An Assessment of Risk Management in Joint Venture Projects (JV) in Malaysia

Abstract

Construction joint ventures have attracted a lot of research interest over the last two decades. Joint venturing can allow participating companies to rapidly change the scale or scope of their businesses. However, joint ventures are often regarded as a risky business. The construction industry is associated with high degrees of risk in the nature of its business activities, operational environment and organization. The success of a construction project depends on the results it is supposed to achieve. But achieving results depends upon how well companies manage the risks that confront their projects. This paper aims to identify the risk factors associated with joint venture projects in the Malaysian construction industry at the project-specific, internal and external levels. The main factors crucial to joint venture success were identified from a literature review and through a questionnaire survey administered to both local and foreign construction organisations in Malaysia. The major risks factors were found to be the agreement of the contract, partner selection, control/equity, sub-contractors, renegotiations and training. The identification of these factors will assist the successful application of joint venture arrangements in construction projects in Malaysia and other similar economies. The major risks factors were found to be the agreement of the contract, partner selection, control/equity, sub-contractors, renegotiations and training.