Interrelationships Among Critical Success Factors of Construction Projects Based On The Structural Equation Model
Interrelationships Among Critical Success Factors of Construction Projects Based On The Structural Equation Model
Interrelationships Among Critical Success Factors of Construction Projects Based On The Structural Equation Model
Yong Qiang Chen1; Yang Bing Zhang2; Jun Ying Liu3; and Peng Mo4
Abstract: Clearly identifying the critical success factors (CSFs) of construction projects and a good understanding of the interrelationships
among CSFs will help project managers focus on the control of key factors and allow them to make reasonable resource allocations. To
explore the interrelationships among CSFs, this research established a CSFs system by first identifying 62 CSFs of construction projects
through a literature review, and then refining them to produce 46 CSFs by expert discussions. On the basis of the CSFs system, which
consisted of three categories and ten subcategories, this study applied the structural equation model (SEM) to explore the interrelationships
among the CSFs. One hundred twenty-four project data that were collected from a questionnaire survey were used to determine the hypo-
thetical model. A detailed evaluation and modification was then performed to revise the model. On the basis of the revised model, which was
verified through evaluating the goodness-of-fit (GOF) indexes, this paper makes a thorough discussion of the interrelationships among the
CSFs. Interrelationships that were identified and verified in the model reveal the influence mechanism among these CSFs. For example, the
factor “riot, revolution, and war” negatively influences the factor “price fluctuation of labor,” whereas the factor “price fluctuation of labor”
negatively influences the factor “time expectation.” Therefore, “riot, revolution, and war” can positively influence “time expectation.”
This indicates that if an owner’s time expectation is a determinant of the time performance of an emergency project, maintaining a
stable political environment would be a critical control point for accomplishing the project. Thus, the interrelationships discovered in this
paper will make it easier to take better control over CSFs and contribute to a project's success. DOI: 10.1061/(ASCE)ME.1943-5479
.0000104. © 2012 American Society of Civil Engineers.
CE Database subject headings: Construction management; Project management; Models.
Author keywords: Construction projects; Critical success factors; Interrelationship; Structural equation model.
Introduction of CSFs (Baker et al. 1983; Pinto and Slevin 1987) to the more
specific identification of CSFs (Terry 2002; Chan et al. 2004).
Various factors influence project performance to varying degrees, Research has been undertaken to generally identify CSFs for whole
with certain factors more critical to a project's success than others project success (Sanvido et al. 1992) to separating CSFs for differ-
(Sanvido et al. 1992). It is important for project managers to focus ent aspects of project performance (Chua 1999; Iyer and Jha 2005,
on these key factors so as to allocate more resources to them. The 2006; Aksorn and Hadikusumo 2008) or for projects of different
term “critical success factor ” (CSF) was first used in the context of types (Songer and Molenaar 1997; Ling et al. 2004; Li et al.
information systems and project management (Rockart 1982). 2005; Dvir et al. 2006; Chan et al. 2010). Since 2000, more and
Sanvido et al. (1992) then brought the term in to the construction more researchers have employed different statistical techniques
field. They defined CSFs as factors that could predict a project's to explore the correlations among CSFs (Li et al. 2005; Toor
success. The last two decades have witnessed a great development and Ogunlana 2008; Chan et al. 2010) or to explore the relation-
in CSFs. Relevant studies developed the conceptual definition ships between CSFs and project performance (Han et al. 2007;
1
Cho et al. 2009).
Professor, Dept. of Construction Management, Tianjin Univ., Tianjin However, Fortune and White (2006) conducted a study of 63
300072, P. R. China. E-mail: symbolpmc@vip.sina.com
2
Research Student, Dept. of Construction Management, Tianjin
publications on CSFs and showed that little agreement on
Univ., Tianjin 300072, P. R. China. E-mail: zhangyangbing89@yahoo CSFs existed. This will lead to more repetitive work and inhibit
.com.cn more in-depth studies. In addition, because of the limitation of
3
Associate Professor, Dept. of Construction Management, Tianjin many statistical techniques, the interrelationships among CSFs
Univ., Tianjin 300072, P. R. China (corresponding author). E-mail: are not easily identified (Li et al. 2005; Toor and Ogunlana 2008),
liujunying@tju.edu.cn
4
Graduate Student CRGP, Collaboratory for Research on Global
which makes it difficult for managers to take better control
Projects, Dept. of Civil and Environmental Engineering, Stanford Univ., over the CSFs. Therefore, this paper aims to (1) identify the
Stanford, CA 94305. E-mail: mpmopeng@yahoo.com.cn CSFs comprehensively and systematically by putting forward
Note. This manuscript was submitted on September 3, 2010; approved a relatively complete CSFs system for further study, and (2) ex-
on October 31, 2011; published online on November 3, 2011. Discus- plore the underlying interrelationships among CSFs for a
sion period open until December 1, 2012; separate discussions must be
submitted for individual papers. This paper is part of the Journal of Man-
better understanding of the influence of mechanisms that are
agement in Engineering, Vol. 28, No. 3, July 1, 2012. ©ASCE, ISSN at play and to encourage innovation in construction project
0742-597X/2012/3-243–251/$25.00. management.
Establishment of a Hypothetical Model Three professionals in the construction management field were
interviewed on the basis of their knowledge (and because of pre-
To set up the hypothetical model, this study selected the 10 vious study on these factors) to make assumptions about the inter-
subcategories as the latent variables and the 44 CSFs as the relationships among the 10 subcategories. A series of literature
measurable variables. The measurable variables used in the analysis were conducted to improve the assumption-making pro-
SEM need to be continuous variables and easily measured. There- cess. Fifteen assumptions were used to construct the hypothetical
fore, the factors “project nature” and “project location” were not structural model in Fig. 1. The arrows represent the direction of the
adopted. hypothesized influence (Bollen and Long 1992; Hoyle 1995).
of new technology/technique/material through the selection of a Baker, B. N., Murphy, D. C., and Fisher, D. (1983). “Factors affecting
contractor. Validating such relationships can be a new research project success.” Chapter 35, Project management handbook, 2nd
topic in the future. Ed., Wiley, Hoboken, NJ, 669–685.
This research developed a model for general types of construc- Bollen, K. A., and Long, J. S. (1992). “Tests for structural equation models:
Introduction.” Sociol. Methods Res., 21(2), 123–131.
tion projects because of the limited amount of sample data; there-
Byrne, B. (1994). Structural equation modeling with EQS and EQS/ win-
fore, the accuracy of the model cannot be guaranteed. Despite the
dows: Basic concepts, applications, and programming, Sage, Thousand
appropriateness of the revised SEM, the authors regarded all Oaks, CA.
environment-related factors as one (namely, the environment Chan, A. P. C., Lam, P. T. I., Chan, D. W. M., Cheung, E., and Ke, Y. J.
characteristics) when conducting the Cronbach’s alpha reliabi- (2010). “Critical success factors for PPPs in infrastructure developments:
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in the SEM, some of which had values as low as 0.50 in the Chan, A. P. C., Scott, D., and Chan, A. P. L. (2004). “Factors affecting the
Cronbach’s alpha reliability test. The same happened with the own- success of a construction project.” J. Constr. Eng. Manage., 130(1),
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study and could be improved by collecting more high-quality data. Cho, K. M., Hong, T. H., and Hyun, C. T. (2009). “Effect of project
Because of the limitation of the SEM method in its requirement of characteristics on project performance in construction projects
continuous variables, some CSFs such as the project type were not based on structural equation model.” Expert Syst. Appl., 36(7),
included in the model. 10461–10470.
Therefore, further research is required to develop a more appro- Chua, D. K. H., Kog, Y. C., and Loh, P. K. (1999). “Critical success
factors for different project objectives.” J. Constr. Eng. Manage.,
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125(3), 142–150.
to explain better the interrelationships among the CSFs, and to Cooke-Davies, T. (2002). “The ‘real’ success factors on projects.” Int. J.
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Acknowledgments 19(5), 535–543.
Fortune, J., and White, D. (2006). “Framing of project critical success
The authors would like to acknowledge the support from the factors by a systems model.” Int. J. Proj. Manage., 24(1), 53–65.
National Natural Science Foundation of China, which funded Hair, J., Black, W., Babin, B., Anderson, R., and Tatham, R. (2006). Multi-
project (Project Number 70772057), and all respondents of the variate data analysis, Pearson Education, Upper Saddle River, NJ.
questionnaire survey. Han, S. H., Kim, D. Y., and Kim, H. (2007). “Predicting profit performance
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