Financial and Commercial Management in Construction Companies

Financial and Commercial Management

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
PESTEL Analysis.......................................................................................................................3
Strategies for selecting projects to bid for and the factors to be considered...............................5
Strategies for mark up optimization used by Laing O’Rourke...................................................7
Consideration of company bidding efficiency............................................................................8
Cash Flow Statement of Laing O'Rourke Construction company..............................................8
Payments...................................................................................................................................10
Ethical consideration.................................................................................................................11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12
APPENDIX....................................................................................................................................14
Summary........................................................................................................................................14

INTRODUCTION
The present report is based on the financial and commercial management within construction companies where they used to
manage project's bid in terms of how to bid, where to bid and at what price bid should be finalized to ensure their sustainability and
reasonable profitability in the market. In this report, by choosing Laing O’Rourke as a construction company, discussion will be done
with regard to strategies followed by company to selected projects to bid for, factors to be considered while bidding, strategies for
markup optimization along with consideration to efficiency of company while bidding (Kalan and Ozbek, 2020). Also, factors
affecting cash flows and strategies for their improvement, payments made and received by contractors, ethical considerations while
bidding and opportunity evaluation within the construction industry will be discussed in this report. Accordingly, commercial and
financial strategy will be proposed to the management of Laing O’Rourke.
PESTEL Analysis
External business environment summarizes with the factors associated with PESTEL Analysis. This tool of external business
environment comprise with the various elements such as political, economic, social, technological, environment and legal factors that
would influence business of company.
Political factor
Political factor comprises with the policies of the government in United Kingdom will influence to the business of the Laing
O’Rourke. The political situation in United Kingdom is well supportive for the organisation to grow in market. The political situation
of United Kingdom is progressive in nature that will certainly influence to the organisation in respect to its business functioning. The
government in United Kingdom is highly supportive for the business houses which fairly support such businesses to strengthen the
business idea and achieve growth. Political stability in country is also one of the major aspect that affect positively (Lokovitis, 2021).
Construction sector is highly influence with the policies of the government as it requires constant support from the government to
delegate the favourable environment and policies so that company can process all its operations. The role of political factor is to

support the companies at political level; and the government has always a great vision to have a huge construction and structure all
across the country. The approach of government has been supportive for the sector to grow rapidly in market.
Economic factor
Economic factor is about to analysis the economic situation of country. This is a factor comprises with the buying power of the
customer in market. The per capita income of the people in country could favour the company to develop the giant structure that
contain massive value in market. This is important for the companies in construction market that the structure must go with the buying
power or capacity of the target customers in market (Segura, Morales and Somolinos, 2018). The inflation in the country is also under
controlled due to the monetary policy which could further increases the buying power of the potential customer in respective target
market. Controlled inflation could empower the construction business to grow rapidly in the country. Further the United Kingdom
construction market has been attracting to the foreign direct investment that further enhanced to the growth and development of the
country.
Social factor
The social factor comprises with the choices of people and preferences of the customer in the country. The people in the
United Kingdom like to explore the big and giant structure. Also the United Kingdom is highly developed in term of commerce which
further empower and direct the country to construct the giant structure to mitigate the need regarding the commercial space.
Preference of the investor is also to develop such a structure (Shi and et.al., 2019). Further, the government in country also give huge
emphasis to bridge development, road development and advancement and such like of practice that further allow the construction
sector to grow in the market.
Technological factor
Technology is one of the basic need for the construction sector to channelise the operations. The United Kingdom is
technically well advanced that could incorporate and allow the construction sector to establish the giant structure that can provide the
safe space to the people. Safety is always a big issue when it comes to developing any structure in construction business. Technical