construction industry isconcerned with two sets of issues:* How demand for its output is generated and affected by modern societies* How a supply system is shaped to cope with changing demandThe construction industry is currently in a state of transition. Forces fromboth the demand, as well as the supply side, have made it necessary to re-examine the strategies for growth and competitiveness (Moavenzadeh, 2006).This thesis focuses on the strategic choice perspective of the leading companiesbased on ENRs top 225 and Australian construction firms.

We need to aim to identify the strategic pattern of each company to identify itsglobalisation and specialisation pattern to achieve the representative modelwhich is shown below;


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Figure 1.1: Globalisation and specialisation section category (Budisetia andHan, 2009)From figure 1.1, we could interpret that there is four regions of model thatrepresents each characteristic of the company.> Region I represents the specialisation and globalisation> Region II represents the specialisation and localisation> Region III represents the generalisation and localisation> Region IV represents the generalisation and globalisationThe division of how the percentage of globalisation and specialisation isdistributed is also showed in the diagram.

1.4 StructureThis thesis is organised into 6 sections, and conducted as the figures showbelow.

Figure 1.2: Outline of the thesis (Budisetia, 2009)

2. Literature ReviewIn this chapter the theoretical framework of the management issues of study will

be discussed. This chapter focuses specifically on globalisation, localisation,specialisation, generalisation and competitiveness issues of a constructionfirms. The first part of the literature review will discuss what globalisationis and how it can challenge firms. The second part of this literature reviewwill discuss the competitive index which identifies the competitive positioningand continuity of construction firms in international markets. Finally, thischapter will focus on the specialisation issue of industrial firms.2.1 Globalisation and LocalisationTwo seemingly competing tendencies, the globalisation and the localisation ofindustries, have captured the interest of scholars, economic developmentprofessionals, and policymakers in recent years. While trends towardsglobalisation of industries and companies appear to reduce the importance anddistinctiveness of (sub-national) regions, a tendency towards localisation ofcertain industries and economic activities appears to do exactly the opposite(Enright et al., 1998).

In the first part of the literature review, we will introduce the terms ofglobalisation and localisation, and distinguish the difference between these twoterms. Referring to our research;? Globalisation

When more than 50% of the total revenue comes from internationalmarket revenue

? LocalisationWhen more than 50% of the total revenue comes from local marketrevenue

2.1.1 What is globalisationKorkmaz & Messner (2008) stated that globalisation has largely been due to

worldwide economic development, increases in communication technology, and theopening of many domestic markets to foreign firms. New economic development andchanges in political policies (e.g., free trade agreements) make it easier forfirms to enter international markets, often through strategic alliances with, oracquisitions of, firms currently operating these domestic markets (Hitt et al.,1998). These developments have opened new markets and opportunities forworldwide firms. Globalisation, however, challenges firms since they must nowcompete within an ever changing and expanded marketplace.According to Russell, globalisation is a term that can refer to everything froman interconnectedness of experience to the rise in international ventures. For


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the design and construction industry, however, globalisation is a trend thatmeans two things: increased opportunity and increased competition.Russell also stated that size and location are important but are definitely notthe only variables. Speciality services, market position, corporate culture, anda willingness to accept and manage change will all have a bearing on a companysability in the globalised future. Engineers must embrace globalisation as thenew reality or risk losing their place in the economy of the future.On the other hand, Kallman (2009) suggests that the quest and need forinnovation have become ever more evident in todays corporate world. Westerncompanies in particular are facing high competition due to the continuousglobalisation of the world. This calls for a higher focus on making innovationmore comprehensive and, hence, more tacit throughout the competitiveorganisation.2.1.2 Globalism

(REFERENCE)The World is flat by Thomas FriedmanBusiness competitiveness has now evolved to a level of sophistication that manyterm globalisms (through more commonly called globalisation). Global competitioncharacterised by networks of international linkages bind countries,

institutions, and people in an interdependent global economy. The invinciblehand of global competition is being propelled by the phenomenon of anincreasingly borderless world, by technological advancements, and by the rise ofdeveloping economies such as China and India (a process that Thomas Friedmanrefers to as levelling the playing field among countries) or the flatteningof the world.Globalisation has led to the narrowing of differences in regional output growthrates as economic activity increased, driven largely by increases led by China,India, and Russia (Chinas growth, 10.7 percent in 2006, continues itsescalation into 2007). It is clear that world trade is phenomenal and growingand, importantly, is increasingly including the developing nations. Howeverthere are important aspects of globalism other than economic factors, thoughthese aspects are intertwined.In todays economic system, no market is isolated from the global markets.Globalisation brings new opportunities to construction companies. However forcompanies that consider international work, these markets also entail manyrisks... To survive and prosper in global economic system, constructioncompanies need to develop special strategies. - (Gunhan and Arditi, 2005).

Therefore, there exist several reasons for construction firms to expand theirbusinesses into international markets, and according to Gunhan and Arditi, thesereasons include stagnant domestic markets, spreading risk throughdiversification into new markets, competitive use of resources, and takingadvantage of the opportunities offered by the global economy.2.1.3 What is localisationAccording to Hoenig, localisation is defined as a company that operates in anumber of countries, adjusting products and practices in each - at a high

relative cost, with a committed operating presence in the markets of othernations.Advocates of the localization strategy point out that, since few markets areexactly alike, some adaptation to local needs is necessary to win buyers andmaximise sales (Ramarapu et al., 1999).(Wind, 1998) has identified three reasons not to become global:1. Standardised products are over-designed for some countries and under designedfor others.2. Company networks that already exist may be undermined, and3. Standardisations dampens entrepreneurial spirit


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Hoenig also stated that localisation allows for:* Winning specific buyers and maximising sales* Not over-designing products for some countries and under designing them forothers* Not undermining some company networks which already exist* Not dampening entrepreneurial spiritThe level of competition one paces????? can decidedly affect the choice betweenstandardisation and localisation. A company that has no direct competition in acountry can more easily standardised its product. However presence of directcompetition tends to orient the company to localisation as a basis forcompetitive advantage (Ramarapu et al., 1999).2.1.4 Organising for globalisation and localisationThis chapter is a summary from ( ) which explains how to organiseglobalisation and specialisation firms.No matter what the stage of internationalisation, a firms structural choicesalways involve two opposing forces: the need for differentiation (focusing onand specialising in specific markets) and the need for integration (coordinatingthose same markets). The way the firm is organised along the differentiation-integration continuum determines how well strategies along a localisation andglobalisation continuum are implemented.

This is why the structural imperatives of various strategies such asglobalisation must be understood to organise appropriate worldwide systems andconnections.As previously presented, global trends and competitive forces have putincreasing pressure on multinational corporations to adopt a strategy ofglobalisation, a specific strategy that treats the world as one market by usinga standardised approach to products and markets.Organising to facilitate a globalisation strategy typically involvesrationalisation and development of strategic alliances. To achieverationalisation, managers choose the manufacturing location for each productbased on where the best combination of cost, quality and technology can beattained. It often involves producing different products or component parts indifferent countries. Typically, it also means that the product design andmarketing programs are essentially the same for all end markets around the worldto achieve optimal economies of scale. The downside of this strategy is a lackof differentiation and specialisation for local markets.Organising for global product standardisation necessitates close coordinationamong the various countries involved. It also requires centralised globalproduct responsibility (one manager at headquarters responsible for a specificproduct around the world), an especially difficult task for multi productcompanies. Henzler and Rall suggest that structural solutions to this problemcan be found if companies rethink the roles of their headquarters and theirnational subsidiaries. Managers should centre the overall control of thebusiness at headquarters, while treating national subsidiaries as partners inmanaging the business- perhaps as holding companies responsible for theadministration and coordination of cross-divisional activities.A problem many companies face in the future is that their structurally

sophisticated global networks, built to secure cost advantages, leave themexposed to the risk of environmental volatility from all corners of the world.Such companies must restructure their global operations to reduce theenvironmental risk that results from multicounrty?????? sourcing supplynetworks. In other words, the more links in the chain, the more chances forthings to go wrong. The overseas Chinese business network alliance whichminimises much risk is described in the accompanying Comparative Management inFocus.2.2 Competitive positioningAccording to The Global Competitiveness Report (2008 2009), after several


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years of rapid and almost unhampered growth, the global economic landscape ischanging. Rising food and energy prices, a major international financial crisis,and the related slowdown in the worlds leading economies are confrontingpolicymakers with new economic management challenges. Todays volatilityunderscores the importance of a competitiveness supporting economic environmentthat can help national economies to weather these types of shocks in order toensure solid economic performance going into the future.A nations level of competitiveness reflects the extent to which it is able toprovide rising prosperity for its citizens.Global Competitiveness reports have examined the many factors enabling nationaleconomies to achieve sustained economic growth and long term prosperity. TheGlobal Competitive Index (GCI) defines competitiveness as the set institutions,policies, and factors that determine the level of productivity of a country.The level of productivity, in turn, sets the sustainable level of prosperitythat can be earned by an economy. In other words, more competitive economiestend to be able to produce higher levels of income for their citizens. Theproductivity level also determines the rates of return obtained by investmentsin an economy. Because rates of return are the fundamental drivers of the growthrates of the economy, a more competitive economy is one that is likely to growfaster over the medium to long term.

The concept of competitiveness thus involves static and dynamic components:although the productivity of a country clearly determines its ability to sustaina high level of income, it is also one of the central determinants of the returnto investment, which is one of the key factors explaining an economys growthpotential (The Global Competitiveness Report, 2008 2009).The Global Competitiveness Report stated that there are 12 pillars ofcompetitiveness with the many and complex determinants of competitiveness. The12 pillars are:1) Institutions2) Infrastructure3) Macroeconomic stability4) Health and Primary education5) Higher education and training6) Good market efficiency7) Labour market efficiency8) Financial Market sophistication9) Technological readiness10) Market size11) Business sophistication12) InnovationKorkmaz and Messner (2008) stated that competition, being at the core of thesuccess or failure of firms, determines the appropriateness of a firmsactivities that can contribute to its performance, such as innovations, acohesive culture or good implementation. A competitive positioning within anindustry attracts attention as a key determinant of a firms profitability.Porter (1980, 1985) proposed generic typologies as a function of each firmssuccess in achieving a competitive advantage within a particular industry, so

they can place themselves in a more advantageous position compared with rivals.The competitive positioning and relationship of the firm to its environmentpromise its continued success and make it secure from the environmentssurprises. A company has a competitive advantage whenever it has an edge overrivals in attracting customers???? and defending itself against competitiveforces.Kozmaz and Messner (2008) also mentioned that dozens of variables and thousandsof their combinations can define competitive space, i.e., the industry settingin which a firm operates. These variables and combinations of variables canpotentially influence a firms positioning. Therefore, sustaining a competitive


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position, as well as the initial creation of position, presents a greatchallenge. Competitive advantage cannot be continued for a long time withoutchanges in products, services, and strategies. Markets change quickly andcompetitors seek to intimate successful products, services, and strategies. Themost successful firms innovate and continually seek new forms of advantage todevelop a competitive gap and maintain their lead.In terms of theories of competitive positioning, Kozmaz and Messner (2008)applied that the debates on competitive positioning can be addressed in thelight of two perceptions in organisational studies literature: environmentaldeterminism and strategic choice perspectives.(a) Environmental DeterminismEnvironmental determinism argues that the environment is the primary mechanismfor explaining the performance of an organisation. Therefore, strategic leadershave limited effect on the performance of an organisation.(b) Strategic Choice PerspectiveStrategic choice perspective states that organisations are capable of respondingto environmental threats and opportunities by adopting alternative strategicchoices, guided by the decisions of strategic leaders whose job is to enhanceperformance.In this strategic choice perspective, Kozmaz and Messner (2008) adopted the idea

such that Porters generic strategies (1980) that consist of cost leadership,differentiation, and focus can be identified as one of the most referencedstrategy classifications and proposes that these strategies were adapted to theconstruction industry.Warzawski (1996) proposes that construction firms can:(1). Achieve a cost leadership strategy by standardisation of products, trainingof personnel, careful selection of suppliers, tight control, technologicaladvance, and incentive programs.(2). Realise a differentiation strategy by a higher standard of product, higherquality of product, faster project completion, and more extensive service toclients, and(3). Obtain a focus strategy by focusing on certain types of project, certaingeographical areas, or certain types of clients.

Mode and scope of competition, illustrated in figure ( ), are unifyingconcepts for strategic choice perspective classifications in the context of theconstruction industry.

(PICTURE)

(c) Integrating PerspectiveRecent research shows that it is not one or the other perspective but, instead,the integrated effects of both environmental factors and the strategic choiceperspectives which lead firms to a competitive advance within their industries.Porter (1990) brings a different dimension to these discussions and states thatcompetitive advantage of nations explains why certain industries succeed

within a nation while others do not. According to his paradigm, the home baseplays a critical role in the potential success of strategy since a firm tends togain competitive advantage in industries for which the local environment isdynamic and challenging.

One of the conditions for firms to operate successfully overseas is that theymust possess competitive advantages in order to outperform domestic and otherforeign contractors (Gunhan and Artiti, 2005).2.3 Specialisation and generalisationIn this part of the literature review, we will introduce the terms of


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specialisation and generalisation, and distinguish the difference between thesetwo terms. Referring to our research;? SpecialisationWhen a company is narrowly focused in only working in one or some market areasuch as only buildings, or only manufacturing etc.? Generalisation

When a company is focused more on different types of market place.

The idea that specialisation is not neutral for growth has deep roots in thehistory of economic thought. According to Verspagen (1999), theoretically, therelationship among specialisation, structural change and economic growth takestwo forms.Firstly, by opening possibilities for an increased specialisation, it leads tohigher productivity growth in the form of learning. In this argument, theemphasis is not so much on what an economy specialises in, but rather whether itspecialises independently of the nature of the specialisation. This argument ispresent in both the New Theory Growth (Aghion & Howitt, 1992; Grossman &Helpman, 1994; Lucas, 1988; Romer, 1990, 1994) and the Postkaldorian export-ledTheory (Mc Combie & Thirwall, 1994).Secondly, some activities might provide bigger growth opportunities than others

and, consequently, it is important in which activities the economy isspecialised. The reasons for this might be in supply-side factors (e.g.differential technological opportunities between activities) or in demand-sidefactors (e.g. differential income elasticities between productive sectors). Thisargument is present in Evolutionary Theory (Nelson & Winter, 1982; Dossi, Pavitt& Soete, 1990; Lundvall, 1992; Verspagen, 2002) in which the growth of theproductivity is subject to the improvements in the economic system, as productquality and R&D efforts.The link between specialisation and income distribution has been rarely studied,but has been the object of recent researches. The distribution of income has animportant impact on demand patterns, as different income groups have differentstructures of demand.Following this idea, Mani & Hwang (2004) argue that countries facing highinequality (absence of a middle class) present a market demand spread and morethinly, but over a wider range of sectors of low, medium, and high levels ofsophistication. As international competitiveness is assumed to develop as anextension of production for the home-market in a process of cumulative learning,the potential for a learning process in the production of high-tech goods israther limited in societies with high inequality.This turns into a restriction on the development of skills, returns [?] to skilland economic growth. The transition to a stage featured by exports with hightechnological content and higher per capita income is thus endogenously limited,in a process in which an initial inequality can depress human capitalaccumulation and retard growth in a manner that is self perpetuating (Mani,2000). Zweimller (2000) argues in a similar way: when income is highlyconcentrated, the potential market for a new product is rather small and ittakes a long time until mass consumption is possible. The expected returns to

innovations are low, which retards technical progress and productivity growth.When wealth inequality is considered (land ownership, for instance), the path ofdevelopment may shift from a situation in which high income-inequality fuelsgrowth, to another in which it restrains growth.The qualitative change in the role of land in the process of industrialisationbrought about changes in the ranking of economies in the world incomedistribution.Therefore, it is also possible to argue that the impact of the structure ofdemand on growth occurs not only at the national level, but alsointernationally. Income distribution affects the way in which countries


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specialise and in which technical progress and productivity can advance.Furthermore, an unequal world economy may show lower growth rates than an equalone. A link between the presented approach and the idea of clubs [?] ofconvergence developed by Quah (1993 a, b, 1996) seems attractive.

3. Research MethodologyIn the previous chapter, the justification for the research project was outlinedin terms of the current literature on knowledge management. The intent of thischapter is to explain and justify how I conducted this research and whichstrategy, methods and approach will be described and discussed. Data collectingand analysing proceeded ???????????? will follow.3.1 Research approachThe research methodology of a scientific approach is a science of studying howresearch is done scientifically. This type of approach is a way tosystematically solve the research problem by logically adopting various steps.Methodology helps to understand not only the products of scientific inquiry butthe process itself. It also aims to describe and analyse method, throw light ontheir limitations and resources, clarify their presuppositions and consequences,relating their potentialities to the twilight zone at the frontiers of

knowledge(Shava, 2005).

The scientific approach in this thesis is deductive, since I initially studiedestablished theories and facts. With help from the collected theories and facts,decisions for the empirical data needed could be carried out. Furthermore, thecontent of the chosen theories is used for analysis of the empirical data inorder to help us answer our research questions.3.2 Research strategyAn empirical research method is used in this thesis.Empirical Research is research that is based on experimentation or observation,i.e. Evidence. Such research is often conducted to answer a specific questionor to test a hypothesis (educated guess). (Basileiad, 2006)

In this type of research, we need to start exploring the project context andformulate the research framework. According to (Basileiad, 2006):Objectives of the Research Process are to:* Capture contextual data and complexity* Learn from the collective experience of the field* Identify, explore, confirm & advance theoretical concepts* Enhance educational design

Aims of the Empirical Research Process are:* Move research beyond simple reporting of observations* Foster environments for enhanced understanding* Combine rigorous research with thorough case study* Relevance of theory is proved by ability to work in a real world environment(context)

Why use Empirical Research Methods?:Tradition and assumed knowledge (i.e. superstition) have been relied upon for

too long* Integrate research and practice* Instructional science (i.e. the education process) needs to progress.

The benefits from Empirical Research Methodology:* Integrate professional knowledge with empirical data to inform instructionaldevelopmental decisions* Teaching methods and student learning are backed by quality data andeducational theory


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* Results reflect or support theory and demonstrate relevance to context* Established relationship between intervention & behavioural responseAs it is stated in the introduction, the objectives of this research aim toidentify the weight of globalisation and specialisation percentage of the 225global leading companies; therefore we need to do some empirical research basedon experiment or observation.3.3 Research objectivesThere are three research questions that arise from this topic;

Figure 3.1: Research objectives (Budisetia, 2009)

3.4 Research analysisThe empirical data collection was based on the annual Engineering News Record(ENR) top 225 companies for the past four years from 2005 to 2008. First of all,we need to analyse these four years data and calculate the globalisation andspecialisation percentage based on the global revenue of each company.3.4.1 Measuring globalisationGlobalisation rate could be found using the International revenue divided by thetotal revenue and multiplied by 100% shown in the Equation 1 bellow.

(1)

In this case we could find out the globalisation percentage in that year of eachof the 225 companies.Once we obtain the globalisation rate, which ranges from 0% to 100%, we findthat:* 0-50 % is defined as localised companies* 51-100% is defined as globalised companies

Figure 3.2: Globalisation percentage (Budisetia and Han, 2009)

3.4.2 Measuring specialisationIn the following stage, after several discussions with my supervisor, wedeveloped the following equation to measure the specialisation rate of eachcompany.

(2)

Specialisation Index is the weight of specialisation of each company based on 9different types of market areas, which is represented by ni.Which,

n1 general building market based on percentage of global revenuen2 manufacturing market based on percentage of global revenue

n3 power market based on percentage of global revenuen4 water supply market based on percentage of global revenuen5 sewer/waste market based on percentage of global revenuen6 industry / petroleum market based on percentage of global revenuen7 transportation market based on percentage of global revenuen8 hazard waste market based on percentage of global revenuen9 telecommunication market based on percentage of global revenue

Note that:* The specialisation index is a range between 0 and 988.* When we sum n1 to n9, we should get a value between 0- 100%.


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Therefore when a company is much specialised, such that it is only focused inone market area and not focused on any other areas at all, the specialisationindex should be 988. Hence, the specialisation rate is 100%.On the other hand, when a company is equally generalised, the niterm of eachmarket area should be about % or 11.1% and we should get a specialisation indexabout 0. As a result the specialisation rate becomes 0%.From the above explanation, we can conclude that;

Figure 3.3: Specialisation rate (Budisetia and Han, 2009)Such that;* 0 50% is defined as a generalised company* 51 100% is defined as a specialised company

3.4.3 Regrouping

After we achieve the globalisation and specialisation rate of each 225 company,we need to divide these companies into 7 smaller groups, based on their globalrankings, in order to analyse how each group is focused on its market,internationally and generally. The division of the groups are as follows;

* Group A --> 1-30* Group B --> 31-60* Group C --> 61-90* Group D --> 91-120* Group E --> 121-150* Group F --> 151-180* Group G --> 181-225Group A represents the top 30 leading companies amongst the global contractorsand we are going to focus further on this group as we analyse the averageglobalisation and specialisation.3.4.4 Hypothesis testIn order to conduct this empirical research, we need to perform four hypothesistests. A hypothesis basically is a hunch, an assumption, a proposion, a guesswhich is tentative, provisional and explains the situation under observation yetto be proved or disprovedAccording to (Warpole, 1974), a statistical hypothesis is an assumption orstatement about one or more populations, which may or may not be true. We obtainevidence from samples of the population to decide whether we will accept orreject a hypothesis.However, rejecting a hypothesis means that we decide that it is false, whileaccepting only implies that we have insufficient information. Therefore wecommonly adopt the practice of using null hypothesis, Ho, which we hope to findthe evidence to reject. Rejecting the null hypothesis allows us to accept thealternative hypothesis, which is the one that we were interested in proving.Strictly speaking, in testing a hypothesis we dont prove anything. What we dois show that it is unlikely that we would be seeing the evidence available ifthe hypothesis was false. Unlikely can vary in different studies. It is

commonly taken to be less than 5%.Another warning needs to be made about doing many tests to test a large varietyof hypotheses on the same data. Each test has a probability of giving theincorrect results, so performing more tests makes it even more likely of makingan error. In fact, if 59 false hypotheses are tested with unlikely being 5%,then it is unlikely that they will all be rejected.3.4.5 Type I and type II errorsWhen we make a decision about whether or not to reject a particular hypothesisthere are two types of errors that we could make. A type I error occurs when wereject a null hypothesis that it is true. A type II error occurs when we accept


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a null hypothesis that is false.The probability of making a type I error is called the level of significance ofthe test and commonly denoted by ?.The probability of making a type II error is commonly denoted by ?. It isimpossible to determine without an alternative hypothesis to measure against.For a fixed sample size a decrease in ? will lead to an increase in ? and viceversa.

3.4.6 One tailed and two tailed testsWhen we are trying to determine if one value is larger than another we have aone tailed test. For example;

(3)

When we are trying to determine if the values are equal then we have a twotailed test. For example;

(4)The type of test selected depends upon the conclusion to be drawn if the nullhypothesis is rejected.3.4.7 Performing a test

Performing a test involves selecting a critical region for a particularstatistic and the determining if the statistic lies within the region or not(Sridhar).The Procedure for hypothesis testing:* Making a clear formal statement indicating use of one- tailed test or two-tailed test* Select significance level based on:(i) The magnitude of the difference between sample means(ii) The size of samples(iii) The variability of measurements within samples(iv) Whether hypothesis is directional or non- directional* Deciding the appropriate sampling distribution to be used (normal or t-distribution).* Selecting a random sample and computing an appropriate value (draw a sample tofurnish empirical data)* Calculation of the probability that sample result would diverge as widely asexpected in null hypothesis* Comparing the probability with given significance level (? or ? )

The figure below explains a better process of hypothesis testing.Figure 3.4: Flow diagram for hypothesis testing (Sridhar)3.4.8 Statistical inferences about two populationsThe hypothesis test we need to perform in this research is statistical inferenceabout two populations as we are trying to determine one population is largerthan another population, such that localisation vs. globalisation andgeneralisation vs. specialisation.

Accordimg to Black et al. (2007), there are 5 types of statistical inferencesabout two populations such that:1. test hypotheses about and construct confidence intervals for the differencein two population means using the z-statistic2. test hypotheses about and confidence intervals for the difference in twopopulation means using the t-statistic3. test hypotheses about and construct confidence intervals for the meandifference in two related populations4. test hypotheses about and construct confidence intervals for the differencein two population proportions


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5. test hypotheses about twi?????? population variancesThe method we going to use in this research is type one which is hypothesestesting and confidence intervals for the difference in two means using the zstatistic (population variances known).In some research designs, the sampling plans calls for selecting two independentsamples, calculating the sample means and using the difference in the two samplemeans to estimate, or test, the difference in the two population means.The object might be to determine whether the two samples come from the samepopulation or, if they come from different populations, to determine the amountof difference in the populations.In order to analyse the difference in two samples by using sample means, thecentral limit theorm states that the difference in two sample means,X and Y, is normally distributed for large sample sizes (both n and m ? 30)regradless of the shape of the populations.The expressions lead to a z formula for the difference in two mean sample means.

(5)where:

= the mean of population 1= the mean of population 2

n = size of sample 1m = size of sample 2For the hypotheses testing, we are going to use one tailed test such that:

(6)

4. Empirical Findingsand AnalysisIn this chapter, the empirical findings gathered to answer our research problemsare analysed. Furthermore, our findings are identified and discussed based onthe theoretical framework. The chapter contains our analysis of the findings ofthe weight of globalisation and specialisation of the 225 top constructioncompanies and the analysis of the statistical interference hypotheses and boxplot distributions result.

This chapter will be divided into five sections, firstly we focus onglobalisation and specialisation of the whole 225 companies. Then in the secondsection we focus on smaller groups of rank of all the companies. The thirdsection is an analysis of the annually globalisation and specialisation rate andat the fourth section, we will perform the hypothesis test and box plotdistribution; and lastly some conclusions will be made based on the observationof the top group and compare them with Australian companies.4.1 Analysis based on 225 companies.In this section, we will discuss the results of our observation based on theanalysis of the top 225 global contractors, which are shown in Figure 4.1.The figures showed the 225 top global construction companies graphed based onthe 2008 globalisation and specialisation percentage. From this graph, we could

observe the weight of these 225 companies and observed the behaviour of theglobalisation vs. localisation and specialisation vs. generalisation.From the observation, we could conclude that 177 companies have a globalisationpercentage less than equal to 50% which is classified as localised and only 48companies have a globalisation percentage above 50%, which is classified asglobalised.Moreover, from observations, 115 companies have a specialisation percentage lessthan equal to 50% and 110 companies have a specialisation percentage more than50%. In this case we could conclude that the specialisation rate of the 225companies is roughly equal in this particular year.


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Figure 4.1: 2008 Globalisation vs. Specialisation (Budisetia, 2009)The rest of the globalisation versus specialisation graphs of 2005 to 2007 areshown in Appendix B.

4.2 Analysis based on particular groupIn this section, we analyse the pattern of globalisation and specialisationbased on the grouping of the rank as it was explained in chapter 3. The resultsare tabulated in table below.2005Ranking GroupsAverage Globalisation (%)Average Specialisation (%)A [1-30]3535B [31-60]2139C [61-90]2752D [91-120]2358E [121-150]2047F[151-180]2467G[181-225]13672006A [1-30]3540B [31-60]2641C [61-90]2256D [91-120]3450E [121-150]1561F[151-180]1966G[181-225]13682007A [1-30]3635B [31-60]3040C [61-90]1962D [91-120]3244E [121-150]2362F[151-180]1473G[181-225]16712008A [1-30]4038B [31-60]2944C [61-90]3652D [91-120]2358E [121-150]2154F[151-180]2469G[181-225]1670Table 4.1: Globalisation and Specialisation percentage based on the grouping(Budisetia, 2009)

The table above shows how each group performs annually. We also can focus oneach individual group and observe the movement of each group year by year. Fromthe table, we could observe that the average globalisation and specialisationpercentage of each group is actually not constant and some of it is increasingand some of it is actually decreasing annually. For a further observation, wecould have a look at the graph below which represents the movement of all groupsin the 225 companies annually.From the graph, we could see clearly the movement of each group annually. Forexample, if we look at the top group (Group A), we could define that theglobalisation rate is constant between 2005 and 2006 and slightly increasing byeach year after 2006. On the other hand, the specialisation is hard to concludebased on four years data as it is not constant, it is slightly increasing, thendecreasing and increasing again.

Figure 4.2: Globalisation vs. Specialisation by groups annually (Budisetia,2009)Therefore based on the table and graph, we could not conclude that there is apattern of each individual group whether it is increasing or decreasing based on

the globalisation and specialisation percentage.For further research, now we average the globalisation and specialisation rate,we could get results as shown in the table below.Groups Average Globalisation (%)Average Specialisation (%)A [1-30]3737B [31-60]2741C [61-90]2656D [91-120]2852E [121-150]2056F[151-180]2069G[181-225]1469Table 4.2: Globalisation and Specialisation average percentage based on thegrouping (Budisetia, 2009)

From Table 4.2, results of the four years average data, it is shown clearly thatthe average globalisation rate is increasing as the group rank gets higher. On


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the other hand, the average specialisation is decreasing as the group rank getshigher.

Figure 4.3 shows the pattern of movement by each group categories more clearlyand it seems that as the groups get higher in rank, they move towardsglobalisation and generalisation.

Figure 4.3: Globalisation vs. Specialisation percentage based on average rankinggroups (Budisetia, 2009)

1.3 Analysis based on the annual dataIn this section, the data will be analysed annually and compared to the averageglobalisation and specialisation percentage from 2005 to 2008. The result istabulated below.

Average Globalisation (%)Average Specialisation(%)20052352200623552007245520082755Table 4.3: Globalisation and Specialisation average percentage based on yearly(Budisetia, 2009)Based on the average globalisation and specialisation, it shows that the top 225global construction companies get more globalised and specialised each year.However the rate of these increases is not constant.

Figure 4.4: Globalisation vs. Specialisation percentage based on averageannually (Budisetia, 2009)

The movement of globalisation and specialisation rate annually can be seen moreclearly in the graph above. The year 2008 is moved towards globalisation andspecialisation if we compare it with the other three years data. However, fromall of the analysis we could not conclude clearly based on 4 years data. Thecomparison also has been done by observation and therefore further analysisneeds to be done, such as hypothesis testing.1.4 Hypothesis Test

In order to perform this empirical research, we are going to perform fourhypothesis tests based on the 2005 to 2008 global constructions data, where allthe methods have been described in the research methodology sections.1.4.1 Case 1Let X represent localisation rankings and Y represent globalisation rankingsbe the independent random variables based on 2008 global construction companyrank. We are interested in testing whether the distribution of localisationrankings and globalisation rankings are the same or one is higher than theother.The hypotheses are:


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H0 : x = yH1 : x> yThe level of significance we are going to use is 0.05The test we are going to perform is one tailed z test for two populations.

X (Localisation Ranks)Y (GlobalisationRanks)157115162208515925911616420910163360117166210111654621181672111517866312016821218186765121169214192048661221702152220796812317121623213126912417221726137112517321827147212617421930167312717522039177412817622141207512917722244217613017922348247713118022451257813218122558288013318261298113418364318213518467328313618570338613718779349313818884359413918985369514019087379614119188389714219289409814319390421001461949143101147195924510214919699461031501971074710415219811049105153199111501061542001195210815520114453109156202145541121572031485511316020515156114161206158n177m48119.3489.60Sx65.32Sy59.21Sx24267.33Sy23505.35Table 4.4: 2008 Localisation and Globalisation rankings distribution (Budisetia,2009)

The table above shows the rankings distribution of localisation andglobalisation companies based on observation. From Equation (5) in the previous

chapter, observed z-value could be calculated.-

z=? [(S2x / n) + (S2y / m)]

(119.34 89.60)z = = 3.018? [(4267.33 / 177) + (3505.35 / 48)]

At an approximate significance level of ? = 0.05, the critical region is z ? z0.05 = 1.645.

Figure 4.5: Location of observed z-value for 2008 localisation vs. globalisation(Budisetia, 2009)Therefore, since the calculated value of the test statistic z = 3.018 > 1.645,the null hypothesis is clearly rejected and conclude that x> y, such that theaverage rankings of localisation is higher than the average rankings ofglobalisation. As a result based on this hypothesis test, at 2008, globalleading companies have competitiveness on international market.For a better illustration, two box plots were drawn as a pictorialrepresentation of the distribution of the set of data using matlab. Box 1represents the localisation ranking distribution and Box 2 represents theglobalisation ranking distribution for 2008.

Figure 4.6: 2008 Localisation vs. Globalisation box plot (Budisetia, 2009)5 Summary NumberBox 1 Localisation RankingsBox 2 GlobalisationRankingsMin15Q162.540Median12486Q3176.5144.5Max225213

Table 4.5: 2008 Localisation and Globalisation 5 summary numbers (Budisetia,2009)

Results of the observation are such that;* Distributions of values in group 1 (Localisation) appear to be skewed to theleft and distribution of group 2 (Globalisation) appear to be skewed to theright.* There is no outliers observed from both groups* The average level of group 2 (Globalisation) measurements is higher than forgroup 1 (Localisation).


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5 Summary NumberBox 1 Generalisation RankingsBox 2 SpecialisationRankingsMin14Q13586Median85140.5Q3143188Max225223Table 4.7: 2008 Generalisation and Specialisation 5 summary numbers(Budisetia, 2009)

Results of the observation are such that;* Distributions of values in group 1 (Generalisation) appear to be skewed to theright and distribution of group 2 (Specialisation) appear to be skewed to theleft.* There is no outliers observed from both groups* The average level of group 1 (Generalisation) measurements is higher than forgroup 2 (Specialisation).* The spread of both groups is similar with a suggestion that group 1(Generalisation) measurements are slightly more variable.

1.4.3 Case 3

Let X represent localisation rankings and Y represent globalisation rankingsbe the independent random variables based on 2007 global construction companyrank. We are interested in testing whether the distribution of localisation

rankings and globalisation rankings are the same or one is higher than theother.The hypotheses are:H0 : x = yH1 : x> y

The level of significance we going to use is 0.05The test we are going to perform is one tailed z test for two populations.

X (Localisation Rankings)Y (GlobalisationRankings)159113162205416126011416320681733611151642089186562116165211141896631181662122020776411916721321209106512016821422210116612216921624215126712317021725225136812417121826156912517221938167012617422041177112717522145187212817622248197313017722349237413117822453277513217957287613318058297713418179307813518280318113618384328213718486338313818588348513918793358714118896368914219099379014319110039911441921034092145193105429414619410843951481951114497149196112469815119711747101153198121501021541991295110415520014052106156201147541071572021505510915920315256110160204158n176.00m49.00117.2297.86Sx65.03Sy63.68Sx24229.51Sy24055.67Table 4.8: 2007 Localisation and Globalisation rankings distribution (Budisetia,2009)

The table above shows the rankings distribution of localisation andglobalisation companies based on observation. From Equation (5) in the previouschapter, observed z-value could be calculated.-

Z =? [(S2x / n) + (S2y / m)]

(117.22 97.86)z = = 1.873? [(4229.51 / 176) + (4055.67 / 49)]

At an approximate significance level of ? = 0.05, the critical region is z ? z0.05 = 1.645.

Figure 4.9: Location of Observed z-value for 2007 Localisation vs. Globalisation(Budisetia, 2009)


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Therefore, since the calculated value of the test statistic z = 1.873 > 1.645,the null hypothesis is clearly rejected and conclude that x> y, such that theaverage rankings of localisation is higher than the average rankings ofglobalisation. As a result based on this hypothesis test, at 2007, globalleading companies have competitiveness on international market.For a better illustration, two box plots were drawn as a pictorialrepresentation of the distribution of the set of data using matlab. Box 1represents the localisation ranking distribution and Box 2 represents theglobalisation ranking distribution for 2007.

Figure 4.10: 2007 Localisation vs. Globalisation box plot (Budisetia, 2009)5 Summary NumberBox 1 Localisation RankingsBox 2 GlobalisationRankingsMin14Q162.543Median122.596Q3174.5148.5Max224225Table 4.9: 2007 Localisation and Globalisation 5 summary numbers (Budisetia,2009)

Results of the observation such that;* Distributions of values in group 1 (Localisation) appear to be fairlysymmetric and slightly skewed to the left and distribution of group 2(Globalisation) appear to be skewed to the right.

* There is no outliers observed from both groups* The average level of group 2 (Globalisation) measurements is higher than forgroup 1 (Localisation).* The spread of both groups is similar with a suggestion that group 1(Localisation) measurements are slightly more variable.4.4.4 Case 4Let X represent generalisation rankings and Y represent specialisationrankings be the independent random variables based on 2007 global constructioncompany rank. We are interested in testing whether the distribution ofgeneralisation rankings and specialisation rankings are the same or one ishigher than the other.The hypotheses are:H0 : x = yH1 : x< yThe level of significance we going to use is 0.05The test we are going to perform is one tailed z test for two populations.X(Generalisation Rankings)Y(SpecialisationRankings)153125311318325412661201844561287123185558129101241868601331812718796113724130188116213825131190126614041132191136714345134192146814748135193157014851136194167114952139195177615155141197197915557142198208016159144199218516263145200228816664146202239016865150203269116969152204279417172153206289517673154207299618174156208309818975157211319919677158213321002017815921433103205811602153410520982163217351062108316421836108212841652193710921686167220381102258717022139112891722224011492173223421159317422443116971754411710117746118102178471191041794912110718050122111182n111m11488.52136.83Sx60.24Sy60.88Sx23628.43Sy23706.30Table 4.10: 2007 Generalisation and Specialisation rankings distribution

(Budisetia, 2009)

The table above shows the rankings distribution of localisation andglobalisation companies based on observation. From Equation (5) in the previouschapter, observed z-value could be calculated.-

z=? [(S2x / n) + (S2y / m)]

(88.52 136.83)


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z = = -5.983? [(3628.43/ 111) + (3706.30/ 114)]

At an approximate significance level of ? = 0.05, the critical region is z ? -z0.05 = -1.645.

Figure 4.11: Location of observed z-value for 2007 generalisation vs.specialisation (Budisetia, 2009)Therefore, since the calculated value of the test statistic z = -5.983 < -1.645,the null hypothesis is clearly rejected and conclude that x< y, such that theaverage rankings of generalisation is less than the average rankings ofspecialisation. As a result, based on this hypothesis test, it seems that at2007, global leading companies have competitiveness in several product areas.For better illustration, two box plots were drawn as a pictorial representationof the distribution of the set of data using matlab. Box 1 represents thegeneralisation ranking distribution and Box 2 represents the specialisationranking distribution for 2007.

Figure 4.12: 2007 Generalisation vs. Specialisation box plot (Budisetia, 2009)

5 Summary NumberBox 1 Generalisation RankingsBox 2 SpecialisationRankingsMin13Q13584Median85148Q3129188Max225224Table 4.11: 2008 Generalisation and Specialisation 5 summary numbers(Budisetia, 2009)

Results of the observation such that;* Distributions of values in group 1 (Generalisation) appear to be skewed to theright and distribution of group 2 (Specialisation) appear to be skewed to theleft.* There is no outliers observed from both groups* The average level of group 1 (Generalisation) measurements is higher than forgroup 2 (Specialisation).* The spread of both groups is similar with a suggestion that group 1(Generalisation) measurements are slightly more variable.

5. Concluding DiscussionsIn this chapter our findings and results from the analysis are summarised basedon our research questions. Firstly, we present a comparison of the resultsachieved from the globalisation and specialisation weight with the results fromthe statistical interference and box plot distributions. Secondly, we presentstrategic conclusions based on our findings.5.1 General ConclusionIn this part of the chapter we will present our academic findings as conclusionsto our research problems. Firstly, the findings for our three sub problems willbe presented and as a summary we will present our conclusions on the mainresearch problem.5.1.1 Observation Result

From our first method of analysing globalisation and specialisation of a companyby using the observation and weighted method, we found that:a. The number of localised companies is more than the number of globalisedcompanies from the 225 ENR ranks.b. The number of generalised companies is more than the number of specialisedcompanies from the 225 ENR ranks.c. We could not conclude that there is a pattern of each individual groupwhether it is increasing or decreasing based on the globalisation andspecialisation percentage.


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d. Based on the four years data average, it seems that as the groups get higherin rank, they move towards globalisation and generalisation.e. Based on the average globalisation and specialisation, it seems that the top225 global construction companies get more globalised and specialised by eachyear; however the rate of these increases is not constant.5.1.2 Rigorous Statistical Hypothesis Test ResultThe second method is obtained by statistical hypothesis testing, and theconcluding results based on the tests are:a. It seems that global leading companies have competitiveness on internationalmarkets;b. It seems that global leading companies have competitiveness in severalproducts or market areas.5.1.3 Box Plot Distribution Result

This is the additional method we used to obtain more valid conclusions and as abackup of our hypothesis testing.The results of Globalisation vs. Localisation are:a. Distribution of values in localisation group appear to be skewed to the leftand distribution of globalisation group appear to be skewed to the right, whichmeans that the globalisation group seems to be a top group with a higher

rankings.b. There is no outlier observed from both groups as all the groups are betweenthe ranks of 1 to 225.c. The average level of globalisation group measurement is higher than forlocalisation group.d. The spread of both groups is similar with a suggestion that localisationgroup measurements are more variable.The results of Specialisation vs. Generalisation are:e. Distribution of values in generalisation group appear to be skewed to theright and distribution of specialisation group appear to be skewed to the left,which means that the generalisation group seems to be a top group with a higherrankings.f. There is no outlier observed from both groups as all the groups are betweenthe ranks of 1 to 225.g. The average level of generalisation group measurement is higher than forspecialisation group.h. The spread of both groups is similar with a suggestion that generalisationgroup measurements are slightly more variable.

5.2 Strategic ConclusionsThe concept of strategic planning indicates the daily management of the issuesand activities and is focused on decision making and performing importantactivities on the basis of their priority. The essential assumption of thismanagement is that the environment is always changing. Therefore, strategicmanagement implies the continuous evaluation of the strategic plan based on thestated priorities and the modification of this plan on the basis of newenvironmental conditions (Temtime, 2004).

This thesis is focused on strategic planning and according to Porters genericstrategies that have been discussed in the literature review; there are threetypes of generic strategies for construction industries such as cost leadership,differentiation, and focus. In this research, we only focus on differentiationand focus as it is difficult to identify the profit of each company.

The differentiation and focus strategy that we obtain from this thesis focusingon only Globalisation vs. Localisation and Specialisation vs. Generalisation.Therefore some limitations rose from this issue.5.2.1 Limitations


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There are some limitations raised in this research. Firstly, the data resourcesthat we used are based on ENRs four years data and, therefore, we cannot draw avalid conclusion based on only four years data. Secondly an issue can be raisedfrom this research such that is it possible to measure a companys performancebased on globalisation and specialisation rate; and to answer this question, weneed to go back to the previous section such as the literature review that wasmentioned that in our research the strategic direction that we used in thisresearch are some of differentiation and focus. It is difficult to guage thecost leadership of a company. Therefore this becomes one of the limitations ofthis research as there are many things we need to take into account to analyse acompanys strategic direction, while we only focus on globalisation andspecialisation performance of a company.As a result, based on these limitations, we cannot draw up a valid conclusionthat either globalisation is better than localisation or generalisation isbetter that specialisation. Even though our research shows that it seems thatmost of the top global leading companies have competitiveness in internationalmarkets and several products or market areas. However we can not conclude avalid conclusion as there are several other factors need to be taken intoaccount.

In closing, clearly the conclusions drawn from the empirical study are mostapplicable to large construction firms, as it is based on ENRs top 225. Othersorts of firms, such as smaller companies may face their own unique issues.Clearly, deceive???/? observations and the conclusion regarding strategicmanagement throughout the construction industries are not even possible giventhe relatively focused????? and small sample size.

comparison of global is at ion

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