Overcoming critical issues of international construction joint ventures in Sri Lankan construction industry

Abstract

International construction joint ventures (ICJVs), have become a successful strategy for sustainable development. Numerous studies have highlighted the potential pitfalls leading to the critical situations and even to failure of construction joint ventures (CJVs), ranging from ambiguous partner roles to imbalanced risk-sharing mechanisms and misunderstandings in operational practices. Even though many researches have focused on identifying critical issues in CJVs, there were lesser number of researches which have focused on strategies to overcome those critical issues. Hence, this research was conducted with the purpose of identifying the critical issues in ICJVs and strategies to overcome those issues. Through the literature review, twenty-eight critical issues and twenty-seven critical success factors were identified. To identify the most significant critical issues and issues that can cause ICJV failure, from the pool of issues, a questionnaire survey was conducted. Forty individuals with expertise of International Construction Joint Ventures (ICJVs) and over five years of experience in the construction industry participated in the survey. The data collected through questionnaire survey was analyzed using Relative Importance Index (RII) to identify the most critical issues. In the view of finding additional critical issues, critical success factors and strategies with practical examples to overcome those factors, ten expert interviews were conducted. The interview data was analyzed using manual content analysis. Among twenty-eight critical issues, five issues have ranked with highest RII which have significant impact to the ICJV such as ICJV partner selection and exit mechanism, JV management related issues, Inter-organizational difference, Issues related to host country, Risk allocation. Through expert interviews, it revealed three critical factors additionally such as time zone difference, Human resource management and supply chain disruption. Further, it was revealed the economic instability in the country has severe impact on ICJV performance. Finally, probable strategies were proposed to overcome critical issues in ICJV. Key Words: International Construction Joint Venture (ICJV), Critical issues in ICJV, Construction industry Sri Lanka