The planning stage is important stage in which involves the decision on, specifying the objectives and goals, determination of product and market, market analysis, technology decision, revenue prediction, cost benefit analysis and personal SWOT analysis. 2. Partner selection
Partner selection is main task in JV which includes; financial resources of the prospective partners, technological capabilities, presence in market and selection of partners for the feasibility study.
3. Feasibility study
Affirmation of the culture and structure of the Joint Venture, analysis of partners comfort with and adaptability to the new technology and culture of the JV, analysis of the authority, responsibility and financial gains and loss sharing among the
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Risk management is an important component to make sure the success of the construction project or to make sure the profitability for the contractors. There are many literatures about construction project risk management. The experience of the construction project risk management can also be used to manage risk in construction joint ventures. A joint venture structure is different from the normal firm structure. It will make risk management different with the project risk management in a normal …show more content…
LITERATURE SURVEY
[1] Title- Risk management in International construction joint ventures
Authors- Li Bing, Robert Lee-Kong Tiong, Wong Wai Fan, and David Ah-Seng Chew
Year- 1999
Description
This paper identifies the risk factors associated with international construction joint ventures (JVs) from and ‘‘integrated’’ perspective. The risk factors are grouped into three main groups: (1) Internal; (2) Project specific; and (3) External. It examines the most effective mitigating measures adopted by construction professionals in managing these risks for their construction projects in East Asia. Based on an international survey of contractors, it was found that the most critical risk factors exist in the financial aspects of JVs, government policies, economic conditions, and project relationship.
[2] Title- An assessment of risk management in joint venture (JV) in Malaysia
Author- Hamimah Adnan
Year- June 2008
Description
This paper identify risk factors associated with joint ventures projects in Malaysian construction industry at the project-specific, internal and external levels. He was adopted methodology for his research was by risk factors identifies from literature review and through questionnaire survey to both local and foreign construction companies in
The last process is called planning. Planning, formerly called Phase II, is the bridge to change. This can include making a clear plan and creating a menu of options for how to proceed.
Yan, A. and Luo, Y. (2001), International Joint Ventures: Theory and Practice. (New York and London: M.E. Sharpe, Inc.).
Risk management is a major success key of project management in business world. With major budget overruns in parallel with significant delays, Sydney Opera House is a real example of poor risk management. Risk management requires effective planning, budgeting, and scheduling. First of all, the highest risks should be identified and evaluated in order to find methods to reduce their impact and exposure. Then, factors that cause risk should be addressed while factors that only correlate with the negative impact but do not affect it may be omitted. At this stage, interrelation between various risks should be accounted for to spot the core factors that should be treated in order to ensure effectively and stability of the project's functioning.
Sharing of knowledge, technology, and capital that are brought to the company by the partner.
No firm can be a success without some form of risk management. Risk are the uncertainty in investments requiring an assessment. Risk assessment is a structured and systematic procedure, which is dependent upon the correct identification of hazards and an appropriate assessment of risks arising from them, with a view to making inter-risk comparisons for purposes of their control and avoidance (Nikolić and Ružić-Dimitrijevi, 2009). ERM is a practice that firms implement to manage risks and provide opportunities. ERM is a framework of identifying, evaluating, responding, and monitoring risks that hinder a firm’s objectives. The following paper is a comparison and evaluation to recommended practices for risk manage using article “Risk Leverage
Some include risks at the enterprise level, managing risks in complex projects and dealing with turnarounds and large capital projects. Liu, Zou, & Gong (2013) explore how enterprise risk management (ERM) may influence the ability and performance of project management risk (PRM) by considering the features of the construction industry, its businesses and projects. Managing risks within projects such as these has become an important process to achieve project objectives in terms of the scope, time and cost. The results show that enterprise risk management can positively influence the implementation of project risk management. This can be achieved through implementing a risk focused culture, setting up risk management departments and setting up risk procedures. This will help control the project risk and improve the performance of project risk management. Communicating the concerns with other team members can help identify the risks earlier on rather than later in the development of the project. If the Stakeholders and managers involved are satisfied then the project outline becomes a
Risk mitigation is also the process of controlling actions, which are identified, and selecting the suitable ones to reduce risk according to project objectives (Pa, 2015). Risk mitigation is important in IT organizations in so many ways. According to Ahdieh, Hashemitaba, Ow (2012), mitigation of risk provides a mechanism for managers to handle risk effectively by providing the step wise execution of the risk handling (as cited in Pa, 2015, pg. 49). Some risks, once identified, can readily be eliminated or reduced. However, most risks are much more difficult to mitigate, particularly high-impact, low-probability risks. Therefore, risk mitigation and control need to be long-term efforts by IT project managers throughout the project lifecycle. There are three types of risk mitigation strategies that hold unique to Business Continuity and Disaster
Access to resource - One of the reasons to collaborate is to take advantage of resources. For example, an inter-company collaborates to place a product in the market where one compa...
Malkat, M., and Gyoo, K.-B. (2012). “An Investigation on the Stakeholders of Construction Projects in Dubai and Adjacent Regions.” International Proceedings of Economics Development & Research, Dubai, UAE, Vol. 45, p77.
Again, JCB was afraid that by sharing their technological knowledge with Escorts, they would take that knowledge and become a direct competitor to JCB. Another disadvantage of a joint venture is it does not give a firm the control its needs over subsidiaries to realize experience curve or location economies. (Hill, 201??) Because JCB had a minority stake, their control was limited as was their expansion strategy. JCB was afraid that Escorts might share or leak the insight, knowledge and technology that was being used by JCB to give them its competitive advantage, which could ruin their chances of doing business in the Indian market
Scott Jardine, 2007, “Managing risk in construction projects – how to achieve a successful outcome – an article”, PricewaterhouseCoopers.
Planning can be used to help the organization map out a way to efficiently achieve their goals. The beginning of the planning process should include analyzing of the current situation. From this information the company can determine the goals and start to outline the steps that need to be taken to ensure that the goal will be met. Other planning activities that should be completed are determining the company’s objectives and were they want to be in the future. This will help them to choose their business objectives and strategies. In addition, the company should look at the resources that they have available and determine if they are sufficient to achieve the organizations goals.
Risk Management allows us to identify the problems which are unknown during the start of the project but may occurs later. Implementing an efficient risk management plan will ensure the better outcome of the project in terms of cost and time.
Planning is basic management function which involves preparation of more than one detailed plans to achieve maximum balance of needs and demands with the available resources. The planning process ascertains the goals and objectives to be achieved, conceptualise strategies to achieve those goals and objectives, arranges the means required to put the plan in work and implement, directs
Members of the industry must collaborate with one another in order to exchange ideas and as a result, provide better services to the customers. Moreover, these collaborations would have a “check” on weather an activity of a project is doing well (Tulao and Habaradas, 2001).