| Title |
A Comparative Analysis of Risk Impacts on Cost Overrun between Actual Cases and Managers’ Perception on Overseas Construction Projects |
| Authors |
Lee, Kyung-Tae ; Ann, Hannah ; Kim Jae-Won ; Kim, Ju-Hyung |
| DOI |
https://dx.doi.org/10.6106/KJCEM.2021.22.3.052 |
| Keywords |
Risk Perception; Cost Overrun; Standardized Coefficient; Monte-Carlo Simulation; SWARA |
| Abstract |
Due to the significant size of overseas construction projects, the cost overrun has enormous impacts on the financial status of construction companies. The managers’ appropriate perception and identification of key risk factors in the construction phase notably affect the performance of projects. However, the actual impacts of risk factors and local manager’s perception of them could be deviated. For this reason, we aim to compare the performance of actual cases and general opinions of responsible practitioners in terms of risk factors relevant to cost overruns in order to present a practical strategy for risk management. Firstly, factors classified from literature review were used to simulate 290 cost overruns data sets from 20 cases by introducing Monte-Carlo Simulation and were ranked by standardized coefficients through multiple regression analysis. Secondly, a survey was conducted against 42 local managers to rank their perception of impact on cost overrun with identical factors by using Stepwise Weight Assessment Ratio Analysis (SWARA). Comparison results show that conflicts such as ‘conflict with subcontractors’ and ‘conflict with the local community’ have caused excessive cost overrun. However, managers' perception of these as less significant than the actual influences and consider other risks such as ‘material price fluctuation’ and ‘construction quality errors’, as relatively serious. Therefore, education for local managers on conflict risks needs to be presented. |