International Construction Sector Research Articles

Determination of the Knowledge Level of the Technical Staff about Arbitration

Türkiye has become one of the world's leading countries in the construction sector in the international arena. Today, the use of FIDIC and similar standard contracts is increasing in Turkish contractor companies. In parallel with this situation, it also becomes more common to prefer arbitration in the settlement of disputes in the international construction sector. In the literature, there is no actual publication about the knowledge level of technical staff on arbitration. By taking this deficiency into consideration, the purpose of this study is to measure the awareness of the groups working in the construction sector about the possibility of applying to arbitration as a result of the disputes that they encounter, by measuring the arbitration knowledge level of the technical staff. Accordingly, an empirical field work was conducted with a total of 100 (one hundred) technical staff working in the public and private sector transportation projects in Istanbul. The data collection tool that was used in the research is a questionnaire developed by the researchers and consisting of 25 questions. In the survey analysis, the data were analyzed with the SPSS 28 package program. In the study, a reliability test was conducted for each statement and the Mann-Whitney U test was used. As a result of the analysis, it has been determined that 84.4% of the participants do not follow up the actual developments in the field of arbitration in the world and in Türkiye, and do not have sufficient knowledge about arbitration. However, it has been determined that the arbitration knowledge level of the participants, who follow up the actual developments in the world and in Türkiye and have sufficient knowledge about arbitration, is high. In addition, it has been determined that 93.8% of the participants would like to participate an information training to be held on arbitration. To increase awareness about arbitration, it is necessary to introduce undergraduate-level arbitration courses for technical staff in engineering and architecture faculties at universities, and to organize periodic in-service training programs by the arbitration centers in our country.

Extension of Arbitration Agreement to Nonsignatory Third Parties with Illustration in the International Construction Sector: The Arbitral Tribunal Needs to Respect the Law

Extension of Arbitration Agreement to Nonsignatory Third Parties with Illustration in the International Construction Sector: The Arbitral Tribunal Needs to Respect the Law

Ranking of Variation Orders Caused by the Owners of Construction Projects in Saudi Arabia Using Statistical and Fuzzy-Based Methods

One common theme in the international construction sector is project variation, which influences project outcomes. This study argued that variation could occur during the lifecycle of a construction project that might affect the contracted project success criteria (PSC), including cost, time, quality, or scope parameters. These variations can originate from the owner, consultant, contractor, or external factors. The construction industry is a critical partner in operationalizing and implementing the long-term sustainability objectives of Vision 2030 in the Kingdom of Saudi Arabia (KSA). The present study identified 18 factors that can cause variation orders by the owners of construction projects and evaluated them using statistical and fuzzy-based methods. To estimate the influence of variation orders on PSC in Saudi Arabia, over 70 experienced professionals, including project managers (58%), engineers (26%), and strategic management officers (16%) working in the construction industry evaluated the identified factors through a questionnaire survey. A 1–4 Likert scale, no impact (1) to high impact (4) on PSC, was used to rank identified factors. Analysis of variance and Tukey tests found no statistically significant difference between the respondents’ opinions. Out of the four PSC, cost and time with 14 out of 18 factors obtaining scores higher than “3” superseded quality with seven and scope with six factors. The Fuzzy Synthetic Evaluation identified inadequate planning, managerial corruption, the method of lowest bidding procurement, the inadequate experience of owner’s staff, additional work added by the owners, delayed starts, mode of financing and payments, and public works contract rigidity as the most critical factors affecting PSC of the construction projects in the view of participated stakeholders. Conversely, shortening the project period, long intervals between design and project initiation, and restrictions against foreign companies were identified as the least important factors. The study helps stakeholders achieve long-term sustainability by focusing on the top-ranked factors in KSA’s construction industry and the Gulf Region with similar working environments, rules, and regulations.

Alternative Dispute Resolution and the Application of the Multitiered Dispute Resolution Clause in the International Construction Sector

Construction projects are notoriously complex, and so are the disputes arising out of them. To resolve this complication, a multitiered dispute resolution clause setting out alternative dispute resolution (ADR) mechanisms, such as through a dispute resolution board or mediation prior to arbitration, has an important role to play. Therefore, this paper seeks to contribute to the existing scholarship by focusing on ADR in the world and its specificities in Vietnam regarding these issues as follows. First, this paper presents the variety of ADR forms in the construction sector in the world and in Vietnam. Second, it explores issues arising from the application of the multitiered dispute resolution clause, such as the impact of noncompliance with the prearbitration procedure on arbitral proceedings and arbitral award; determining the statute of limitations period if the parties to dispute followed the prearbitration mechanism prior to arbitration; and finally, considering jurisdiction of the arbitral tribunal as to the enforcement of the solution given from prearbitration step.

A new framework for ranking Critical Success Factors for International Construction Projects

Abstract Due to the wide range of opportunities, collaborations, and challenges offered by the international construction sector, interest in international construction is on the rise. Construction companies must be able to carry out international construction projects (ICPs) more effectively and efficiently. However, executing ICPs is more challenging than executing domestic construction projects. Considering the peculiarities of the construction industry and the associated complexity of construction projects, construction companies should decide on international capability and the selection of an ICP through a careful evaluation of their critical success factors (CSFs). Most of the previous research deals with the concept of CSFs in the context of project management in general, but few studies have identified CSFs for ICPs. To fill that gap in current research, the main objective of this study was to identify and group CSFs for ICPs. A total of 37 CSFs were identified after conducting a detailed literature review and a pre-pilot study. A new framework of CSFs for ICPs was proposed following primary research, which was conducted through in-depth interviews with leading experts in international projects. Although the constructability/complexity factor of the project received the highest rating in terms of importance to the success of the ICP, the next most critical factors were found to be external factors, such as local contractor/subcontractor, investor, and presence of a foreign partner. The results of this research may help participants involved in ICPs to improve their understanding of the international construction environment and deliver more successful ICPs.

Resource based view in the Turkish construction sector and resource selection with ANP technique

The competitive environment observed in the international construction sector has reflected in the Turkish construction sector through joint projects. In order to achieve competitive advantage in joint construction projects and to achieve success against national competitors, it is necessary to review resource selection strategies. In this context, the main purpose of this study is to look at the resource selection criteria of the construction companies in terms of International Resource-Based Theory. The 77 resources of the construction firms reviewed during this study were evaluated by taking into consideration their ability to be strategic resource and their competitive advantages. In this study, the Building Information Modelling (BIM) tools and technique, which has been spoken as a resource that will benefit competition in Turkey in recent years, was discussed as an objective and the research problem was whether BIM is a strategic resource or not. In the resource evaluation process, resources should be listed and evaluated by firm employees and managers. In the survey conducted for this purpose, construction firms were asked to select the resources they already had from the resource pool of the research and to score only 9 important resources. To establish vertical hierarchy and horizontal relationships, the obtained results of the evaluation were analyzed by using the Analytical Network Process (ANP) method. In the established hierarch, the objective was BIM and the selection criteria were VRIO criteria including Valuable, Rare, Inimitable and Organization, which are the resource selection criteria of the Resource-Based Theory. The scores obtained as a result of the survey study applied to the Turkish construction firms were reflected to the ANP technique. While the data processed with the Super Decisions software provides numerical and quantitative comparisons of resources in the construction sector, it also points to a selected set of resources that can work with BIM.

CO2 emission linkage analysis in global construction sectors: Alarming trends from 1995 to 2009 and possible repercussions

As significant contributors to global carbon dioxide (CO2) emissions, the international construction sector is under great pressure to mitigate CO2 emissions and slow global warming more aggressively. The aim of this study is to measure and compare the sectoral CO2 emission linkages and their structures in the construction sectors of 41 countries over 1995–2009 by combing a hybrid multi-regional input–output (MRIO) model and the hypothesis extraction method. The backward and forward CO2 emission linkages indicate that the international construction sector plays a significant role in importing CO2 emissions from upstream industries, while the export of CO2 emissions to downstream industries is relatively minimal. Four fundamental linkage elements show that the net backward CO2 emission linkages account for the largest proportion, followed by the mixed and net forward CO2 emission linkages, while the mixed backward CO2 emission linkages are relatively small. The leading CO2 emission inflows are from the energy, resource and raw-material sectors. The outflows from the construction sector are mainly to the real estate and public utilities sectors. Based on these findings, the paper puts forward countermeasures for the global construction sector to improve energy efficiency, promote industrial structure upgrading and improve the policy system for greenhouse gas emission reduction.

Analysis of internationalization trends in the construction industry with an overview on Croatian construction companies

Abstract Today’s level of globalization and intensifying of competition have resulted in increased number of companies that aim to internationalize their business, and internationalization is gaining more and more significance among the research community. There are not only many perceived benefits of conducting business activities outside one’s home country but also additional risks, challenges and barriers. Construction industry is specific in its nature as it is an extremely regulated profession. This presents an additional challenge to the construction companies seeking to internationalize their business. The goal of the paper is to analyze the current levels of internationalization on the global construction market and to gain insight into future trends, which are achieved by analyzing business data regarding the international construction sector and the data on international results of the Croatian construction companies. The paper first presents the development of the international construction market, followed by the report on the current state of the internationalization in the construction industry as well as on future trends. Finally, the paper presents an overview on the Croatian construction companies and their performance on the foreign markets and gives guidelines or potential growth strategies to participate on the foreign markets.

Agglomeration and Competitive Position of Contractors in the International Construction Sector

The international construction sector is an important contributor to international economic cooperation, and recent decades have witnessed the dramatic development of the Engineering News Record (ENR)’s top 250 or 225 international contractors (TICS250) in the global market. World agglomeration and competitive positioning has a significant influence on engineering companies’ selection and development of their international markets. Based on the location quotient index and the Boston Portfolio Matrix, an agglomeration level and competitive positioning model is presented for international engineering contractors. Assessment methods are introduced to quantitatively analyze the competitive statements of international contractors collected from the ENR, the main focus being on the difference in agglomeration levels between 13 contractors from 2009-2013. The competitive positions and diversified changes of contractor clusters in 9 different industries from 13 countries are also analyzed to highlight the differences in their agglomeration levels and competitive position. The study establishes referential methods for contractors to understand their development patterns and competitive statements in the global market and is of a significant importance for developing relevant strategies.

Naïve Bayesian Classifier for Selecting Good/Bad Projects during the Early Stage of International Construction Bidding Decisions

Since the 1970s, revenues generated by Korean contractors in international construction have increased rapidly, exceeding USD 70 billion per year in recent years. However, Korean contractors face significant risks from market uncertainty and sensitivity to economic volatility and technical difficulties. As the volatility of these risks threatens project profitability, approximately 15% of bad projects were found to account for 74% of losses from the same international construction sector. Anticipating bad projects via preemptive risk management can better prevent losses so that contractors can enhance the efficiency of bidding decisions during the early stages of a project cycle. In line with these objectives, this paper examines the effect of such factors on the degree of project profitability. The Naïve Bayesian classifier is applied to identify a good project screening tool, which increases practical applicability using binomial variables with limited information that is obtainable in the early stages. The proposed model produced superior classification results that adequately reflect contractor views of risk. It is anticipated that when users apply the proposed model based on their own knowledge and expertise, overall firm profit rates will increase as a result of early abandonment of bad projects as well as the prioritization of good projects before final bidding decisions are made.

Construction Sector Transparency Initiative: making construction more accountable

The international Construction Sector Transparency Initiative brings government, the private sector and civil society together with the aim of promoting transparency and accountability in the global construction sector. The UK was one of seven pilot countries along with Ethiopia, Malawi, the Philippines, Tanzania, Vietnam and Zambia, later joined by Guatemala. This paper explains why the initiative is of importance to not only the public, who fund the procurement of public sector construction projects through rates and taxes, but also to construction professionals and the organisations they work for worldwide. It explains the concepts of the multi-stakeholder approach and disclosure, and highlights the findings and lessons from the pilots.

A macroeconomic regression analysis of the European construction industry

PurposeThe purpose of this paper is to analyse the international construction sector from a macroeconomic point of view through production functions. The aim is to contribute additional knowledge on the European construction sector, highlighting differences in the industry among European countriesDesign/methodology/approachIn order to analyse the sector panel, data from 1996‐2005 for nine European countries were used. Raw data were obtained from Eurostat (Bach Project). Variables for the production functions were chosen after a correlation analysis. Annual turnover was taken as the dependent variable, whereas total assets and personnel costs were the independent variables. The econometric regression models considered were linear (bivariate and multivariate) and logarithmic (Cobb‐Douglas).FindingsIn spite of the limitations stated, there are some factors that can explain the results obtained, such as the diverse preponderance of small and medium enterprises and the different roles played by informal economy, migration and subcontracting in each of the countries.Research limitations/implicationsData collected by Eurostat are provided by the enterprises voluntarily. This implies a bias in the representativeness of the data. Thus, the discrepancies and inconsistencies in the results obtained are a direct consequence of the data limitations. Furthermore, the regression models obtained should be tested using future data to predict the behaviour of the construction industry in each one of the countries.Originality/valueThe use of production functions in the construction industry is a novel approach that should be further developed to gather more precise information on the behaviour of the sector.

Assessment of strengths in the UK international construction sector

The background to international production theory is presented with a view to relating the eclectic approach to a part of the international construction industry. This sector includes a number of industry participants: consulting engineers, architects, surveyors, contractors and capital goods manufaturers etc. It can be observed that the sector has adapted to changing client requirements, partly triggered by competitive pressures. The nature of these can be predicted to some extent from the brief reviews of some theoretical and empirical work; the latter is drawn mostly from the contracting sector, but it is widened here to include other sector groups. Fieldwork has thus been carried out to interview a total of 20 firms comprising the different parties to the sector. Although consultants were of primary interest, it was considered that a wider selection of parties should be interviewed in order to determine some of the aspects common to each group. There is also a measure of interrelating across each group in carrying out international projects although this is more the case in competitor nations. Questions were framed on their own strengths and weaknesses, and that of their competitors, as well as the opportunities and threats faced. The findings of the survey and that of the earlier review are brought together in order to summarize where the main ‘advantages’ of the firms lie.