Risk-based go/no-go decision making model for international construction projects: The cross-impact analysis approach

The world economy is becoming more global due to agreements such as the "Uruguay Round" in GATT (General Agreement on Tariffs and Trade). The globalization of the world construction industry provides tremendous opportunities for contractors to expand into new foreign markets. However, the international construction market is dramatically different from the domestic market. It involves all of the uncertainties common to domestic construction projects as well as risks specific to international transactions. Consequently, in contrast with the globalization trend, only 19% of the "Top 400 U.S. Contractors" actively seek international contracts. Moreover, despite the complexity and difficulty, the majority of construction firms have typically entered international markets based on personal intuition or previous experience, both of which are easily influenced by biases that distort the firms' perception of reality. This thesis focuses on developing a formalized "risk-based Go/No-Go decision making model" for contractors who wish to expand into international construction markets. The Go/No-Go decision model basically applies the Cross-Impact Analysis (CIA) method to assess the various uncertainties associated with international construction. This model consists of three parts: (1) the conceptual hierarchical model for the global explanation of a Go/No-Go decision, (2) the CIA causal relationship model to quantitatively analyze the project conditions, and (3) the multi-criteria decision making tool for combining multiple project outcomes. This research draws significant findings regarding the benefits of the Go/No-Go decision model from case studies by 56 participants. With the Go/No-Go decision model, decision makers can make better decisions by improving correctness, enhancing confidence, reducing difficulty, helping decision formulation, and increasing consistency, etc. Other major contributions in this research include the establishment of the most appropriate approach to develop a Go/No-Go decision model, the extensions of the CIA method applicable to this research domain, the conceptualization of the multi-sequential decision processes for the whole phases of entry decisions, and other valuable research findings. These include: the descriptive reasons for wrong Go/No-Go decisions, the investigation of the most critical factors in a Go/No-Go decision, the evaluation of decision consistency, and the discovery of risk aversion in the selection of international construction projects, etc.