The impacts of obstacles on East and South East Asian cross-border construction

Abstract

East and South East Asia has emerged as the most dynamic construction market with a huge untapped potential in many of the developing countries in this region. The opportunities exposed have attracted the interest of multinational construction firms to extend their market shares in this region. Nevertheless, the complexities of operation in a multicultural system that is fraught with large uncertainties have affected the multinational construction firms on market entry, increase of market share and market penetration. In view of a variety of situations involving many unknown, unexpected, frequently undesirable, and often unpredictable factors in cross-border construction in this region, the multinational construction firms are recommended to understand the character and nature of the East and South East Asian construction market, analyze the uncertainties in a systematic approach, and adjust business strategy accordingly prior to business expansion.The obstacles may be encountered during exporting engineering services to Asian countries has been investigated in this study, in terms of business environmental risk, regulatory restrictions, contractual arrangement, differences in standards and differences in culture. An approach combining the use of Influence Diagram and Analytic Hierarchy Process has been proposed to quantify the influence of obstacles on cross border construction, which vary across Asian countries in connection with the level of economic development. t-test is employed to evaluate the significance of difference between cost growth in exporting engineering services to China and Singapore construction market. A framework of obstacle-cost growth-strategy is presented to facilitate planning for cross-border construction. A reasonable percentage of contingencies that may be incorporated into the tender price for operations in China and Singapore construction markets are recommended accordingly. An industry survey is carried out to solicit information from industry experts regarding the criticality of cost growth factors and percentage of cost growth as well as the effectiveness of strategic measures. The results have been utilized to distinguish critical influence links in the influence diagram models.