Country risk assessment in the construction industry

Download
2006
Akçamete, Aslı
Every business involves risk, but due to its nature, construction business involves more risk than many other industries. Therefore, risk assessment is indispensable to the success of construction companies in terms of, preventing dramatic financial losses. When the decision process for expanding the operations in the international construction market is concerned, it becomes more important for companies to analyze the risk of the target country. For this reason, construction firms benefit from many different risk assessment methods. Contractors prevalent practice of risk assessment is identifying related risks and making an evaluation relying on their personal judgments (without substantial explicit support), but none of the applied methods is construction specific. To overcome this, a construction specific country Risk Breakdown Structure (RBS) is prepared. While preparing this construction specific RBS, not only macro level country risks but also market risks for construction are considered in order to reflect the real risks of performing construction business in foreign countries. Consequently, a tentative country RBS specific for construction industry is constructed and its reliability is tested by interviews carried out with six professionals from four Turkish construction companies operating in international markets. After finalization of the RBS, utilization method of practical aspects of RBS is questioned by interviewing the experts. Finally, a case study is conducted to propose a company-specific system for iv the implementation of RBS. The case study findings demonstrate the applicability of RBS and its potential as a systematic country risk assessment tool.

Suggestions

Assessing risk management maturity : a framework for the construction companies
Öngel, Begüm; Tanyer, Ali Murat; Department of Building Science in Architecture (2009)
Due to its complex nature, risk and uncertainty are more widespread in construction industry than many other industries. Aiming to ensure that all project objectives are met, risk management is considered as a critical success factor for construction projects. The core elements of risk management are now known and used by many organizations. On the other hand, as declared by Project Management Institute (PMI), the ability to measure the effectiveness in managing risk is one of the most important areas that ...
Quality integrated earned value management for construction projects
Akgün, Eray; Atasoy Özcan, Güzide; Department of Civil Engineering (2019)
Today, construction sector is one of the leading sectors in the world employing millions of people and creating an economy of billions of dollars. Therefore, such a huge sector must be under control during its all stages in terms of its main components namely; cost, time and quality to achieve a unique scope. Numerous studies focus on tracking the components of cost and schedule. One of the most commonly used methods is EVM (Earned Value Management). EVM is a powerful progress measurement method, integratin...
Capturing knowledge in construction projects: Knowledge platform for contractors
Kivrak, Serkan; Arslan, Gokhan; Dikmen Toker, İrem; Birgönül, Mustafa Talat (American Society of Civil Engineers (ASCE), 2008-04-01)
Managing knowledge effectively is critical to the survival and advance of a company, especially in project-based industries such as construction. However, capturing knowledge in construction projects is a tedious task, as knowledge is usually experience based, tacit, and hard to pass on to others. In this study, a survey was carried out among eight leading Turkish construction contractors that are operating within the international construction market. The specific objectives of this survey are to find out ...
Cash flow analysis of construction projects using fuzzy set theory
Melik, Serhat; Sönmez, Rifat; Department of Civil Engineering (2010)
Construction industry is a one of the most risky sectors due to high level of uncertainties included in the nature of the construction projects. Although there are many reasons, the deficiency of cash is one of the main factors threatening the success of the construction projects and causing business failures. Therefore, an appropriate cash planning technique is necessary for adequate cost control and efficient cash management while considering the risks and uncertainties of the construction projects. The m...
Factors affecting the risk ratings assigned by decision-makers under uncertain situations: the case of international construction
Hayat, Ehsanullah; Dikmen Toker, İrem; Birgönül, Mustafa Talat; Department of Civil Engineering (2014)
Assessing risk in international construction projects is an essential part of the risk management process. Due to the lack of available data and knowledge about the project risks, objective/quantitative risk assessment is facing with some challenges and subjective/qualitative risk assessment is still a prevailing technique in the construction industry. The Probability-Impact (P-I) risk matrix/table is one of the frequently used techniques among the subjective/qualitative risk assessment methods, which usual...
Citation Formats
A. Akçamete, “Country risk assessment in the construction industry,” M.S. - Master of Science, Middle East Technical University, 2006.