Risk management model for international construction joint ventures

The current Asian financial crisis has put the role of risk management in t he construction business into focus. For firms engaging in the internationa l construction business, one of the most effective means of mitigating fina ncial risks is through a joint venture (JV) with a local partner. There are , however, risks associated with an international construction JV. Based on a study by the writers on the risk factors and their mitigating measures, the most effective risk mitigating measures were categorized into eight gro ups. These are partner selection, agreement, employment, control, subcontra cting, engineering contract, good relationship, and renegotiation. In this paper, a risk management model incorporating these measures was proposed. T hree cases of international construction JVs were analyzed from the perspec tives of the execution of these measures. It is hoped that this model would help construction firms in improving their decision-making process for the ir overseas ventures.