The development of 'soft' strategic indicators for international client satisfaction

Despite the increasing significance of the construction industry as an emerging sector of the Australian economy, there is inadequate research performed on construction design firms in terms of theoretical and empirical foundations. Although past research has identified the barriers and success factors for firm market entry, evidence suggests that to date no research has explicitly explored the sustainability of construction design firms in international markets. SMEs and their approach to firm internationalisation differ significantly from large manufacturing firms and a vast majority of construction design firms operate as SMEs. This paper develops a sustainable business model for construction design SMEs, which rely upon the development of clear Client Following (CF) versus Market Seeking (MS) strategies to support internal firm strategic and operational management. The understanding of these strategies is vital as the application of either will shape the design management approach of firms, which would in turn impact on the sustainability of these firms in foreign markets. Long-term sustainability of firms in international markets relies heavily upon client satisfaction. Client and project team participants’ communication during various design processes has often been problematic and the added difficulty of communicating across international boundaries further compounds the problem of capturing and maintaining client’s requirements. Therefore this paper develops a model for business sustainability of Australian construction design firms working in international markets by exploring factors that affect client satisfaction across international boundaries, through the development of business performance indicators. These include not only the critical financial capital but also other ‘softer’ indicators, namely: social, cultural and intellectual capital. These act as a firm’s measure of success and the acquisition of this type of capital will provide significant advantages to firms’ success, hence sustainability in international markets.

Challenges of international design chain integration and cultural diversity : organisational reflexive capability

Increasingly project teams on international mega projects are composed of multiple partners from different countries forming joint ventures to achieve a higher level of strategic flexibility. Establishing and maintaining local business networks are critical to ensure the success of exporting firms. Firms who achieve competitive advantage in international markets and long term economic sustainability constantly adapt their business practices to achieve client satisfaction by a combination of self, market and project needs assessment. Successful firms ultimately achieve this in local markets but in international market this is intensified with the complexity of barriers grounded in cross-cultural contexts. The need for flexibility, adaptability and continual reassessment is enhanced as the market evolves in various localities. Reflexivity theory was used to develop a conceptual model to explain the way in which firms develop awareness, responsiveness and adaptability for long term success in diverse international markets. This paper summarizes the initial Australian study which developed the model grounded in empirical observations of design construction firms working on projects in developing countries and a second study of Malaysian firms which validated the model. The aim of this study was to develop a performance measurement framework for capabilities assessment of international collaborative partnerships. The study explored the joint venture partnerships between Australian and Malaysian property and construction professionals. Four Malaysian organizations were examined as case studies and two key activities of design management and knowledge management were analyzed in relation to social, cultural and intellectual capital transformation within the Reflexivity Capability Maturity Assessment Framework.

The role of reflexive capability in relation to intellectual capital on multi international partnerships

This paper reports the results of an analysis of five Malaysian firms who have worked successfully on multi international partnerships and/or megaprojects. A case study methodology was employed to examine the barriers and successful strategies the firms used in decision making in various international markets. A common characteristic across the firms was the ability to self reflect and adapt their practices to different international conditions despite numerous differences between countries including cultural, social, project governance structures, regulatory, terminology and codes. A reflexive capability model developed from the social sciences theory of individual agent reflexivity was developed to explain the way in which firms as an entity can develop awareness, responsiveness and adaptability for long term success in diverse international markets. This paper builds upon an initial Australian study which developed the model grounded in empirical observations of internationalising design construction firms by presenting the results of a second study of Malaysian firms. Results indicate that the model of reflexivity capability is a useful way to interpret practices that are undertaken in multi partner relationships on larger more complex projects. Successful Malaysian firms within joint venture relationships display an ability to self reflect and adapt. This transformation process is critiqued in relation to the relationships between social, cultural and intellectual capital. Reflexive capability is a characteristic of the successful case study firms working within global models of practice. The reflexive capability model is explained in relation to common themes identified in relation to the management of intellectual capital in successful multi international partnerships and megaprojects.

Reflexive capability maturity assessment for firm management of multipartner international projects

This paper reports the findings of a research project which was aimed at developing and promoting a greater understanding of the uniqueness of successful Australian-Malaysian partnerships and joint ventures undertaken on complex multi-partner mega construction projects. The aim of the investigation was to identify the critical success factors specific to such partnerships. The theoretical framework was grounded in a previous empirical study on design firm internationalisation which demonstrated that long-term success in international markets is enhanced by the management of integration of transformation of social, cultural and intellectual capital within the firm. A generic adaptive performance framework mapping the key performance indicators for each of these dimensions was developed which can be modified to unique contexts related to specific geographical localities. In the Australian Malaysian Institute study the framework is tested within the context of firm and shared partnership capital. The broad interpretive framework of adaptive performance was refined as a result of the findings of the four case studies of Malaysian organisations to develop a partnerships capacity performance measurement framework for Malaysian firms working on international projects. Six in-depth interviews were conducted with ten participants across the four Malaysian firms and a thematic analysis was undertaken of the transcripts. A reflexive capability maturity assessment tool was developed from insights gained into the underlying causes of key barriers coupled with common themes emerging in relation to the successful approaches used by case study firms to overcome those barriers. Specific examples of the case study firms' demonstration of reflexive capability in the areas of market knowledge, design management and market entry are presented.

Policy drivers of international entrepreneurship in Europe

The diversity of countries and cultures in Europe necessitates an international outlook for most businesses. This paper examines the internationalisation of business in Europe through a literature review on international entrepreneurship theory. The role of the individual business owner and of business and interorganisational activity in facilitating the internationalisation of businesses in Europe is discussed by utilising the theoretical framework of international entrepreneurship and by putting forward three main propositions. The main aim and intent of this paper is to understand how the policies of individual governments and institutions such as the European Union help businesses in Europe to internationalise, with particular emphasis on businesses in the Baltic region. The paper discusses policy implications and suggestions for future research, which highlight the importance for firms in Europe of focussing on international markets.

Volatility transmissions between stock and bond markets : evidence from Japan and the U.S.

This study attempts to investigate the transmission of market-wide volatility between the equity markets and bond markets of Japan and the U.S. To measure the volatility transmission, the BEKK (Baba, Engle, Kraft and Kroner, 1990) method, a decomposition approach of the multivariate GARCH (1,1) model, is used to examine the cross-market contemporaneous effect of information arrival. The time series analysis provides evidence to the long-run phenomena of causality in conditional variances of paired assets within the local and international markets. Within various pairings, some evidence of bi-directional volatility transmissions such as informational linkages have been observed. Our empirical results suggest that within the domestic cross markets, the volatility transmission is unidirectional from the stock market to the bond market. Evidence from international cross-market analysis is mixed, with strong evidence on volatility spillover among these international stock markets, but weak evidence between international stock and bond markets. In addition, there are significant directional volatility transmissions between DJI index and FTSE100 index, and between DJI index and DAX200 index. The volatility transmission between these two markets indicates that the international diversification of bonds is not prevalent.

Sustaining the international competitive advantage of Asian firms : a conceptual framework and research propositions

The sudden loss of export markets by many Asian firms during the Asian financial crisis (AFC) has raised important questions on how firms in the region can regain and sustain their competitive advantage in international markets. This paper develops a conceptual model which focuses on certain key elements of a firm's internal resources as critical sources of competitive advantage and offers research propositions. It is argued that Asian firms can enhance their international competitive advantage by leveraging their internal resources within an external environment generally conducive to growth.

Does organisational heritage matter in the development of offshore markets? the case of Australian life insurers

The globalization of financial markets over the past decade has focused the spotlight on the responsiveness of financial firms to international pressures. Insurance markets have traditionally relied on global networks not only to expand the insurers' sphere of influence but also to support domestic business. Until relatively recently, Australian insurance companies have not played a significant role in the development of international markets. However, in the last decade of the twentieth century Australian insurers ventured overseas on a scale without precedence. This article presents an historical perspective on the internationalization of the Australian life-insurance market with a view to understanding why these firms have been classified "late starters" in the internationalization stakes. In a broader capacity it provides insights into the impediments to overseas expansion and the forces encouraging or discouraging the development of cross border networks.

Volatility dynamics in the term structure of Latin American sovereign international bonds

We examine the nature of volatility dynamics in the term structure of sovereign bonds issued in international markets by major Latin American countries. Focusing only on the U.S. dollar-denominated sovereign international bonds, this study shows the heterogeneous nature of volatility effects that affect the term structure of individual countries in Latin America. Considering the significance of the Argentine credit event in the region, we also account for any change in dynamics following the Argentine default in 2001 by subsampling the pre- and postdefault windows. We also find some evidence of liquidity-driven volatility interaction in the term structure.

International market selection model for large Chinese contractors

An increasing number of construction contractors are actively participating in international markets. One of the most fundamental issues confronting contractors moving offshore is where to do business. Although international market selection is a much studied topic, the market choices made by construction firms have attracted little attention. This paper aims to identify factors that influence internationalmarket selection and to develop an international market selection model for construction firms. The market entry choices of 39 large international Chinese contractors across 87 countries were investigated through logistic regression analysis. The results indicate that international contractors prefer to enter countries with large market potential, small culture distance, and, surprisingly, high country risk and high competitive intensity. Moreover, large, experienced contractors are more willing to compete in international markets. Contrary to generally accepted belief, geographic distance is not revealed to have any significant influence on international market selections by Chinese contractors. This paper will be of interest to contractors considering international market selection as part of their global expansion strategy.

The Strategic outsourcing Decision of IT and eCommerce: The Case of Small Businesses in New Zealand

In New Zealand, small to medium-sized enterprises (SMEs) play a very important role in the economy by their contribution to both employment and gross domestic product. Addressing issues pertinent to SMEs is of paramount importance in driving this sector forward. Information Technology (IT) emerges as one main enabler for SMEs in automating their operations, seeking new opportunities and enhancing their strategic business positioning in local and international markets. However, the inability of SMEs to handle the dynamic nature of IT due to problems inherent in their size, structure and resources, makes it difficult for them to take appropriate decisions to benefit from the IT technologies. The advent of eCommerce (EC) has only compounded this problem. One way out of this complex situation is to outsource the IT and EC technology requirements by the SMEs. This study endeavours to identify the pattern of IT and EC outsourcing issues of SMEs within New Zealand. This research attempts to identify the main driver for IT/EC outsourcing in SMEs as well as to explore the problems of IT outsourcing and makes suggestions for further research in this crucial sector.

IT and ecommerce outsourcing in small to medium-size enterprises in New Zealand : an exploratory research

In New Zealand, small to medium-sized enterprises (SMEs) play a very important role in the economy by their contribution to both employment and also to gross domestic product. Addressing issues pertinent to SMEs is of paramount importance in driving this sector forward. Information Technology (IT) emerges as one main enabler for SMEs in automating their operations, seeking new opportunities and enhancing their strategic business positioning in local and international markets. However, the dynamic nature of IT and inability of SMEs, due to problems inherent in their size and structure, makes it difficult for them to take appropriate decisions to benefit from the IT technologies. The advent of eCommerce (EC) has only compounded this problem. One way out of this complex situation is to outsource the IT and EC technology requirements by the SMEs. This study endeavours to identify the pattern of IT and EC outsourcing issues of SMEs within New Zealand. It reveals that the main driver for IT outsourcing is access to expertise and used mainly for maintenance purposes only. The study also identifies the problems in IT outsourcing and makes suggestions for further research in this crucial sector.

The global biopharma industry and the rise of Indian drug multinationals: implication for Australian generics policy

This article provides a synopsis of the new dynamics of the global biopharma industry. The emergence of global generics companies with capabilities approximating those of 'big pharma' has accelerated the blurring of boundaries between the innovator and generics sectors. Biotechnology-based products form a large and growing segment of prescription drug markets and regulatory pathways for biogenerics are imminent. Indian biopharma multinationals with large-scale efficient manufacturing plants and growing R&D capabilities are now major suppliers of Active Pharmaceutical Ingredients (APIs) and generic drugs across both developed and developing countries. In response to generic competition, innovator companies employ a range of life cycle management techniques, including the launch of 'authorised generics'. The generics segment in Australia will see high growth rates in coming years but the prospect for local manufacturing is bleak. The availability of cheap generics in international markets has put pressure on Pharmaceutical Benefits Scheme (PBS) pricing arrangements, and a new policy direction was announced in November 2006. Lower generics prices will have a negative impact on some incumbent suppliers but industrial renewal policies for the medicines industry in Australia are better focused on higher value R&D activities and niche manufacturing of sophisticated products.

Internationalisation process for construction design service SMES on multi national projects

The internationalisation process has four key factors including market selection, decision to enter, entry modes and factors affecting entry modes. Small and medium sizes enterprises (SMEs) in the architectural engineering construction design services sector have demonstrated an increasing involvement in international markets. Consequently, activities and processes involved in internationalisation of these SME types present important issues for understanding from entrepreneurial, managerial and research perspectives. A research gap exists, however, through emphasis in past research having been given to large firms, and in particular those within manufacturing. This investigation identified similarities and differences between two construction design service SMEs who have been exporting to various localities including Eastern Europe, Africa, Middle East, UK, Asia and South America for typically more than two decades. Similarities and differences were identified within eight major constructs including: purpose, firm type, market image and design philosophy, entry mode strategy, institutional arrangement, factors affecting mode of entry, marketing selection and firm strategy in relation to project selection. The primary reasons for firms in both cases working in international markets were associated with the firms' motivations related to growth and enhancement of financial viability. Both firms were categorized as client following. This paper discusses the various internationalization processes and explains the reasons intrinsic to each case study. The two firms have been highly successful in the internationalization processes on multi-national projects die to a reflexive capability philosophy which incorporates continuous analysis and alignment between firm and locality characteristic to transform traditional barriers into enablers of success.