Chuing, L S (2015) Modelling capability-based risk assessment for international construction project ventures. PhD thesis, University of Malaya, Malaysia.
Abstract
Globalization has created more opportunities for contractors to enter international construction markets. Despite the financial markets meltdown in the autumn of 2008, international contractors are still finding opportunities in the international marketplace. International projects are exposed to more diverse and complex risks, thus higher possibility of loss, than domestic projects. Similarly, the vast uncertainties and complexities in international construction would render project selection decisions to be intricate as compared to domestic construction. As a result, copious risk assessment tools and methods have been proposed to assist this decision making, most of them based on Probability-Impact (P-I) risk model. Although P-I risk model is useful to assess risks, firm’s capabilities are missing in the early assessment to provide accurate risk picture to decision makers for project selection decision in the international construction. This study aims to develop a risk assessment model, through the determination of the extent to which firm’s capabilities impact on international construction project risk significance values, for improved productivity and performance. The international construction firm’s capabilities are explored using resource-based view, dynamic capabilities, and Porter’s generic value chain theories. The conceptual framework postulated that international construction firms could lower the exposure to risks in the international construction foray by a combination of firm’s capabilities. A total of 252 survey questionnaires were sent out in 2013 to 2014 to 155 international construction firms and 65 firms responded via either structured interview or questionnaire survey. The respondents are project selection decision makers in their firms and thus are approached through face-to-face interviews if they are based in Malaysia or contacted via email if they are based in their home countries. The data collected were analyzed using SPSS and PLS-SEM software. The results from structural model evaluation found that only 53 out of 110 hypothesized relationships were significantly important. It was discovered that four firm’s capabilities have less influence on the risks studied; they are financial, innovation, physical, and procurement capabilities. This suggests that human resource, organizational, business management, organizational learning, construction, and project management capabilities are more influential towards international construction risk significances. A novel CapabilityRisk Assessment (CapRA) model was developed and validated using the PLS-SEM technique. The model was then formulated into modified P-I risk model equations and computerized into a CapRA calculator to facilitate construction firms in selecting international construction projects. The Mean Absolute Percentage Error found that CapRA is able to improve prediction accuracy by 16% to 21%. International contractors are recommended to use CapRA to conduct preliminary assessment on their firm’s capabilities and risks of potential projects. This study contributes to the knowledge of risk assessment by enhancing the P-I risk model with firm’s capability component. The model developed enables firms to be informed of the combination of firm’s capabilities needed to lower the exposure to certain risks. Thus, a proper assessment of firm’s capabilities and project risks before coming into any decision can be achieved. Future study could incorporate other influencing variables such as various contract clauses to refine CapRA.
| Item Type: | Thesis (Doctoral) |
|---|---|
| Thesis advisor: | Rahman, H A |
| Uncontrolled Keywords: | Malaysia; accuracy; construction firms; decision making; domestic construction; dynamic capabilities; globalization; innovation; international construction; international construction project; interview; learning; markets; organizational learning; probability; productivity; questionnaire survey; resource-based view; risk assessment |
| Index terms: | modelling, markets, project management, future study, project selection, risk assessment, international construction, productivity, domestic construction, value chain, Malaysia, exposure, conceptual framework, international project, international construction project, complexity, business management, decision-making, dynamic capability, human resource, globalization, questionnaire, face, survey, accuracy, construction firm, interview, organizational learning, resource-based view |
| Subjects: | business, research design and methodology, data collection methods, value management, public and environmental health, management, value chain strategy, professional development, project management theory and practice, decision analysis, economic factors, systems engineering, organization, strategic management, construction type, psychology, analytical methods, economic analysis, theoretical framing, financial risk, Geography |
| Topics: | Supply Chain Management, Project Management, Geographical Context, Engineering Principles, Health and Safety, Risk Management, Human Resources, International Construction, Organizational Design, Research Practice, Information Management, Cost Management, Business Strategy, Construction Technology |
| Descriptive scope: | 5 PCTEA |
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