Towards attaining efficient joint ventures in international construction: the case of Saudi Arabia

Abstract

PurposeDespite the numerous benefits of adopting international construction joint ventures (ICJVs), effective operation of the joint ventures in Saudi Arabia is impeded by various limitations. Thus, this paper is aimed at determining, analyzing, and prioritizing these major limitations and to propose a strategy that can provide guidance on how best to promote the achievement of efficient joint ventures in international construction in Saudi Arabian construction industry.Design/methodology/approachContent analysis was augmented by the expert-based assessment process to identify the critical limitations while the interpretive structural modeling (ISM) technique was utilized to analyze and determine the hierarchical structure of the limitations. This is important in order to comprehend and describe the complex relationship between the limitations.FindingsThe results identified “selecting unsuitable partner”, “divergent organizational cultures, policies and procedures”, and “poor knowledge of local regulations by foreign partners” as the most critical limitations affecting the efficiency of joint ventures in international construction in Saudi Arabia.Research limitations/implicationsThe inclusion of many variables (limitations) increases the complexity of the ISM technique, which compels the researchers to consider reduced number of variables in establishing the ISM structural hierarchy. Other variables that were perceived to be less critical were not included in the development of the ISM structural hierarchy. On the other hand, the structural hierarchy was not validated statistically, and this requires the use of other linear structural relationship techniques like the Structural Equation Modeling to test the validity of the hypothetical ISM structural hierarchy. The proposed strategy to mitigate the limitations presented in this study was not validated, and this requires further study to verify the accuracy of the strategy.Practical implicationsThe implications inferred in this study are better performing ICJVs in the execution of mega infrastructure projects in Saudi Arabia. The findings and managerial implications of the study are expected to further provide an invaluable guide that can support policymakers and all key stakeholders to establish efficient strategies and suitable measures that can enhance the successful implementation of ICJVs.Originality/valueThe findings of this study provide comprehensive understanding of the limitations affecting the efficiency of ICJVs in Saudi Arabia. This can assist in mitigating the potential impacts of these limitations and to advocate for the achievement of efficient joint ventures in international construction in Saudi Arabia. Meanwhile, there is a need to further develop a framework that can elucidate on the proposed strategy to promote better performing ICJVs in Saudi Arabia. Also, the further study will seek to investigate the influence of project duration, value, location, or ownership on the performance of the joint ventures in order to generalize the findings to all forms of ICJVs.