Woosik Jang

Which Strategies Are More Effective for International Contractors during Boom and Recession Periods

AbstractGiven the global financial crisis and other plummeting market conditions in 2008, the international construction market moved from boom to recession. Although this recession is expected to be completed soon, many international contractors still have difficulty deciding on the strategies that are more effective during volatile market conditions. Korean contractors have already experienced one recession in recent times, instigated by the Asian financial crisis in 1997, and two boom economies before and after this recession. To investigate more effective strategies used in the overseas construction market, this study evaluates 31 Korean contractors’ international performance over the different periods (boom, recession, and reboom) and analyses the effects of diversification, localization, strategic alliance, resources cost allocation, and financial soundness by using 14 key variables. The results showed that regional diversification had a profound effect on overcoming the recessionary periods. Locali...

Risk Identification and Priority method for Overseas LNG Plant Projects - Focusing on Design Phase -

Korean contractors have been maintained sustainable growth since entering into overseas construction market for the first time in 1960` s. In 2010, Korean contractors ordered 761 billion (USD) from overseas markets. Especially, billion (USD) were earned by Korean contractors in overseas plant construction market which account for more than 80% of the total amount by Korean contractors. Nevertheless, many Korean contractors are suffering from lack of technological competitiveness and construction management skills in the design phase compared with global leading contractors. These conditions have directly effect on the success of projects in terms of cost, duration, and quality. So, this study focused on identifying the risk factors and developing risk priority method for the design phase of LNG plant projects whose market is expanding. Research procedures were conducted by the following three steps. First, total 57 risk factors were identified in design phase through extensive literature reviews and experts survey. Second, the authors developed risk priority method which are more suitable for design phase of LNG plant projects by using three criteria, Probability(P), Impact(I), and Coordination Index(CI). Finally, the suitability of risk priority method and practical applicability were verified through expert survey and interview. Consequently, if korean contractors use the suggested risk factors and priority method based on their own know-how and experiences, then more reasonable and rational risk management will be conducted in the design phase of LNG plant projects.

Optimal Supply Vendor Selection Model for LNG Plant Projects Using Fuzzy-TOPSIS Theory

AbstractInterest in clean energy has led to increased international demand for liquefied natural gas (LNG), and the development of LNG plants as megaprojects is also expected to rise. In these megaprojects, the procurement phase is crucial in terms of costs and ripple effects in subsequent phases. If unexpected problems with supply vendors arise, then redesign, reprocurement, and reconstruction are often needed. Although many studies have been conducted on vendor selection, most have focused on identifying evaluation criteria from a general perspective. Existing models are still lacking a comprehensive approach that combines both quantitative and qualitative content to extract the priority level from a pool of candidate supply vendors, particularly for LNG plant projects. Seven evaluation criteria that reflect the uniqueness of LNG plants are identified in the literature and expert interviews. The suggested model can consider multiple scales for each criterion, as well as uncertainty in experts’ opinions,...

Empirical Assessment of International Entry Strategy for Large Construction Companies

Although international construction market gradually takes a important position among the export industries, the previous studies about international construction entry strategy have just focussed on trend investigation or suggestion for revitalization. Moreover, in order to prepare the market uncertainty such as world financial crisis and to plan the long term strategy, specific strategy studies based on corporate level are required. Therefore, this study estimates the nine strategic index and four financial index of 31 companies that performed 1920 international projects from 1993 to 2007 and evaluate the performance as three periods by multi-regression analysis. Also, this study analyze dynamic correlation between these index and the performance considering times. this study verifies that market diversification, product diversification, localization and decrease of debt to asset ratio make a good effect on the international order as long term strategy and shows that collaborated entry with domestic corporations, alliance entry with host country`s company, alliance entry with third country`s company, portion of labor cost and portion of management expense differently make a influence on the performance as times. these results will be helpful for the construction companies to plan the international entry strategy reasonably and specifically.

Stage-Gate Process Integrated Risk Management Framework for Overseas LNG Plant Projects

The demand of Liquefied Natural Gas (LNG) is on a steady increase, and the estimation of world LNG consumption will be doubled by 2030 compared with 2005. In the wake of increasing demand, numerous LNG plant projects are under construction and many new projects are in the planning stage. However, since there are limited numbers of companies that have a full capability of core technologies and licenses related with LNG plant construction, companies that are less experienced in LNG plant projects suffer from a lack of project management ability, such as process planning, schedule management, and risk management particularly for early stage of project initiation. A number of researches have highlighted the importance of the early design phase in EPC-type plant projects and its consequential impact on project performance. Therefore, this study aims to develop a risk management system to support an efficient decision-making process during the design phase. The research procedure consists of three parts. First, we identified a total of 82 design risk factors composed of typical risk items related to any plant projects and LNG-specified design risks. Second, we developed a risk management framework based on the stage-gate process, composed of three sub-stages: Pre-stage, On-stage and Poststage of each sub-design phase. Finally, we applied this procedure to plant layout stage. This study is expected to support better decision-making in the design phase of overseas LNG plant projects by integrating the stage-gate process and risk management cycles for making prompt “go/no-go decisions” on the key decision checkpoints.

A Empirical Research for Subcontractor Selection Model in the International Construction Project

Abstract : International construction market have quantitatively increased and have reached up to 700 Bil. US

VRIO Model Based Enterprise Capability Assessment Framework for Plant Project

through active effort of construction firms and government. In spite of this increase, substantiality issue has been constantly disputed due to qualitative problems such as lack of capability and technical shortage. To overcome these problems, many methods in performing quantitative growth and qualitative substantiality of overseas construction are being researched which showed that selection of subcontractors in general contractor is regarded as a very important success factor. However, it is difficult to make a reasonable decision for selecting the subcontractors due to the lack of evaluation standards and reliability. This study proposes an improved evaluation system through adjustment of the evaluation indicators using correlations analysis and multiple regression analysis with pre-qualification and performance evaluation of 121 firms in 6 countries. Keywords : Subcontractor, Pre-qualification, Performance Evaluation, Correlation Analysis, Multiple Regression Analysis

Model development for site selection considering the characteristics of LNG receiving terminal

Abstract : Construction enterprises have performed various projects such as buildings, infrastructure and plant projects in the international market. Among these, the plant project’s amount of orders accounted for about 68.9% of all. However, because of the enterprises won a contract with a low-budget for plant project in the last 10 years, the profit has dropped dramatically. And it is forecasted that there are extreme competition for bid award of plant projects because of the current falling oil prices and raising interest rates. In this circumstance, the comprehending of enterprises strength and weakness must be a priority to get a sustainable competitive advantage. Therefore this research suggests the enterprises’s capability assessment framework and it is in order to diagnose the korean construction enterprises capabilities. The framework is based on the VRIO model that is on the basis of resource based theory. First, the capability assessment indices and their importance and priority that based on the life-cycle of plant project is deducted by literature review and survey. Second, the 5 point likert score applied VRIO survey is conducted to diagnose the enterprises and quantified the survey result using the fuzzy theory. Lastly, the competitive implication and capability assessment are deducted.

Sustainable Performance Index for Assessing the Green Technologies in Urban Infrastructure Projects

Recently, due to the increasing concern of environmental factors and low carbon usage, the use of natural gas has been inclining steadily. In order to meet the growing demand of natural gas, government have established strategies to secure the sufficient amount of gas that is mainly used by industries, power generation and residential use by constructing additional receiving terminals for Liquid Natural Gas (LNG). In the process of selecting the optimal site for the terminals, the characteristics of the terminals are not considered where the decision making is done through internal meetings or outsourcing. In respect to site selection, researches are done to derive the factors that are considered for optimal site selection. However, there have not yet been researches in creating a systematic model for analyzing the optimal site selection. To this aim, the paper aims to propose a model for site selection of LNG receiving terminals that considers the characteristics of the terminal construction. Total of 47 factors considered in site selection is derived through interviews with experts and analyzing the previous cases of site selection by various firms. Furthermore, the derived 47 factors are used for the survey for the previous LNG terminals in PT, IC, TY, SC and BR areas where the survey data is analyzed by factor analysis and multiple regression models to depict the optimal site. By applying the model for site selection, practitioners are able to make decisions for site selection in a systematic approach for new candidates of sites.