Key relationship-based determinants of project performance in China

The aim of this paper is to investigate the relationship-based factors that affect performance of general building projects in China. Thirteen performance metrics that may be used to measure the success level of construction projects are defined and categorized into four groups namely cost, schedule, quality and relationship performance. Fourteen risks inherent in relationships and 16 tools expected to facilitate relationship building that may affect project success are identified. Data of different projects were collected in China via a self-administered postal survey. Multiple linear regression models are developed to help explain the variance in different performance metrics. It has been found that ten risks and nine tools have either positive or negative influence on project performance to some different extents and in different project development process stages. Detailed explanations are made, especially to those variables bearing unexpected signs. It is recommended that firms in the Chinese construction industry manage the relationship-based factors that are significant in the MLR models so as to achieve project success.

Relationship-based determinants of building project performance in China

The aim of this paper is to investigate the relationship-based factors that affect performance of general building projects in China. Eight performance metrics that may be used to measure the success level of construction projects are defined and categorized into two groups namely 'hard' and 'soft' performance. Eight indicators of risks inherent in relationships and seven indicators of tools expected to facilitate relationship building that may affect project success are identified. Data of different projects were collected in China via a self-administered postal survey. By using structural equation modelling techniques, a structural model is developed to help explain the relationship among different variables. It has been found that relational risk has negative influence on project performance. It is recommended that firms in the Chinese construction industry manage the relationship-based factors that are significant in the model so as to achieve project success.

The Pinoke Project Performance

The Pinoke Project is a 6 week creative development to create a full-length transmedia dance performance at the cutting edge of artificially intelligent technology, elite contemporary dance practice, and publication. This process will be a collaboration between creative coders, 3D graphics and motion artists, a dance/choreographer, and an embedded dance critic who will work with an artificially intelligent robot, Pinoke, on the creative development of a new stage production as well as the documentation and dissemination of the process. This project is supported by the Victorian Government through Creative Victoria.

Does absorptive capacity affect project performance? A study based on project management practices, organization learning, and knowledge

The literature has emphasized that absorptive capacity (AC) leads to performance, but in projects its influences still unclear. Additionally, the project success is not well understood by the literature, and AC can be an important mechanism to explain it. Therefore, the purpose of this study is to investigate the effect of absorptive capacity on project performance in the construction industry of São Paulo State. We study this influence through potential and realized absorptive capacity proposed by Zahra and George (2002). For achieving this goal, we use a combination of qualitative and quantitative research. The qualitative research is based on 15 interviews with project managers in different sectors to understand the main constructs and support the next quantitative phase. The content analysis was the technique used to analyze those interviews. In quantitative phase through a survey questionnaire, we collected 157 responses in the construction sector with project managers. The confirmatory factor analysis and hierarchical linear regression were the techniques used to assess the data. Our findings suggest that the realized absorptive capacity has a positive influence on performance, but potential absorptive capacity and the interactions effect have no influence on performance. Moreover, the planning and monitoring have a positive impact on budget and schedule, and customer satisfaction while risk coping capacity has a positive impact on business success. In academics terms, this research enables a better understanding of the importance of absorptive capacity in the construction industry and it confirms that knowledge application in processes and routines enhances performance. For management, the absorptive capacity enables the improvements of internal capabilities reflected in the increased project management efficiency. Indeed, when a company manages project practices efficiently it enhances business and project performance; however, it needs initially to improve its internal abilities to enrich processes and routines through relevant knowledge.

Conflict Resolution to Project Performance

Conflict resolution is a key issue to manage when dealing with diverse stakeholders. By analysing in depth the most relevant and implicit aspects of the construct "conflict", this study focuses on examining how the five main strategies in solving common disagreements are adopted by considering different conflict sources. Hypotheses are tested using data collected from both the academic and business world. Perceptions of project managers and team members allows the authors not only to find significant differences by role played or type of organization, but to narrow the design of future approaches to investigate the relation between conflict and project performance. More specifically, the research indicates that project managers adopt confronting and compromising styles in most cases as first options, highlighting the influence of responsibility degree factor in how issues are undertaken within a project team.

Wisconsin Career Education Consortium, for training and/or retraining : final project performance report.

WI docs. no.: Ed.6/2:C 3f/1978

Motivational misalignment on an iconic infrastructure project

Aligning the motivation of contractors and consultants to perform better than ‘business-as-usual’ (BAU) on a construction project is a complex undertaking and the costs of failure are high as misalignment can compromise project outcomes. Despite the potential benefits of effective alignment, there is still little information about optimally designing procurement approaches that promote motivation towards ‘above BAU’ goals. The paper contributes to this knowledge gap by examining the negative drivers of motivation in a major construction project that, despite a wide range of performance enhancing incentives, failed to exceed BAU performance. The paper provides a case study of an iconic infrastructure project undertaken in Australia between 2002 and 2004. It is shown that incentives provided to contractors and consultants to achieve above BAU performance can be compromised by a range of negative motivation drivers including: • inequitable contractual risk allocation; • late involvement of key stakeholders; • inconsistency between contract intentions and relationship intentions; • inadequate price negotiation; • inconsistency between the project performance goals and incentive goals; •unfair and inflexible incentive performance measurement processes. Future quantitative research is planned to determine the generalisability of these results.

Validation of an instrument to measure governance and performance on collaborative infrastructure projects

Collaborative infrastructure projects use hybrid formal and informal governance structures to manage transactions. Based on previous desk-top research, the authors identified the key mechanisms underlying project governance, and posited the performance implications of the governance (Chen et al. 2012). The current paper extends that qualitative research by testing the veracity of those findings using data from 320 Australian construction organisations. The results provide, for the first time, reliable and valid scales to measure governance and performance of collaborative projects, and the relationship between them. The results confirm seven of seven hypothesised governance mechanisms; 30 of 43 hypothesised underlying actions; eight of eight hypothesised key performance indicators; and the dual importance of formal and informal governance. A startling finding of the study was that the implementation intensity of informal mechanisms (non-contractual conditions) is a greater predictor of project performance variance than that of formal mechanisms (contractual conditions). Further, contractual conditions do not directly impact project performance; instead their impact is mediated by the non-contractual features of a project. Obligations established under the contract are not sufficient to optimise project performance.

Risk sharing with Multilateral Financial Institutions in infrastructure and energy project financing : effect on capital relief for commercial banks

(Matsukawa and Habeck, 2007) analyse the main instruments for risk mitigation in infrastructure financing with Multilateral Financial Institutions (MFIs). Their review coincided with the global financial crisis of 2007-08, and is highly relevant in current times considering the sovereign debt crisis, the lack of available capital and the increases in bank regulation in Western economies. The current macroeconomic environment has seen a slowdown in the level of finance for infrastructure projects, as they pose a higher credit risk given their requirements for long term investments. The rationale for this work is to look for innovative solutions that are focused on the credit risk mitigation of infrastructure and energy projects whilst optimizing the economic capital allocation for commercial banks. This objective is achieved through risk-sharing with MFIs and looking for capital relief in project finance transactions. This research finds out the answer to the main question: "What is the impact of risk-sharing with MFIs on project finance transactions to increase their efficiency and viability?", and is developed from the perspective of a commercial bank assessing the economic capital used and analysing the relevant variables for it: Probability of Default, Loss Given Default and Recovery Rates, (Altman, 2010). An overview of project finance for the infrastructure and energy sectors in terms of the volume of transactions worldwide is outlined, along with a summary of risk-sharing financing with MFIs. A review of the current regulatory framework beneath risk-sharing in structured finance with MFIs is also analysed. From here, the impact of risk-sharing and the diversification effect in infrastructure and energy projects is assessed, from the perspective of economic capital allocation for a commercial bank. CreditMetrics (J. P. Morgan, 1997) is applied over an existing well diversified portfolio of project finance infrastructure and energy investments, working with the main risk capital measures: economic capital, RAROC, and EVA. The conclusions of this research show that economic capital allocation on a portfolio of project finance along with risk-sharing with MFIs have a huge impact on capital relief whilst increasing performance profitability for commercial banks. There is an outstanding diversification effect due to the portfolio, which is combined with risk mitigation and an improvement in recovery rates through Partial Credit Guarantees issued by MFIs. A stress test scenario analysis is applied to the current assumptions and credit risk model, considering a downgrade in the rating for the commercial bank (lender) and an increase of default in emerging countries, presenting a direct impact on economic capital, through an increase in expected loss and a decrease in performance profitability. Getting capital relief through risk-sharing makes it more viable for commercial banks to finance infrastructure and energy projects, with the beneficial effect of a direct impact of these investments on GDP growth and employment. The main contribution of this work is to promote a strategic economic capital allocation in infrastructure and energy financing through innovative risk-sharing with MFIs and economic pricing to create economic value added for banks, and to allow the financing of more infrastructure and energy projects. This work suggests several topics for further research in relation to issues analysed. (Matsukawa and Habeck, 2007) analizan los principales instrumentos de mitigación de riesgos en las Instituciones Financieras Multilaterales (IFMs) para la financiación de infraestructuras. Su presentación coincidió con el inicio de la crisis financiera en Agosto de 2007, y sus consecuencias persisten en la actualidad, destacando la deuda soberana en economías desarrolladas y los problemas capitalización de los bancos. Este entorno macroeconómico ha ralentizado la financiación de proyectos de infraestructuras. El actual trabajo de investigación tiene su motivación en la búsqueda de soluciones para la financiación de proyectos de infraestructuras y de energía, mitigando los riesgos inherentes, con el objeto de reducir el consumo de capital económico en los bancos financiadores. Este objetivo se alcanza compartiendo el riesgo de la financiación con IFMs, a través de estructuras de risk-sharing. La investigación responde la pregunta: "Cuál es el impacto de risk-sharing con IFMs, en la financiación de proyectos para aumentar su eficiencia y viabilidad?". El trabajo se desarrolla desde el enfoque de un banco comercial, estimando el consumo de capital económico en la financiación de proyectos y analizando las principales variables del riesgo de crédito, Probability of Default, Loss Given Default and Recovery Rates, (Altman, 2010). La investigación presenta las cifras globales de Project Finance en los sectores de infraestructuras y de energía, y analiza el marco regulatorio internacional en relación al consumo de capital económico en la financiación de proyectos en los que participan IFMs. A continuación, el trabajo modeliza una cartera real, bien diversificada, de Project Finance de infraestructuras y de energía, aplicando la metodología CreditMet- rics (J. P. Morgan, 1997). Su objeto es estimar el consumo de capital económico y la rentabilidad de la cartera de proyectos a través del RAROC y EVA. La modelización permite estimar el efecto diversificación y la liberación de capital económico consecuencia del risk-sharing. Los resultados muestran el enorme impacto del efecto diversificación de la cartera, así como de las garantías parciales de las IFMs que mitigan riesgos, mejoran el recovery rate de los proyectos y reducen el consumo de capital económico para el banco comercial, mientras aumentan la rentabilidad, RAROC, y crean valor económico, EVA. En escenarios económicos de inestabilidad, empeoramiento del rating de los bancos, aumentos de default en los proyectos y de correlación en las carteras, hay un impacto directo en el capital económico y en la pérdida de rentabilidad. La liberación de capital económico, como se plantea en la presente investigación, permitirá financiar más proyectos de infraestructuras y de energía, lo que repercutirá en un mayor crecimiento económico y creación de empleo. La principal contribución de este trabajo es promover la gestión activa del capital económico en la financiación de infraestructuras y de proyectos energéticos, a través de estructuras innovadoras de risk-sharing con IFMs y de creación de valor económico en los bancos comerciales, lo que mejoraría su eficiencia y capitalización. La aportación metodológica del trabajo se convierte por su originalidad en una contribución, que sugiere y facilita nuevas líneas de investigación académica en las principales variables del riesgo de crédito que afectan al capital económico en la financiación de proyectos.

Stakeholder impact analysis of infrastructure project management in developing countries : a study of perception of project managers in state-owned engineering firms in Vietnam

Construction projects can involve a diverse range of stakeholders and the success of the project depends very much on fulfilling their needs and expectations. It is important, therefore, to identify and recognize project stakeholders and develop a rigorous stakeholder management process. However, limited research has investigated the impact of stakeholders on construction projects in developing countries. A stakeholder impact analysis (SIA), based on an approach developed by Olander (2007), was adopted to investigate the stakeholders' impact on state-owned civil engineering projects in Vietnam. This involved the analysis of a questionnaire survey of 57 project managers to determine the relative importance of different stakeholders. The results show the client to have the highest level of impact on the projects, followed by project managers and the senior management of state-owned engineering firms. The SIA also provides suggestions to project managers in developing and evaluating the stakeholder management process.

Value-mapping for major economic infrastructure projects

The establishment of corporate objectives regarding economic, environmental, social, and ethical responsibilities, to inform business practice, has been gaining credibility in the business sector since the early 1990’s. This is witnessed through (i) the formation of international forums for sustainable and accountable development, (ii) the emergence of standards, systems, and frameworks to provide common ground for regulatory and corporate dialogue, and (iii) the significant quantum of relevant popular and academic literature in a diverse range of disciplines. How then has this move towards greater corporate responsibility become evident in the provision of major urban infrastructure projects? The gap identified, in both academic literature and industry practice, is a structured and auditable link between corporate intent and project outcomes. Limited literature has been discovered which makes a link between corporate responsibility; project performance indicators (or critical success factors) and major infrastructure provision. This search revealed that a comprehensive mapping framework, from an organisation’s corporate objectives through to intended, anticipated and actual outcomes and impacts has not yet been developed for the delivery of such projects. The research problem thus explored is ‘the need to better identify, map and account for the outcomes, impacts and risks associated with economic, environmental, social and ethical outcomes and impacts which arise from major economic infrastructure projects, both now, and into the future’. The methodology being used to undertake this research is based on Checkland’s soft system methodology, engaging in action research on three collaborative case studies. A key outcome of this research is a value-mapping framework applicable to Australian public sector agencies. This is a decision-making methodology which will enable project teams responsible for delivering major projects, to better identify and align project objectives and impacts with stated corporate objectives.