Abstract:
Subcontracting is a term which means giving a portion of the work or obligations to
another party called as subcontractor (SC) under a contract. This was used in several
industries but in the construction industry, it plays a vital role to complete the project
with a higher quality of output. In gross domestic product (GDP) calculation of the
national economy, the significance of the construction industry is very high. When a
country faces an economic recession, it has a direct impact on the construction industry
and the stakeholders of that industry. A small number of researches was available
regarding how the construction firms handle the external changes like economic
recession. In this respect, this research analyses the key strategies used by the SCs when
they face an economic recession. Purposive sampling method was used for data
collection and a questionnaire survey was selected as the basic technique to collect data.
The respondents were first asked about their profile and then about the effect of recession
and survival strategies in economic recession. Relative Importance Index (RII) method
was used to rank the effects and the strategies according to its importance given by the
respondents. Findings of the research were that there are various strategies which are
most important to the survival of subcontracting firms “Increasing the focus on forming
relationship with main contractors”, “maintain goodwill to get additional financial
support from bank”, “Implementing stricter site management to reduce material and
time wastage”, “Implementing stricter financial management on company cash flow”,
and “bidding for more projects that are within the firm’s resources and capabilities”.
Finally, practicable suggestions were identified for SCs to survive in the construction
industry during the economic recession period.;.
