Determinants of International Architectural, Engineering, and Construction Firms’ Project Success in China

As China becomes a member of the World Trade Organization, many international architectural, engineering, and construction (AEC) firms are undertaking or expected to undertake projects there. This study identifies the significant factors that contribute to the successful performance of projects undertaken by international AEC firms in China. Data were collected using structured questionnaires from foreign (non-Chinese) AEC firms that have completed projects in China. Personal interviews with 27 experts were also conducted to supplement and test the survey findings. The findings reveal that the variable that affects the most number of success measures is the AEC firm’s ability to understand the client’s requirement. Achieving this brings about good project quality performance and owner satisfaction. Furthermore, firms that have superior product or service quality would also achieve better project performance. The interviewees also exhorted the importance of having core competencies as a critical success factor for projects in China. Practitioners may use the findings to help them manage their projects in China, so as to achieve higher levels of success.     

Discriminant Analysis for Predicting Ranges of Cost Variance in International Construction Projects

Unanticipated market conditions as well as project-related risks can easily lead to cost overruns in international construction projects. For a contractor to be financially successful in international projects, a careful examination of the project is a prerequisite to understanding the cost variance characteristics. Based on the reasonably accurate characterization of the cost performance, the markup or contingency amount is determined to ensure both a decent level of profit and a good chance of winning the contract. This paper presents a classification model to categorize international construction projects, particularly faced by Korean contractors, into five cost-variation classes: extreme cost overrun, moderate cost overrun, neutral, moderate cost saving, and extreme cost saving. The model is able to characterize an international project for its cost performance prediction in comparison to the contractor’s initial cost estimate. A linear discriminant analysis is utilized to develop the predictive classification model with the support of the bootstrap method. Tests show that the proposed model is able to help cost estimators determine a proper level of cost contingency before bidding on an international project.     

Success/Failure Factors and Performance Measures of Web-Based Construction Project Management Systems: Professionals’ Viewpoint

This paper presents the results of an empirical study conducted to refine the writers’ previous findings on potential factors that may influence performance of commercial Web-based project management systems (WPMSs) and potential measures that might be used to assess performance of such systems. Data used in this study were obtained from 39 professionals who had practical experience with WPMSs in construction projects. The results of the study confirm 42 factors that can potentially affect performance of WPMSs and 36 measures that can be used to evaluate such performance. These 42 factors are categorized into four distinct groups: characteristics of the project, the project team, the service provider, and the specific WPMS system used in the project. The 36 measures reflect performance of WPMSs in six different perspectives: strategic, schedule/time, cost, quality, risk, and communication. Findings presented in this paper can be used by researchers as a starting point for future research in the area of WPMS implementation and performance evaluation and may be used by practitioners in the industry as a useful guide to increase the likelihood of a successful WPMS adoption.     

Models for Predicting Project Performance in China Using Project Management Practices Adopted by Foreign AEC Firms

China is a new market to many international architectural, engineering, and construction (AEC) firms and it is not known what would be the likely project outcomes, based on different project management (PM) practices adopted. This research developed and tested five models to predict the likely project success levels, based on PM practices adopted by foreign AEC firms in China. Based on data obtained from 33 projects, multiple linear regression (MLR) models for predicting the performance of foreign managed projects in China were constructed. The models were tested against 13 new cases, and the results show that they are able to predict project outcomes with some level of accuracy. The models show that certain scope management practices can be used to predict owner satisfaction, profit margin, and cost and quality performance of the project. Construction industry practitioners who are managing projects in China may benefit from the findings by focusing more on upstream management, like managing project scope, in order to ensure project success. It is recommended that construction industry practitioners use the MLR models to make preliminary assessment of the possibility of project success based on the type of PM practices they intend to adopt in China. From the results, they can then decide if they should change their practices or abort the project.     

Owner’s Role in Construction Safety

Despite dramatic improvements in recent decades, the construction industry continues to be one of the industries with the poorest safety records. Recent improvements are due, in part, to the concerted efforts of owners, contractors, subcontractors, and designers. While past safety studies have investigated the roles of contractors, subcontractors, and designers, the owner’s impact on construction safety has not been previously investigated. This paper will present the results of a study on the owner’s role in construction safety. Data were obtained by conducting interviews on large construction projects. The relationship between project safety performance and the owner’s influence was examined, with particular focus on project characteristics, the selection of safe contractors, contractual safety requirements, and the owner’s participation in safety management during project execution. By identifying practices of owners that are associated with good project safety performances, guidance is provided on how owners directly impact safety performance.     

Political, Economic, and Legal Risks Faced in International Projects: Case Study of Vietnam

The aim of this research is to investigate the political, economic, and legal (PEL) risks faced by foreign firms when undertaking construction projects in Vietnam. The specific objectives are to investigate the types of PEL risks faced and the risk response techniques adopted. The data collection instrument was a questionnaire with open ended questions. The data collection method was in-depth face to face interviews with 18 experts from France, Hong Kong, Malaysia, Singapore, and the United States who have managed construction projects in Vietnam. The major risks faced include corruption, termination of public projects, bureaucratic administrative system to obtain permits and approvals, changing and inconsistent regulations, inadequate legal framework, fluctuation of exchange, and interest and inflation rates. Ways to respond to these risks are recommended by the experts. Foreign firms undertaking construction projects in Vietnam may make use of these findings to identify their PEL risks and determine the appropriate risk response measures to give their projects a higher chance of success.     

SIM-UTILITY: Model for Project Ceiling Price Determination

Before considering bids submitted by competing contractors for a public procurement project, the owner should determine a project ceiling price or cost estimate to use as a reference point for evaluating the bids. A high ceiling price conflicts with the owner’s interests in minimizing costs. Meanwhile, a low ceiling price can jeopardize the project if all bids exceed the ceiling price. This paper proposes a model for determining a reasonable project ceiling price. The model, called SIM-UTILITY, is based on a utility theory and facilitated by a cost simulation approach. The utility theory is applied to reflect the owner’s preferences regarding the determination criteria, while the simulation approach is used to generate more objective project cost data to support execution of the utility theory. The advantages of SIM-UTILITY are proven by its successful application to three construction projects in Taiwan. A computerized SIM-UTILITY is expected to be broadly applicable to public construction projects in Taiwan.     

Who Needs to Know What? Institutional Knowledge and Global Projects

Projections for future demand in infrastructure and buildings indicate that there will be increasing opportunities for firms to engage in construction projects around the world. However, international construction projects also face numerous uncertainties. Foreign firms engaged on these projects must work in unfamiliar environments, with differing regulations, norms, and cultural beliefs. This can increase misunderstandings and risks for the entrant firm. To reduce these risks, successful international firms strategically increase their understanding of the local area by collecting knowledge that is important for a given foreign project. This study compiles and analyzes data from 15 case studies of three types of international firms (developers, contractors, and engineers) engaged in international infrastructure development to identify the types of institutional knowledge that informants indicate are important for their international projects. Using institutional theory, we categorize the kinds of knowledge about foreign country operations that managers deem to be important, expanding prior studies by attending to normative knowledge in addition to regulative and cultural knowledge. Finally, we analyze the importance of different categories of knowledge according to firm type. This analysis provides entrant firms a tool to help identify important types of institutional knowledge to collect as they undertake international projects.     

Predicting Performance of Design-Build and Design-Bid-Build Projects

Design-build (DB) and design-bid-build (DBB) are two principal project delivery systems used in many countries. This paper reports on models constructed to predict performance of DB and DBB projects on 11 areas, using project-specific data collected from 87 building projects. The study included collecting, checking, and validating industry data, and the statistical development of multivariate linear regression models for predicting project performance. Robust models are developed to predict construction and delivery speeds of DB and DBB projects. Gross floor area of the project is the most significant factor affecting speed. Besides this, for DBB projects, contractors’ design ability, and adequacy of plant and equipment would ensure speedy completion of the projects. For DB projects, if the contract period is allowed to vary during tender evaluation, this would slow down the project. Robust models to predict turnover and system quality of DB projects are also constructed. A DB contractor’s track record is an important variable. They must have completed past projects to acceptable quality and have ability in financial, health and safety management.     

Examining the Relationship between Organizational Learning Styles and Project Performance

A review of literature on organizational learning suggested that organizations mainly exhibit three types of learning styles: single-loop learning (SLL), double-loop learning (DLL), and deutero learning (DeuL). SLL refers to the detection and correction of errors without adjusting one’s underpinning assumptions about performance requirements. DLL refers to improvement actions which are undertaken in response to the change of one’s underpinning assumptions. DeuL refers to the establishment of a system which propels continuous learning. It has been advocated that effectuating these learning styles are critical for attaining continuous project performance improvement. This paper reports a study that aimed to examine the relationship between organizational learning styles and performance improvement in construction projects. A conceptual model for the same was first developed. Data about the contracting organizations’ practice of learning styles and project performance were collected through a questionnaire survey. Structural equation modeling was used to examine the significance of the relationship between organizational learning styles and project performance improvement. It was found that the attainment of project performance improvement was positively related to the practice of DLL. Further, DeuL was found essential for facilitating the practice of SLL and DLL.     

Explaining Cooperative Behavior in Building and Civil Engineering Projects’ Claims Process: Interactive Effects of Outcome Favorability and Procedural Fairness

Cooperation is fundamental to successful procurement and delivery of building and civil engineering projects. This study explores the role of perceived fairness as a motivator of cooperative behavior in the process for administering project claims. The objective is to investigate how a contractor’s perceptions about fairness of the procedure for administering project claims would interact with the outcome received from the claims to influence the contractor’s cooperative behavior in terms of conflict intensity and potential to dispute. The data collection instrument was a structured questionnaire. Face-to-face interviews were conducted with 41 contractors’ personnel regarding their experience with claims on 41 completed projects in Singapore. The data were analyzed using the structural modeling approach. The results indicate that on projects where contractors did not receive a favorable outcome from claims, there was lower intensity of conflict and lower potential to dispute when contractors perceived that the procedure for administering the claims was fair than when the procedure was perceived to be unfair. The findings suggest that, in construction, cooperative behavior is a combined function of the outcome and procedure leading to that outcome. It also suggests that enhancing cooperative behavior goes beyond formal contract provisions but rather how the contract is administered in practice. It is recommended that employers’ project management team whose actions of rejecting invalid claims may be misinterpreted and disputed pay greater attention to how decisions on claims are reached. A fair procedure could cushion the effect of an unfavorable decision and thereby reduce a contractor’s uncooperative attitude.     

Risk/Reward Compensation Model for Civil Engineering Infrastructure Alliance Projects

A risk/reward model is described as that which aligns project participants’ behaviors toward the achievement of a project’s performance objectives through the use of incentives. A risk/reward model typically includes the following mechanisms: risk/reward shared percentages among nonowner participants, project cost risk/reward, noncost risk/reward, risk cap, and achievability of performance targets. This paper examines the influence of a risk/reward model on the behavior of project participants. Twenty-nine industry practitioners from eight civil infrastructure project alliances were interviewed. The interviews revealed that individual features of a risk/reward model identified had merits, but the achievability of performance targets model appeared to be the most appropriate for promoting positive behaviors within the project team. Additionally, it was found that all incentive aspects of the model examined led to positive and constructive behaviors occurring due to their perceived fairness and equity of payment structure. Participants indicated that having a commercial interest in an alliance’s performance outcomes ensured collaboration and engagement throughout the project’s life cycle. It is concluded that risk/reward sharing is pivotal to obtaining a successful project outcome for the procurement of civil engineering infrastructure projects when using an alliance.     

Impact of Change Orders on Small Labor-Intensive Projects

In today’s construction, small projects can be just as important if not more important than the larger projects. However, small projects are usually fast track projects, which often involve overlapping design and construction time. Subsequent modifications may be required for the sections that are already under construction. These disruptions to the ongoing project are labeled as change orders. The impact due to changes has been described as the adverse effect upon the unchanged work due to changes in the contract. For this study, 34 projects were selected to develop a statistical model that estimates the amount of labor efficiency lost due to change orders for small projects. The variables in the final model are percent design related changes, percent owner initiated changes, the ratio of actual peak labor to estimated peak labor, the ratio of actual project duration to estimated project duration, and project manager’s percent time on the project. The results of this paper are of value to owners, electrical and mechanical contractors, and construction managers. The model quantifies the impact of change orders by introducing the most important variables that bring the largest disruptions.     

Predicting the Academic Performance of Construction Engineering Students by Teaching and Learning Approaches: Case Study

There are various teaching approaches that instructors may adopt in their quest to teach effectively, and students can choose from a range of learning approaches to help them achieve good grades. This study investigates the effectiveness of personal learning approaches adopted by undergraduates and the teaching approaches employed by instructors in the context of construction engineering courses. The research questions are as follows. (1)?What are the students’ learning approaches that lead to better academic achievement? (2)?What are the instructors’ teaching approaches that give rise to better academic achievement? The study also aims to construct a model to predict a student’s likely academic performance in a construction engineering course. The research design is a self-administered survey. Using a structured questionnaire consisting of questions relating to learning strategies and teaching approaches, data were collected from undergraduates who majored in construction engineering. Statistical analyses undertaken include Pearson correlation and multiple linear regression modeling. Pearson correlation analysis shows that both the Growing Teaching approach and the students’ Achieving Motive learning approach are significantly correlated with academic performance. A robust grade prediction model was developed, whereby a student’s grade in a construction engineering course may be predicted using one teaching approach (Growing Teaching) and three learning approaches (Achieving Motive, Achieving Strategy, and Deep Motive). To help students obtain higher grades in a construction engineering course, instructors should adopt the Growing Teaching approach, and students should adopt the Achieving Motive learning approach. Because students who adopt the Deep Motive learning approach are penalized with lower grades, it is recommended that instructors modify their teaching methods and approaches so that students do not take shortcuts in their learning without deeper regard for higher-order learning outcomes.     

Relationship between Automation and Integration of Construction Information Systems and Labor Productivity

Information technology (IT) has been used to increase automation and integration of information systems on construction projects for over two decades. However, evidence that overall costs have been reduced or project performance has been improved with IT in construction is limited and mostly focused on application specific studies. A comprehensive understanding of the relationship between IT and project performance helps industry practitioners better understand the likely outcomes of implementation of IT application and likewise benefits researchers in improving the effectiveness in their IT development efforts. An opportunity to examine new evidence exists with the emergence of the Construction Industry Institute’s Benchmarking and Metrics database on construction productivity and practices. This article presents an analysis of that data to determine if there is a relationship between labor productivity and level of IT implementation and integration. Data from industrial construction projects are used to measure the relationships between the automation and integration of construction information systems with productivity. Using the independent sample t-test, the relationship was examined between jobsite productivity across four trades (concrete, structural steel, electrical, and piping) and the automation and integration of various work functions on the sampled projects. The results showed that construction labor productivity was positively related to the use of automation and integration on the sampled projects.     

Project Delivery Systems and Project Change: Quantitative Analysis

Design/build has become one of the favored project delivery methods in the engineering construction industry. Numerous studies have advocated the use of design/build over the traditional design/bid/build delivery approach. A comprehensive analysis of 67 global projects from the Construction Industry Institute's database shows that design/build projects may not provide all the benefits to project performance. The study found timesaving was a definitive advantage of design/build project delivery, but, the positive effects of cost and productivity changes were not convincing. Based on the results of the study, the project management expertise and experience of the contractor may have a greater impact on project performance outcomes than focusing on project delivery strategy only.     

Critical Factors Affecting Schedule Performance: Evidence from Indian Construction Projects

Over 40% of Indian construction projects are facing time overrun ranging from 1 to 252 months; the reasons for which are being studied by researchers to suggest possible remedial measures. This paper identifies 55 attributes responsible for impacting performance of the projects. These attributes were then presented to Indian construction professionals in the form of a questionnaire. Statistical analysis of responses on the attributes segregated them into distinct sets of success attributes and failure attributes. Factor analysis of sets of success attributes and failure attributes separately grouped them into six critical success factors and seven critical failure factors. In order to understand the extent of contribution these factors have on the outcome of a construction project, a second stage questionnaire survey was also undertaken. The analyses of responses of the second stage questionnaire led us to conclude that two success factors and one failure factor: commitment of project participants; owner’s competence; and conflict among project participants contribute significantly in enhancement of current performance level of the project. The extent of their contribution has, however, been observed to vary for a given level of project performance. The analyses results are expected to help project professionals to focus on a few factors and get the optimum results rather than giving attention to all the factors and not getting the proportionate results.     

Influence of Project Type and Procurement Method on Rework Costs in Building Construction Projects

While it is widely recognized that additional costs due to rework can have an adverse effect on project performance, limited empirical research has been done to investigate the influencing factors. The research presented in this paper aims to determine the influence of different project types and procurement methods on rework costs in construction projects. Using a questionnaire survey, rework costs were obtained from 161 Australian construction projects. The direct and indirect consequences of rework are analyzed and discussed. It is shown that, contrary to expectation, rework costs do not differ relative to project type or procurement method. In addition, it was found rework contributed to 52% of a project’s cost growth and that 26% of the variance in cost growth was attributable to changes due to direct rework. To reduce rework costs and therefore improve project performance, it is posited that construction organizations begin to consider and measure them, so that an understanding of their magnitude can be captured, root causes identified, and effective prevention strategies implemented.     

Selection Model for Delivery Methods for Multifamily-Housing Construction Projects

Selecting an appropriate delivery method that will achieve a project’s objectives and characteristics is one of the most critical factors for the project’s success. A selection model for this study was developed by using actual construction case data in quantitative data analysis methods such as logistic regression, factor analysis, and correlation analysis. The model was developed on the basis of the design-build and design-bid-build methods from various project delivery methods. To validate the developed model, comparative tests were conducted on the selection of the delivery method for multifamily-housing construction projects, which showed that the model resulted in 95.0% accuracy. It is expected that the developed selection model will enable owners to select delivery methods that accurately meet their needs characteristics, project characteristics, and external environments.     

Framework of Success Criteria for Design/Build Projects

Success has always been the ultimate goal of every activity, and a construction project is no exception. Due to the ambiguous definition of project success and the different perceptions of participants toward this concept, it may be difficult to tell whether a project is successful as there is a lack of consensus. Time, cost, and quality have long been the success criteria used to evaluate the performance of a construction project. However, such a list has been criticized as not being comprehensive. Even studies of the project success of a particular construction method, such as the design/build procurement system, are lacking in most previous research considering construction projects in general. This paper sets out to establish criteria for project success for a design/build project in construction, first by identifying relevant measures of project success for a construction project in past studies, with particular emphasis on design/build projects, and then by establishing a comprehensive assessment framework for project success for design/build projects. The significant impacts on the construction field of study, in terms of educational value and practical use, are also presented. With little research in the project success of design/build projects, the writers suggest a research focus for the study.