Risks of joint venture formation in the South African construction industry

Abstract

The global expansion of construction joint ventures (JVs) signifies the drive to proffer solutions to some of the challenges confronting the delivery of projects in the construction industry. However, irrespective of the potential benefits resulting from JV formation for construction project delivery, it is yet associated with risks that possess significant threats to the actualisation of enhanced and effective construction project management. Therefore, this study assessed the risks characterising the formation of JVs in the South African construction industry. Quantitative data was collected from construction professionals in Gauteng province of South Africa. Data analysis was carried out using a 4-stage process which included data reliability and validity, descriptive statistics, one sample t-test and exploratory factor analysis. Findings from the study indicated a 6-pronged cluster of risks associated with JV formation in the South African construction industry. The contribution made by the study to the body of knowledge is that the findings will help stakeholders in the construction industry to be fully equipped with the requisite knowledge of the inherent risks attributed to JV formation. Thus, providing a basis for how best the identified risks can be abated, mitigated or avoided.