The effects of organization characteristics towards innovation in construction industry

Construction industry needs to be dynamic in order to keep pace with the changes that the world is constantly facing.The use of innovative construction technologies particularly in the heavy construction industry is expected to enhance the contractor’s ability in producing cost-competitive, resource-efficient, and price-stable projects. Diverse abilities, capitals and organizational cultures are required to foster innovation orientation and adoption. The Malaysian construction industry is apparently one of the imperative sectors of the economy, however, the rate of adopting innovative products and processes are relatively low.The dilemma facing construction companies when introducing new construction technologies is identifying those factors that substantially influence the rate of implementation, adoption and diffusion. Many companies have the attempt to implement innovation, nevertheless different innovation orientation necessitates the use of various strategies, skills and resources and there would be many possible reasons to the failure for the innovation implementation.Furthermore, the relationship between the characteristics and innovation orientation of construction companies is relatively unexplored. Hence, this paper aims to discuss the effects of organization characteristics of the constructions companies namely the industry fragmentation, companies location and size towards the construction innovation. A study has been conducted on 703 contractors that registered as G7 contractor with Malaysian Construction Industrial Board (CIDB).The study found out that the industry fragmentation, location and size have some influence yet very small on the construction companies innovation implementation and adoption behavior.The results suggest that increasing the rate of implementation and adoption may be enhanced to a greater degree by other factors such as increasing external cooperation, perceived environmental uncertainties and competitive rivalry attributes.The findings contribute significant insight on both theoretical development and practical implications on the issue of the innovativeness in Malaysian construction industry, with particular reference to the heavy construction sector