Determining Success Criteria and Success Factors for International Construction Projects for Malaysian Contractors

Abstract

The success of international construction projects is fraught with various challenges such as competitiveness, lack of resources, versatile global economy, and specific conditions in the host country. Malaysian contractors have been venturing into global construction market since early 1980s. However, their venturing was not successful all the time. The number of international projects awarded to Malaysian contractors has reduced drastically during the past decade. Taking advantage of this experience, this paper aims to identify the success criteria and success factors of international construction projects. The data was collected from 120 respondents using a questionnaire survey and analysed using principal component analysis and regression analysis. The results revealed three principal criteria of project success namely, Management Success, Functional Success, and Organisation Success. The main components of success factors include Team Power and Skills, Resource Availability, External Environment, Organisation Capability, Project Support, and Project Organisation. Further analysis emphasized the importance of strong financing capacity of contractors, project social environment, and competence of the project manager in achieving project success. The results of this paper can serve as a guideline for contractors and project managers to achieve success in this context. Future studies may provide in-depth analysis of success criteria and success factors specific for construction project type and host-country location.

Risk Management as a Success Factor in the International Activity of Spanish Engineering

“…The uncertainty that was subsequently generated in the international market has been reflected in the statistics published by the Engineering News Record (ENR 2017), according to which international revenues of the 250 largest international contractors from projects abroad reached $468.12 billion in 2016 compared to $ 501.14 billion in 2015. Despite this uncertainty, there are different reasons why construction companies have expanded their business to international markets, such as national market saturation, the distribution of risk, or the use of opportunities abroad (Alashwal et al 2017). However, it must be taken into account that international projects involve more risks than projects carried out in the national market because they take place in environments characterized by political, economic, social, legal, and cultural differences that will affect the performance of engineering companies (CII 2013;Han et al 2007a;Javernick-Will and Scott 2010;Jin et al 2013;Park et al 2014).…”

“…A study conducted by Hwang and Lim (2012) identified 32 key success factors in the context of construction in Singapore, in order to help foreign contractors that wanted to access this country, and noted that "the success of the construction project depends on a combination of factors related to the human being, factors related to the project, factors related to the management of the project, and even factors related to the external environment". In addition, Pal et al (2017) analyzed the success factors in relationship management in international engineering procurement and construction (IEPC) projects carried out by Chinese companies, and Alashwal et al (2017) identified the success factors of the internationalization of Malaysian contractors.…”

“…One of the most prominent success factors in the literature review is the identification and management of risks (Lee et al 2015). Since contractors must take into account the different environments surrounding international projects, they must anticipate and identify political, social, and economic risks in the host country and determine how these risks influence the success of their projects (Alashwal et al 2017). In multicultural environments, risk management in construction projects has acquired a key importance in the last two decades (Razzaq et al 2018), being one of the factors that makes it possible to increase the value of the company (Zhao et al 2015) and that leads to obtain potential benefits for companies (Pagach and Warr 2011).…”

“…Many Spanish engineering companies chose the latter option; in 2011, over 80% of firms lacked export activity, and in 2013, the external sector accounted for more than 85% of the total turnover of companies with international presence, which constituted more than 12% of the total number of companies in the sector (Tecniberia 2013). In this process, understanding how to measure the success of international projects and conditions affecting this success is critical (Alashwal et al 2017). In this sense, several studies have been carried out to analyze the internationalization of Spanish engineering companies: García-Canal et al (2002) studied global alliances as a strategy to accelerate the pace of internationalization; Calderón García et al (2007) focused on the entry mode choice as part of the internationalization strategy of Spanish companies, and Goñi (2008) identified several variables (reasons, entry modes, competitive advantages, and barriers, among others) of the internationalization of Spanish engineering companies in the period 1993-2008.…”

“…The investigation of entry strategies in the market is fundamental to the success of international contractors. Establishing alliances is one of the most effective ways to operate in international markets (Alashwal et al 2017). The formation of joint ventures reduces the risks of international activity, and constituted an important success factor in international companies in the 1980s (Arditi and Gutierrez 1991).…”