Effects of Negotiations about the Formation of Construction Consortium on Consortium Successful Performance in Iran’s Construction Industry

Document Type: Original Research

Authors

1 PhD Candidate, Tarbiat Modares University, School of Architecture & Art, Tehran, Iran

2 School of Architecture & Art, Tarbiat Modares University,Tehran, Iran

Abstract

Growth rate in the number of consortiums formed between Iranian contractors in the construction industry has increased during the recent decade. To enhance competitiveness and capacity, and to enter new markets, contractors in the construction industry develop different forms of consortiums. This case study which is done among the Iranian construction contracting firms centers on the issues involved in the first stage of the process of forming a consortium and agreement that must be negotiated between the partners. Results show that some of the key issues affecting the increase in the success rate of the consortium in the construction industry are identifying the objectives and scope of the consortium, clear definition of each stakeholder’s duties, clarifying the financial rules governing the consortium, identifying the decision-makers, and the decision-making mechanisms in the consortium. Therefore, holding effective and efficient meetings at the first stage of the process of consortium formation and increased understanding of the key issues among the stakeholders has a significant effect on the success of consortium performance.

Keywords


Anderson, E. & Weitz, B. (1989). Determinants of Continuity In Conventional Industrial Channel Dyads. Marketing Science, 8:13.
Andrew C., I. & Li, K.-Q. (1999). Joint Venture Formation: Planning And Knowledge Gathering For Success. Organizational Dynamics, 15.
Badger, W. W. & Mulligan, D. E. (1995). Rationale And Benefits Associated With International Alliances. Journal of Construction Engineering And Management, 121, 12.
Bing, L. & Tiong, R. L. K. (1999). Risk Management Model For International Construction Joint Ventures. Journal of Construction Engineering And Management, 125, 8.
Bing, L., Tiong, R. L. K., Fan, W. W. & Chew, D. A. S. (1999). Risk Management In International Construction Joint Ventures. Journal of Construction Engineering and Management, 125, 8.
Chen, C. (2005). Entry Strategies for International Construction Markets. Doctoral Dissertation, Pennsylvania State University, University Park, Pa.
Contractor, F. J. & Lorange, P. (1988). Why Should Firms Cooperate? The Strategy And Economics Basis For Cooperative Ventures. Cooperative Strategies in International Business, F. J. Contractor And P. Lorange, Eds., Lexington Books, Lexington, Mass.
Gale, A. & Luo, J. (2004). Factors Affecting Construction Joint Ventures In China. International Journal of Project Management, 22, 10.
Geringer, J. M. 1988. Joint Venture Partner Selection: Strategies for Developing Countries. Quorum, New York.
Geringer, J. M. & Hebert, L. (1989). Control and Performance of International Joint Ventures. Journal Of International Business Studies, 20, 20.
Geringer, J. M. & Hebert, L. (1991). Measuring Performance of International Joint Ventures. Journal Of International Business Studies, 22:14.
Girmscheid, G. & Brockmann, C. (2010). Inter And Intraorganizational Trust In International Construction Joint Ventures. Journal of Construction Engineering And Management, 136, 9.
Harrigan, K. R. (1988). Strategic Consortiums and Partner Asymmetries. Cooperative Strategies In International Business: Joint Ventures and Technology Consortiums Between Firms. Ma: Lexington Books, 20.
Herzfeld, E. (1989). Joint Ventures. Bristol: Jordans.
Hinze, J. (1993). Construction Contracts. Mcgraw-Hill, New York.
Ho, S. P., Lin, Y.-H., Chu, W. & Wu, H.-L. (2009). Model for Organizational Governance Structure Choices in Construction Joint Ventures. Journal of Construction Engineering And Management, 135, 14.
Hwang, C. & Yoon, K. (1981). Multiple Attribute Decision Making Methods And Applications. New York: Springer-Verlag:181.
Lee, S. & Ness, A. (1986). Investment Approval. China Business Review, 5.
Llaneza, A. V. & Garcia-Canal, E. (1998). Distinctive Features Of Domestic And International Joint Ventures. Management International Review, 38, 17.
Mohamed, S. (2003). Performance In International Construction Joint Ventures: Modeling Perspective. Journal of Construction Engineering and Management, 129, 8.
Munns, A. (1995). The Potential Influence of Trust On The Successful Completion Of A Project. International Journal of Project Management, 13, 6.
Munnsa, A. K., Aloquili, O. & Ramsay, B. (2000). Joint Venture Negotiation and Directorial Practices In The New Countries Of The Former Soviet Union. International Journal of Project Management, 18, 11.
Nair, A. S. & Stafford, E. R. (1998). Strategic Alliances in China: Negotiating the Barriers. Long Range Planning, 31, 8.
Nielsen, B. B. (2007). Determining International Strategic Alliance Performance: A Multidimensional Approach. International Business Review, 16:25.
Ngowi, A. B. (2007). The Role Of Trustworthiness In The Formation And Governance Of Construction Alliances. Building  Environment, 42, 8.
Norwood, S. R. & Mansfield, N. R. (1999). Joint Venture Issues Concerning European and Asian Construction Markets Of The 1990's. International Journal of Project Management, 17.
Ozorhon, B., Arditi, D., Dikmen, I. & Birgonul, M. T. (2008). Effect Of Partner Fit In International Construction Joint Ventures. Journal Of Management In Engineering, 24, 10.
Pangarkar, N. & Klein, S. (2004). The Impact of Control on International Joint Venture Performance: A Contingency Approach. Journal of International Marketing, 12, 22.
Pareto, V. (1971). Manual of Political Economy. English Translation by A.M. Kelley, New York, 1971.
Sillars, D. N. & Kangari, R. (1997). Japanese Construction Alliances. Journal of Construction Engineering and Management, 123, 7.
Tatoglu, E. & Glaister, K. W. (1998). Performance of International Joint Ventures In Turkey: Perspectives Of Western Firms And Turkish Firms. International Business Review, 7, 23.
Van Olderberg, M. (1995). Court with Care. International Business, April, 4.