Quantifying Organizational Resilience in the US Construction Industry: A Novel Diagnostic Index Approach

Abstract

Construction contractors across the US face disruptive shocks, such as financial, pandemics, and geopolitical events. Despite this, the construction industry suffers from a lack of data-driven frameworks for assessing organizational resilience. This study introduces a holistic Diagnostic Resilience Index (DRI) for medium- and large-scale US contractors. The proposed approach follows a three-step methodology: (1) analyze performance data from nine US contractors over 21 years (2003–2024); (2) apply the Resilience Triangle Theory (RTT) to evaluate responses to the 2008 Credit Crunch and COVID-19 pandemic to obtain the DRI; and (3) correlate DRI to resilience indicators extracted from companies’ records. Collected data were analyzed considering four key dimensions: Human capital, corporate governance, physical and financial capabilities, and business partners. Findings revealed that contractors with a more agile workforce, better financial health, and wiser corporate governance were more resilient. In contrast, contractors with a unstable financial structures, inconsistent governance, and underinvestment in human capital expressed slower recovery. Nevertheless, larger contractors showed slower recovery as opposed to their medium-sized counterparts. Not only did the DRI constitute a holistic index, but it also offered a diagnostic tool that helps depict vulnerability areas. This acts as a pre-emptive early warning and helps build immunity facing future shocks.