International Construction Projects Research Articles

Critical risk factors in international construction projects

PurposeInternational construction projects encompass various risks, and it is essential to evaluate and manage them to achieve project and firms’ success. As approaches to addressing international market risks vary from one country to another, the purpose of this paper is to identify the critical risk factors of embarking on international construction projects according to Indian experiences.Design/methodology/approachAfter primarily verifying the identified 26 risk variables, a questionnaire survey was conducted to draw upon the views of experts who possess international project experience. The 105 responses were analyzed using univariate and multivariate techniques. An analysis of variance identified the significant variables that influence overall performance on international construction projects, which were then grouped according to underlying relationships using factor analysis to determine the specific risk factors. Furthermore, considering these risk factors as independent variables and overall project performance as a dependent variable, a stepwise regression analysis was carried out to identify relatively critical risk factors.FindingsThe results revealed that of the identified four risk factors, the project-specific risk factor emerged as the foremost critical risk factor, the economic and market-specific risk factor was the second most critical risk factor, the firm-specific risk factor was the third most critical risk factor and the political-specific risk factor was the least critical risk factor. These findings were also validated appropriately.Research limitations/implicationsThis study was limited to the data acquired from Indian construction firms, predominantly consultants and contractors. Though the survey respondents possessed adequate familiarity in international construction, commonly perceived limitations in self-reported surveys such as the lack of conscientious responses and reporting bias were not an exception in this research.Practical implicationsThe risk factors and their criticality – as identified in this study – can aid the multinational firms and international aspirants to prioritize the critical aspects and develop a suitable risk mitigation strategy to achieve greater project success in international market.Originality/valueBy investigating the various risk factors that influence overall performance of international construction projects, this research considerably contributes to the body of knowledge pertaining to international construction risk management that will enable firms from India and similar developing nations to emphasize on critical risk factors.

Construction Contract Administration Performance Assessment Tool by Using a Fuzzy Structural Equation Model

The contract administration process is inevitably complex, and improper performance of the associated tasks and procedures may lead to disputes between the contracting parties whilst further driving against the sustainability bottom lines. Therefore, this paper proposes an assessment tool to improve the implementation of construction contract administration (CCA) through a multi-dimensional construction contract administration performance model (CAPM), construction contract administration performance index (CCAPI), and a mobile software to assess the CCA performance at the project level by integrating the crisp value of the fuzzy set theory within a second-order confirmatory factor analysis of the structural equation modeling technique. A hybrid mobile application (CAPM) is developed using the Ionic framework which can run either in full model mode or short model mode with 93 and 33 key construction administration factors, respectively. Assessment of sustainability practices in the area of contract administration is a part of the holistic model and CAPM defines 13 major key indicators relevant to social and environmental sustainability while economic sustainability is scattered over the rest of the CAPM indicators. The CAPM is practically implemented in 13 international construction projects and the results reveal that the proposed tool is reasonably captured in the different performance levels of CCA, and we conclude a low level of implementing in risk management. As part of the holistic model, assessment of sustainability practices in the area of contract administration is separately discussed and the study reveals the need to improve the environmental and social sustainability practices in contract administration.

Mapping BIM Uses for Risk Mitigation in International Construction Projects

International construction projects (ICPs) have become more popular in the current wave of globalization. The Building Information Model (BIM) has been adopted in ICPs. However, the utility of the BIM in ICPs for effective risk control remains unclear. This paper maps the relationship between ICP risks and BIM use to improve the adoption and selection of the BIM. The results show that the BIM can effectively facilitate communication management, mitigating risks engendered by language barriers among stakeholders, for instance, design errors. The BIM can also effectively mitigate risks caused by particular and temporal differences during the construction process. This research highlights internal/technical ICP risks that can be effectively mitigated by certain applications of the BIM; however, in contrast, external risks of ICPs cannot be mitigated by the BIM. However, some risks need to be addressed by new BIM functions. For example, regarding legal risks, laws and regulations of various countries can be included in the BIM information integration model to facilitate timely acquisition of legal provisions by project participants. This study complements prior risk‐management research, which typically focused on the BIM as an advanced tool by which to manage project risk, such as design errors, quality, and budget. Practically, the contractor and owner can select suitable BIM applications for different project objectives and risks in the pre‐project phase.

Identification of critical risks in international engineering procurement construction projects of Chinese contractors from the network perspective

International engineering procurement construction (IEPC) is a complex subject interconnected with risk transfer. In-depth understanding of risks in IEPC projects is essential for effective risk management and managerial strategies. Most related studies focus on the critical risks based on the perceptions of stakeholders or their direct “contribution” to the project loss. This study aims to investigate risk interconnection in IEPC projects through social network analysis, with a focus on the critical risks, risk interactions, and risk mitigation strategies. Three approaches were employed. First, the risk register and interconnection between IEPC projects were identified through a literature review. Second, the risk register and interrelationships were investigated using a questionnaire to formulate theoretical risk-interdependent networks. Third, practical IEPC projects were analyzed using network metrics to identify mitigation strategies for the associated critical risks. From the obtained results, we concluded that controlling security and contract risks in project management can reduce the occurrence or impact of other risks. Moreover, environmental issues related to contractors are also critical in international construction projects. Investigating relationships between risks has uncovered different risk-propagation mechanics within IEPC projects, thus extending the theoretical knowledge for international construction and risk management.

Bid/no-bid decision factors for Chinese international contractors in international construction projects

Purpose Factors affecting bid/no-bid decisions of international projects are more complex than those of domestic projects. The purpose of this paper is to identify and rank decision factors considered by variously sized Chinese international contractors (CICs) and categorize those groups of factors important to experienced practitioners. Design/methodology/approach The analysis of factors identified by a literature review is conducted based on data derived from questionnaire results received from 119 CIC project and bidding managers. The relative importance of factors is measured by mean value and standard deviation. The discrepancy in rank and importance value perceived by variously sized CICs are explored by ranking disparity analysis, non-parametric test and Spearman’s rank correlation coefficient test. Finally, factor analysis is used to categorize the underlying groups of factors considered by CICs. Findings In sum, 41 factors are identified through the literature review as having an impact on the bid decision. Significant disparities in ranking and importance are found in several factors, which partially affect the consistency of the ranking of factors perceived between large and small-medium CICs. Ultimately, nine major factors are identified as impacting the bidding decision, with “contractor’s capability” and “country risk of the host country,” being the most important. Research limitations/implications The weight of a factor considered in a decision varies across contractors as a function of contractor size. Whether using models or subjective judgment in making decisions, it is beneficial to fully understand the main groups of factors influencing the decision. Vulnerability to country risk emerges as the first criterion accessed in the bid decision. Originality/value A comprehensive set of factors is established for CICs, including both general factors common to domestic projects, and international factors unique to international projects. All factors are grouped by inferential analysis from the perspective of contractors, which reveals the underlying mechanism of the bid decision-making process. While the data were collected from CICs, the methodology in exploring factors, along with implications, is determined to be applicable internationally.

Organizational Culture and Stakeholder Success Criteria in Construction Projects

This paper presents the findings of a theoretical investigation into the association between organizational culture and stakeholder management. With an aspect focused on international construction projects, the study explores the relationship between the cultural origin of key stakeholders and the cultural context in which projects are realized. Emphasis is placed on the examination of project outcomes and the factors that influence cultural domain. Secondary data suggests stakeholder management and corporate culture are critical areas that decide an organization’s success. The importance of these areas will inevitably grow in the future as projects continue to be procured in a global economy. Identifiable theoretical associations between the constructs have been found that provide early evidence that stakeholders and culture influence project life-cycles. Stakeholders—organizations and their representatives—must be informed of the distinct types of cultures and success criteria to ensure they manage them efficiently alongside traditional and long-accepted project variables.

The impacts of FOREX fluctuations on international construction projects

The international construction project is a highly valuable market project and many of the contractors would like to be participate. This is because they are misled with the exchange rate (money) and instantly attracted with the profit they assumed will be gained after the project is completed. In fact, without noticing that they will be affected with the FOREX’s fluctuations which might complicate the project further. In addition, many new vendors nowadays will try their luck in construction business without making a good judgement on the risks. So, the objective of this study is to identify the impacts of FOREX fluctuations on those perspectives at international level. This study also uses quantitative method through questionnaire survey that were distributed randomly, and the result obtained were from top management and non-top management in construction hierarchy with different level of experiences. The collected data were analysed by using two methods which are Statistical Package for Social Science (SPSS) and Microsoft Excel. The SPSS software is used to process the regression analysis for the impacts of FOREX data of the questionnaire. The Relative Importance Index then is applied to run the data for capability and mitigation actions in determining the ranking of priorities. Overall, the impacts of FOREX fluctuation on international construction projects have been identified with regards to three mechanisms which are business management, technical and financial. These outputs are useful as a guideline for international construction project companies when they are venturing into this challenging market especially in terms of managing/expediting quality, completion period, and optimising cost of the projects.

What Enables a High-Risk Project to Yield High Return from a Construction Contractor’s Perspective?

“High risk high return” is a general rule in the overall industry; however, high-risk projects in the construction industry frequently fail to yield a high return. In order to achieve a sustainable business in the international construction market, contractors require an average to high return yield under high-risk conditions. This study aims to reveal what risk factors and risk management performance enables high-risk projects to yield high returns. The study investigated 124 international construction projects by Korean contractors and classified them into four groups: high-risk high-return (HH), high-risk low-return (HL), low-risk high-return (LH), and low-risk low-return (LL). The study found that risk assessment accuracy was the most important trigger in discriminating between high return projects (HH, LH) and low return projects (HL, LL), whereas risk mitigation performance showed little difference between high return and low return projects. In addition, the contingency amount did not significantly affect project return in HL, LH, and LL projects, but HH projects showed a positive relation between contingency and predicted risk amount. This article contributes to recognizing the differences between high return and low return projects and provides insights for practitioners into the relation between risk management performance and high returns in different risk conditions.

Improving Quantitative Assessment of Political Risk in International Construction Projects: The Case of Chinese Construction Companies

AbstractPolitical risk is one of the most prominent dangers for International Construction Companies (ICCs) to deal with in overseas countries. Despite considerable studies on political risk manage...

Developing China's “international” railway: The Canton–Hankow line, 1898–1937

Using contemporary journalism and archival material, this article is concerned with the construction of the Canton–Hankow (Hankou) Railway, a strategically important route and a product of international competition and influence. It argues that the line's construction between 1898 and 1937 witnessed a transition from speculative to bilateral investment, the latter comprising Britain's share of the Boxer Indemnity fund. It details China's keenness for the fund to be directed towards completing the railway and proposes that the opportunity to reduce the overcapacity of British manufacturing industries in a depressed market through exports has parallels in contemporary China's international railway construction projects.

A stakeholder-based risk assessment and intervention framework for international construction projects

PurposeThe purpose of this paper is to construct a two-stage risk management framework for international construction projects based on the meta-network analysis (MNA) approach. A plethora of international construction studies seems to assume risks as independent and therefore, risk intervention strategies are usually critiqued as ineffective.Design/methodology/approachIn the risk assessment stage, a multi-tiered risk network structure was developed with the project objectives, risk events, risk factors and stakeholders, and critical risk factors were selected based on a series of calculations. In the risk intervention stage, targeted risk intervention strategies were proposed for stakeholders based on the results of the first stage. A highway construction project in Eastern Europe was selected as a case study.FindingsThe results showed that 17 risk factors in three categories – external, stakeholder-related and internal – are critical, and the project manager, construction management department, supplier and contract department are the most critical stakeholders that affect the entire project performance. Based on the critical risk factors and project stakeholders, targeted risk intervention strategies were proposed. The risk assessment results of MNA were found to be more reliable and consistent with the project conditions than the risk matrix method; the risk intervention strategies of MNA can effectively address project objectives.Originality/valueThis study modeled risk priorities based on risk associations and put forward a new method for risk management, supplementing the body of knowledge of international construction. The results of this study are of critical importance in management practices.

Forming Mechanism of Political Risks in International Construction Projects: From the Perspective of Chinese Contractors

The performance is analysed from the perspective of the characteristics of overseas business of Chinese contractors and political risks. Based on the results of this research project, it further analyse the funds and pricing model of Chinese Contractors Overseas Projects, as well as their ability to withstand political risks and coping strategies. This study aims to explore the statistical analysis of the project system and transnational operations to political risks in international construction projects. This research is based on one belt and one road. The questionnaire was distributed to 100 Chinese international contractors in the form of emails. Of the 100 contractors, 50 are in the top 225 of the 2017 ENR. Researches based on the project, each project only fill in a questionnaire, the final recovery of 370 copies, and recovery rate of 37%. 370 respondents are from 46 Chinese international contractors, of which 28 (60.87%) are from top ENR225 enterprises and 18 (39.13%) are from other enterprises. This survey reflects the general situation of political risks of Chinese contractors in overseas project management. Generally speaking, Chinese contractors are facing higher political risks, and they do not attach enough importance to political risks, and their ability to deal with political risks. This research study is a useful reference for managing the political risks for international contractors when expanding into this emerging market.

Clustering of host countries to facilitate learning between similar international construction markets

Purpose In the global construction industry, experience gained in various countries is a major source of competitive advantage. By transferring the knowledge gained in previous projects using an effective knowledge management strategy, they can increase their competitiveness by adopting best practices and by not repeating the same mistakes under similar conditions. The purpose of this paper is to demonstrate how similar countries can be clustered to facilitate learning in global markets. Design/methodology/approach Initially, country factors that can affect success in international projects and can be used to assess the similarity of markets were identified by an extensive literature review and prioritised by a web-based questionnaire. A country evaluation form was prepared to collect country-specific data to be used in the cluster analysis of 39 countries where the Turkish contractors have been frequently working since the last 45 years. Cluster analysis was performed with SPSS 23.0. Findings Three country clusters were obtained and validated. Ultimately, how obtained country clusters may be used to facilitate learning from international construction projects was demonstrated by using an illustrative example. Research limitations/implications The findings depend on the experience and perspective of Turkish contractors doing business abroad. Thus, the identified clusters are not generic. Moreover, country clusters were not identified considering only the country factors such as economy, culture, politics, etc.; thus, countries in the same cluster do not necessarily represent “similar” countries in terms of macro-factors. Clusters were identified so that the lessons learned can be effectively transferred within the same cluster considering construction and project-related factors as well as country-related factors. Although the findings cannot be generalised and clusters are not static, it is believed that the methodology used in this research is repeatable for different countries considering different timeframes. Originality/value Theoretical contributions include the identification of factors that can be used for similarity assessment of countries for transferring lessons learned as well as a methodology for clustering. Findings may also have a practical value for the Turkish contractors.

IDENTIFICATION AND QUANTIFICATION OF PROJECT COMPLEXITY FROM PERSPECTIVE OF PRIMARY STAKEHOLDERS IN US CONSTRUCTION PROJECTS

Construction experts believe that complexity could adversely affect construction projects’ performance. Several studies have been focused on identifying leading complexity indicators; however, the complexity indicators from the perspective of primary stakeholders (owners, contractors, and consultants) have been rarely studied. Therefore, the aim of this study is to utilize the systematic Delphi method to identify, rank and weight the complexity indicators based on the primary stakeholders’ perspectives associated with US construction projects. Additionally, the shared entity-based complexity indicators (ECIs), as well as the weighting of entity-based complexity categories were determined and analyzed. Therefore, 101 potential ECIs were identified through a comprehensive literature review. Then, thirteen senior subject matter experts (SMEs), and three academic advisors were selected and invited to participate in a workshop to determine significant ECIs and then rank and weight them. The results reveal that the ECIs associated with complexity categories “scope definition” and “project resources” received the highest aggregated complexity weights in the aspect of the primary stakeholders. Although this study has been conducted based on US construction projects, the results would provide helpful guidance for international construction projects. Moreover, this study would assist the primary stakeholders in allocating resources properly in order to manage project complexity worldwide.

Influence of risk mitigation measures on international construction project success criteria – a survey of Indian experiences

Despite globalisation bringing diverse opportunities for construction firms from developing countries, executing international construction projects entails many risks. Several past studies illustrate the risks faced by firms in international construction projects and recommend various risk mitigation measures without revealing their effect on project success criteria. In order to fill this knowledge gap, this study aims to test the influence of identified risk mitigation measures on project success criteria. To achieve this, nine risk mitigation measures and three project success criteria—cost performance, schedule performance and firm’s performance—were identified through a literature review. After verifying the identified risk mitigation measures and project success criteria with a preliminary study, a questionnaire was administered to experts who possess adequate knowledge in international construction projects. The collected data from 105 questionnaires were analyzed, grouped and modelled using factor analysis and structural equation modelling (SEM). Application of factor analysis to identify the correlated risk mitigation measures extracted three risk mitigation factors, namely pre-project planning, local participation and contract selection. Furthermore, the influence of risk mitigation factors on project success criteria is hypothesized and tested using SEM. Amongst the identified risk mitigation factors, local participation emerges as the most influencing factor on project success criteria followed by contract selection and pre-project planning. The generated model would enable construction firms from India and similar developing countries to focus on identified risk mitigation factors to achieve improved project success criteria and project management success.

Development of Automatic-Extraction Model of Poisonous Clauses in International Construction Contracts Using Rule-Based NLP

As construction projects have significantly increased in size and become more complicated, the number of claims and dispute cases between participating parties during the construction work have been continuously increasing. To prevent such claims and disputes, the participants need to be assured of their contractual positions and rights based on contract facts. For this reason, the process of writing and reviewing the contracts for construction work is crucial. Most international construction projects require contract management teams to review all the possible risks in the contracts during the bidding periods. However, it is very difficult to review a vast number of contracts in a short period of time. Therefore, in this study, we proposed an automatic model of contract-risk extraction based on natural language processing (NLP) that can automatically detect the poisonous clauses of the contract in order to support contract management for construction companies (contractors). In validating the performance of the automatic model developed in this study, we found that the precision and recall were both 81.8% compared with manual review. This study is meaningful since a model has been developed that can carry out a preemptive contract-risk review.

Key Strategies in Undertaking International Construction Project: Contractors’ Perspective

The pressures of internationalisation have generated a high competitive market on Malaysian construction industry. However, the competitive and saturated of domestic market has driven many Malaysian contractor to undertake international projects. Without any denial, participation in international projects is a challenging task. It requires Malaysian contractors to develop strategy to enable them to operate successfully abroad. Therefore, the objectives of this research is to examine the key challenges for Malaysian contractors to undertake international construction projects thus identify strategies for Malaysian contractors to undertake international construction projects. To achieve the objectives of this research, quantitative method were adopted by using questionnaires. Questionnaire were distributed to participants from well experienced management team of G6 and G7 companies that have vast involvement in international projects. The findings of this research revealed that skilled worker shortage, high cost of financing of international project and limited experience with similar projects are the top three key challenges encountered by the Malaysian contractors in international construction project. The research identifies risk management and forming joint venture are the key strategies for Malaysian contractor to undertake international projects. In conclusion, this research can assist Malaysian contractor who wish to embark in international projects in supporting the current Construction Industry Transformation Programme (CITP) and the 4th Industrial Revolution in construction industry.

A Concept for Automated Construction Progress Monitoring: Technologies Adoption for Benchmarking Project Performance Control

Despite recent advances in technologies and equipment for automated progress monitoring, most construction companies worldwide do not utilize them for their projects. This can be due to many reasons, such as the high cost of technologies and equipment, need for skilled staff, and lack of sufficient information about the impact of automated progress monitoring on project performance control. The aim of the present research is to investigate the impact of automated progress monitoring on key project performance indicators: time, cost, and quality. This study prepared based on a survey of contracting and engineering consulting firms in North America, Europe, and the Middle East. In the first part of this study, structural equation modeling is used to identify the relations of different factors of project progress monitoring (both conventional and automated) with project performance control. In the second part of the study, a benefit analysis is evaluated based on the sixteen (16) journal and international conference papers and also twenty-four (24) international construction projects for which automated progress monitoring was employed. The research findings validate the positive impact of real-time, accurate, and cost-effective automated progress monitoring environments and reveal how automated progress monitoring affects construction project success.

ROLE OF FINANCIAL CAPABILITY IN MANAGING IMPACTS OF FOREX FLUCTUATIONS ON CONSTRUCTION BUSINESS

Many reasons have led construction organizations to venture into international projects in the past years. Despite offering opportunities for business expansion, risks from foreign exchange (FOREX) fluctuations are some of the challenges that need addressing. These fluctuations have affected the construction business at company level and project levels. Most of the impacts are related to financial issues. Thus, coordinating strategic plans to deal and mitigate the impacts of FOREX fluctuations is crucial. A qualitative research was conducted in response to this. Data collection for this research involved interviewing 14 respondents who represented Malaysian construction organizations and actively involves in international construction projects. The respondents ranged from Chief Executive Officer (CEO), Chief Financial Officer (CFO), financial and project managers. NVivo Version 11.0 was used in managing the transcribed interview data. The data were analyzed via content analysis. Results revealed that FOREX fluctuations give impacts on the financial performance of construction businesses. This study also suggested mitigation actions that could be implemented to manage these issues. The most important finding is that Financial Capability (FC) is relevant and essential to overcome those issues. Finally, a framework of FC in managing impacts of FOREX fluctuations on construction business is proposed.

Qualitative Analysis of the Occupational Health and Safety Performance of Chinese International Construction Projects

Chinese contractors undertaking international projects are frequently criticized for their poor Occupational Health and Safety (OHS) performance. It is noticed that people with different occupations may perceive OHS differently. From a qualitative perspective, this study investigates the perceived OHS performances of design managers and construction managers engaged in Chinese overseas construction projects, considering a range of subgroups classified by people’s overseas experience, project size, project industry, project location, and firm size. The analysis was based on an e-questionnaire survey that sampled responses from 52 design managers and 160 construction managers involved in 110 international projects, and face-to-face interviews with 26 managers. The findings indicate that the assessment variation of OHS performance between design managers and construction managers is not only related to their different mental ways, but also can be mediated by their in-progress communication and affected by project and organizational conditions. The varying OHS performance in projects with different sizes or from different regions also suggests that Chinese contractors should be more proactive in OHS management instead of passively responding to external requirements.