Significance of internalization factors for Singapore transnational construction corporations

Abstract

Singapore Transnational Construction Corporations (STCCs) are engaged in foreign value-added construction-related activities in foreign markets. A survey was undertaken to assess the significant factors that serve as reasons for STCCs to benefit from their internalization advantages. The protection of the reputation of the firm and the quality of service to clients were the two related and more important reasons for internalization. STCCs with greater international presence also stressed on avoiding the costs of broken contracts and ensuing litigations as an incentive for internalization. Regardless of the size, years of international experience, or whether specialized or diversified, STCCs viewed the ranking order of seventeen internalization factors to be significantly the same. Besides controlling costs, managers of STCCs will do well by guaranteeing the quality of works to foreign clients to maintain and enhance further the reputation of the firm and contribute positively to the Singapore brand name. © 2005 Taylor & Francis Group Ltd.