Abstract
Any organization’s performance depends on profitability which depends on several adopted criteria. The preference and level of adoption of these criteria varies, on different industries. This study focuses on investigating the criteria of profitability in the construction industry. This investigation involves a survey to seek the perception of the contractors involved in handling physical activities of construction works. The survey considered 63 questionnaire forms. Statistical analysis was performed to compute the frequency and the relative importance index. The results indicated that structural capital, lifetime values, capital structure and competitor actions are the top 4 criteria implemented in construction organizations to measure profitability.
Highlights
Profitability is considered a fundamental aspect for any enterprise
Another study showed that criteria for measuring profitability include unexpected product reliability failures, firm innovativeness, product reliability, warranty costs, unexpected product failure costs, moderating effect of industry innovativeness and firm return on assets (ROA) as the major metrics of profitability measurement [2]
Demographic information presents the characteristics of the participating respondents
Summary
Profitability is considered a fundamental aspect for any enterprise. The same apply for organizations in the construction industry, which is a very fast growing industry, especially in developing countries such as Pakistan. Several researchers have identified various metrics of profitability measurement such as intellectual capital, relational capital, human capital and structural capital [1]. Another study showed that criteria for measuring profitability include unexpected product reliability failures, firm innovativeness, product reliability, warranty costs, unexpected product failure costs, moderating effect of industry innovativeness and firm return on assets (ROA) as the major metrics of profitability measurement [2].
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