Teacher Day in Vietnam, 20 Nov 2009

Dear all

MPM 1 and MPM 2 Ho Chi Minh organized a teacher day party on Sunday 15 November 2009 in Lion Beer Restaurant . Myself and Mr Eng Wan were invited to attend the party since we were in vietnam for teaching. The party was attended by MPM1 - Ms Dung Mai, Mr Bao and Mr Vu, MPM2 - Mr Dung, Mr Nam, Mr Hung, Mr Khe, Mr Phuc, Mr Bao, Mr Phong, Mr Anh, Mr Chuong, MPM3 - Mr Anh (class B), Mr Quang (class B), and CEIM Thailand - Mr Trung, Mr Quy, Ms Ngoc.

MPM2 students gave me a nice teacher day card. They wrote a nice sentence "Teachers Plant Seeds of Knowledge that Grow Forever"

Happy Teacher Day 20 November 2009!

Cheers
Hadikusumo

Emotional Intelligence and Leadership Styles in Construction Project Management

Riza Yosia Sunindijo1; Bonaventura H. W. Hadikusumo2; and Stephen Ogunlana3

Introduction

The role of project managers is very important as they are the ultimate persons responsible for the success or failure of projects. The human skill is of paramount importance as project managers need to interact with people frequently. In reality, about 88% of project managers spend more than half of their working time interacting with others (Strohmeier 1992). This high level of interaction demands that project managers are able to lead effectively and to manage conflicts continuously in order to build good relationships and ensure the success of their projects.

Project managers also need to possess skills to lead teamwork. Within the internal organization, project managers have to lead their subordinates, a situation which requires them to possess effective leadership skills necessary for facilitating workers to achieve project goals successfully (Lewis 1998; Loo 1996).

Many studies have been carried out on human skills in project management. Some studies suggested critical skills for project managers (El-Sabaa 2001; Strohmeier 1992; Cowie 2003); whereas others recommended effective leadership as a critical factor in project management (Cleland 1995; Keegan and Den Hartog 2004; Zimmerer and Yasin 1998). Rowlinson et al.’s (1993) study on the leadership style of construction managers in Hong Kong revealed that human skills are of paramount importance in project management.

Emotional intelligence (EI) is increasingly being recognized as an important issue in the workplace. There is a surprising finding that intelligent quotient (IQ) is second after EI in determining outstanding job performance (Goleman 1995, 19980. According to Carmeli (2003), emotionally intelligent senior managers perform better on their jobs compared to their contemporaries with lower EI. The benefits of EI to project management are therefore proposed for study in this research.

The objective of the study is to investigate the benefits of EI in project management in terms of its relationship with effective leadership styles. The benefits of EI are being investigated because project managers need good human skills to lead project teams. This research therefore examines whether project managers with high or low EI have different leadership styles.

Emotional Intelligence

According to Goleman (1998), emotional intelligence is the capacity to recognize our own feelings and those of others, for motivating ourselves, and for managing emotions well in us and in our relationships.

Compared to the amount of research already conducted on IQ, the study of emotional intelligence is still relatively new. Nevertheless, EI is increasingly being recognized as an important issue in the workplace. Many studies have shown that high IQ does not necessarily guarantee a successful life. According to Goleman (1995, 1998), emotional intelligence is more important than IQ in determining outstanding job performance. Dulewicz and Higgs (2000) supported this assertion by saying that the IQ test has failed to provide sufficient variance in success criteria both in the educational and in the organizational environments. Research has indicated that emotional competencies (i.e., the potential of EI that has translated into practical capabilities) are twice as important as IQ and expertise in contributing to excellent and effective Performance (Goleman 1998).

Goleman (2001) explained that emotional intelligence has two competencies, the personal competence and the social competence. The personal competence consists of self-awareness and self-management, whereas the social competence consists of social awareness and relationship management. Self-awareness means knowing one’s feelings at the moment and using it for decision making, which is known as “intuition.” A person who has this ability is aware of his/her own strengths and weaknesses, is open to feedback, and is willing to learn from past experiences. Self-awareness competencies are: emotional awareness (recognizing one’s emotions and their effects), accurate self-assessment (knowing one’s strengths and limitations), and self-confidence (a strong sense of one’s self-worth and capabilities).

Self-management is the ability to regulate distressing factors such as anxiety and anger and to restrain emotional impulsivity. Given this ability, a person will be able to hold in mind the positive feelings that arise when he/she achieves goals or inhibit negative feelings, a situation that will help to boost motivation. Competencies of self-management are emotional self-control (keeping disruptive emotions and impulses in check), trustworthiness (maintaining standards of honesty and integrity), conscientiousness (taking responsibilities for personal performance), adaptability (flexibility in handling change), achievement drive (striving to improve or to meet a standard of excellence), and initiative (innovativeness and readiness to act on opportunities).

With social awareness, a person can recognize the feelings of other people. An individual with this ability can read nonverbal cues for emotional currents from others. This is critical for job performance when the focus is on interactions with people. Social awareness competencies are empathy (understanding others’ feeling and perspectives, taking an active interest in their concerns, and cultivating opportunities through them); service orientation (anticipating, recognizing, and meeting customers’ needs); and organizational awareness (reading a group’s emotional currents and power relationships).

Finally, relationship management is the ability to attune oneself to, or to influence, the emotions of other people. The competencies of relationship management are developing others (sensing others’ development needs and bolstering their abilities); influence (welding effective tactics for persuasion); communication (listening openly and sending convincing messages); conflict management (negotiating and resolving disagreements); visionary leadership (inspiring, guiding, and commitment to individuals and groups); change catalyst (initiating or managing change); building bonds (nurturing instrumental relationships); and teamwork and collaboration (working with others to achieve shared goals).

Leadership Behaviors of Project Managers

Mintzberg (1980) identified ten managerial roles performed by project managers. Two of the roles investigated in this research are the ability to act as a leader and as a disturbance handler. A leader should influence people toward the attainment of organizational goals and should be able to manage conflicts whenever disputes or crises arise.

Thirteen leadership behaviors necessary to influence people were identified from extensive literature reviews.

1. Visioning: The leader communicates the vision and helps the team to clarify its goals (Boehnke et al. 1999; Katzenbach and Smith 2003).

2. Inspiring: This behavior is usually displayed by the communication of high expectations, using symbols to focus efforts, and expressing important purposes in simple ways (Boehnke et al. 1999; Humphreys 2002).

3. Stimulating: The leader helps subordinates to look at old problems from new and different perspectives. Intelligence and rationality are used in problem solving (Boehnke et al. 1999; Humphreys 2002).

4. Coaching: The leader pays close attention to individual differences among subordinates; and he/she teaches and advises employees with individual personal attention (Humphreys 2002).

5. Rewarding: The leader provides rewards and positive feedback to employees who meet agreed goals (Boehnke et al. 1999; Humphreys 2002).

6. Punishing: This style is characterized by giving punishment and negative feedback to employees who show undesirable and below par performance (Daft 2003).

7. Delegating: The basic concept of delegation is to transfer authority and responsibility to lower positions in the organizational hierarchy (Daft 2003) and to provide challenging and difficult tasks to subordinates to enhance their development (Boehnke et al. 1999).

8. Leading by example: The leader does the same real work and contributes in the same way like subordinates (Zimmerer and Yasin 1998; Littrell 2002; Katzenbach and Smith 2003).

9. Sharing and open communication: The leader shares all types of information throughout the organization, across functional and hierarchical levels (Daft 2003).

10. Listening: The leader grasps both facts and feelings to interpret a message’s true meaning, and shifts thoughts to empathizing with others (Cacioppe 1997; Daft 2003).

11. Directing: The leader tells subordinates exactly what they are supposed to do. The leader sets the goals, standards, rules, and the regulations (Littrell 2002; Daft 2003).

12. Participating: The leader consults with subordinates before making decisions. Opinions, suggestions, and participation are encouraged in the decision-making process (Littrell 2002; Katzenbach and Smith 2003; Daft 2003).

13. Proactive: The leader actively seeks information from others and identifies problems at the early stage (Daft 2003).

Conclusion

EI is gaining increasing acceptance as an important success factor in the workplace. In order to extend the usefulness of EI, the study focused on investigating the benefits of EI to project management in terms of leadership styles.

PMEs with higher EI scores tend to use more open communication and proactive leadership styles than PMEs with lower EI scores. Open communication is a key factor in organizational success as it opens up the possibility of getting the best from people. Proactivity is essential to tackle problems at the early stages. Therefore, a PME with high EI can stimulate team performance and innovation.

Positive correlations between leadership behaviors and EI dimensions were observed. These correlations show the dimensions of EI that generate particular leadership behavior. The study also found that EI generates delegating, open communication, and proactive behavior. These relationships support the theory of EI and these three leadership behaviors can bring positive outcomes for the organization if used properly (Goleman 2001; Goleman et al. 2002; TalentSmart 2004).

This study was published in the “Journal of Management in Engineering, Vol. 23, No. 4, October 1, 2007” and full journal article is available upon request.

Abstract is copied and posted.

Abstract: Human factors are of paramount importance to the success of projects. Although a lot of studies have been carried out on human factors in project management, not much research has been done on emotional intelligence (EI). Studies have shown that EI is beneficial to both the individual and the organization. The benefits of EI to project management were investigated in terms of the style of leadership. The study was conducted in Thailand by interviewing project managers and engineers (PMEs); and client representatives. The results showed that EI affected leadership behavior of the project leader. PMEs with higher EI tend to use open communication and proactive leadership styles. It is also found that EI generates delegating, open communication, and proactive behavior, which can bring positive outcomes to the organization.

1 Asian Institute of Technology, Pathumthani, Thailand.
2Asian Institute of Technology, Pathumthani, Thailand.
3Asian Institute of Technology, Pathumthani, Thailand.

Mr Bui Van Bao is promoted as Director of SCQC Enterprise no. 2

Dear All

I have a good news. Mr Bui Van Bao (MPM1 graduated in 2008) is promoted as the Director of SCQC Enterprise No. 2.

We wish you luck with your new position. We trust that you will perform very well.

Regards
Hadikusumo

Gap Analysis Approach for Construction Safety Program Improvement

*Thanet Aksorn and B.H.W. Hadikusumo

Due to its hazardous nature, construction is globally perceived as an accident-prone industry. It has always been reported that construction work has a very high rate of injuries and deaths. Therefore, there is a negative stereotype concerning safety in the construction industry. In recent years, in order to survive in a highly competitive market, many construction companies have begun considering safety to be one of the main factors in reducing costs associated with work-related accidents and injuries.

In Thailand, construction work is generally labor-intensive rather than technology-intensive. Most construction workers are farmers with low levels of education and skills. Many are seasonal workers who divide time between agriculture and construction. Consequently, the rapid expansion of construction work has brought a parallel increase in injuries to unskilled workers. The accident and injuries statistics from 2004 to 2005 showed that the construction industry had the highest rate of deaths, accounting for close to a hundred workers per year, and up to 20,000 workers have suffered minor injuries on sites every year (SSO, 2005). Unfortunately, it has always been higher than all other industries.

To eliminate construction-related accidents, implementation of safety program is regarded as a key strategy by both government and private sectors. Effective safety programs can substantially reduce accidents because they can help management to eliminate unsafe practices by workers and can also create safe working environments (Anton, 1989; Abdelhamid & Everett, 2000). Additionally, Henshaw (2004) stated that an effective safety program could result in a triple win; workers' lives would be saved and protected, cost would be reduced and returns on investments would be maximized, and workers' morale and motivation would be raised which, in turn, would result in the production of high quality products and services.

How can a safety program be improved? Several extended studies have been undertaken to spotlight key activities contributing to strong safety programs such as top management support, sufficient resource allocation, teamwork, worker involvement, etc. In business terms, the key factors are known as critical success factors (CSFs). If these key activities are not implemented successfully, safety programs may fail miserably. Safety researchers have acknowledged and confirmed that safety program performance depends largely upon the satisfactory results of a number of key activities or CSFs. Although the connection between safety programs and safety performance has already been studied extensively, very little research has been undertaken to provide the construction industry with practical guidelines to improve safety programs.

Mr. Thanet Aksorn under Dr. B. H. W. Hadikusumo, his advisor, made a study which aimed at identifying the critical factors affecting the improvement of safety programs from safety literature and previous research and at evaluating these success factors in order to rank the urgency of improving them. To obtain these rankings, gap analysis was carried out to measure the difference between the degree of importance of CSFs and the actual status of CSFs. The results of the study can help the construction industry to identify and improve the high priority CSFs, shown by the large gaps, in order to improve safety programs.

CSFs OF SAFETY PROGRAM IMPROVEMENT
There are a set of factors that have a great impact on the success of safety program implementation. In a business context, those factors are known as CSFs. CSFs can be defined as "areas in which results, if they were satisfactory, would ensure successful performance for the organization" (Rockart, 1979). Rungasamy et al. (2002) viewed CSFs as being essential to the success of any program, in the sense that, if objectives associated with the factors were not achieved, the program would probably fail catastrophically. Top (1991) and Michaud (1995) pointed out that a successful safety program can be measured by the amount or the extent of injuries to people; damage to equipment, machines and tools; damage to environment; loss of market share; damage to company image or brand name; increased productivity; etc. Based on extensive review of safety literature, there are 16 factors that are potentially essential to obtain improved safety programs such as follows.

Clear and realistic goals: Outstanding safety program results can be achieved when safety goals are clearly established (Pierce, 1995a). Safety goals should give a clear picture, direction, and focus for performing day-today activities in order to achieve desired results. When realistic and achievable goals are set up, the progress towards accomplishing such goals can be easily measured and monitored (Weber, 1992a; Blake, 1997).

Good communication: Vredenburgh (2002) stated that when the lines of communications between management and the workforce are open, workers can directly report unsafe working practices and hazardous conditions to management. Management can also communicate
safety concerns and priorities to gain employees' awareness and compliance (Stranks, 1994).

Delegation of authority and responsibility: A safety program cannot be successful if it is implemented by only one individual. Responsibility for accomplishing safety activities must be effectively delegated to individuals at lower levels of authority (Anton, 1989). Effective delegation involves granting adequate authority and assigning clear responsibility for performing specific tasks with enough resources, such as appropriate completion time, money, and cooperation of all involved individuals (Rue & Byars, 2001).

Sufficient resource allocation: The desired goal of a safety program cannot be achieved when resources are lacking. An effective safety program is the result of a commitment by top management to give an appropriate level of resources (Erikson, 1997). Management must consider and allocate sufficient resources to carry out day-to-day activities in order accomplish short and long-term goals. The resources required for an effective safety program may include sufficient staff, time, money, information, methods, facilities, tools machines, etc. (Rue & Byars, 2001).

Management support: It is strongly accepted that management plays a very important role in an effective safety program. Management must fully and actively turn ideas into actions. This includes issuing a written comprehensive safety policy, allocating sufficient necessary resources, promptly reacting to safety suggestions and complaints, attending regular safety meetings and training, regularly visiting the workplace, following the same safety rules as others, etc. (Stranks,
2000; Rowlinson, 2003).

Program evaluation: Every safety program should be periodically evaluated to see how successfully it meets its goals and objectives. When the actual operations of a safety program do not meet their defined goals, an evaluation process can help to identify the program's shortcomings so that improvements can be applied (Rowlinson, 2003).

Continuing participation of employees: The success of a safety program depends largely on the level of employee involvement because workers tend to support the activities that they helped to create. According to Ariss (2003) and Smith (2003), workers should be given opportunities to be involved in the design and operation of a safety program, such as joining a safety committee, reporting hazards and unsafe practices to supervisors, identifying training needs, investigating accidents, suggesting required personal protective equipment, etc.

Personal motivation: Although people have sufficient knowledge and skills to accomplish their jobs safely, unless they have motivation, they will not normally perform their work accordingly (Neal & Griffin, 2002). Johnson (2003) suggested that, in order to have a better safety record, all people in the workplace must be motivated to perform their jobs safely. Such motivation can include offering opportunities for achievement and recognition, additional responsibilities, rewards, and personal growth.

Personal competency: A successful safety program is a result of assigning the right person for the right job. The right person is defined as a person who is physically and mentally capable of carrying out the assigned tasks with the right knowledge, experience and skills (Mohamed, 2002).

Teamwork: According to Krause (1997) and Ulloa and Adams (2004), a safety program succeeds when everyone, regardless of rank or status within the company, realizes that accident prevention is everyone's responsibility. Every function must share responsibility in implementing safety activities in order to achieve the goals set by the team. Such goals can be planning and controlling work, handling day-to-day safety problems, etc.

Positive group norms: Group norms are the accepted attitudes about various things in a group of people (Stranks, 2000). In practice, Johnson (2003) explained that members of a group try to conform to accepted attitudes to avoid boycott from other members. If a positive group attitude towards safety can be built and embedded, safety can then be managed successfully.

Personal attitude: Attitude is a tendency to respond positively or negatively to certain people, objects or situations and is built up from experience (Stranks, 1994; Schultz, 2004). Individuals, however, differ in their perceptions of risk and willingness to take risks. A successful safety program can be achieved if a positive employee attitude towards safety is reinforced.

Effective enforcement scheme: Not conforming to safety rules is known as a violation (Pierce, 1995b). Violation can be countered with enforcement. Management must provide the methods for enforcing obedience to the safety rules and regulations. By providing an effective enforcement mechanism, management can achieve employee compliance (Construction Safety Association of Ontario, 2002).

Safety equipment acquisition and maintenance: The workplace must be carefully assessed to determine possible hazards in order to properly select safety equipment. An effective safety program will result in fewer injuries due to good management of safety equipment acquisition and maintenance. Managing a safety equipment program takes up a large percentage of time.
This includes purchasing the correct equipment, maintaining it in good condition, and inventory control. Moreover, it requires cooperation from a number of people: safety personnel, purchasing, production, warehouse supervisor, maintenance managers, etc. (Toole,
2002).

Appropriate supervision: A sound safety program requires employers to provide sufficient supervision in protecting workers from workplace hazards (Weber, 1992b; Levitt &
Samelson, 1993). Successful supervision requires competent personnel for assigning work according to worker's ability, praising workers when they perform their duties safely, communicating by listening and speaking, setting a good example by following safety rules and correcting safety problems (Stranks, 2000).

Appropriate safety education and training: A successful safety program can be achieved if all employees are given periodic educational and training programs to improve their knowledge and skill at workplace safety (Cooper & Cotton, 2000).

This study concluded that safety continues to be one of the major problems in the construction industry. To achieve better site safety performance, emphasis has been placed on implementing effective safety programs. His study identified 16 factors contributing to the improvement of safety programs and then evaluated their degrees of importance and actual status based upon the respondents' perceptions. The results of his study showed that all respondents rate management support as the most important factor, followed by appropriate safety education and training, teamwork, clear and realistic goals, and effective enforcement scheme. On the other hand, positive group norms and personal competency were perceived as the two least important factors. His study also showed that five CSFs, namely appropriate safety education and training, followed by clear and realistic goals, safety equipment acquisition and maintenance, delegation of authority and responsibility, and good communication, have better actual status amongst all factors. In other words, it is implied that these factors have been given appropriate consideration in construction sites. On the contrary, appropriate supervision and sufficient resource allocation were considered the factors with the poorest actual status. Thus, more effort must be made to improve the actual status of these two factors.

In light of his research, gap analysis was carried out to determine how to improve safety programs. This analysis suggested that larger gaps between degree of influence and actual status of success indicate more unsatisfactory practices. Thus, correcting the factors which have large gaps must be emphasized more strongly. His study also found that the first five critical problems of safety program implementation are management support, appropriate supervision, sufficient resource allocation, teamwork, and effective enforcement scheme. These five priority factors should be given more attention in order to achieve a satisfactory level. Meanwhile, there are five factors, namely delegation of authority and responsibility, good communication, clear and realistic goals, appropriate safety education and training, and safety equipment acquisition and maintenance, showing satisfactory practices as characterized by very small gaps.

This study was published in the “Journal of Construction in Developing Countries, Vol. 12, No. 1, 2007” and full journal article is available upon request.

Abstract is copied and posted.

Abstract: To improve construction site safety, emphasis has been placed on the implementation of safety programs. In order to successfully gain from safety programs, factors that affect their improvement need to be studied. Sixteen critical success factors of safety programs were identified from safety literature, and these were validated by safety experts. This study was undertaken by surveying 70 respondents from medium- and large-scale construction projects. It explored the importance and the actual status of critical success factors (CSFs). Gap analysis was used to examine the differences between the importance of these CSFs and their actual status. This study found that the most critical problems characterized by the largest gaps were management support, appropriate supervision, sufficient resource allocation, teamwork, and effective enforcement. Raising these priority factors to satisfactory levels would lead to successful safety programs, thereby minimizing accidents.

Keyword: Critical success factors, Safety programs, Safety management systems, Safety performance, Construction industry


Construction Engineering and Infrastructure Management, School of Civil
Engineering, Asian Institute of Technology, Pathumthani, THAILAND.
*Corresponding author: artty_th@yahoo.com

Cost Management Behaviour Under Cost Overruns of Japanese and Thai Construction Companies

Generally, the basic objective of a construction project is to implement the project on time within reliable budget and meet required quality. From the contractors’ point of view, cost control is an extremely important aspect because it is conducted to ensure that the project costs are monitored and kept within the project’s objectives and company’s requirements. Therefore, the contractors have to pay attention to it in order to maximize profit.

However, most of Thai construction companies are still facing with cost overrun and competitiveness nowadays. Previous study by Charoenngam and Sriprasert (2001) found that one reason is cost control systems are unsystematic and ineffective cost information management. Lack of reliable data, ineffective planning, insufficiency of updated data, or ineffective cost management is also critical problem that can lead to cost overruns (Construction Management Committee, 1999). Moreover, several project managers in several projects are incompetent in order to bring successful project within a given budget. Many companies have to face with untimely and meaningless cost status so that project managers cannot make correct decision and take corrective actions. It means that if management does not receive accurate information timely, right decision making will not be effective. As a result, productivity improvement cannot be attained.

Not only internal factors can lead cost overruns but also companies still face with several uncontrollable external factors such as oil price, market conditions, and interest rates. These factors affect project costs that may lead to cost overruns if lack of appropriate cost information management. Furthermore, continuous cost overrun in most of the projects of a company can lead to bankruptcy. Up to now, both inefficient cost information management and uncertain variables factors still are the problems affecting cost overruns in construction companies. In order to control high project cost and accomplish profit maximization, it is necessary to understand the current cost information management and manage problems occurring.

In Thailand, there are several ongoing projects that are managed by Japanese companies. Therefore, Japanese company has much influence to construction industry in Thailand. Moreover, when Japanese companies go and invest in any countries, they bring their culture, organization and management to that country. It is interesting to understand the cost management behavior in situation of cost overruns of Japanese construction companies and Thai construction firms. Therefore, the reactions under each management behavior of both Japanese and Thai firms are generated. Moreover, key factors influencing same or different reaction of both two groups will be understand.

Ms. Narumon Jongcharoensub made a study to understand the key parameters that influencing the same or different reaction of Japanese and Thai construction firms. Her study objectives were to (1) identify key factors affecting the cost management in each stage, warning, detection, analysis, and corrective action; (2) investigate the existing practice of cost overruns management in order to understand the management behavior especially the difference between Japanese and Thai construction companies; and (3) propose recommendation for improving of cost overruns management.

Ms. Jongcharoensub found out that cost management behavior under cost overruns consists of four stages wherein each stage has different key factors that make difference or similar behavior and reaction. These are:
Warning stage where the key factors are purchasing requisition procedures, sub-contractor payment procedure.
Detection stage where the key factors are cost detection style, timeliness to detect cost overruns, accuracy of cost overruns.
Analysis/ reporting stage where the key factors are ability to identify cause of overruns, ability to recheck cause of overruns, ability to forecasts cost at completion; .and
Corrective action stage where the key factors are flexible of corrective action, project manager’s behavior, feedback’s evaluation by project manager

Her research revealed that the companies’ strategies vary from one group to other, thus companies’ behaviors about cost management are also different. The Japanese companies try to put customers’ satisfaction as the top target whereas mostly medium-scale Thai companies concentrate on the cost. On the other hand, the large-scale Thai companies are in the middle. They try to trade off and balance between project cost and customer’s satisfaction. The differences in companies’ strategies make the cost management in Japanese companies and large scale Thai companies vary even though they are quite similar in cost management system. The research also found that the companies’ performance and project’s cost management in Japanese are the best while the small-scale companies are in the opposite side.

Key factors that affect cost management behavior in each stage

The similarity of Japanese and Thai (L) companies

The key factors appear in Japanese and Thai (L) is quite similar and the only difference in cost management is the company strategy which is the way manager does on-site. Since owner’s satisfaction is the most concern of Japanese companies, they always follow the owner and do not care in cost especially in urgent situation. Another difference is manager’s behavior. Japanese project manager will not blame the project team in the meeting, but he will call the staff who did mistake to discuss about cause and reason of that problem. This way is motivate the staff who did mistake in order to correct it. On the other hand, project manager from Thai (L) companies blame the staff who did the mistake in the meeting. Moreover, blaming with negative pressure is generated in Thai (L) companies. It discourages the staff who did mistake and indication to other staff to avoid mistake.

The difference of Japanese, Thai (L) and Thai (M) companies

From the findings, most of cost overrun management in Thai (M) companies are quite different. Medium Thai companies still have not got the factors that appear to be positive factor in cost management as follows:

Cost detection is centralized and Timeliness to detect cost overruns

On-site analysis is identified only cost overruns from quantity. Project manager or project engineer cannot save cost or minimize cost overruns at a given progress. This result affects the Timeliness to detect cost overruns which is one factor influences to minimize or prevent cost overruns. Cost overruns from excessive unit price will be known at nearly the end of project. Therefore, cost overruns are not handled at the beginning. Most of Thai (M) companies do not allow site personnel to know and manage cost on –site. This process will not motivate site personnel in cost control. Project manager and project engineer know only cost overrun in term of excessive quantity. This is the indirect way to know cost status but the real actual cost is not recognized from site personnel. However, cost detection is not decentralized in Thai (M) companies because corruption may be occurred. Moreover, money in Thai (M) companies is not much so they cannot give authority to personnel on-site. At this point, corruption is occurred in most of Japanese and Thai (L) companies when cost detection is decentralized. However, the amount of corruption compares with amount of profit is too little. Moreover, Japanese and Thai (L) companies cannot detect cost overruns by centralized because there are a lot of projects.

Timeliness to input data

Accuracy of cost overruns affects analytical cost overruns in term of identifying cause of overrun and the way to take corrective action. All companies, even Japanese, Thai (L), or Thai (M) companies obstruct with accuracy of cost overruns from human behavior. Since the attention and responsibilities of their staffs is limited. Most of staffs always wait to input collected data until report submitting. Therefore, many collected data is not accurate enough for project manager/ site manager to analyze.

Moreover, manipulating to cover up staff’s mistakes is always occurring from all of Japanese, Thai (L), or Thai (M) companies. Although, Japanese and Thai (L) companies still have quite sufficient form of collecting data and clear procedure for working, collected data always inaccurate and insufficient. Furthermore, inaccurate of cost overruns will also affect forecasting cost at completion. If amount of cost overruns are inaccurate so much, clear direction to correct the problems cannot be identified.

Her thesis abstract is copied and posted.

ABSTRACT

In order to maximize profit, cost control is an extremely important aspect because it is conducted to ensure that the project costs are monitored and kept within the project’s objectives and company’s requirements. However, cost overruns are still becoming common problems in the construction industry nowadays. Cost overruns create financial risk to both general contractors and owners. Moreover, Japanese companies have much influence to construction industry in Thailand and many projects on hand are managed by Japanese companies. Therefore, it is important to have a study on cost management behavior.

The purpose of this study was conducted to: 1) identify key factors affecting the cost management in each stage, warning, detection, analysis/ reporting, and corrective action., 2) investigate existing cost management practice in order to understand the behavior, reaction, and key parameters affecting different reaction between Japanese and Thai companies, and 3) To propose recommendation for improving of cost overruns management.

The data was collected from interview surveys in large scale projects of 3 groups consisting of Japanese companies, large scale Thai companies, and medium scale Thai companies. There were 3 companies conducted in each groups. The target group of this research is project managers, project engineers, site engineers. The findings were already discussed in detail and recommendations for improvement of cost overrun management were propose in this study.

The Practices of Thai Contractors in Cross Border Procurement

During the end of the 20th century, many accomplishments of multilateral trade diplomacy were established. The effect of globalization has brought a new trend in trading and has much changed the world economy. Presently, the share of services in the world-wide economy has expanded greatly. Since the establishment of the GATT (General Agreement on Tariffs and Trade) in 1947, it has generally been considered a success in reducing tariffs and increasing trade volumes around the world. The finalization of the Uruguay round of the General Agreement on Tariffs and Trade (GATT) 1994 and the establishment of the World Trade Organization (WTO) has further enhance the movement to trade liberalization. Since then many trade agreements consisting of bilateral and multilateral have been formed until today. As an emerging country, Thailand is not far behind. Until the year 2006, Thailand has formed many FTA’s with other countries.

FTA offers not only opportunity but also threat especially to those local construction companies. For those companies who understand the importance of integrating FTA and the supply chain, they strive in aligning their strategies towards that direction. They will then partake the benefits and gain competitive advantage. As FTA is unavoidable, companies that fail to evolve will loose their competitive edge. This has made it difficult for construction companies to align their strategies for the future.

Another problem faced by Thai contractors these days is the fear of going global. Most contractors fear the risk and do not understand the procedures involved in global procurement which put them to a disadvantage situation.

Mr. Arasavindiran Mariappan made a research which aimed to find out how construction companies can improve their strategies and competitiveness with relations to globalization especially FTA. The focal point of his research was large scale contractors. His objectives were to (1) develop a supply chain framework showing different participants in construction service; (2) survey the perception of large scale contractors in terms of their procurement practices and flow of materials, equipment and labor globally; (3) identify the mechanisms affecting the global procurement practices and analyze the relationship affecting the parties of the supply chain; and (4) propose guidelines for construction companies to align their strategies towards competing in international trade and gain benefit from the FTA phenomenon.

Based on the analysis of cases, several trade mechanisms were identified that allowed free flow of materials, equipment and labor. Although the general FTA parameters were initially identified from literatures, a detailed screening was done to get an in depth information of all the existing mechanisms. After a thorough analysis of each case, the impact of each mechanism on the cases was identified. Analysis shows some mechanism giving benefit and some not. He found out that each mechanism can contribute to the benefit of the contractor or otherwise give disadvantage to them. This is because in order for the mechanism to function depends on the country of project being undertaken and also other parties in the supply chain such as the supplier, the bank and the freight company. In order to conclude this study, a proposed guideline was constructed to help Thai contractors with global procuring in their mind. This guideline is meant to assist them in assessing all the possible impact from each participating party so that a strategic for procuring international project can be created.

The Road towards Globalization

The road toward globalization is never a smooth path. Most contractors learned the hard way in order to grasp the true benefit or FTA and the use of each mechanism. One of the interview respondent stated that 5 years ago, the Letter of Credit (L/C) was not know by contractors. Today it has become an important mechanism for transaction and a driving mechanism for easier flow of materials and better finance. Many contractors before fear of exploring the global market because of the many risk involved. Those who dare are mainly large scale contractors. Times are changing, contractors nowadays are slowly moving towards globalization due to tight competition and untapped advantages in the global market.

Another driving force for contractors is the recent trade agreements between Thailand and other countries. For the years to come, many more trade agreements will exist and Thai contractors will be force to join the global market or lose competitiveness.

His thesis abstract is copied and posted.

ABSTRACT

The shift of procurement methods in the construction industry is inevitable as Thailand moves towards globalization. Many contractors are slowly shifting their mindset towards the global market. Nevertheless, some contractors are still keeping their legs crossed because of fear and the risk involved in global procurement. This study aims to identify and analyze the mechanism that affects the free flow of materials, labor and equipment into other countries. The result of this study proposed useful guidelines for contractor in procuring oversea projects in terms of material, labor and equipment. In the analysis, the researcher found out that effect of each mechanism on the parties can be different according to case. This is because in order for the mechanism to function depends on the country of project being undertaken and also other parties in the supply chain such as the supplier, the bank and the freight company. The study is concluded by proposing some guidelines for contractors to check and measure when procuring international project. This model is done based on free trade mechanisms of the analyzed cases. To make a sound decision, the contractor should also consider other important factors such as cost, time, distance, political conditions and others.

Dr Shamaz joined UNSW

Dr Shamaz-Ur-Rehman Toor has joined UNSW as faculty member in the School of Built Environment.

http://www.fbe.unsw.edu.au/staff/shamas.toor/

Congratulations for your excellent achievement!

Regards
Hadikusumo

Riza Yosia received PhD scholarship from UNSW

Good morning

I have a good news to share with you that Mr Riza Yosia is now pursuing his PhD in UNSW. He receives full scholarship from UNSW.

Regards
Hadikusumo

Risks In The Construction Of Hydropower Tunnels In Vietnam

The landscape and topography of Vietnam is characterized by high mountains and deep valleys. There are thousand of rivers across the country, out of which, about ten rivers has potential for hydropower development. As a result of economic deregulation over the pass two decades, Vietnam economy is growing rapidly, causing a great demand of electricity. At the end of 2004, Electricity of Vietnam (EVN) was forced to sign a deal to import electricity from China because of impending shortages and it is also expected to sign up for imports from Laos from 2008.

Tunnel in hydropower project is very important for the development of electricity in Vietnam. However, tunnel construction is very risky. Firstly, the geologic condition of underground rock is unforeseeable; the risk of tunnel collapse due to unstable of rock mass or excessive of underground water may cause accidents resulting in losing of human, damage to equipment, and time extension and extra money are needed to overcome it. Secondly, the equipment for tunneling are unique, sophisticated and very expensive, the cost for replacing the main equipment is very high and some time it is not available in the market so that contractors need time to order it from the manufacturers. Moreover, as specified by Charoenngam and Yeh (1999) the projects are capital intensive and have long duration so that financial risk is very high.
Vietnam’s hydropower project it is now suffering from cost overrun, failing to meet time targets and specifications due to lack of systematic risk management. Some major risks may not be identified and appropriate allocated so that risks may not be controlled properly. As a result, many projects were not successful completed as planed in view of economic efficiency, technical requirements and production.

Given that the construction of hydropower tunnels in Vietnam is experiencing many problems, Mr. Dau Xuan Thuy made a research with three main objectives such as follows: (1) to identify the unique or critical risks associated with hydropower tunnel construction projects in Vietnam; (2) to investigate perceptions of the parties about risk allocation in hydropower tunnel construction and whether the risks have really been allocated efficiently or not; and (3) to propose recommendations for the government agencies, the contractors, the consultants in developing human resources in order to build proper risk allocation strategies, leading to manage risks in future hydropower tunnel constructions more effectively.

His study revealed that in construction projects, cost over run and schedule delay can be prevented, work quality can be increased and disputes can be reduced if risks are identified and allocated properly. Tunneling is a special type of constructions but also have to face general risks like other type of constructions but also have to face some critical, unique risks that specific to underground works.

Mr. Thuy’s Risks first objective has been obtained. Risks in tunnel construction have been identified and ranked for significant at two case studies. In the order to determine the major risks, total weighting score, which is product of frequency of occurrence and degree of impact, has been calculated. The top-ten risks and its ranks were identified (see table below) at Buon Kuop project and Dai Ninh project.

The results showed that some risks are ranked somewhat differently between the two projects and this is because the two projects used different methods of tunnel excavation. About half of Dai Ninh tunnel were excavated by TBM, which are more mechanised than excavated by D&B method. The TBM itself is a unique and very complicated machine which is very sensitive to the risk of breakdown which explains why the risk ‘Productivity of equipment’ in Dai Ninh project ranked sixth and is significantly higher than in the Buon Kuop project which ranked ninth. Tunneling by TBM will produce fewer overbreaks than tunneling by D&B method. This explained why the risk ‘Overbreak’ in Dai Ninh ranked lower than in Buon Kuop project. On the contrary, the risk ‘Underground water’ in Dai Ninh project ranked higher in Buon Kuop project because the TBM, which are very heavy and run by electricity, is very sensitive to the ingress of water in rock mass cavities into tunnel.
Mr. Thuy’s study also identified and listed 15 risks that unique to tunnel projects (see table below). Some of these risks are also listed in the top-ten most important risks.

Mr. Thuy’s second objective was also obtained which are the results of the surveys about risk allocation opinion of respondents at the two projects. The risk allocation opinion is based on the percentages of total counts of participant responses such as risk should be allocated to the owner, to the contractor, to the consultant, shared between the owner and the contractor, or shared between the owner and the consultant.
Risk allocation is an important stage of risk management. The purpose of risk management is to reduce the cost of the owner and maximize the benefit of the contractor. As we know that contractors charge a higher price on projects when the risk is high than when it is low. Therefore, owners can reduce the cost on their projects by reducing the risks the contractors are required to bear. This potential is greatest for those forms of risk which the owner is in a better position to control than the contractor.

Hypothesis testing also revealed that risks allocation attitude of the owner and the contractor in tunnel project in Vietnam is not different. This indicates that owners and contractors in Vietnam have the same opinion about who should be responsible for a certain risk. This is an important advantage that could reduce deputes in project procurement process and making important contribution to the success of projects.

The investigation into risk allocation practices at the two projects also have been done and the results show that although there are conflicts about policy perception for risk allocation between participants in the projects, majority of participants are satisfied with the current risk allocation arrangement in their projects. Risks are allocated more properly at Dai Ninh project than at Buon Kuop project, and respondents from Dai Ninh project are more optimistic about successfulness of risk control than the respondents at Buon Kuop Project. These differences between the two projects may be explained by the fact that Dai Ninh is an international project using FIDIC condition of contracts and most risks are allocated by contract clauses. Meanwhile, Buon Kuop is a local project and has not followed any standard contract form; consequently, many risks are not allocated properly.

Mr. Thuy’s recommendations

In recent years, the construction industry in Vietnam is having a good reputation of rapid development. However, many large scale projects invested by the government are still facing cost overrun and schedule delay. The main reason for these problems is that risks are not identified and allocated properly before project start. Owners and contractors don’t have official risk management systems for their projects. Through this study, the author would like to recommend some measures as follows:
Firstly, education and training policies should be established by the government to bring out the best of current human resources in the field of project management in which risk management is a major.

Secondly, corporations also had better have periodic risk training programs for its employees. Therefore, they can recognize the benefits of risk management and also know how to handle risks in their projects. It must help encourage responsibility, knowledge sharing, continuous improvement in coping with risks in tunnel construction projects.

Finally, a standard contract form should be developed and applied in all hydropower tunnel projects in Vietnam in which all major or known risks are allocated by contract clauses. So that risks can be managed by responsible party in order to reduce cost for the owner and maximize benefit to the contractor, preventing of conflicts, claims or litigations between the owner and the contractor.

His thesis abstract is copied and posted.

ABSTRACT

This research focuses on the identification of major risk factors faced by parties involved in hydropower tunnel construction in Vietnam and investigates into the risk allocation opinion among the involved parties. The data collections were carried out by structured interviews at two hydropower tunnel construction projects in Vietnam. Beside, the research also investigated into the risk allocation practices at the two projects to find out whether the risks in these projects are allocated properly or not.

The results of risk identification obtained at the two tunnel projects indicated that, in general, the two tunnel project facing the same risks; however, some of the risks are somewhat different in rank between these tunnel projects because they used different methods of construction. Tunneling by TBM, which is more mechanized than tunneling by drill and blast method (D&B method), faces more risk about equipment productivity and ingress of ground water but less risk about overbreak. Opinions on risk allocation were also obtained at the two projects. Hypothesis tests pointed out that there is no conflict of opinion about risk allocation between the owner and the contractor in tunnel construction in Vietnam. Furthermore, risk allocation practices at the two projects have been investigated. Although there are some conflicts about policy perception for risk allocation between participants in the projects, majority of participants are satisfied with the current risk allocation arrangement in their projects.

Professor Ali Jaafari Gives Lecture at AIT

Dr. Ali Jaafari, Professor and President of the Asia Pacific International College was invited to be the Speaker at the seminar held in AIT on 27 October 2009. The theme of this seminar is “The making of Professional Managers and Leaders: How to succeed on the Face of a Fast Challenging World”. This was attended by Dr. B. H. W. Hadikusumo, Associate Professor and Coordinator, CEIM-SET, some AIT staff and around 35 Ph. D. and M. S. Students of CEIM Field of Study.

About the Lecture

ABSTRACT

Professional people face different career paths to those of the past, when relative certainty and continuity were the norm. The socio-economic and political environments have changed to complex or even chaotic state and continue to challenge even the most hardened managers. Projects and programs have risen in complexity too, due to complex environments, changing goals and conflicting interests. Knowledge increases at a rapid rate and affects all fields of activity. In this environment a normative model of thinking and practice, based on best practice models, can no longer be the foundation of professionality in most fields of endeavour. In this presentation the author will attempt to respond to the following key questions and to raise the level of debate on professional development and practice as well as the role of educational institutions:

 What characterises the contemporary environment within which business, projects and endeavours take shape?

 What are the business and social drivers and how do these affect organisations in both public and private sectors?

 What are the implications for professional people?
 Why is it necessary to promote and apply a new model of professionalism along the concept of transformative leadership?
 Who are creative-reflective professionals, and what characterises them?
 How relevant are these concepts to professionals, classed as techno-management professionals?

The thesis advanced by the author is that most graduates taught under a normative model cannot cope with a fast changing world nor perform professionally well despite all that training that goes to their preparation. They need additional and systemic preparation to develop different competencies and cognitive abilities that will aid them survive or even thrive in an environment of change and uncertainty. This thesis gave rise to the establishment of Asia Pacific International College (APIC) as a unique institution that aims to help both fresh university graduates as well as mature age professionals to acquire new resilience and abilities to rise above the complex challenges facing them. A major pillar of such development is leadership and transformative capabilities.

Photos during the Seminar

Speaker’s Biography:

Professor Jaafari is a distinguished educator and consultant, recognised internationally, particularly in management of large complex projects and programs. He has delivered courses and training workshops for more than 3500 professionals and executives globally, including many multi-national corporations, EPC firms, major public and private sector organisations, and government agencies. Professor Jaafari has published widely in major international journals and conferences, books and monographs. He currently heads Asia Pacific International College. He held the Chair of Project Management at the University of Sydney until August 2004. Professor Jaafari has an extensive professional track record in this field and is known as an authority internationally.

Prof. Peter Barrett gives lecture on “The important place of construction in the economy (using results from the revaluing construction work)”

The School of Engineering and Technology (AIT Thailand) conducted a seminar with the theme “The important place of construction in the economy (using results from the revaluing construction work)” last 19 October 2009. Professor Peter Barrett was invited to be the guest speaker for this event. Prof. Barrett is currently Professor in Construction and Property Management of the University of Salford.

Dr. Chotchai Charoenngam, Associate Professor, CEIM-SET and around 40 Ph. D. and Master Students attended this event.

Prof. Peter Barrett and Dr. Chotchai Charoenngam after the lecture.

Group photo : Prof. Barrett and Dr. Chotchai (center) together with CEIM staff, Ph. D. and M. S. students


About the Speaker
Peter is President of the UN-established International Council for Research and Innovation in Building and Construction (CIB) involving 2000 experts in 60 countries. He is a past Director of Salford’s top rated, 6* Research Institute for the Built and Human Environment and is currently Chairman of the £5M EPSRC funded, Salford Centre for Research and Innovation. From 2001 - 2008 Professor Barrett was Pro-Vice Chancellor for Research with overall responsibility for all research across Salford University, which in this period grew from involving 38% to 60% of academic staff. See Research and Graduate College,Peter is a Fellow of the Royal Institution of Chartered Surveyors and in 1989 was the first Chartered Building Surveyor to gain a PhD. He has since supervised and supported a wide range of Post Graduate students. To date he has produced over one hundred and seventy single volume publications, refereed papers and reports, and has made over one hundred and ten presentations in around sixteen countries. Professor Barrett has undertaken a wide range of research, typified by a management focus around real world problems using a range of hard and soft research methods. He is currently focusing on the theme of Revaluing Construction with a particular interest in the links between Senses, Brain and Spaces.

AIT-CV August 2009 Intake for CEIM and MPM Field of Studies

The AIT-CV Hanoi branch accepted 13 students for August 2009 semester. Twelve (12) students are now enrolled in Professional Master in Project Management and one (1) MS student for Construction, Engineering and Infrastructure Management.

In AIT-CV Ho Chi Minh City Branch, twenty four (24) students are currently registered; four (4) MS students and one (1) Ph. D. for Construction, Engineering and Infrastructure Management, while nineteen (19) students for Professional Master in Project Management field of study.

Below is the complete list of AIT-CV students.

Hanoi Branch

No. Name Field
1. Mr. Tran Van Trung - MPM
2. Mr. Pham Nhu Dung - MPM
3. Ms. Le Ngoc Diep - MPM
4. Mr. Doan Thai Duong - MPM
5. Mr. Le Nam Binh - MPM
6. Mr. Pham Van Thanh - MPM
7. Mr. Le Van Thu - MPM
8. Mr. Nguyen Trung Kien - MPM
9. Mr. Nguyen Duy Duc Thu - MPM
10. Mr. Dinh Quang Hiep - MPM
11. Mr. Bui Duc Luong - MPM
12. Mr. Vu Van Cao - MPM
13. Ms. Nguyen Phung Hai - CEIM


Ho Chi Minh City Branch

No. Name Field

1. Mr. Nguyen Tuan Tu - CEIM
2. Mr. Bui Duy Khanh - CEIM
3. Mr. Nguyen Quoc Trung - CEIM
4. Mr. Duong Quang Minh - CEIM
5. Mr. Ha Cong Huy - CEIM - Ph. D.
6. Mr. Bui Kim Binh - MPM
7. Mr. Nguyen Phan Hoa Binh - MPM
8. Mr. Truong Thai Binh - MPM
9. Mr. Le Minh Đang - MPM
10. Mr. Truong Ngoc Dung - MPM
11. Mr. Nguyen Duy Thien Giang- MPM
12. Ms. Trinh Thi Thu Ha - MPM
13. Mr. Bien Nam Hai - MPM
14. Mr. Vo Si Hoai - MPM
15. Mr. Bui Hai Nam - MPM
16. Mr. Ha Chi Nghia - MPM
17. Mr. Nguyen Van Nhan - MPM
18. Mr. Nguyen Chanh Phuong - MPM
19. Mr. Nguyen Le Thuan - MPM
20. Mr. Le Mien Thuy - MPM
21. Ms. Nguyen Thu Trang - MPM
22. Mr. Nguyen Duc Trong - MPM
23. Mr. Nguyen Quoc Viet - MPM
24. Ms. Nguyen Thi Vui - MPM

Knowledge Management in the Construction Project Environment

The construction industry, wherein the highest capital investment is drawn up at the construction stage, is one intensely competitive business with a high risk and low profit margin. Currently, the construction industry still encounters the consequences of construction delays, cost overruns and delivery failures (Beatham et. al., 2004). Issues of controversy have been on means of improving the construction industry from a less productive and poorly organized set-up to a fully effective and yet remain highly competitive. The use of knowledge in organizations has been increasingly seen as a basis for enhancing a competitive advantage (Krogh et. al., 2000; Goh, 2002, Carrillo, 2004). The challenges therefore lie in the means of managing knowledge resources and capabilities, contributing to project success and sustained organizational competitiveness.

In Thailand and other developing countries, construction projects have inadequate and ineffective control strategies towards project management problems. The operational modes of contractors are mainly based on sole ownership, headed by entrepreneurs lacking efficient expertise in construction management. Evidently, the most important factor inhibiting the successful completion of a construction project is the scarcity of skilled personnel at all levels of construction personnel especially supervisors (Ofori 1985; Imbert 1990; Mackenzie et al., 2000). However, most owners do not want to incur expenditures on employing qualified professionals to compliment and enhance management competency.

Mr. Wasan Teerajetgul made a case study to examine the key knowledge influencing factors (individual and organizational factors) and the knowledge creation process that affects construction project team creativity, and his research mainly focused on the practice of knowledge management in Thai construction projects at the on-site work level. The following are his specific objectives to: (1) identify knowledge factors influencing on-site construction; (2) examine the current practice of knowledge factors in association with the knowledge creation process and project team creativity during the course of on-site construction; (3) examine the influence of key knowledge factors and the knowledge creation process on project team creativity; and (4) propose improved mechanisms of knowledge creation process for on-site construction.

In his analyses, he identified the knowledge factors influencing on-site construction works using Varimax rotation. These analytical techniques showed that that there are six important knowledge factors with 36 items under each. These knowledge factors are: 1) visionary leadership, 2) reward or incentive, 3) collaboration, 4) trust, 5) information technology, and 6) individual competency or skills. Analyses of components of the knowledge creation process revealed that a total of 21 items are under the four dimensions of socialization, externalization, combination, and internalization.

The results of the study showed that majority of respondents tend to mostly rate their assessment between somewhat and agree on the scale of measurement. This could be attributed to respondent’s particular reluctance to disclose negative perceptions about knowledge management practices. As peculiar to the Thai culture, Thais are generally hesitant to openly critique others and issues of concern.

IT support has the largest effect and uniquely contributed to the knowledge creation process. Such result automatically reflects the complexity of engineering knowledge that requires rich technology applications such as the use of 3D simulations. IT allows construction engineers to retrieve critical information, incorporate information with their experiences and enhance additional opportunities to create new concepts by sharing knowledge and techniques with each other. Nonaka and Takeuchi (1995) argued that the IT networks have proved to be a limited means for disseminating tacit knowledge. They address the added importance of human networks than IT networks.

Experience provides individuals with the opportunity to create knowledge through trial-and-error learning. Experience also affects individuals’ ability or competency to transfer knowledge (Argote et al., 2003). Individual competency is a set of skills, related knowledge, and attributes that allow an individual to perform a task or an activity within the scope of a specific function or job.

The results also showed that there is a significant influence of the overall knowledge creation process on project team creativity. In this study, if each part of the knowledge creation process is perceived as mutually exclusive, then only internalization comes into the limelight. Internalization significantly affects project team creativity. Schonstrom (2005) discussed that when knowledge is transferred, it is suggested that knowledge has to be first internalized by the receiving individual before it can be used. The internalized learning through problem-solving facilitated construction engineers in becoming experts and therefore they could use existing knowledge to create products, stimulate innovations and creativity in addition to much more. The results explain that internalization is the process whereby one increases knowledge by learning from external events such as work and apprenticeship.

Contribution to Practice
This research established evidence on how construction project teams adopted the knowledge creation process to improve its project performance. Thai construction managers are seen to place emphasis individual competency or tacit knowledge. Their flexible thoughts and engineering techniques were elements of tacit knowledge fundamental to foster knowledge management and creativity. The strength of knowledge management rests on the vision and aspiration of construction managers in applying creativity in on-site knowledge practices. By having appropriate and attractive incentives, competent project teams were brought in to utilize and generate new knowledge in the form of problem solving. In order to make knowledge visible, the competency in using IT to convert conceptual ideas and package knowledge into obvious activities must be inherent. IT is seen to facilitate the knowledge creation process by capturing knowledge in real time and thereafter, making it accessible for future use. IT greatly benefits construction projects in that it speeds up the project team’s decision making process and thus shortens the product life cycle. The knowledge creation process is seen to facilitate the improvement of project performance. In conclusion, successful execution of construction projects requires that project managers to consider the above-mentioned three important factors.

Contribution to Research
The following are summarized contributions of this research to the body of knowledge in construction projects at large.

1. This study establishes the new instrument for measuring knowledge factors, knowledge creation, and project team creativity in Thai construction.
2. The study provides opportunity to facilitate and to manage the key knowledge factors identified and knowledge creative environment for improving competitive advantage.
3. The research proposes improved mechanisms of knowledge creation that will generate effective practices in a construction project environment, for example, fostering knowledge sharing culture (employee exchange knowledge as standard operating procedure), providing knowledge vision, platform or community of practice, and knowledge process, and knowledge delegation etc.
4. These improved mechanisms can be applied at all levels of construction organizations that need to improve its knowledge management process.

His thesis abstract is copied and posted.

Abstract

The research focuses on the practice of knowledge management practice in Thai construction projects at on-site work level with the objectives as follows: 1) to identify knowledge factors including individual and organizational factors influencing on-site construction execution; 2) to examine the current practice status of knowledge factors in association with knowledge creation process and project team creativity; 3) to examine the influences of key knowledge factors and knowledge creation process on project team creativity; and 4) to propose an improving mechanism of knowledge creation process at on-site construction.

The design of this research is cross-sectional and uses a blended methodological approach of both quantitative and qualitative methods. The research model includes the following variables: a) six knowledge factors: vision of leadership, trust, collaboration, incentives, Information Technology (IT) support, and individual competencies, b) four knowledge creation processes: socialization, externalization, combination, and internalization, and c) team creativity

At the beginning stage, the qualitative method using focus-group interviews is used due to the novel nature of knowledge management practice in Thai construction. This method helps the researcher to obtain some rich data. The quantitative method is used when exploring the effects of the knowledge factors, the knowledge creation process, on the project team creativity. Then, the study results are verified through the qualitative method by using a case study again.

Survey data from 70 construction projects in Thai construction firms, obtained in second stage by means of a questionnaire developed by the researcher, were collated and analyzed. As a means of testing the model, regression analysis techniques were used to analyze the data. Consistent with previous empirical evidence, three knowledge factors affected the knowledge creation process: incentives, IT, and individual competencies. It was noted that these factors overlay the knowledge creation process at all execution stages of on-site construction. In other, only internalization of knowledge creation process affected project team creativity. It was presented that construction members had focused largely on managers’ conception as individual.
This research is expected to contribute to a better understanding of important knowledge factors and knowledge management research in Thai construction which is still at an infancy stage. In order to build a knowledge creative culture, construction project executives need to support and maximize the value of human assets (individual competencies). Furthermore, facilitating IT-supported knowledge management in construction projects needs to be considered and emphasized needs to be placed on productive work and gain a competitive advantage.

Risk Management In Port & Waterway Projects: A Case Study Of The Southern Focal Economic Area Of Vietnam

Facility construction involves a wide variety of risks. Factors impacting owner investment decisions can be quite complex and may vary significantly from region to region and project to project. Contractors face similar difficulties when they consider working outside of their resident jurisdiction. The risks arise from many areas such as legal requirements, construction systems, technology, and management techniques. The success of a specific venture, and in some cases the viability of an organization, can hinge on an understanding of the risks associated with such projects. Construction projects that fail to meet scope, budget, and schedule can result in a host of impacts with serious economic, social, and political ramifications.

Many experts agreed that the company that earned the highest profit has a good risk management system. Management of Risk (MoR) is not only about avoiding explosions or natural disasters. In fact for most businesses it is about profit. And many businesses do it without really understanding how better risk management could help their organization achieve its goals. Risk management proponents say that the better the organization is at managing risk, the more profitable it will be.

In summary, a certain amount of risk taking is inevitable, and even to be encouraged, if an organization is to achieve its objectives. Objective management and acceptance of risk helps to improve performance by contributing to:
a. Increased certainty and fewer surprises
b. Better service delivery
c. More effective management of change
d. More efficient use of resources
e. Better management at all levels through improved decision making
f. Reduced waste and fraud, and better value for money
g. Innovation
h. Management of contingent and maintenance activities

Although there are many improvements of management in Vietnam, the construction industry still has to face many changes in both market and government policies. The causes are many but one of them is the lack of attentiveness with the important of the risk management process.

Besides, the value of systematic risk management of project activity is not fully recognized by the construction industry (Walewski, et al. 2002). Since no common view of risk exists, owners, investors, designers, and constructors have differing objectives and adverse relationships between the parties are common. Attempts at coordinating risk analysis management between all of the project participants have not been formalized and this is especially true between contractors and owners.

Moreover, the construction engineers were not familiar with the risk management issues and they found it was hard when working in a competitive climate, especially in a project. Because of lack of knowledge of management and risk management, they were not preferred with the relevant works such as planning than the technical issues like designing or calculating structural. Thus it is understandable if they were unaware of risks and less concerned of risk management. Therefore, a study of risks and risk management is necessary and beneficial to all of the construction industry in general and Port & Waterway Projects particularly. In summary, the problems are stated as follow:
§ The ambiguous of risks and risk management of the Vietnamese engineers.
§ The lack of awareness and knowledge of risk management.

Mr. Nguyen Viet Dung made a case study which focused on the management of risks in P&W projects in Southern Focal Economic Area (SFEA). The framework of his research started with the findings of risk management that include risk management planning, risk identification, risk analysis, risk response and risk monitoring and control which followed by the analysis and the discussion. Based on the collected information, improvement suggestions will be made to improve effectiveness in risk management in port and waterway projects in SFEA of Vietnam. His specific objectives were:
§ Finding the potential risks and how are they managed in P&W projects
§ Suggest how to effectively manage risks in port & waterway projects.

His study was conducted with the intention of giving more benefit to the engineers working on P&W projects though it could be useful for other fields of the construction industry. He found out that the most important risks consisted of 1) corruption and bribery, 2) budget viable (contractor), 3) incompetent project team, 4) changes in law and regulation, and 5) inadequate designer.

He investigated two projects were the picture of risk management in P&W projects was clearly defined. In both studied projects, they have formal processes of risk management and are constantly improving by practicing experience. The process consisted of 4 main stages:
1. Risk management planning - although most of interviewees agreed about its importance, it is still not utilized carefully. Project budget and project management plan are important and usually used.
2. Risk identification and analysis - performance is quite fine. A few formal standards have been applied and encouraged the engineers to participate. The project budget is considered as the most concerned subject, while business environment factors are accounted to cope with changes in the market. Tools and techniques which based on historical data and experience are highly utilized. The engineers prefer easy and convenient methods to do their work when it proves useful and is accepted by the authorities.
3. Risk response - mitigation and sharing are mostly utilized and have high effectiveness when these strategies could make the stakeholders reach agreement without arising disputes and losing time. Thus the experts with high skill of negotiation are needed to motivate the relevant parties and ensure the success of the agreement.
4. Risk monitoring and control - though new risks appearing in the project life aren’t identified very well, it is successful in other means. By applying “risk audit” and “technical performance measurement”, the risk responses and risk management process is evaluated and necessary activities will be implemented to ensure the success of achieving the project’s objectives. However new risks could be major problems if they are ignored, especially in complex projects where risks can’t be recognized fully in identification stage. Therefore applying the strategies to continuously uncover the new risks such as “risk reassessment” is suggested to make the risk management process concrete.

At present, risk management is still a new area in the management field. Therefore, facing difficulties are frequent and unavoidable.

Mr. Dung found out that although the founded general attitude was that risk management was already so much of concern. Thus if more effort was put into it, no other work would get done. He also found out that the transferring of risks and risk management knowledge from project to project was poor. The interviewees admitted that even if they proposed a new solution and put serious effort into transferring that knowledge to others, but it would be difficult even within their own organization.

In theory, although many methods of carrying out risk management processes are presented, they were not in practice. Some of the interviewees were working with risk management, and they admitted that they had little knowledge about risk management methods. Professionalism and experience are very important in identifying and managing risks, but it is necessary to encourage larger participants and apply more appropriate tools and techniques.

Formal methods of communicating and of sharing experiences and knowledge of risks and risk management were missing or inadequate. That is why in order to secure the activities of the project, it is important to adapt the most suitable approach. Therefore, risk management courses for all construction project engineers are necessary to increase the level of knowledge of formal risk management processes. Furthermore, understanding its benefits would increase the willingness to invest in risk management and capabilities to do it.

His thesis abstract is copied and posted

Abstract
Project risk management has been a subject of intensive discussion in recent years. Still, research on how project risk management should be adopted is inadequate. The objectives of this study are to identify the risks and how to manage risks in Port and Waterway (P&W) Projects. The focus of the study is on the means for risk management. The purpose is to emphasize the importance and requirement of risk management.

The study was conducted with 7 interviews in two different P&W projects and mainly targeted to the engineers involved in the projects. Literature searches were mostly done by using AIT library materials and databases.
Empirical study was used to show the application area for risk management derived from literature. Based on this, a picture of risk management in P&W projects was formed. The basic idea of the picture is to sensitize the engineers regarding the potential risks and suggest how to manage them. According to the understanding gained during this study, it is suggested that by enabling more caution of risk management methods, project risk management will become more efficient and the inefficient and costly activities identified would be reduced.

Factors In Power Purchase Agreements Affecting Investment Flows In Independent Power Production In The Nepalese Environment

“Public private partnerships (PPPs)” have a critical role to play in implementing the development projects in developing countries. Traditionally, the responsibility of constructing and operating infrastructure facilities had rested with the government, but with the growth of economy outstripping infrastructure supply (Gupta and Sravat, 1998) and the need for providing infrastructure facilities to keep up the pace of development, the burden of infrastructure development has been shifted to private sector through concession contracts such as Build-Own-Transfer (BOT). As the term implies, public private partnership is a structure that implements and carries infrastructure projects into effect on a basis of partnership, each sector contributing what it does best.

In South Asia, private participation in electricity was oriented mainly towards building generation capacity also in the form of independent power producers (IPP). This focus reflects the need in the region to expand generation capacity to keep pace with expected demand. Nepal alone with substantial hydropower capacity will require an investment estimated to be US$ 1.8 billion (Private Participation in Infrastructure: Trends in Developing Countries in 1990-2001, 2001) for the expansion of the power sector for domestic demand over the next ten years. With the declining trend of availability of scarce public resources soft loans and grants from multilateral and bilateral agencies, such financial resources will have to be mobilized through the private sector, in the form of IPPs.

Despite having a feasible generation potential of about 43000 MW and with a demand growth rate of about 10%, Nepal's current total installed capacity is only about 526MW with only 40% of the total population having access to electricity. The quality of the supply is poor, system losses high, and power shortages persistent. The cost of electricity for the consumers in Nepal is also one of the highest in South Asia.

Project Sponsors and lenders seek to reap adequate returns in stable environments, minimizing political, financial, operational and other risks associated with the project ensuring a steady stream of revenues.

Likewise, the state owned public enterprises will want to limit the abuses of monopoly power by the private operator and will seek to maximize production efficiency. The responsibility of the state owned enterprises also lies in ensuring the appropriate quality, environment, health standards and social justice.

Similarly, other stakeholders to IPPs have interests ranging from social welfare from the project company to reasonable costs of services.

Private hydropower production is still in the phase of evolution in Nepal, and the process is proving to be slow and expensive. Prospective developers continue to face risks and difficulties and fifteen years after the introduction of the Hydropower Development Policy in the early 1990s, the government of Nepal has only been able to attract limited private investments in power generation.

As pointed out by Head (2000), all private infrastructure development carries common risks such as political, currency exposure, force majeure etc. but hydropower is perceived as being exposed to additional risks in project definition, risks in hydrology, environment, financing, and regulatory risks. Even straightforward issues like scheduled outages and contract energy have led to disputes in PPAs in the Nepalese environment. Therefore, in the process of designing PPAs, a variety of questions need to be asked about the best feasible means satisfying the concerned parties allowing them to come to a zone of possible agreement.

Mr. Raju B. Shrestha made a research which aimed to 1) identify the underlying factors in PPAs in hydropower production in the Nepalese environment; b) identify how the principle issues affect the stakeholders; and 3) identify ways to address the principle issues

He believed that the benefits of his study will have contributions to the body of knowledge pertaining to PPAs in the Nepalese environment.
· Assessment of the underlying factors for project sponsors, utilities, lenders and the host Government.
· The impact of the underlying factors to the concerned parties.
· Positions of the concerned parties, their shared interests, and uncertainties.
· The strategy to adopt for future projects.

His analyses of the PPAs concluded to date, and the perception study of the prime stakeholders has shown the following:
· The analyses of the PPAs concluded to date in the Nepalese environment have shown that discriminatory clauses and unequal treatment are present in the key issues of the agreements.
· The prime stakeholders have divergent perceptions in the key issues of the PPAs, and that not all the clauses have been acceptable to the parties concerned. The responses of the prime stakeholders of the contracting parties reflect the past trends and practices in PPAs between the utility and the IPPs of various types.

From this study, the contracting parties can better evaluate future projects as well as negotiate the terms in the PPAs and provide suitable alternatives wherever required. The past trends of PPAs, the degree of convergence of opinions in each clause in terms of its importance and its importance in inclusion in PPAs can be evaluated. This will facilitate the contracting parties in negotiations to come to agreement sooner and successfully conclude PPAs.

The responses regarding the clauses of the PPAs of the other major stakeholders, namely the lenders and the government, will further help in facilitating successful conclusion of PPAs. His conclusions are categorized in 5 aspects such as:

1. Power Purchase Guarantees
a. Take or Pay Clauses
b. Purchase Guarantees of Interim Energy
c. Supply Guarantee of Minimum energy
d. Purchase Guarantee of Excess Energy
e. Two Part Tariff- Demand Charge
f. Third Party Sales Guarantees

The clauses in the PPAs are more favourable to IPPs with foreign investment than IPPs with local investment with guarantees of purchase of excess energy, interim energy, and better escalation rates, more coverage from exposure to political and changes in law risks.
· The clauses of the PPAs with investment in JV with the Utility have favourable clause for the project sponsors with better escalation rates and purchase guarantees of excess and interim energy than projects with local investment, and explicit clause covering political risks.
· Take or pay clause has not been favourable to the utility as it has resulted in losses.

2. Force Majeure Guarantees
a. Political Risk s
b. Natural Disasters
c. Changes in Law
d. Buyout Clauses

3 Financial and Foreign Exchange Guarantees
a. Convertibility
b. Repatriation
c. Devaluation
d. Escalation
f. Tax Holidays
g. Concessional Funding

4. Operation Risks
a. Dispatch Rights
b. Scheduled Outages
c. Availability Declaration
d. Maintenance Clauses

5 Other Risk Mitigating Measures
a. Dispute resolution Methods
b. Informal Dispute Resolution Methods
c. Arbitration
d. Insurance
e. Insurance Before RCOD
f. Insurance after RCOD

His thesis abstract is copied and posted.
ABSTRACT
With the Introduction of Hydropower Development Policy in the early 1990s, combined with the changes in electricity legislation and the opening up of the power industry to the private sector, Independent Power producers (IPPs) have been playing a bigger role in the development of the electricity sector. However, further investment in this sector has been difficult to mobilize, and part of this difficulty can be attributed to the factors in the existing Power Purchase Agreements (PPAs) and inconsistencies in the guarantees provided by the state owned utility.
The research provides the underlying factors in PPAs in hydropower production in the Nepalese environment, which are of most significance to the stakeholders of independent power production. The research is carried out with a triangulation approach taking into account both the qualitative viewpoint, in the form of comparative studies; and quantitative viewpoint, a questionnaire survey, regarding issues of PPAs.
From a pool of existing independent power producers, 10 PPAs are compared for patterns of specific variables by examining, categorizing and tabulating the underlying factors of PPAs. Opinions in the form of a questionnaire are sought from the stakeholders and the means of the ranks tested by Kruskal-Wallis tests to see if the perceptions of the stakeholders differ in the key issues of PPAs. Further, Mann-whitney tests are carried out to examine the difference in the perception between the pairs of stakeholders in the key issues of PPAs.
The research shows that discriminatory clauses and unequal treatment are present in key issues of the agreements. Questionnaire survey of the stakeholder’s shows the significant clauses of the PPAs and the clauses most likely to be included in PPAs by the stakeholders. With the knowledge of the underlying factors in PPAs, the research allows the stakeholders of the power production to clearly understand the positions of the parties involved. The parties can combine their shared interests to create a joint value and deal with multiple issues and make trades between them, eventually both the parties getting something that they value.