Documentos de Académico
Documentos de Profesional
Documentos de Cultura
Du Yon Kim
Hyoungkwan Kim
Yeonil Chung
Heedae Park
Seokjin Choi
Abstract: Overseas construction projects are exposed to diverse and complex risks, including political, economical, social,
and cultural issues. They tend to have a high possibility of loss/failure compared to domestic projects. For this reason, risk
management is getting more important, emphasized, and systemized so as to improve the project performance. Since each
phase of a construction project causes different types of risk associated with decision-making process, risk management
system for global projects should be tailored to satisfy the specific needs of the particular phase. In this way, various risk
management issues that arise through the entire life cycle of the project can be constantly checked and monitored. This
study reviews basic decision-making processes in the global construction projects, and presents a framework for risk
management of each process of a sequential decision. A fully integrated risk management system is also developed as a
decision supporting tool, using key risk factors of each stage of a project.
Keywords: Integrated Risk Management System, International Construction, Risks, Web-based system.
1. INTRODUCTION
Traditionally, risk management was utilized in the
area of safety, cost, and time management in construction
projects. However, since the 1980s, risk management has
been actively executed and has become the key decision
supporting tool. Its application area has expanded to include
such fields as bid-decision making, feasibility study,
marketability study, performance evaluation, and
contingency management by reflecting the various factors
spanning all phase of the project life-cycle. There now
exists the consensus that risk management is the integral
part of project management and plays such an important
role that its application goes beyond the traditional scope
which normally centers on the construction phase (Del
Cao and De la Cruz 2002). Accordingly, it is utilized in
various decision-making fields related to construction
projects.
Particularly, international construction projects are
exposed to more diverse and complex risks than what are
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2. LITERATURE REVIEW
The studies concerned with international construction
projects have been actively performed since the 1980s.
Purtell (1982) and Arditi and Gutierrez (1991) drew risk
factors that are important for international construction
projects and presented methods to manage those risk
elements. Efforts were also made to develop methods for
addressing specific risk issues. Bing and Tiong (1999)
identified risk factors and a management model for
international joint venture. Han and Diekmann (2001)
presented a model to support bid decisions by structuring
various influencing factors on international construction
projects. On the other hand, efforts were made to manage
risks in the entire cycle of construction projects. Ward and
Chapman (1995) suggested major items to be monitored in
each stage of an international project. Hastak and Shaked
(2000) drew risk factors at country, market, and project
level, and presented a model to evaluate those risks. Del
Cao and de la Cruz (2002) developed a management
model by systematizing risk management process along
with the projects characteristics. Although those
aforementioned studies regarding project risk management
have been contributory to the body of knowledge, the entire
aspect of international project risks have not yet been fully
addressed, leaving the room for further researches designed
to develop systematic risk management processes that cover
all the stages of projects life cycle.
Those risk management studies (Ward and Chapman
1995, Hastak and Shaked 2000, del Cao and de la Cruz
2002) followed the traditional risk control strategy
(transfer, share, reduction or avoidance). The strategy,
which typically consists of five steps: identification,
analysis, evaluation, response, and monitoring (see Figure
1), has been perceived as an effective method to identify
risks that may occur in the construction projects and to
efficiently manage the identified risks. However, the
amount of risk-related information collectable on a phase of
the project differs from that of another phase. Also, the
depth and extent of why and how a decision maker
evaluates the relevant risks becomes quite different together
with each phase of a project. In this sense, if the
characteristics of all phases of the construction project are
not considered adequately, it is hard to bring the risk
management into its full fruition. Moreover, risk factors of
international construction projects are diverse, complex,
and interrelated. They are also different from project to
project. Therefore, the traditional style of risk management
has clear limitation on its applicability to international
construction projects where not only management of
probable risk factors but also continuous interaction
between different decision-making processes is extremely
important.
This paper intends to draw major decision-making
processes and seeks to identify a unique solution for risk
management concerned with international construction
projects. Typically, the life-cycle of international
construction projects can be divided into four stages:
3.
RISK
MANAGEMENT
PROCESS
FOR
INTERNATIONAL CONSTRUCTION PROJECTS
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Users environment
y Minimum resolution
: 1024 768
y Database: MS SQL 2000
y Internet access
y Framework
a. Input screen
b. Estimation result
Figure 5. Application procedures of the system
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SD
#1
4.25
0.96
#2
5.00
0.00
#3
5.75
0.50
#4
4.75
1.50
#5
6.00
0.82
#6
5.75
0.50
#7
5.00
0.82
#8
4.75
0.96
#9
5.00
0.00
# 10
6.00
0.82
Mean
5.40
5.40
5.50
4.60
5.23
0.42
SD
0.70
0.52
1.08
1.07
0.84
0.28
ACKNOWLEDGEMENT
This paper includes the achievements of research
project, "Risk Management System Establishment for the
Profitable International Construction Projects, and
Development of Web-based Practical Guidelines" (Aug. 20,
2003 - Aug. 19, 2005) jointly carried out by International
Contractors Association of Korea and Yonsei University,
funded by the Ministry of construction and transportation as
a part of construction research program in 2003. Authors
sincerely thank all the people who helped finish this
research in many ways.
REFERENCES
5. CONCLUSION
This study derived key decision making processes
through a literature review and experts feedbacks so as to
establish an integrated risk management model, which
addresses the life cycle of international construction
projects. Based on the results, individual models suitable for
each stage of international construction projects, and an
integrated risk management process were presented. In
addition, a Web-based system was developed based on the
proposed concept, which enabled users to perform
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