Introduction

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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 2nd 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
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