Internal Communication Effectiveness Model for Construction Companies: A Case Study of the Korean Construction Industry

Abstract

Internal communication is pivotal to a company's performance during construction projects. Although internal communication is known to be strongly affected by the type of business, it is still unclear which influence factors have a greater impact. This research aimed to investigate the causal relationship between internal communication effectiveness and company performance for the different business types within the construction industry, namely owners, contractors, and architects/engineers. Structural equation modeling was applied to analyze the influence factors of 52 measurement variables and 11 latent variables. Based on the results of 317 completed surveys collected from 15 construction-related firms, the authors successfully investigated crucial factors in company performance according to the different business types. The results showed that vertical information flows are more influential in organizational performance than horizontal information flows due to hierarchical organizational characteristics common to most construction-related firms. The results assist managers in evaluating their internal communication based on the company's business type and developing organizational strategies to mitigate any communication-related issues. This research contributes to the construction industry's body of knowledge by demonstrating the influence factors crucial to internal communication effectiveness for different business types.