2011. 12. 13 박병권 Factors affecting contractors’ risk attitudes in construction projects: Case study from China.

2011. 12. 13 박병권

Factors affecting contractors’ risk attitudes in construction

projects: Case study from China

1. Abstract

2. Introduction

3. Previous studies related to risk attitude

4. Research methodology

5. Data analyses, discussion and findings 5.1 Ranking of the factors 5.2 Factor analysis of the important factors

6. Conclusion

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Contents

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1. Abstract

• Risk-based decision making (RBDM) is critical in successful construction project management, in which decision makers’ attitudes towards risks play an important role.

• To improve RBDM, we investigate the critical factors affecting contractors’ risk attitudes in construction projects in China in this research.

• Results from factor analysis on the identified critical factors reveal that they can be grouped into four categories.

• The significance of this research is that the findings do not only provide decision making support for contractors by deepening their understandings of the factors that affect their risk attitudes, but also serve as a useful reference for further studies under this topic.

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2. Introduction

• Risk-based decision making (RBDM) is in the core of construction risk management.

• Over the past decades, researchers have developed a diversity of methods to enable a more objective RBDM process.

• A detailed description of these methods is shown in Table 1

• In this paper, we aims at identifying the critical factors affecting contractors’ risk attitudes, which pervade in a large number of decision making activities in construction projects.

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2. Introduction

• Risk-based decision making (RBDM) is in the core of construction risk management.

• Over the past decades, researchers have developed a diversity of methods to enable a more objective RBDM process.

• A detailed description of these methods is shown in Table 1

• In this paper, we aims at identifying the critical factors affecting contractors’ risk attitudes, which pervade in a large number of decision making activities in construction projects.

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3. Previous studies related to risk attitude

• The relationship between attitude and decision making behavior has been studied in many fields including the construction management area.

• Theory of planned behavior by Ajzen (1993) is one of the most prevailing models for illustrating the relationship between attitude and decision making behavior, which is illustrated in Fig. 1.

• Many researchers have realized the importance of decision makers’ risk attitudes within the decision making process.

• As the decision making behavior would, to a large extent, be influenced by the risk attitude, identifying factors critical to decision makers’ risk attitudes is of vital importance before one could better understand decision making behaviors under uncertainty in construction projects.

• This paper mainly focuses on identifying the critical factors affecting contractors’ risk attitudes in construction projects in mainland China.

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3. Previous studies related to risk attitude

• The relationship between attitude and decision making behavior has been studied in many fields including the construction management area.

• Theory of planned behavior by Ajzen (1993) is one of the most prevailing models for illustrating the relationship between attitude and decision making behavior, which is illustrated in Fig. 1.

• Many researchers have realized the importance of decision makers’ risk attitudes within the decision making process.

• As the decision making behavior would, to a large extent, be influenced by the risk attitude, identifying factors critical to decision makers’ risk attitudes is of vital importance before one could better understand decision making behaviors under uncertainty in construction projects.

• This paper mainly focuses on identifying the critical factors affecting contractors’ risk attitudes in construction projects in mainland China.

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4. Research methodology

• Various methods have been employed for data collection in this study, which are presented in Fig. 2.

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4. Research methodology

• Step one, a thorough literature examination.

• Step two is to develop a tentative-critical-factor list in which all factors can influence contractors’ risk attitudes at different degrees.

• In this step, three semi-structured interviews were carried out with two main contractors and one subcontractor, each of which lasted around 25 min.

• At the end of the interviews, a list of 26 factors was obtained, which forms the main basis for questionnaire design.

• All factors are tabulated in Table 2 with detailed descriptions in the last column.

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4. Research methodology

• At last step, questionnaire is adopted as an appropriate method for quantitative data collection in this study.

• The questionnaire contains two sections. - the first section is designed to collect the general information about

spondents. - the second section consists of 26 factors with potential to affect

contractors’ risk attitudes.

• It is should be noted that these factors could be typically divided into two categories.

- Internal factors (F1–F19 in Table 2) - external factors (F20–F26 in Table 2)

• In this paper, using a Likert scale survey was SPSS 13.0 were analyzed using a questionnaire.

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5. Data analyses, discussion and findings

• In order to identify the critical factors affecting contractors’ risk attitudes in construction projects, several statistical analysis techniques, typically including ranking analysis and factor analysis, are adopted for data analyses.

• These research activities are facilitated with the assistance of SPSS 13.0.

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5.1 Ranking of the factors

• The aim of this section is to identify the important factors affecting contractors’ risk attitudes.

• The factors with mean values that are greater than the average value of all mean values (0.634) are classified as critical factors in affecting contractors’ risk attitudes.

• The ranking results of these factors are shown in Table 3.

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5.2 Factor analysis of the important factors

• Factor analysis is used to address the problem of analyzing the structure of the interrelationships among a large number of variables by defining a set of common underlying dimensions, known as factors.

• This statistical technique was employed in this study to explore the groupings that might exist among the critical factors.

• The survey data of the 16 critical factors were fed into the SPSS 13.0 for principal component analysis, which is a common method in factor analysis.

• The component matrix after rotation is presented in Table 4.

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5.2 Factor analysis of the important factors

• Factor analysis is used to address the problem of analyzing the structure of the interrelationships among a large number of variables by defining a set of common underlying dimensions, known as factors.

• This statistical technique was employed in this study to explore the groupings that might exist among the critical factors.

• The survey data of the 16 critical factors were fed into the SPSS 13.0 for principal component analysis, which is a common method in factor analysis.

• The component matrix after rotation is presented in Table 4.

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5.2 Factor analysis of the important factors

• Table 5 shows the total variance explained, from which it can be seen that the four components account for 83.06% of the variance.

• Important factors are classified into four groups - Knowledge and experience (component 1) - Contractors’ character (component2) - Personal perception (component 3) - Economic environment(component 4)

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5.2.1 Component 1: Knowledge and experience

• There are six critical factors involved in this component. - Education background - Engineering experience - Social experience - Professional knowledge - Scope of knowledge - Completeness of project information

• This component accounts for 40.43% of the total variance explained among all critical factors.

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5.2.2 Component 2: Contractors’ character

• There are five critical factors involved in this component. - Boldness - Values - Decision motivation - Interest in the engineering - Sensitivity to external information

• This component accounts for 20.62% of the total variance explained among all critical factors.

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5.2.3 Component 3: Personal perception

• There are three critical factors involved in this component. - Desire for decision objectives - Consequences of decision making - Judgment ability

• This component accounts for 13.42% of the total variance explained among all critical factors.

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5.2.4 Component 4: Economic environment

• There are two critical factors involved in this component. - Company’s economic strength - External economic environment

• This component is responsible for 7.59% of the total variance explained in the critical factor analysis.

• This factor was ranked relatively lower compared with other critical factors as discussed previously, it also plays an important role in influencing contractors’ risk attitudes in the Chinese construction sector.

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6. Conclusions

• Contractors’ risk attitudes are influenced and determined by many factors in construction practice.

• These findings provide decision making support for contractors by deepening their understandings of the critical factors that affect their risk attitudes.

• It is important to note that this paper provides only the critical factors affecting risk attitudes of contractors.

• Further studies will need to be carried out to identify the critical factors that influence risk attitudes of other major decision makers in construction projects.

• Finally, while this research is conducted in the particular context of the Chinese construction industry, the methods proposed can be applied to study decision makers’ risk attitudes in other context, and the identified factors provide a solid basis for future studies under this topic as well.

Thank you