DBAX 9101 Week 1 Topic to Problem Discussion Example

Week 1 Discussion: From Topic to Business Problem

Waiting Ninety Days for a Check: Turning a Topic Into a Business Problem, From Construction Payment in General to What Small Subcontractors Lack When General Contractors Pay Late

My Topic

My topic is late payment in construction. For twelve years I have worked as an estimator for a mechanical subcontractor in central Ohio, and I have watched invoices for completed work sit unpaid for sixty, ninety and sometimes 120 days while our firm paid its own workers and suppliers on time. I find the subject interesting, and I could read about it for months. That is exactly why I need to be careful: interest makes a topic, not a problem.

From Topic to Problem

A business problem, as I understand this week's reading, is something that costs someone, that the people affected cannot yet solve and that research could help with. My first attempt at a problem: small specialty trade subcontractors, such as plumbing, electrical and mechanical firms, often wait far longer to be paid than their contracts say, and some fail as a result. Peters et al. (2019) review the causes of late payment in U.S. construction, including pay-when-paid clauses and disputes over changes, and describe how delays pass down the contracting chain to the firms with the least cash.

That statement names a cost, but not yet what is missing. A sharper version: some owners of small subcontracting firms have no reliable way to handle slow-paying general contractors, while others in the same market survive it. The difference between those two groups is something a study could examine.

Where I Am Unsure

I am not sure yet whether the problem is a lack of strategies or a lack of bargaining power that no strategy can fix. Murfin and Njoroge (2015) found that small suppliers paid slowly by large customers cut their own investment, which suggests the cost is real, but it does not show that small firms can do anything about it. Petersen and Rajan (1997) found that firms with better access to bank credit tend to extend more trade credit to their customers, which hints that a subcontractor's own banking relationships may decide how long it can afford to wait.

Who Would Use the Answer

The people who would act on a study like this are owners of small mechanical, plumbing and electrical firms, along with the bankers and surety agents who decide how much risk those owners can carry. If a study found that surviving firms shared a handful of habits, such as checking a general contractor's payment record before bidding or negotiating shorter terms up front, other owners could adopt them without waiting for the law to change. That practical audience is what makes this a business problem rather than an interest.

Question for Classmates

Where in your own topic is the line between what interests you and what is costing someone money right now?

Reply to Keisha

Keisha, your topic of employee wellness programs is broad. Who, specifically, is losing money or performance because those programs fail, and who would act on what you found?

Reply to Arturo

Arturo, you framed your problem as "the lack of research on family business succession." Is the gap in the literature, or in what owners know how to do? A DBA study usually needs the second.

References

Murfin, J., & Njoroge, K. (2015). The implicit costs of trade credit borrowing by large firms. Review of Financial Studies, 28(1), 112-145. https://doi.org/10.1093/rfs/hhu051

Peters, E., Subar, K., & Martin, H. (2019). Late payment and nonpayment within the construction industry: Causes, effects, and solutions. Journal of Legal Affairs and Dispute Resolution in Engineering and Construction, 11(3), Article 04519013. https://doi.org/10.1061/(ASCE)LA.1943-4170.0000314

Petersen, M. A., & Rajan, R. G. (1997). Trade credit: Theories and evidence. Review of Financial Studies, 10(3), 661-691. https://doi.org/10.1093/rfs/10.3.661