Evaluating impact of construction risks in the Arabian Gulf Region from perspective of multinational architecture, engineering and construction firms

Ruqaya Al-Sabah, Carol C. Menassa and Awad Hanna

Construction Management and Economics, 2014, vol. 32, issue 4, 382-402

Abstract: Although multinational firms use risk mitigation measures when venturing into new international markets, there has been little research into identifying and evaluating the impact of these risks on project and multinational firm performance in the Arabian Gulf Region (AGR). Risks encountered in the AGR are identified through a data collection process from multinational architecture, engineering and construction (AEC) companies with work experience in the AGR. The impact of these risks on four performance metrics (i.e. project cost, schedule and performance; and company performance) is then evaluated using relative importance index (RII), significance score (SS) and principal component analysis (PCA) for validation. The results indicate that multinational firms are potentially exposed to a total of 27 external risks and 47 internal risks. Of the 27 external risks, war threat, political instability, price inflation, resources availability and quality, authorities and regulations requirements, and inclement climate have the most significant impact on the four performance metrics. Of the 47 internal risks, defective late design documents, constructive changes and insufficient scope definition have the most significant impact on the four performance metrics. These findings can guide multinational AEC firms in the AGR in establishing effective risk mitigation plans.

Date: 2014
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Citations: View citations in EconPapers (3)

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DOI: 10.1080/01446193.2014.884281

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