THE PROCESS OF PARTNER SELECTION IN INTERNATIONAL CONSTRUCTION JOINT VENTURES IN SINGAPORE

Abstract

Joint venture (JV) has long been an effective answer by firms to achieve goals that may stay out of their own reach thanks to the ability to collaboratively combine the resources and capabilities between them. This trend of firms forming such strategic partnerships has accelerated since the late 1970s in almost all industries. In the field of construction, the emergence of the infrastructure and property booms in developing countries, coupled with the desire to expand businesses of contractors from developed nations, has changed the conventional local alliance to what is known as international construction joint venture (ICJV). While the benefits of ICJVs to member parties are recognized to be technologically and commercially significant, construction firms entering such ventures are always required to first overcome a huge challenge: choosing the right partner. This dissertation aims to provide an insight into the process of partner selection in ICJVs in the context of the Singapore construction industry. The objectives of the research include understanding the role of partner selection in the formation of ICJV; evaluating and comparing the selection criteria of the local and foreign contractors; and addressing the challenges that contractors commonly face in the process of selecting partners. Adopting a mixed approach of qualitative and quantitative research methods, the study analyzed data collected from two main sources, namely literature review and questionnaire-based survey. The findings revealed that contractors saw selection of suitable partner as one of the top three critical success factors of ICJVs, beside stable political situation and sound economic environment; and joint venture operational competence and skills. In addition, perspectives on the selection criteria between the local and the foreign groups of builders were found to be relatively parallel, such as those on risks identification and mitigation; management competence and resourcefulness; and overall reputation within industry. In the conclusion, the dissertation summarized the findings and their analyses, highlighting the similarities found in the various selection considerations between the local and foreign contractors, yet also acknowledging certain differentiating factors between the two groups, which could be explained by their different basic natures, i.e. local versus foreign. Recommendations were then made, where contractors were encouraged to adopt measures to enhance their financial situation; their state of technological capability; as well as their practices to manage risks. Finally, some limitations of the research were highlighted, followed by the suggestions for further studies.