Project quality as a strategic capability of performance in construction SMEs in Gauteng, South Africa

This study investigates project quality as a strategic capability and examines its effect on the performance of construction SMEs operating in Gauteng Province, South Africa. A positivist, quantitative, cross-sectional research design was adopted. Data were collected from 363 SME managers and supervisors using a structured questionnaire. Reliability and validity were assessed through Exploratory Factor Analysis while multiple regression was applied to test the hypothesised relationships. The findings indicate that project quality has a strong, positive, and statistically significant effect on SME performance. Project quality accounted for 70.4% of the variance in profitability, 66.7% in customer satisfaction, 75.3% in innovation, and 70.4% in employee performance. All standardised effects were large and significant (p < 0.001). Project quality functions as a firm-level capability that enables construction SMEs to convert limited resources into superior and sustained performance outcomes. This study reconceptualises project quality as a strategic organisational capability rather than merely an operational project outcome, thereby extending Resource-Based View and Dynamic Capabilities Theory.