scholarly journals What Enables a High-Risk Project to Yield High Return from a Construction Contractor’s Perspective?

2019 ◽  
Vol 11 (21) ◽  
pp. 5971
Author(s):  
Jin Woo Won ◽  
Wooyong Jung ◽  
Seung Heon Han ◽  
Sungmin Yun ◽  
Bonsang Koo
Keyword(s):  
Risk Management ◽  
High Risk ◽  
Construction Projects ◽  
Risk Mitigation ◽  
General Rule ◽  
Low Risk ◽  
Management Performance ◽  
International Construction ◽  
High Return ◽  
High Risk Project

“High risk high return” is a general rule in the overall industry; however, high-risk projects in the construction industry frequently fail to yield a high return. In order to achieve a sustainable business in the international construction market, contractors require an average to high return yield under high-risk conditions. This study aims to reveal what risk factors and risk management performance enables high-risk projects to yield high returns. The study investigated 124 international construction projects by Korean contractors and classified them into four groups: high-risk high-return (HH), high-risk low-return (HL), low-risk high-return (LH), and low-risk low-return (LL). The study found that risk assessment accuracy was the most important trigger in discriminating between high return projects (HH, LH) and low return projects (HL, LL), whereas risk mitigation performance showed little difference between high return and low return projects. In addition, the contingency amount did not significantly affect project return in HL, LH, and LL projects, but HH projects showed a positive relation between contingency and predicted risk amount. This article contributes to recognizing the differences between high return and low return projects and provides insights for practitioners into the relation between risk management performance and high returns in different risk conditions.

Identification of critical risks in international engineering procurement construction projects of Chinese contractors from the network perspective

2020 ◽  
Vol 47 (12) ◽  
pp. 1359-1371
Author(s):  
Tsenguun Ganbat ◽  
Heap-yih Chong ◽  
Pin-Chao Liao ◽  
Jeremy Leroy
Keyword(s):  
Risk Management ◽  
Construction Projects ◽  
Risk Mitigation ◽  
Mitigation Strategies ◽  
Risk Transfer ◽  
International Construction ◽  
Managerial Strategies ◽  
Risk Mitigation Strategies ◽  
Network Metrics ◽  
Theoretical Risk

International engineering procurement construction (IEPC) is a complex subject interconnected with risk transfer. In-depth understanding of risks in IEPC projects is essential for effective risk management and managerial strategies. Most related studies focus on the critical risks based on the perceptions of stakeholders or their direct “contribution” to the project loss. This study aims to investigate risk interconnection in IEPC projects through social network analysis, with a focus on the critical risks, risk interactions, and risk mitigation strategies. Three approaches were employed. First, the risk register and interconnection between IEPC projects were identified through a literature review. Second, the risk register and interrelationships were investigated using a questionnaire to formulate theoretical risk-interdependent networks. Third, practical IEPC projects were analyzed using network metrics to identify mitigation strategies for the associated critical risks. From the obtained results, we concluded that controlling security and contract risks in project management can reduce the occurrence or impact of other risks. Moreover, environmental issues related to contractors are also critical in international construction projects. Investigating relationships between risks has uncovered different risk-propagation mechanics within IEPC projects, thus extending the theoretical knowledge for international construction and risk management.

Risk Assessment and Countermeasures of Occupational Fraud Conduct in Corporate Construction Projects

2014 ◽  
Vol 599-601 ◽  
pp. 2130-2133
Author(s):  
Yi Lan Dai ◽  
Lei Chen
Keyword(s):  
Risk Assessment ◽  
Risk Management ◽  
High Risk ◽  
Data Processing ◽  
Construction Projects ◽  
High Probability ◽  
Low Risk ◽  
Engineering Construction ◽  
Occupational Fraud ◽  
Low Probability

Risk management has been a part of enterprise engineering construction projects. Since previous studies mostly analyzed in a qualitative way. This paper utilized in a more quantitative way, which merges the use of questionnaires and the use of risk assessment formula for data processing. The results show that the probability and consequences of corporate construction projects in 18 career malpractice risk events fall into four categories: high-risk and high-probability, high-risk and low-probability, low risk and high probability, low risk and low probability. And accordingly it puts forward the corresponding countermeasures.

Risk mitigation modelling of international construction projects executed by Indian firms: a structural equation modelling approach

2020 ◽  
Vol 27 (9) ◽  
pp. 2687-2713
Author(s):  
Satish Kumar Viswanathan ◽  
Kumar Neeraj Jha
Keyword(s):  
Risk Factors ◽  
Structural Equation ◽  
Construction Projects ◽  
Risk Mitigation ◽  
Mitigation Measures ◽  
Content Type ◽  
Construction Firms ◽  
International Construction ◽  
Equation Modelling ◽  
International Projects

PurposeA number of previous studies have investigated international construction project risks and have proposed risk mitigation measures without examining their interdependence. The purpose of the current study is to identify the influence of various risk mitigation measures on macro-level risk factors in the international marketplace.Design/methodology/approachThe authors initially identified 26 risk variables and nine risk mitigation measures through a literature review, which were then verified for their pertinence to international projects by three experts. Subsequently, 105 questionnaire survey responses were collected and analysed using factor analysis and structural equation modelling to test the interrelations between the risk variables and mitigation measures.FindingsThe findings suggest that joint ventures with local partners is emerged as the most critical risk mitigation measure that influences the international projects, which are exposed to political, project and firm-specific risk factors. Further, it is worth noting that among the recognised risk mitigation measures in international projects, offering more local employment is the least critical mitigation measure in the international projects.Research limitations/implicationsThe findings of this study are based on the macro-risk factors encountered by Indian construction firms in international projects, mostly from specific Asian and African regions. Thus, the opinions of construction firms from the developed countries might be different.Originality/valueThe main contribution of this study to existing knowledge is empirical evidence of the interrelationships between risk mitigation measures and risk factors that are portrayed as latent variables of different manifest risk variables. The generated model can assist construction firms in emphasising several risk mitigation methods, in order to reduce risk and enhance performance in international construction projects.

A stakeholder-based risk assessment and intervention framework for international construction projects

2019 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Tao Wang ◽  
Shangde Gao ◽  
Pinchao Liao ◽  
Tsenguun Ganbat ◽  
Junhua Chen
Keyword(s):  
Risk Factors ◽  
Risk Assessment ◽  
Risk Management ◽  
Construction Projects ◽  
Management Practices ◽  
Intervention Strategies ◽  
The Body ◽  
Content Type ◽  
International Construction ◽  
Project Objectives

Purpose The purpose of this paper is to construct a two-stage risk management framework for international construction projects based on the meta-network analysis (MNA) approach. A plethora of international construction studies seems to assume risks as independent and therefore, risk intervention strategies are usually critiqued as ineffective. Design/methodology/approach In the risk assessment stage, a multi-tiered risk network structure was developed with the project objectives, risk events, risk factors and stakeholders, and critical risk factors were selected based on a series of calculations. In the risk intervention stage, targeted risk intervention strategies were proposed for stakeholders based on the results of the first stage. A highway construction project in Eastern Europe was selected as a case study. Findings The results showed that 17 risk factors in three categories – external, stakeholder-related and internal – are critical, and the project manager, construction management department, supplier and contract department are the most critical stakeholders that affect the entire project performance. Based on the critical risk factors and project stakeholders, targeted risk intervention strategies were proposed. The risk assessment results of MNA were found to be more reliable and consistent with the project conditions than the risk matrix method; the risk intervention strategies of MNA can effectively address project objectives. Originality/value This study modeled risk priorities based on risk associations and put forward a new method for risk management, supplementing the body of knowledge of international construction. The results of this study are of critical importance in management practices.

scholarly journals Analisis Tipologi Saham Syariah Di Bursa Efek Indonesia Berdasarkan Nilai Return Dan Resiko (Value At Risk) Pasca Krisis Global 2008

2012 ◽  
Vol 1 (1) ◽  
pp. 17
Author(s):  
Mohammad Farhan Qudratullah
Keyword(s):  
At Risk ◽  
High Risk ◽  
Risk Analysis ◽  
Capital Market ◽  
Value At Risk ◽  
Low Risk ◽  
Global Crisis ◽  
Analysis Tools ◽  
High Return

Since the signed memorandum of understanding between BAPEPAM with Dewan Syariah Nasional-Majelis Ulama Indonesia (DSN-MUI) on the principle of Islamic capital market in 2003, the Islamic capital market in Indonesia has developed significantly. In each investment, including Islamic capital market investment, there are 2 (two) fundamental things that always accompany it, the return and risks. This paper discusses the analysis of return and risk of sharia stocks that always go in Jakarta Islamic Index (JII) after the global crisis in 2008, risk analysis tools using Value at risk (VaR) approach to model the Generalized Autoregressive Conditional  Heteroscedastic (GARCH), then proceed with the analysis of the typology to determine the characteristics of these stocks. The results that shares sharia can be grouped into 4 (four) :  6 (six) shares entering the low return and low risk (TLKM, UNVR, SMGR, AALI, ELSA, and SGRO), 3 (three ) shares into group of low-return but high risk (INCO, ANTM, and TINS), 3 (three) shares enter the group of low risk but high return (PTBA, LSIP, and KLBF), and 4 (four) shares enter the group high return but high risk (ITMG, ASII, INTP, and BMTR).

scholarly journals Risk Management Of EPC (Engineering Procurement Construction) “Siberut Agregated Biomass Gasification Power Plant” Project in Civil Engineering Design Stage

2019 ◽  
Vol 2 (1) ◽  
Author(s):  
Erma Damayanti ◽  
Ronny Durrotun Nasihien
Keyword(s):  
Risk Management ◽  
High Risk ◽  
Power Plant ◽  
Risk Mitigation ◽  
Biomass Gasification ◽  
Design Stage ◽  
Extreme Risk ◽  
Detailed Specification ◽  
Risk Treatment ◽  
Treatment Table

The Construction of EPC (Engineering, Procurement, Construction) Siberut Aggregated Biomass Gasification Power Plant is the first power plant project in Indonesia that uses bamboo as fuel to produce electricity. Judging from the complexity of the project, it is necessary to carry out risk management for the identification and detailed analysis of the risks or uncertainties that occur in the project, especially the design engineering stage. This study uses interview methods and surveys that are implemented in the google form questionnaire to make it easier for respondents to assess risks provided. Risk assessment uses a Likert scale to determine the level of probability and impact. Next step is risk mapping to determine mitigation efforts. There are 15 independent risk variables and 1 variable risk binders obtained from interviews and literature studies. It is known that 6.67% of the risk is included in the criteria of low risk (minor risk), 73.33% of the risk is included in the criteria of moderate risk (high risk), and 20% of the risk is included in the criteria of high risk (extreme risk). From the data projected onto the risk treatment table so that the results of 6.67% risk are acceptable (acceptable), 20.00% risk is unacceptable, 73.33% undesirable risk. Risk mitigation for 16 identified risks comes from detailed specification issues, incompatibility and implementation of drawing, and multitasking engineering resources. Most risk ownership is directed to the implementing contractor, but not limited to the owner, subcontractor, planning consultant, and supervisory consultant.

scholarly journals Behavioral finance: the analysis of investor behavior based on belief and feeling and the investor rationality towards LQ 45 stocks

2018 ◽  
Vol 15 (1) ◽  
pp. 292-298
Author(s):  
Etty Indriani ◽  
Cahyani Tunggal Sari
Keyword(s):  
Regression Analysis ◽  
High Risk ◽  
Behavioral Finance ◽  
Significant Relationship ◽  
Stock Exchange ◽  
Low Risk ◽  
Investor Behavior ◽  
Average Return ◽  
High Return ◽  
The Relationship

This research analyzes behavioral finance, especially the behavior of investors in Yogyakarta, Indonesia Region. The performance of investor behavior is examined based on the LQ 45 stocks return on Indonesia Stock Exchange and questionnaires that are spread out to five securities agents in Yogyakarta.The performance of LQ 45 stocks return is compared to the questionnaire analysis in the “Belief” part at the first and second stages. The first result shows that LQ 45 stocks are profitable. It can be seen from the average return of the stocks that it has positive value and is statistically identical with the LQ 45 index return. This result is in line with the investors’ opinion that LQ 45 stocks are profitable. The second result shows that most of LQ 45 stocks are profitable and give high return. But, this result is also contrary to the opinion of investors towards traditional finance paradigm that investors still believe “high risk – high return, low risk – low return”. Although most of LQ 45 stocks are considered as low risk stocks, many investors prefer to choose LQ 45 stocks. It means that the traditional finance paradigm has weakness. It is proven that investors sometimes act irrationally.The third and fourth stages of the study are aimed to analyze the relationship between feeling and belief towards frequency of transaction each day based on the questionnaire using regression analysis. The result shows that there is significant relationship between feeling and frequency of transaction each day.

scholarly journals Centralization of Risk Management in Business Companies: A Case Study on the Role of Specialist Departments

2015 ◽  
Vol 2 (1) ◽  
pp. 31
Author(s):  
Michael Schwandt
Keyword(s):  
Risk Management ◽  
Construction Projects ◽  
Construction Company ◽  
International Construction ◽  
Advantages And Disadvantages ◽  
Active Player ◽  
Project Controlling ◽  
The One ◽  
Centralization And Decentralization

As part of his Ph.D. studies, the author researches risk management in project business and focuses on the construction industry. This paper deals with the intra-company organization of risk management. In particular, it examines advantages and disadvantages of centralization and decentralization of risk management. First, the paper deals with various aspects of risk management on theoretical level, ways of organizing risk management structures and relating decision criteria as well as the relevant tasks of specialist departments. Methodology of further research is based on a case study that explores details of centralization and decentralization in business practice. In the center of the case study is the company Bilfinger Berger Civil, a large, international construction company, which is an active player in the project business and has already carried out a variety of construction projects successfully. On the one hand, the company units and persons involved in Bilfinger’s risk management are introduced; on the other hand the tasks of the Group’s centralized departments are illuminated in detail. This includes the Corporate Legal, Internal Auditing, Corporate Treasury, Group Controlling and Project Controlling departments. The risk management of Bilfinger Berger Civil is finally assessed in form of a summary. As a main result the reader gains information about theories on structuring risk management within business companies and numerous impressions on the practical application in a real construction company.

scholarly journals Identifying Political Risk Management Strategies in International Construction Projects

2018 ◽  
Vol 2018 ◽  
pp. 1-11 ◽  
Author(s):  
Tengyuan Chang ◽  
Bon-Gang Hwang ◽  
Xiaopeng Deng ◽  
Xianbo Zhao
Keyword(s):  
Risk Management ◽  
Construction Projects ◽  
Management Strategies ◽  
Political Risk ◽  
Implementation Phase ◽  
Construction Enterprises ◽  
International Construction ◽  
Political Risks ◽  
Risk Management Strategies ◽  
International Experts

International construction projects are plagued with political risk, and international construction enterprises (ICEs) must manage this risk to survive. However, little attention has been devoted to political risk management strategies in international construction projects. To fill this research gap, a total of 27 possible strategies were identified through a comprehensive literature review and validated by a pilot survey with 10 international experts. Appraisals of these 27 strategies by relevant professionals were collected using questionnaires, 155 of which were returned. Exploratory factor analysis was conducted to explore the interrelationships among these 27 strategies. The results show that all of the 27 strategies are important for political risk management in international construction projects. Moreover, these 27 strategies were clustered into six components, namely, (1) making correct decisions, (2) conducting favorable negotiations, (3) completing full preparations, (4) shaping a good environment, (5) reducing unnecessary mistakes, and (6) obtaining a reasonable response. The 6 components can be regarded as 6 typical management techniques that contribute to political risk management in the preproject phase, project implementation phase, and postevent phases. The findings may help practitioners gain an in-depth understanding of political risk management strategies in international construction projects and provide a useful reference for ICEs to manage political risks when venturing outside their home countries.

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