Introduction
Contruction is one of the main sectors that provide important ingredient for the development of a country’s economy , accordingly Ethiopian government is undergoing tremendous mega projects in a variety of sectors like Road, buildings, dams, railways and electricity and telecomunication services which are incorporated in the 2 nd
growth and transformation plan.
Nevertheless these projects including the multibillion projects are experiencing extensive delays, cost overrun and considerable quality and safety problems which are attributed to the effectiveness in the performance of the contracting parties especially contractors and consultants.
The
Organizational effectiveness is a difficult concept to define and measure for many organizations in other words there is no well defined parameters to measure a certain organization’s effectiveness. But Organizational effectiveness can be defined as how effective is an organization in achieving the desired goals is set out before undergoing a project. Instead of measuring organizational effectiveness directly, the organization selects proxy measures to represent effectiveness.
Even though the external problems associated with poor performance of contracting parties especially contractors in Ethiopian construction industry are extensively studied, the internal issues or cases concerning the organizations’ effective performance are not elucidated, with this respect this study focuses on effectiveness of construction firms as an organization.
The general objective of this study is to examine and show how Ethiopian construction industry is currently organized and structured and providing clues, ideas, suggestions, and models as to how construction firms organize and structure themselves to successfully grow and develop their companies based on attributes of organizational effectiveness identified from literature.
The methodology adopted for this research will comprise a literature review to determine the research focus (local and international studies conducted on related works in general and organizational effectiveness in particular) and a Questionnaire survey on grade 1 & 2 contractors.
In particular the study will evaluate the relevance of LAD clauses in construction contracts, will

briefly survey the methods employed in the assessment of LADs in Ethiopian educational projects and will try to identify the problems in enforcing LAD clauses and implications on the successful completion of the projects. The study will contribute to the success of future projects by pointing the pitfalls in administering contracts in general and properly quantifying and enforcing liquidated damages in particular.
1.1
Problem statement
It is a difficult concept to define and measure especially in the construction industry due to its project-based nature. Therefore it is not possible to give one definition of organization effectiveness that can be applied to all companies (each company has its own attitude towards achieving an effective organization.)But it is possible to draw out common criteria’s to decide whether an organization is effective or not. In our thesis project we have tried to assess the organizational effectiveness of construction firms and provide major solutions for the associated root problems of construction firms towards achieving organizational effectiveness.
1.2
Research objective
1.2.1 General objective
The purpose of the research is to show how Ethiopian construction industry is currently organized and structured and providing clues, ideas, suggestions, and models as to how construction firms organize and structure themselves to successfully grow and develop their companies based on attributes of organizational effectiveness identified from literature.
1.2.2 Specific objectives
The following are main specific objectives of our research:
 Understand construction firms’ organization and structure, their organizational effectiveness and identify the associated root problems.
 Identify the key success factors for construction firm’s success.


Identify difference in leadership styles adopted in local and international construction firms.
 Identify the fundamental principles that guide construction firms’ leaders in exercising leadership.

Assess the existing HRM practices to identify requirements for taking on excellent leadership in the Ethiopian construction industry.
 Put forward: o A summary of leadership matters important to civil engineers in Ethiopian construction industry. o A set of key factors essential for the success of construction firms o Corrective measures and recommendations to improve the organizational effectiveness of construction firms