Organization and managerial environment of the Korean construction industry

Abstract

In 1983, Korean construction contractors captured over 11% of the overseas market and twenty-five of them were listed in the top 250 international contractors. However, they have struggled against the inefficiency of their organizations, accelerating competition, and the rapid changes in the managerial environment. Although the various features of the environment had required variety in strategy and organization structure, the managers of construction firms have not kept pace with the requirement, but have shown an inability to predict what kind of influence the changes will have on their organizations and what kind of response is proper to the environmental changes they confront. These problems are mainly caused by a lack of understanding of the suitability of their organization's structure and managerial environment. The present research shows that: the functional structure is the archetype of the Korean construction organizations; direction and delegation are the mainstream in corporate management; the critical factors for corporate management are accelerating competition, inconsistent government policy and the pressure of rising costs; and most of the contractors, except the top 5% large-sized firms, have little capability to respond to a new environment.