ĐẠI HỌC QUỐC GIA HÀ NỘI TRƯỜNG QUẢN TRỊ VÀ KINH DOANH --------------------- TRẦN HÙNG CƯỜNG FACTORS IMPACTING CORPORATE COMPETITIVE CAPABILITIES IN CONSTRUCTION SERVICES: A CASE STUDY OF VIETNAM INVESTMENT DEVELOPMENT CONSTRUCTION JSC CÁC YẾU TỐ ẢNH HƯỞNG NĂNG LỰC CẠNH TRANH CỦA DOANH NGHIỆP TRONG LĨNH VỰC XÂY DỰNG: TRƯỜNG HỢP NGHIÊN CỨU CỦA CÔNG TY CỔ PHẦN ĐẦU TƯ PHÁT TRIỂN XÂY DỰNG VIỆT NAM LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH HÀ NỘI - 2023 ĐẠI HỌC QUỐC GIA HÀ NỘI TRƯỜNG QUẢN TRỊ VÀ KINH DOANH --------------------- TRẦN HÙNG CƯỜNG FACTORS IMPACTING CORPORATE COMPETITIVE CAPABILITIES IN CONSTRUCTION SERVICES: A CASE STUDY OF VIETNAM INVESTMENT DEVELOPMENT CONSTRUCTION JSC CÁC YẾU TỐ ẢNH HƯỞNG NĂNG LỰC CẠNH TRANH CỦA DOANH NGHIỆP TRONG LĨNH VỰC XÂY DỰNG: TRƯỜNG HỢP NGHIÊN CỨU CỦA CÔNG TY CỔ PHẦN ĐẦU TƯ PHÁT TRIỂN XÂY DỰNG VIỆT NAM Chuyên ngành: Quản trị kinh doanh Mã số: 8340101.01 LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH NGƯỜI HƯỚNG DẪN KHOA HỌC: TS. NGUYỄN TÚ ANH HÀ NỘI - 2023 DECLARATION The author confirms that the thesis‟ research outcome is the result of the author‟s independent work compiled mainly during his study and research period, and it has not been published in any other research and article. The other‟s research results and documentation (quotes, tables, figures, formulas, charts, and other documents) used in the thesis are cited properly with permission of their authors. The author is responsible in front of the Thesis Defense Committee, the Hanoi School of Business and Management, and under the law for this declaration.
i ACKNOWLEDGEMENT After studying and researching with the enthusiastic assistance of teachers, friends, and colleagues, thesis Master of Business Administration with the topic “FACTORS IMPACTING CORPORATE COMPETITIVE CAPABILITIES IN CONSTRUCTION SERVICES: A CASE STUDY OF VIETNAM INVESTMENT DEVELOPMENT CONSTRUCTION JSC” has been accomplished. To complete this thesis, the author has received great encouragement and support from friends, teachers, and the company. First of all, the author would like to express my deep gratitude to Ph. NGUYEN TU ANH who enthusiastically guided the author to carry out the research.
The author would also like to express my sincere gratitude to teachers & lecturers who provided the author with extremely useful supplementary knowledge during my study at the HSB School of Business and Management, Hanoi National University. While carrying out the thesis, the author made efforts to complete the thesis in the best way, but due to limitations of knowledge, time, experience, and references, the thesis might contain mistakes. Therefore, the author would like to receive further suggestions and guidance from teachers and colleagues. Thank you so much for the honor! ii TABLE OF CONTENTS DECLARATION.
v LIST OF FIGURES. vi CHAPTER 1: INTRODUCTION. Rationale of Research. Review of previous research.
Scope of research. 7 CHAPTER 2: LITERATURE REVIEW. Corporate competitive capabilities. Definition of competition.
Classifications and types of competition. Corporate competitive capabilities. Corporate competitive capabilities in construction industry. Cost capability in construction industry.
Delivery capability in construction industry. Quality capability in construction industry. Flexibility capability in construction industry. Knowledge management in construction industry.
Suggested research model. 35 CHAPTER 3: RESEARCH DESIGN AND METHODOLOGY. Introduction about case study. History of development.
Results of business activities. Data collection and analysis. Data analysis procedure. 48 CHAPTER 4: RESEARCH RESULT.
Analysis of survey outcomes. Exploratory Factor Analysis. Pearson Correlations Analysis. 67 CHAPTER 5: CONCLUSION AND SUGGESTION.
Limitations and further research directions of the topic. 71 APPENDICE iv ABBREVIATION EFA Exploratory Factor Analysis FPTS FPT Securities GSO General Statistic Office MBV Market-based view ME or Mechanical and Electrical M&E PMBOK Project Management Body of Knowledge (PMBOK® Guide) PMI Project Management Institute RBV Resource-based view TQM Total Quality Management VACC Vietnam Association of Construction Contractors Vietnam Investment Development Construction Joint Stock VINADIC Company v LIST OF FIGURES Figure 2. Firm's competitive pyramid (Hoang Dinh Phi, 2011). Five forces model, M.
Classification of delays by causes. Root cause diagram for delay of construction works in Tra Vinh. Suggested Research Model. Real growth rate of Vietnam construction industry 1990-2018.
Competition environment of construction industry in Vietnam (FPTS, 2019). 46 vi CHAPTER 1: INTRODUCTION 1. Rationale of Research According to the socio-economic development strategy report for the period of 2011-2020 by the Government of Vietnam, the construction industry is an essential economic sector playing strategic role for the national development. The construction, installation and infrastructure development sectors have thrived with an average growth rate of 9.15% per year compared to 4.
FPT Securities (2019) forecasted in their report on 12/2019 that the construction industry of Vietnam will have an average growth rate of 6.9% per year until 2028, with the market driving force by constructing non-living houses. There has been more attractive for private and foreign enterprises to join the construction market. These two groups gradually replace the state enterprises. According to the General Statistics Office of Vietnam, the state enterprises only shared 8% of total market revenue by 2016, while the major portions of the market are shared by private and foreign enterprises (87% and 5%, respectively).
There are about 74,000 construction enterprises operating in the local market; most of them are small and medium enterprises. This fragmentation led to the highly competitive pressure on the construction market in Vietnam. In line with the growth rate of the construction industry, Vietnam Investment Development Construction Joint Stock Company (hereafter called “VINADIC”) has had a high growth rate in recent years. VINADIC is a construction enterprise established in 2001 as a member of the AMACCAO Group.
It has a vision of becoming an enterprise with a prestigious brand name, sustainable development, and affirming its high position in the Vietnam 1 market of general construction works, mechanical and electrical construction, design consultancy, and real estate investment. In recent years, revenue of VINADIC mainly depends on the construction works from a group of major customers such as Vin Groups, Sun Groups, the Ministry of Transport, Hyundai E&C – Ghella, as well as self- investment on the production industry and the energy sector of the AMACCAO Group. As a result, VINADIC has grown rapidly from a medium construction company with annual revenue of about VND 700 billion (2015) to a relatively large company with annual revenue of over VND 2,525 billion (2019). It‟s now equivalent to large and long-standing enterprises in the local construction market such as Fecon Corporation, Licogi Corporation, Song Da Corporation, Delta Construction Jsc, etc.
The fast growth and extension have posed many challenges for corporate management and potential risks in governance. The hot growth might disrupt the balance of its human resources, defined work processes and capital of the enterprise leading to delays in delivery of construction works, decrease in quality, and loss of credibility with clients. The internal capabilities need to be reviewed and upgraded following the size and vision of the company. In addition, in volatile real estate and construction markets, these kinds of companies always face risks related to a decline in investment or redirection of business from its clients.
With more substantial competitiveness, the company will be able to find new customers and provide better services to cope with risks better. Referring to the above reasons, the author chose the topic "Factors impacting corporate competitive capabilities in construction services: a case study of Vietnam Investment Development Construction Jsc” with a desire to give an objective analysis of factors that will influence the company‟s competitiveness and performance. Based on that, the company can further study and strengthen its capabilities to achieve higher competitiveness and performance. Review of previous research There are quite a lot of research on the competitive capabilities of a company.
Competitive capabilities are the abilities of a company to capture competitive strengths compared to its primary competitors in its target markets, Roth and Jackson (1995). Kathuria (2000) suggested that four broad competitive capabilities drive business: cost, flexibility, quality and delivery. Lin et al. (2012) detailed the four well-known competitive capabilities below: Cost: the most cost-effective way to supply the product and/or to provide service to customers; Flexibility: the ability to respond to changes in terms of product range, design and volume; Quality: producing and delivering the product and/or service to the highest possible standards, providing outstanding products of consistent quality; Delivery: the ability to reliably and speedily deliver product and/or service.
Delivery reliability is the ability to meet delivery dates with correct quantities and specifications (Sarmiento et al., 2007), while delivery speed is the ability to fulfill an order promptly. Zhang et al. (2011) suggested that at least two theories emerge to explain the patterns of capabilities development: the trade-off theory and the cumulative theory. The former means improving one capability is at the expense of another capability; and the latter means simultaneous improvement in several capabilities can be achieved.
A number of research focused on the relationship between competitive capabilities and business performance. Ferdows and De Meyer (1990), through empirical studies, have reported that competitive capabilities have an impact on business performance. More recently, Swink et al. (2007) showed empirically that four levels of integration (strategy, customer, supplier and 3 product/process) lead to improvement in manufacturing capabilities; and that these capabilities improve business performance.
Some recent researches have proposed other capabilities in additional to the four traditional competitive capabilities. Zhang et al. (2011) proposed service and customization as a new capability for industries located in China and proved that the new capability is mutually supportive with flexibility and delivery capabilities. Jayaram and Narasinham (2007) showed that new product development is related to project success, and therefore, it can be considered as a competitive capability.
Nguyen Van Tien et al. (2019) suggested that competitive capabilities are influenced by five factors: finance, management, marketing, human resources and technology. Nguyen (2019) proposed that the five factors affecting the competitive capability of companies in the tourism sector are service quality, human resources, information technology, marketing activities and tourism infrastructure. To another extent, Kim (2006) proved that the supply chain has interaction and positively impacts to the competitive capability of a company.
Recent studies have shown that firms can have other capabilities. Thurer et al. (2015) confirmed that in addition to the traditional four capabilities, innovativeness is an important, fifth capability for small and medium-sized firms. Likewise, the concept of knowledge management as a powerful competitive weapon has been strongly emphasized in the strategic management literature.
Knowledge management emerges as essential management and organizational capability in creating value through knowledge. Shu-Hui Chuang (2004) confirmed the impact of knowledge management on competitive advantage. The proactive management of knowledge assets is essential to achieving both innovation capability and innovation performance. Through data analysis, Marianne Gloet and Danny 4 Samson (2020) revealed the main contributions of knowledge management to systematic and sustained forms of innovation.
Knowledge was described as the “key competitive sustained resource” and an organization‟s most important asset by Storey and Barnett (2000). Beijers (1999) suggested that knowledge is a primary factor of production on which competitive advantage rests. Mohamad (2019) suggested that technical and administrative innovations fully mediated the relationship between knowledge management and firm competitiveness. The results of his research consolidate the resource- based view on the importance of internal resources and capabilities of the firm and improve knowledge management research area.
It also strengthens the view that knowledge management is a critical factor for firm competitiveness. From the above background of research, this study will focus on the four traditional competitive capabilities in the case of VINADIC, which are cost, flexibility, quality and delivery. In addition, the author also studies whether knowledge management has an impact as the additional competitive capability for construction contractors through the research on this particular enterprise.