Development of a performance model for international construction joint venture : a system dynamics approach

The uncertain and dynamic nature of International Construction Joint Venture (ICJV) performance is evolved with many critical factors which lead to make partner relationships more complex in respect of making decisions to maintain a cohesive environment. Addressing to the fact, a generic system dynamics performance model for ICJV is developed by integrating a number variables as to get an overall impact on performance of ICJV and to make effective decisions based on that. In order to formulate and validate the model both structurally and behaviourally, both qualitative and quantitative data are gathered by conducting intensive interviews from two ICJVs in Thailand. After conducting intensive simulations of model, three major problems are identified related to negative value gap, low productivity in construction and high rate of ineffective information sharing of both ICJVs. Several policies are suggested and integrated application of these policies provides a maximum improvement to performance of the ICJV.

Joint venture behaviour in construction industry : an Australia case study

Joint ventures can take many forms and can be formed for different reasons, from sharing resources to creating future business opportunities. At the same time, there is increasing interest and discussion of alternative procurement methods, moving away from traditional procurement systems to relational approaches. Business systems and strategies need to be redefined and move from a short-term project to project culture to a more strategic, long-term perspective. Joint ventures of construction organisations, global and local, have become increasingly popular to deliver large-scale infrastructure construction projects. However, successful strategic collaborations require project organisations to formulate a fit between contractual and operational arrangements for each situation. This study reviews the movement from traditional procurement methods towards relational contracting approaches in Queensland, Australia. The study examines the organisational factors that facilitates sustainable relationship between project organisations and hence, lead to long-term business success. This paper reports on initial findings captured from a survey undertaken with construction contracting organisations in Australia, focusing on the supply chain relationships. Contractors’ perceptions of the relationship management process and the engagement of the supply chain are also presented.

Lifting the joint venture veil : liability of related entities for misleading conduct of agents engaged by joint venture partners

At common law, a corporation may be liable vicariously for the conduct of its appointed agents, employees or directors. This generally requires the agent or employee to be acting in the course of his or her agency or employment and, in the case of representations, to have actual or implied authority to make the representations. The circumstances in which a corporation may be liable for the conduct of its agents, employees or directors is broadened under the Australian Consumer Law (ACL) to where one of these parties engages in conduct “on behalf of” the corporation. As the decision in Bennett v Elysium Noosa Pty Ltd (in liq) demonstrates, this may extend to liability for the misleading conduct of a salesperson for the joint venture to parties who are not formal members of the joint venture, but where the joint venture activities are within the course of the entity’s “business, affairs or activities”.

Practical framework for measuring performance of international construction firms

The internationalization of construction companies has become of significant interest as the global construction market continues to be integrated into a more competitive and turbulent business environment. However, due to the complicated and multifaceted nature of international business and performance, there is as yet no consensus on how to evaluate the performance of international construction firms (ICFs). The purpose of this paper, therefore, is to develop a practical framework for measuring the performance of ICFs. Based on the balanced scorecard (BSC), a framework with detailed measures is developed, investigated, and tested using a three-step research design. In the first step, 27 measures under six dimensions (financial, market, customer, internal business processes, stakeholders, and learning and growth) are determined by literature review, interviews with academics, and seminar discussions. Subsequently, a questionnaire survey is conducted to investigate weights of these 27 performance measures. The questionnaire survey also supports the importance of measuring intangible aspects of international construction performance from the practitioner’s viewpoint. Additionally, a case study is described to test the framework’s robustness and usefulness. This is achieved by benchmarking the performance of a Chinese ICF with nine other counterparts worldwide. It is found that the framework provides an effective basis for benchmarking ICFs to effectively monitor their performance and support the development of strategies for improved competitiveness in the international arena. This paper is the first attempt to present a balanced and practically tested framework for evaluating the performance of ICFs. It contributes to the practice of performance measurement and related internationalization in the construction industry in general.

Forming a joint venture project team for multi-discipline engineering services in Australia

Joint venture design teams are formed to combine resources and expertise in order to secure multi-discipline engineering design services on major projects. Bringing together resources from two ordinarily competing companies to form one joint team is however challenging as each parent company brings to the project its own organisational culture, processes and team attitudes. This study examined the factors that impact on forming a successful joint venture project team. Three critical areas were identified from an extensive literature review; Joint Venture Arrangements, Parent Companies and Forming the Team; and a survey was conducted with professionals who have worked in joint venture project teams in the Australian building industry in order to identify factors that affected successful joint venture team formation, and the common lessons learnt. This study reinforced the importance of three key criteria - trust, commitment and compatibility - for partner alignment. The results also identified four key lessons learnt which included; selecting the right resources, enabling a collaborative working environment by way of project office, implementing an independent Joint Venture Manager, and allocating work which is best for project with fees reflecting risk where risk is disproportionate.

Market structure of international construction professional services: Evidences from top design firms

Construction professional service (CPS) in the international arena has been very competitive despite that the industry is proliferating at a high rate. To excel in international business, CPS firms have the importance of building overseas competition strategies on a proper understanding of the international CPS (I-CPS) market. However, subject to borderless trade, information technology–based networking, global outsourcing, and changing forms of procurement, the I-CPS market structure has become more covert, intricate, and unstraightforward than before. Through examining business competition among top international design firms, this study aims to identify the attributes of the I-CPS market structure from two perspectives—concentration and turnover. Data from Engineering News-Record over the period 2001–2011 were collected to calculate market concentration ratios and turnover indices. The results show that I-CPS competition is characterized by atomism, much turbulence with a steady increase in competition intensity, and the predominant role of new entrants and exiting firms in market turnovers. The combination of concentration and turnover is found useful to address the attributes of the I-CPS market structure, which favors I-CPS firms to formulate international competition strategies in due ways.

Joint Ventures Law in Australia (3rd ed.)

Following on from the 2nd edition published in 2005, this new edition updates its predecessor and adds considerable new material as a result of changes in the law generally and commercial approaches to financing joint ventures in particular. Of special note, Financing of Joint Ventures has been completely re-written with considerable additions to take account of the new legislative regimes such as the Personal Property Securities. The impact of climate change legislation has been covered, specifically carbon pricing with additional material on structuring generally and particularly in relation to large joint ventures with governments through Public Private Partnerships. A new Chapter has been added called Resources Joint Ventures and undertakes a thorough analysis of a typical resources joint venture and is heavily cross referenced into the chapter on Default which has also been updated. In addition, International Joint Ventures now includes additional material on structuring and dispute resolution and Joint Ventures and the Competition and Consumer Act has been substantially re-written to take account of 2009 legislative amendments on cartel conduct, and the impact of changes wrought by the Competition and Consumer Act 2010. All other chapters and material has been updated to accommodate other legislative changes and new case law over the seven years since the last edition.

Intellectual Property and Joint Ventures

Following upon the success of the 2nd edition published in 2005, this new edition not only updates its predecessor but also adds considerable new material in consequences of changes in the law generally and commercial approaches to financing joint ventures in particular. Of special note are the following: Financing of Joint Ventures has been completely re-written with considerable additions to take account of the new legislative regimes such as the Personal Property Securities, the impact of climate change legislation, specifically carbon pricing with additional material on structuring generally and particularly in relation to large joint ventures with governments through Public Private Partnerships. A new Chapter called Resources Joint Ventures undertakes a thorough analysis of a typical resources joint venture and is heavily cross referenced into the chapter on Default which has also been updated. International Joint Ventures now includes additional material on structuring and dispute resolution. Joint Ventures and the Competition and Consumer Act has been substantially re-written to take account of 2009 legislative amendments on cartel conduct, and the impact of changes wrought by the Competition and Consumer Act 2010. All other chapters and material has been updated to accommodate other legislative changes and new case law over the seven years since the last edition.

An entry mode decision-making model for the international expansion of construction enterprises

Purpose – The purpose of this paper is to provide a new type of entry mode decision-making model for construction enterprises involved in international business. Design/methodology/approach – A hybrid method combining analytic hierarchy process (AHP) with preference ranking organization method for enrichment evaluations (PROMETHEE) is used to aid entry mode decisions. The AHP is used to decompose the entry mode problem into several dimensions and determine the weight of each criterion. In addition, PROMETHEE method is used to rank candidate entry modes and carry out sensitivity analyses. Findings – The proposed decision-making method is demonstrated to be a suitable approach to resolve the entry mode selection decision problem. Practical implications – The research provides practitioners with a more systematic decision framework and a more precise decision method. Originality/value – The paper sheds light on the further development of entry strategies for international construction markets. It not only introduces a new decision-making model for entry mode decision making, but also provides a conceptual framework with five determinants for a construction company entry mode selection based on the unique properties of the construction industry.

Environmental assessment for commercial buildings: Stakeholder requirements and tool characteristics

The Cooperative Research Centre for Construction Innovation (CRC CI) is a national research, development and implementation centre focused on the needs of the property, design, construction and facility management sectors. Established in 2001 and headquartered at Queensland University of Technology as an unincorporated joint venture under the Australian Government's Cooperative Research Program, the CRC CI is developing key technologies, tools and management systems to improve the effectiveness of the construction industry. The CRC CI is a seven year project funded by a Commonwealth grant and industry, research and other government support. More than 150 researchers and an alliance of 19 leading partner organisations are involved in and support the activities of the CRC CI

Evaluating the influences of stakeholder management on construction project quality

The issue of ensuring that construction projects achieve high quality outcomes continues to be an important consideration for key project stakeholders. Although a lot of quality practices have been done within the industry, establishment and achievement of reasonable levels of quality in construction projects continues to be a problem. While some studies into the introduction and development of quality practices and stakeholder management in the construction industry have been undertaken separately, no major studies have so far been completed that examine in depth how quality management practices that specifically address stakeholders’ perspectives of quality can be utilised to contribute to the ultimate constructed quality of projects. This paper encompasses and summarizes a review of the literature related to previous research undertaken on quality within the industry, focuses on the benefits and shortcomings, together with examining the concept of integrating stakeholder perspectives of project quality for improvement of outcomes throughout the project lifecycle. Findings discussed in this paper reveal a pressing need for investigation, development and testing of a framework to facilitate better implementation of quality management practices and thus achievement of better quality outcomes within the construction industry. The framework will incorporate and integrate the views of stakeholders on what constitutes final project quality to be utilised in developing better quality management planning and systems aimed ultimately at achieving better project quality delivery.

Common law obligations of good faith in non-fiduciary joint ventures

This chapter is devoted to the issue of non-fiduciary common law obligations of good faith, as they may arise in the performance and enforcement of joint ventures. In recent times a rush of commercial contractual claims involving good faith has signified the need for a separate chapter examining this issue. Although most of these decisions have arisen in commercial contexts other than joint ventures, the decisions, nevertheless, warrant careful consideration to the extent that they cast light on the likely contours of the common law good faith obligation as it may apply in the joint venture context.