Factors contributing to the success of equipment-intensive subcontractors in construction S. Thomas Ng a, * , Ziwei Tang a , Ekambaram Palaneeswaran b a Department of Civil Engineering, The University of Hong Kong, Pokfulam Road, Hong Kong b Department of Building and Construction, City University of Hong Kong, Tat Chee Avenue, Kowloon Tong, Kowloon, Hong Kong Received 10 June 2008; received in revised form 1 August 2008; accepted 9 September 2008 Abstract The risk of subcontracting shall not be underestimated especially under today’s highly competitive environment. To protect the best interest of contracting firms, subcontractors should be carefully selected. Previous studies have been focusing on the factors leading to the success of subcontracting work without paying much attention to those factors contributing to the organizational success. To gain a better insight on the success factors for subcontracting organizations, a survey which focuses on equipment-intensive subcontractors has been conducted in Hong Kong with various construction stakeholders. Acknowledging that equipment-intensive subcontractors may have their peculiar needs and characteristics, this paper strives to explore the critical success factors (CSFs) for this type of subcon- tractors. Seventeen CSFs for equipment-intensive subcontractors have been identified, and the results indicate that majority of them are internal factors. A one-way ANOVA test has been carried out, which confirms the consistency in perceptions of different construction stakeholders surveyed. Through a factor analysis the CSFs are grouped into six major components namely: (i) market position; (ii) equip- ment-related factors; (iii) human resources; (iv) earnings; (v) managerial ability to adapt to changes; and (vi) project success related fac- tors. The findings of this research should not only help subcontractors to improve their performance but also to assist main contractor to identify a successful equipment-intensive subcontracting firm. Ó 2008 Elsevier Ltd and IPMA. All rights reserved. Keywords: Subcontracting; Construction industry; Equipment; Critical success factors; Equipment-intensive subcontractor 1. Introduction Main contractors opt to sublet their work for various compelling reasons not least financial benefits, workload pressures, human or plant resource constraints, and better efficiency [10,13,45]. While majority of the work in a pro- ject is carried out by a group of non-repeated subcontrac- tors, meeting the client requirements and achieving project success depend heavily on their performance [3,12]. Unfortunately, many contracting firms have underesti- mated the risk of employing incapable subcontractors. Subcontractors are particularly vulnerable to market fluc- tuations and extreme economic conditions resulting in a prevalence of high bankruptcy rate, poor business prac- tices and/or non-performance [37,39,40,46]. Identification of critical success factors (CSFs) from the business function perspective as well as their rela- tionships with the project level functions should help enhance organizational performance and project success [7,8,38]. With little attention being attributed to this important issue, this research seeks to identify and clas- sify subcontractor CSFs from the perspective of the prin- cipal stakeholders in the construction industry of Hong Kong. For this purpose, subcontractors are broadly clas- sified into two types viz. (i) equipment-intensive subcon- tractors (i.e. those who are predominantly hired as a result of their specialized plant and equipments) and (ii) labor-intensive subcontractors (i.e. those who are mainly hired on the basis of their specialized labor resources). 0263-7863/$34.00 Ó 2008 Elsevier Ltd and IPMA. All rights reserved. doi:10.1016/j.ijproman.2008.09.006 * Corresponding author. Tel.: +852 2857 8556; fax: +852 2559 5337. E-mail addresses: tstng@hkucc.hku.hk (S. Thomas Ng), ziwei.tang@ gmail.com (Z. Tang), palanees@cityu.edu.hk (E. Palaneeswaran). Available online at www.sciencedirect.com International Journal of Project Management 27 (2009) 736–744 www.elsevier.com/locate/ijproman