Deng, X; Low, S P; Li, Q and Zhao, X (2014) Developing competitive advantages in political risk management for international construction enterprises. Journal of Construction Engineering and Management, 140(9): 04014040, ISSN 0733-9364
Abstract
International construction projects invariably involve political risks. This has been a persistent and pernicious problem encountered by international contractors. Various sets of variables have been suggested in the literature focusing on different aspects of political risk management (PRM) for international construction enterprises (ICEs). It is crucial to identify the relative importance and groupings of these variables. This paper aims to identify critical variables associated with PRM in international construction projects, and to analyze their rankings and underlying relationships. A total of 17 variables were identified through a literature review and consolidated by pilot studies with professionals in the international construction industry. Questionnaire instruments containing the 17 variables were sent out to the practitioners and academics, and 138 completed questionnaires were received. The top five ranked variables for PRM were (1) relationship with governments, (2) misconduct of contractors, (3) experiential knowledge of political risks, (4) relations with power groups, and (5) localization. Factor analysis was used as the data reduction tool and these 17 variables were further grouped into four resource dimensions, as follows: (1) relations, experience, acceptance, and localization; (2) recourse, organization, operation, and technology; (3) growth, ownership, leverage, and diversification; and (4) sustainability, opportunity, integration, and long-term. A management framework with both theoretical and practical meanings was finally developed for successful PRM in international construction projects. The findings would help the ICEs to clarify the highly prioritized variables and underlying factors which could be used as an assessment tool to evaluate the performance of PRM. Successful PRM would provide competitive advantages for the ICEs to survive and prosper in the host construction market, especially in those locations characterized by highly political risks.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | competitive advantage; international construction enterprise; international projects; political risks; project planning and design; risk management |
| Index terms: | relative importance, meaning, literature review, integration, practitioner, questionnaire, international project, international construction project, project planning, competitive advantage, international construction industry, diversification, ownership, international construction, factor analysis, risk management, dimension, construction market, localization |
| Subjects: | sociology, organizational analysis, market analysis, statistical analysis, economics, urban planning, health monitoring assessment and metrics, data analysis and analytics, data collection methods, risk assessment, strategic management, control systems, practitioner |
| Topics: | International Construction, Organizational Design, Project Management, Research Practice, Health and Safety, Governance, Roles and Professions, Risk Management |
| Descriptive scope: | 3 PCA |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here