Joint Ventures in the A/E/C Industry - Use and Success Factors

Abstract

Joint venturing characteristics and patterns found through survey-based research, conducted of the top 400 constructors and the top 400 architects (as defined by ENR) within the United States, are presented in this paper. The respondents provided information regarding their experience with project-based joint ventures, including their evaluation of success, operational characteristics, and other related factors. As change occurs in construction technology, as geographic, business and communications barriers are removed, and as project sizes increase, firms may find themselves at a competitive disadvantage when trying to secure projects. Project-based joint ventures are often used in the construction industry to assemble an organization that meets a client's project needs and matches or exceeds the capacities of competitors. The joint venture provides the means for a firm to quickly add resource, political, technical, or other required strengths that will increase project acquisition. Limited study has been undertaken in the construction industry to evaluate this partnering phenomenon. The few industry-related studies have primarily used case study techniques and have focused on large, international joint ventures and firms. However, many joint ventures are formed on small- and medium-sized projects within the United States in addition to the international joint ventures reported. Further, due to the narrow focus of earlier studies, patterns of joint venturing across industries or across service providers are not evaluated. The survey results provide evidence of varied success among joint venture projects, and indicate which industry segments use joint ventures most frequently and which find these experiences worthwhile. Further, patterns are developed which show partnering frequency among varying sizes and types of firms. Importantly, the highly experienced respondents--mostly executive or senior managersdivulged factors they found most important in joint venture success. These anecdotes are categorized and coded to form a list of important success concepts. The resulting list provides managers with a practical operations checklist to steer future joint venture formation and operation.