Comparative analysis of managers’ perception in overseas construction project risks and cost overrun in actual cases: a perspective of the Republic of Korea

Abstract

As the number of overseas projects increase, capabilities of managers should be comprehended by handling risks. Therefore, comparison of project managers’ risk perception and risk handling costs from actual cases is necessary to set the management direction. Thus, eleven risk factors that occur frequently in overseas construction were classified into three categories. Perception of 54 international construction managers were collected by survey and ranked by using relative importance index. Consequently, managers perceived that the impact of risks occurring due to the wrong plan was high and conflict risk was low. Then, the data from 20 cases were amplified by applying Monte-Carlo simulation with statistical verification of reliability and normality. Through multivariable regression analysis, the cost impact of the legal conflict risks with the local subcontractors and engineers was the highest,intensely differed with managers’ perception. Specifically, the risks involving various stakeholders with sufficient time to resolve were not recognized, despite the high-cost impact. Though, fully understanding perception of the host-clients or site labors was difficult, this study is vital in that the conceptual gap was narrowed by numerically comparing the difference between risk perception of managers and actual risk cost., It would be used as a guideline by focusing on factors with high impact for educating managers at overseas sites.