Title The hierarchical structures of cause-and-effect relationships on the profit factorsin overseas construction projects
Authors Han, seung-heon ; Sun, seung-min ; Park, sang-hyuk ; Jung, do-young
Page pp.64-76
ISSN 1229-7534
Keywords International Construction Market ; Profitability ; Profit Factors ; Cause-and-Effect Hierarchy ; Risk Management
Abstract Korea's overseas construction industry has been rather depressed by the weakened profitability as well as the sharp decrease ofthe market shares due to the lack of international competitiveness and the declined international market. There exist a lot ofvarious risks in performing the overseas construction, and especially EPC projects, which entail complicated process fromdifferent parts, also require a sophisticated procurement and management skill. Subsequently, to survive in the competitiveinternational market, we need to establish strategies to select potentially profitable projects at the initial stage of bidding processand to mitigate the high degree of risk exposure through contract negotiation and its adjustment. This research discusses thetrend of environment in international construction markets. Then, it identifies the key factors that affect the profitabilitysignificantly through the structured surveys from 59 actual overseas projects, and it analyzes the key factors by using statisticalmethods. This research provides the profitability evaluation bases, with which overseas construction participants can forecastand analyze the risk more systematically, by eliciting profit-influencing factors using the result of statistical analysis, literaturereview and structuring their cause-and-effect relationships. The profitability casual hierarchy structure describes the profitabilityfactors' hierarchy in details and their interrelationships. It also enables us to find out critical factors directly related toprofitability aggravation through a qualitative and quantitative analysis. Ultimately, with this hierarchy structure as the base, theresearch will suggest how to develop the quantitative profitability forecasting model.