Wang, C; Loo, S C; Yap, J B H and Abdul-Rahman, H (2019) Novel capability-based risk assessment calculator for construction contractors venturing overseas. Journal of Construction Engineering and Management, 145(10): 04019059, ISSN 0733-9364
Abstract
Globalization creates opportunities for contractors to enter lucrative international markets yet international projects are exposed to more diverse and complex risks than domestic projects. Owing to vast uncertainties and complexities, international construction entry decisions are intricate. Although conventional Probability-Impact (P-I) risk models are useful, the firm's capabilities are missing in early assessments for project selection decision. Hence, this study aims to develop a capability-based risk assessment (CapRA) calculator for international contractors venturing overseas. The international construction firm's capabilities are explored using resource-based views, dynamic capabilities, and Porter's generic value chain theories to conceptualize an integrated framework for risk assessment. Additionally, a questionnaire was sent to international construction firms operating outside their home countries to appraise their firm's capabilities and international construction project risk significance values. Then, a partial least squares approach was used to analyze the data. The findings are used to develop a novel CapRA model, which is then formulated into modified P-I risk model equations and computerized into a CapRA calculator to simplify the application. In essence, this study contributes to both knowledge and practice by developing and testing a model to improve the accuracy and facilitate project selection decisions for international construction firms.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | entry decision; international construction; overseas venture; risk calculator; risk management |
| Index terms: | project selection, risk assessment, international market, international construction, risk management, testing, value chain, dynamic capability, globalization, questionnaire, partial least square, international project, construction contractor, complexity, international construction project, resource-based view, accuracy |
| Subjects: | risk assessment, strategic management, data collection methods, value management, practitioner, professional practice, management, financial risk, development economics, professional development, value chain strategy, statistical analysis, systems engineering, economic factors |
| Topics: | International Construction, Supply Chain Management, Engineering Principles, Information Management, Project Management, Research Practice, Business Strategy, Cost Management, Roles and Professions, Risk Management |
| Descriptive scope: | 4 PCTA |
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