Risk Management in Multinational Construction Companies: Research

This report, titled "Designing Research: Risk Management in multinational construction companies while developing projects in foreign countries", explores the critical aspects of risk management within the global construction industry. It begins by highlighting the industry's substantial growth and prof...Read More

Running head: DESIGNING RESEARCH
Risk Management in multinational construction companies while developing projects in
foreign countries
Name of the Student
Name of the University
Author note

1DESIGNING RESEARCH
Project Summary
Over the last decades with the raising of global demand construction industry has faced huge
profitability and expansion across the globe. At the same time, despite of this huge
profitability and expansion the construction industry is also famous for its risky operations.
For any overseas constructional project delivery the risks are associated with several phases
with project planning, development and delivery. The purpose of this research is to examine
the risk issues and their interconnection in overseas construction projects and to find the
appropriate procedures or way outs to avoid the risky issues. For this exploratory study
combine data collection process has been proposed where the literature review was proposed
for secondary data and interview was proposed as primary data collection process. QDA
Miner based data analysis process for this research has been proposed in this proposal.

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Table Content
Introductory Background...........................................................................................................3
Research Questions....................................................................................................................4
Aims and Objectives of the Project............................................................................................5
Significance/Contribution to the Discipline...............................................................................6
Theoretical Framework and Method..........................................................................................7
Budget........................................................................................................................................9
Timeline...................................................................................................................................10
References:...............................................................................................................................11

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Introductory Background
Construction is a one of the major global industries that has currently a valuation of
2.3 to 7 trillion worldwide monetary turnovers. It has been suggested that the construction
industry is currently producing 13.4% (as per the report of 2012) profit worldwide that could
be increased by 14.6% by 2020 (Liu, Zhao and Yan 2016). The construction industry is a
complication of many business operations and interventions namely mobility of labour,
production plant, capital and operational investment, electronic communications and others.
However, with the growth of the globalised industrialisation the mobility of workforce has
become of the major criteria in construction industry. At the same time, despite of this huge
profitability and expansion the construction industry is also famous for its risky operations.
These risks are ranged from financial risk, workforce risk, and physical risk to non physical
risk. Here non physical risk implies the risk related to market reputation, CSR (Corporate
social responsibility) activity, employee engagement and other non physical business
components (Han et al. 2014).
The overall constructional operations can be segregated into two sections, namely
building construction and transportation related construction. In both cases the demand of
international construction companies is raising rapidly. With the raising of global demand the
cash flow is also increasing (Yildiz et al. 2014). Over the last decades the international
trading policies have been also changed significantly increasing the financial and legal
complexity of any overseas business operation. The constructional industry is not an
exception in this case. With this increasing complexity the risk of losing market reputation,
value, profitability and labour support is also increasing radically. Governments of many
countries such as China, India, Middle East, Eastern Europe and other developing market are
taking several financial policy related steps in order to deal with the national infrastructure

4DESIGNING RESEARCH
discrepancy (Liu, Zhao and Yan 2016). Thorough addressing the infrastructure deflect they
are trying create ne regions of booming construction within their territory.
In this situation, there are several types of risk that a globalised construction company
can face due to interactive business operations. Most of this risks are highly related the
project delivery and jurisdictional risk, where the dynamic organisation structures,
environmental factors, protracted contract periods, financial intensity and complicated
processes are some of the common risk factors (Zhao, Hwang and Low 2015). The risk could
be identified through bossiness case and economic feasibility in a particular geographical
territory considering the Taxation system, currency exchange, Market conditions, standards
and practices, Insurance, Legal entity establishment, National employment, Government
relationships, Health and safety and many more.
Research Questions
From the above discussion it can be seen for any overseas constructional project delivery
the risks are associated with several phases with project planning, development and delivery.
These phases are tendering phase, resources transferring phase, implementation phase and
production phase. For overseas operation it is still not clear that how these interactive risky
phases can induce or dominate any particular risky issue. At the same time, there are some
other factors that could be also involved in the overseas project delivery in construction
industry. Hence, Different types of risks are associated with these phases, where the
interrelation between those phases and other underlying factors are still to be found. Hence,
the questions of this research are:
 What the major risk factors are in oversees construction project?

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 What are the potential regulators or influencers of these risks and how they regulates
the outcomes?
 How the risk factors are interconnected and how they could lead to additional
complicacy?
 What a construction company could do to avoid those risks while conducting business
activities overseas?
 What are the contribution of third parties such as government and policy makers it
this situation in order to minimize the risk factors of overseas construction projects?
Aims and Objectives of the Project
As per the above research questions it can be said that there are multiple aims of this
research to accomplish. The primary aim of this study is to evaluate the risk issues and their
interconnection in overseas construction projects. The secondary aim of this research is to
find the appropriate procedures or way outs to avoid the risky issues that could occur in any
overseas construction project. The tertiary aim of this project is to find the underlying factors
that could influence the likeliness and impact of the risks in various levels.
As per the above set of aims this research also has a set of objectives as well. Meeting
these objectives will help this research to achieve its aims. These objectives could be also
considered as the operational milestones. These objectives are:
 Exploring the current situation in order to evaluate the current risk factors in overseas
construction projects
 Conducting basic risk assessment based on the secondary findings to collect real-time
data

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 Collecting evidence based data collection through primary research by involving more
than one participants
 Analysing the data to find the major risk factors and their interrelations in overseas
constructional projects
 Finding the underling influencers and regulators within these risks and the process of
influencing likeliness and impact
 Finding the possible solution and external involvement needs in order to avoid the
potential business risks
Significance/Contribution to the Discipline
Assessing these risks and the subtle impact of relationships among the risky attributes
is a difficult job. On the one side, it is irresponsible to ignore such hazards and there will be
unrealistic choices. Based on insufficient international environmental data and foreign
building experience, contracting projects outside of the country is generally a "high-risk
operation" (Smith, Merna and Jobling 2014). Similar building projects in separate areas may
have entirely distinct risk features. In a fresh setting a newcomer finds it hard to recognize
new hazards. At the business level, the main dangers emerge from outside operations
between enterprises and inner operations within a business. Externally, the operations of the
employer / owner, the architect, direct workers / suppliers, distributors of materials and
equipment can be categorized into four main kinds of relationships (Tamošaitienė, Zavadskas
and Turskis 2013).
On the other side, it is a very complex, time-consuming and costly method to identify
and evaluate all fresh hazards and associations. For most projects, this method is nearly
impossible, particularly when data and time are insufficient. The local vendors of products
and machinery may be affected by similar issues. Internal dangers could arise from

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unbalanced cash flow, particularly in foreign currencies, shortages of staff in job outside the
country, and removal of machinery or facilities from other countries that affect other projects
or reduce the productivity of companies. The issues of the employer / owner often involve
uneven demands, shortfalls in financing and contracts that are disadvantageous to the
entrepreneur (Zhao, Hwang and Phng 2014). Unclear design or specification, a lack of
familiarity with local norms and codes and absence of understanding with local building
techniques are the prevalent issues created by the architects. The dangers posed by
subcontractors and direct labour often causes direct employment issues for unfavourable local
subcontractors and local workers nominated by the proprietor.
If such a complicated scenario is encountered, it is highly essential to identify and
control these key risk variables in projects abroad. A way to manage different hazards is
created in this document for building projects outside Germany. How the essential hazards in
foreign projects can be efficiently identified requires adequate debate. A helpful risk
evaluation method that combines risk likelihood analysis and risk effect evaluation should be
implemented. Vital risk reaction methods should also be demonstrated in supporting case
studies from around the globe for the overseas construction projects.
Theoretical Framework and Method
Theoretical Frameworks of this project is based on conventional business based
environmental inspections considering possible strength, weakness and opportunity.
According to the aims and objectives of this research it could be said that this study needs
both situational analysis from various other researchers and secondary resource as well as the
primary resources through real-time data collection process. The analysis of this research is
also based on multidimensional variables such as risk factors, likeliness, impacts,
interrelations, recommendations, involvement and others. From the primary discussion of the

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theoretical framework it could be found that this research will need a mixed methodological
design to collect and analyse the data to formulate the conclusion and recommendation
(Taylor, Bogdan and DeVault 2015).
The data collection process of a research could be either primary or secondary or
both. The primary research allows the research to collect data from interactive tools such as
interview, survey or observation (Bell, Bryman and Harley 2018). This research needs both
secondary research and the primary data collection process. The secondary data collection
process will be done by the article review, collecting evidences from business reports,
reading relevant litterateurs and research papers on the construction industry and their
business operations as well as associated risks. The primary research will be conducted
through using semi structure interview tool to collect practical evidences related to overseas
construction business operations. The participant selection for the interview was conducted
through non-probability systematic sampling. Total 5 respondents are selected for the
interview. These respondents are the managers of different departments of different
organisations who are involved in the overseas constructional business.
The ethical consideration of a research defines its validity, reliability, authenticity and
viability (Taylor, Bogdan and DeVault 2015). Privacy and security of the collected data is a
major ethical concern in this research. The collected data will be stored in a secured digital
database system. At the same time, willingness of the participants will be another major
ethical consideration. The purpose of this research will be presented to the participants before
conducting the interview and only after receiving the acknowledgement from the respondents
the interview procedure will be initiated. The personal information such as name,
organisation’s name, address and other will be considered highly considered and will not be
disclosed in this research or for any other purpose.

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Data analysis is another major aspect of any research that can be segregated into two
different categories namely qualitative data analysis and primary data analysis. The
quantitative data analysis procedure is a process of collecting numerical data and analysing
them with mathematical methods and statics. On the other hand, qualitative data analysis
allows the research to conduct a non numerical analysis through rational reasoning and
conceptual evaluation approach (Smith, Merna and Jobling 2014). From the data collection
procedures discussed earlier, it is clear that this research needs a method that can analyse the
qualitative data. Therefore, qualitative data analysis procedure will be used for this research.
The qualitative analysis will be done by QDA miner software to do coding of the responses
and findings the emerging themes from them. The results will be discussed under those
themes considering the qualitative frequency map and other representations.
Budget
From the budget plan it has been found that to complete the entire research project
AUD1,110 will be required. Therefore, arranging adequate funds is also essential for this
project. In the following section the detailed budget for this particular research project is
presented:
Components Cost (AUD)
Subscribing online libraries for research $ 320
Interview tools such as recorder, pen, script, etc. $ 80
Transportation cost $ 50
Digital data operation (Computer, MS office etc) $ 70
Subscription to QDA Data Miner software package $ 500
Final draft printing and polishing $ 90
Total Expenditure $ 1,110

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Timeline
In the following section the time required for this project is analysed and presented in
a Gantt Chart format. As per the timeline, for collecting the initial secondary data to develop
the final dissertation draft 12 weeks or 84 days will be required.
Activities 1st wk 2nd wk 3rd wk 4th wk 5th wk 6th wk 7th wk 8th wk 9th wk 10th wk 11th wk 12th wk
Collecting initial secondary data
Forming the aims and objectives
Developing the research design
Conducting literature review
Developing primary tools (interview)
Having permission of final research
Conducting interviews
Analysing data
Forming conclusion
Developing final draft and submission

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References:
Bell, E., Bryman, A. and Harley, B., 2018. Business research methods. Oxford university
press.
Han, S.H., Park, H.K., Yeom, S.M. and Chae, M.J., 2014. Risk-integrated cash flow
forecasting for overseas construction projects. KSCE Journal of Civil Engineering, 18(4),
pp.875-886.
Liu, J., Zhao, X. and Yan, P., 2016. Risk paths in international construction projects: Case
study from Chinese contractors. Journal of Construction Engineering and
Management, 142(6), p.05016002.
Sekaran, U. and Bougie, R., 2016. Research methods for business: A skill building approach.
John Wiley & Sons.
Smith, N.J., Merna, T. and Jobling, P., 2014. Managing risk in construction projects. John
Wiley & Sons.
Tamošaitienė, J., Zavadskas, E.K. and Turskis, Z., 2013. Multi-criteria risk assessment of a
construction project. Procedia Computer Science, 17, pp.129-133.
Taylor, S.J., Bogdan, R. and DeVault, M., 2015. Introduction to qualitative research
methods: A guidebook and resource. John Wiley & Sons.
Yildiz, A.E., Dikmen, I., Birgonul, M.T., Ercoskun, K. and Alten, S., 2014. A knowledge-
based risk mapping tool for cost estimation of international construction projects. Automation
in Construction, 43, pp.144-155.
Zhao, X., Hwang, B.G. and Low, S.P., 2015. Enterprise risk management in international
construction firms: drivers and hindrances. Engineering, Construction and Architectural
Management, 22(3), pp.347-366.

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Zhao, X., Hwang, B.G. and Phng, W., 2014. Construction project risk management in
Singapore: resources, effectiveness, impact, and understanding. KSCE Journal of Civil
Engineering, 18(1), pp.27-36.