Novel Capability-Based Risk Assessment Calculator for Construction Contractors Venturing Overseas
Publication: Journal of Construction Engineering and Management
Volume 145, Issue 10
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.
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Data Availability Statement
Data generated or analyzed during the study are available from the corresponding author by request. Information about the Journal’s data-sharing policy can be found here: http://ascelibrary.org/doi/10.1061/(ASCE)CO.1943-7862.0001263.
Acknowledgments
The authors would like to gratefully acknowledge University of Malaya, Malaysia (BK002-2017) for providing the financial support for this research. Special gratitude is also extended to the anonymous reviewers for their constructive comments, which have helped improve the quality of this manuscript.
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Journal of Construction Engineering and Management
Volume 145 • Issue 10 • October 2019
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©2019 American Society of Civil Engineers.
History
Received: Jul 12, 2018
Accepted: Feb 15, 2019
Published online: Aug 6, 2019
Published in print: Oct 1, 2019
Discussion open until: Jan 6, 2020
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