Editorial

Citation

Akintoye, A., Davis, P. and Holt, G. (2012), "Editorial", Journal of Financial Management of Property and Construction, Vol. 17 No. 2. https://doi.org/10.1108/jfmpc.2012.37617baa.001

Editorial

Article Type: Editorial From: Journal of Financial Management of Property and Construction, Volume 17, Issue 2

Welcome to issue Number 2 of Volume 17 of the Journal of Financial Management of Property and Construction (JFMPC). This is the second issue that the new editorial team have produced and we extend a thank you, for all the kind messages we have received, welcoming us into our new roles!

May we first remind readers that JFMPC no longer accepts manuscripts by e-mail, so potential authors will have to use our new ManuscriptCentral submission portal that is accessible through the journal homepage, or, its unique URL[1].

Keeping somewhat with JFMPC tradition issue 17(2) contains five papers, all of which relate to financial aspects of construction. That is a timely prompt, to mention that a present editorial aim is to increase the proportion of property related papers within future issues and with this in mind the journal will give precedence to all property/real estate papers that are submitted within the immediate future, by expediting them through our thorough reviewing process and minimising lead-in time to publishing. This editorial strategy may hold potential benefit to the publishing aspirations of some individuals and/or UK higher education institutions, in relation to the impending Research Excellence Framework (2014) assessment.

While papers that deal with the financial aspects of property are especially welcome at this time; all manuscripts relating to any property/real estate subject areas will be given due consideration. We equally of course, continue to welcome papers that fit within our broader editorial aims and scope.

In the first paper of this issue, Colin C. Williams, Sara Nadin and Jan Windebank deal with a well-known but much less acknowledged aspect of construction activity: working for cash-in-hand. By drawing on findings from the Special Eurobarometer No. 284 “Undeclared Work in the European Union” survey – which one of the paper’s authors was party to – they find that saving money is to varying extents a motive for consumers in approximately three-quarters of cash-in-hand transactions in the European property and construction sector. Additional motives are noted to include circumventing the shortcomings of “formal” construction sector provision in terms of availability, speed and quality – and for social and redistributive rationales. The financial aspirations may be expected, while the non-financial may not? The issue of black market activity is topical given challenges presently placed on many, by high levels of construction unemployment in some countries. The subject also holds relevance for several other aspects of construction activity, including avoidance of tax revenue; the issue of unregistered or “cowboy” firms; and quality of work and materials (not a definitive list!).

The second paper by Hanh Tran and David G. Carmichael, looks at a key financial aspect of construction business: cashflow – in this particular study – as a feature of subcontractors’ payment by main contractors. Historically (notwithstanding legal or moral obligations) main contractors sometimes pass on their (unprofitability, liquidity issues, or under-capitalisation and hence) cashflow problems down the supply chain. This, one might argue, looks set to remain “business as usual” given that present contract profit margins remain “[…] so thin one wrong move could pitch [a] project into a loss” (Knutt, 2012). Tran and Carmichael’s findings present a model that they proffer, enables subcontractors to calculate “likelihood” of getting their claims paid, based on owner (employer) and contractor historical payment practices. They suggest that using the model will allow subcontractors to determine conditional and unconditional probabilities of their claims being paid at any time after their submission.

I.O. Famakin, I.O. Aje and D.R. Ogunsemi contribute the next paper which assesses issues affecting the performance of joint venture partners of Nigerian construction projects. Their research method was designed around a questionnaire survey of partner and consultant stakeholders, and was employed to identify and analyse (using a factor analysis), those factors considered most important. Their findings highlight amongst others, that communication, compatibility of objectives and mutual understanding are key in this respect. One might reasonably argue compatibility and mutuality as fundamental to the success of any project coalition delivery system, joint venture or otherwise. But, are these “achievable ideals” or simply “unachievable and idealistic” – in a global construction environment often characterised by intense competition and survival-oriented business interactions?

The fourth paper by Thanuja Ramachandra and James Olabode Bamidele Rotimi, adds to a field of study that has grown significantly over recent years among business finance generally and construction management specifically – that of business failure (Balcaen and Ooghe, 2006). In this research the issue of insolvency is focussed on in particular and the authors utilise liquidators’ report data, relating to New Zealand construction firms. With an eye to Tran and Carmichael’s paper above, Ramachandra and Rotimi confirm that one of the major reasons for construction insolvencies is non-payment and, that the negative impact of business failure can be cascaded down the supply chain – which demonstrates synergy with Famakin et al.’s reference in the last paper, to the importance of business mutuality and interdependency.

The issue concludes with a review by Robert Eadie, Srinath Perera and George Heaney who consider the maturity of information communication technology (ICT) applications in construction processes. They review contemporary literature relating to two main types of model used to assess ICT impact: capability maturity models (CMM) and e-readiness models. Their paper concludes that the latter have not progressed in line with CMM and accordingly, CMM can more usefully be applied to construction organisations. A useful next step in this work would be to help remove the organisational level barriers to adoption of ICT within construction firms that are associated with its capital costs of investment (Peansupap and Walker, 2006).

Akin Akintoye, Peadar Davis, Gary Holt

Note

1. Journal web site: www.emeraldinsight.com/jfmpc.htm or ManuscriptCentral direct via: http://mc.manuscriptcentral.com/jfmpc