TY - JOUR
T1 - Modelling the domino effect of advance payment system on project cash flow and organisational performance
AU - Omopariola, Emmanuel Dele
AU - Windapo, Abimbola Olukemi
AU - Edwards, David John
AU - Aigbavboa, Clinton Ohis
AU - Yakubu, Sunday Ukwe Nya
AU - Obari, Onimisi
N1 - Publisher Copyright:
© 2023, Emmanuel Dele Omopariola, Abimbola Olukemi Windapo, David John Edwards, Clinton Ohis Aigbavboa, Sunday Ukwe-Nya Yakubu and Onimisi Obari.
PY - 2023
Y1 - 2023
N2 - Purpose: Previous studies have postulated that an advance payment system (APS) positively impacts the contractor's working capital and is paramount to ensuring an efficient and effective project cash flow process. However, scant research has been undertaken to empirically establish the cash flow performance and domino effect of APS on project and organisational performance. Design/methodology/approach: The epistemological design adopted a positivist philosophical stance augmented by deductive reasoning to explore the phenomena under investigation. Primary quantitative data were collected from 504 Construction Industry Development Board (CIDB) registered contractors (within the grade bandings 1–9) in South Africa. A five-point Likert scale was utilised, and subsequent data accrued were analysed using structural equation modelling (SEM). Findings: Emergent findings reveal that the mandatory use of an APS does not guarantee a positive project cash flow, an improvement in organisational performance or an improvement in project performance. Practical implications: The ensuing discussion reveals the contributory influence of APS on positive cash flow and organisational performance, although APS implementation alone will not achieve these objectives. Practically, the research accentuates the need for various measures to be concurrently adopted (including APS) towards ensuring a positive project cash flow and improved organisational and project performance. Originality/value: There is limited empirical research on cash flow performance and the domino effect of APS on project and organisational performance in South Africa, nor indeed, the wider geographical location of Africa as a continent. This study addresses this gap in the prevailing body of knowledge.
AB - Purpose: Previous studies have postulated that an advance payment system (APS) positively impacts the contractor's working capital and is paramount to ensuring an efficient and effective project cash flow process. However, scant research has been undertaken to empirically establish the cash flow performance and domino effect of APS on project and organisational performance. Design/methodology/approach: The epistemological design adopted a positivist philosophical stance augmented by deductive reasoning to explore the phenomena under investigation. Primary quantitative data were collected from 504 Construction Industry Development Board (CIDB) registered contractors (within the grade bandings 1–9) in South Africa. A five-point Likert scale was utilised, and subsequent data accrued were analysed using structural equation modelling (SEM). Findings: Emergent findings reveal that the mandatory use of an APS does not guarantee a positive project cash flow, an improvement in organisational performance or an improvement in project performance. Practical implications: The ensuing discussion reveals the contributory influence of APS on positive cash flow and organisational performance, although APS implementation alone will not achieve these objectives. Practically, the research accentuates the need for various measures to be concurrently adopted (including APS) towards ensuring a positive project cash flow and improved organisational and project performance. Originality/value: There is limited empirical research on cash flow performance and the domino effect of APS on project and organisational performance in South Africa, nor indeed, the wider geographical location of Africa as a continent. This study addresses this gap in the prevailing body of knowledge.
KW - Advance payment system
KW - Domino effect
KW - Organisational performance
KW - Project cash flow
KW - Project performance
UR - http://www.scopus.com/inward/record.url?scp=85174033979&partnerID=8YFLogxK
U2 - 10.1108/ECAM-03-2023-0254
DO - 10.1108/ECAM-03-2023-0254
M3 - Article
AN - SCOPUS:85174033979
SN - 0969-9988
VL - 31
SP - 59
EP - 78
JO - Engineering, Construction and Architectural Management
JF - Engineering, Construction and Architectural Management
IS - 13
ER -