Author(s): Muhammad Farooq & Laraib Fatima
The factors affecting construction firm performance are multiple, and their interrelationship is often complex. Recently, researchers have started advocating the use of contingency theory to understand such performance differentials factors. The contingency theory advocates achieving a ‘fit’ between various factors to achieve superior performance. This study aims to understand a few such performance-related contingencies, i.e. the role of Dynamic Capabilities (DCs) and environmental dynamism upon the firm performance. Design/methodology/approach Data is collected through industry professionals via a questionnaire survey. A quantitative data analysis method, i.e. Partial Least Squares – Structural Equation Modelling (PLS-SEM), is applied to validate the hypothesized relationships. Findings Our findings suggest that the DCs have a significant and positive impact on construction firm performance. Additionally, this relationship is further enhanced in the presence of environmental dynamism, thus implying its role as a ‘moderator’. The results suggest that construction firms equipped with DCs will outperform those without any such capabilities operating in dynamic business environments. Originality Few studies in Construction, Engineering and Management (CEM) literature have examined the concept of DCV for construction firms. However, as per the authors’ understanding, no study in CEM literature has tried to empirically explore the role of DCs on performance from the contingency theory perspective