CHAPTER ONE:

 INTRODUCTION

1.1 Background Uganda has got many Small and Medium Sized Contractors (SMSC) engaged in the construction business. Some of these (SMSC) change business name and scope within a short time because of the competitiveness pressures within the construction industry. Little is achieved by these struggling SMSC due to the level of development of the local construction industry (LCI). Recent studies show that the Local Construction Industry is not very competitive, undeveloped and faced with many problems. These problems range from lack of innovative management and technical capacity to lack of access to credit facilities and work altogether (Uganda Association of Consulting Engineers (UACE, 2008). This business environment poses a great challenge to the young Local Contracting Companies who may wish to become competitive by improving on their performance. The end result of such a struggle is likely to be transferred to the Local Construction Industry thus rendering the LCI ill-equipped to take on large construction projects. What the Local Construction Industry continues to witness is total surrender of large construction projects to international construction contractors and consultants rather than to progressively building the local capacity in the construction industry. Factors that bring about changes in growth, competition, and improved performance are closely linked to organizational competitiveness which closely correlates to the composition and practice of the construction industry (Li-yin et al, 2007). If the industry is composed of uncompetitive players, the quest for growth, and improvement in performance at the national level becomes a dream. The concept of competitiveness can be integrated into management, economic and operation research when all aspects of performance are embraced. Lu and Alum (2007) link competitiveness to management or economic idea that is superior to the traditional economic indicators such as profitability, productivity or market share, which are seen as being insufficient to enable continuous improvement of performance. The competitiveness of Small and Medium-Sized Contractors (SMSC) in Uganda, especially those belonging to the Uganda Registration 2 Services Bureau (URSB), the umbrella that registers all construction contractors, formed the core of this study.