The Influence of the External and Internal Factors on the Adoption of the Performance measurement System in the Construction Industry in Yemen

Abstract

This study was conducted for testing the hypothesis of the relationship between contingency and institutional variables and the adoption of the performance measurement system (PMS) in the construction industry in Yemen. These variables were ordered as external and internal contextual factors that facilitate or hinder the adoption of the modern managerial account systems such as PMS. A survey questionnaire was deployed in this study to gather the data from the largest construction firms representing classes 1, 2, and 3. Then, 104 were returned and usable questionnaires were used for the analysis by employing Partial Least Squares Structural Equation Modeling (PLS-SEM) using SmartPLS 0.3 software. The results show that the stakeholder involvement has the highest impact on the adoption of PMS whereas environmental uncertainty has no effect at all. In addition, leadership, information system, and quality management practices have significant positive effects, while the competition and strategy have significant but negative impacts on the adoption of PMS in construction firms in Yemen. Based on the findings, some implications have been drawn for promoting the adoption of performance measurement system in organizations in developing countries, including Yemen.