SUSTAINABLE DEVELOPMENT OF CONSTRUCTION SMALL AND MEDIUM ENTERPRISES (SMEs): IT IMPEDIMENTS FOCUS Rodney A. Stewart*, Christopher Miller**, Sherif Mohamed* and Gary Packham** *School of Engineering, Griffith University, PMB 50 GCMC, QLD 9726, Australia **Welsh Enterprise Institute, University of Glamorgan, Pontypridd, Wales, UK r.stewart@mailbox.gu.edu.au SUMMARY Construction Small and Medium Enterprises (SMEs) face numerous impediments preventing their sustainable growth and development. These impediments include: operational factors; financial constraints; limited marketing and human resource management expertise; limited strategic planning; and ineffective Information Technology (IT) implementation. These factors are all contributing to the stagnated growth of these smaller, mostly privately owned companies. In an attempt to enhance the growth opportunities of SMEs, this paper firstly presents a conceptual framework incorporating the above-mentioned impediments. Secondly, the paper hones in on the IT implementation impediments in order to target the IT-specific barriers facing SMEs. Finally, the paper proposes some possible coping strategies to ensure more effective implementation of IT in SMEs. INTRODUCTION Research has indicated that the economic activity of small firms has increased substantially in the past twenty years (Hughes 1997). The employment growth rate has also been greater in small firms than large organisations offering further evidence of the importance of the small firm sector (Enterprise in Europe 1994). Small firms have offered lessons to large organisations in terms of surviving within a volatile environment, and provided a focus for economic and management enquiry (Hughes 1997). A paradox however exists in many sectors. The theory essentially focuses on large organisations and their potential for development and employment, although the significance of such firms has receded. Some theory fails to offer a clear picture of an economy that actually possesses a structure of small firms that are responsive to change, are a major source of innovation and are important job creators (Barrow 1993). The construction SMEs and the industry as a whole has been criticized by many with regard to its adversarial nature, the take up of new technologies and processes and issues associated with organisational management (Miller et al 2002). Historically, large construction firms have taken remedial action to negate the effects of declining profits and economic recession. One strategic option available to the large firm is to retrench back into core business areas and organisations. Retrenchment and disinvestment strategies enable larger diversified firms to disregard peripheral business activity and instead concentrate on areas in which they enjoy distinct competencies or superior competitive advantage. Retrenchment strategies and the emergence of the small subcontracting firm suggest that there is an implicit interdependent relationship between the small and large firm. Interdependence implies that both parties require cooperation to ensure the success of a project and secure customer satisfaction. Harmonisation however, can often prove to be difficult. The very fact that small and large firms are fundamentally different leads to as many problems as it does opportunities for both parties. The Cambridge Study (1992) quoted in Storey, (1994) and Stokes, (1995) suggests that small firms generally are not adept at marketing, financial control, or management, and often possess little motivation in terms of accelerating the firm’s innovative capacity. These factors can be construed as contrary to the atypical large organisation. The work of O ‘Farrell and Hitchins (1988) offers the argument that many craftsmen-entrepreneurs wish to continue to exercise their own trade skills, and may be reluctant or unable to become more heavily involved in the administration, management and paperwork required by technological complexity. Woo et al (1989) identified that craftspeople and independent entrepreneurs had less experience in marketing and sales. These are areas that current theoretical thinking consider to be imperative if small firms are to succeed within a global market. Many theorists within the small Construction Informatics Digital Library http://itc.scix.net/ paper w78-2003-361.content