CONTRIBUTION-BASED PROFIT-SHARING SCHEME FOR JOINT VENTURES / PELNO PASIDALIJIMO TARP ĮMONIŲ SCHEMA, PAGRĮSTA PATIRTOMIS IŠLAIDOMIS

2011 ◽  
Vol 17 (3) ◽  
pp. 445-458 ◽  
Author(s):  
Sung-Lin Hsueh ◽  
Min-Ren Yan
Keyword(s):  
Joint Ventures ◽  
Production Efficiency ◽  
Profit Sharing ◽  
Sharing Rule ◽  
Construction Firms ◽  
Domestic Markets ◽  
Construction Market ◽  
International Construction ◽  
Local Construction ◽  
Cooperative Relationship

Along with globalization of the construction market, international construction firms often choose to cooperate with local construction firms in the form of Joint Ventures (JV) when they enter into the domestic markets of different countries. In this way, they cannot only reduce investment risks, but also enhance production efficiency, reduce costs and generate more profits. The conventional method of profit-sharing between JV firms is based on ratio of investment. However, as the firms make different contributions to the project, the rationality of such a profit-sharing method is often doubtful and thus is difficult to maintain a stable cooperative relationship for a JV team. Based on the concept of the cooperative game theory, this paper proposes a contribution-based profit-sharing model using Shapley Value. A case study is used to describe how firms can use this model to reach decisions of participation, and determine a fair profit-sharing rule after cooperation to enhance mutual trust and create the advantages of cooperation. Santrauka Vykstant statybos rinkos globalizacijai, tarptautinės statybos įmonės, patekusios į vietinę kitos šalies rinką, dažnai linkusios bendradarbiauti su vietos statybos įmonėmis. Jos gali ne tik sumažinti investicijos riziką, bet ir padidinti gamybos efektyvumą, sumažinti išlaidas ir gauti didesnį pelną. Tradicinis pelno pasidalijimo metodas tarp įmonių grindžiamas investicijų santykiu. Tačiau kai įmonių įnašas į projektą skirtingas, toks pelno metodo racionalumas dažnai abejotinas, todėl tokiu atveju yra sunku palaikyti stabilų įmonių bendradarbiavimą. Remiantis lošimų teorijos koncepcija, šiame darbe siūlomas pelno pasidalijimo modelis naudojant Shapley reikšmę. Skaitmeniniu pavyzdžiu rodoma, kaip įmonės gali taikyti šį modelį priimdamos sprendimus dėl dalyvavimo bendroje veikloje ir teisingo pelno pasidalijimo. Taip sustiprinamas tarpusavio pasitikėjimas ir sukuriamos bendradarbiavimo prielaidos.

An assessment of the readiness of construction firms for international construction joint ventures (ICJVs) using the VERDICT model

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Stephen Akunyumu ◽  
Frank D.K. Fugar ◽  
Emmanuel Adinyira
Keyword(s):  
Joint Ventures ◽  
Technology Infrastructure ◽  
Commitment To Change ◽  
Content Type ◽  
Construction Firms ◽  
Construction Companies ◽  
Construction Joint ◽  
Foreign Companies ◽  
International Construction ◽  
Construction Organizations

Purpose The purpose of this study was to assess the readiness of construction companies in Ghana to partner with foreign companies in international construction joint ventures (ICJVs). Design/methodology/approach Using the Verify End-User e-Readiness using a Diagnostic Tool (VERDICT) model, a survey with 31 construction companies was conducted to assess their readiness through four pre-defined elements of readiness. Findings The results indicated the readiness of construction companies to collaborate with potential foreign partners in ICJVs. Notwithstanding, certain areas such as management commitment to change, employee buy-in, process flexibility and technology infrastructure need improvement in some firms to achieve readiness. Government has a role in ensuring the readiness of domestic firms for the international market. Originality/value This study applies the VERDICT model, a tool originally designed to assess construction organizations’ readiness for e-commerce, to assess the readiness of Ghanaian construction companies for ICJVs.

scholarly journals A Study of Joint Venture Formation between Construction Organizations in Tanzania

2013 ◽  
Vol 1 (2) ◽  
pp. 32 ◽  
Author(s):  
Steven Minja ◽  
Geraldine Kikwasi ◽  
Wellington Thwala
Keyword(s):  
Joint Ventures ◽  
Financial Stability ◽  
Joint Venture ◽  
Financial Risks ◽  
Multiple Sources ◽  
Construction Firms ◽  
Construction Companies ◽  
Tax Relief ◽  
Construction Organizations ◽  
Local Construction

Formation of joint ventures between construction companies is one of the recent efforts in combating contractors problems in Tanzania and addresses one of the key challenges facing the construction industry today in the country especially when large and complex projects are involved. The main objective of the research is to examine the formation of joint ventures in Tanzania, specifically to: study joint ventures formation procedures; identify criteria in selection of joint venture partner; and identify risks associated with and challenges facing joint venture undertakings in Tanzania. The study adopted a descriptive research design and purposive sampling. Multiple sources of evidence was used to collect information mainly literature review, questionnaires and interviews. Key findings reveal that legal and statutory requirements in the formation of joint ventures include registration by Business Registration and Licensing Agency (BRELA), Contractors Registration Board (CRB) and under Registration of Documents Act (RDA). All JV respondents were registered by BRELA and CRB which are mandatory but only 7 were registered by RDA. Most important factors considered during formation of JVs are: contract agreement, financial stability and commitment while key risks associated with JVs are cultural and social differences, delays in approvals and financial risks. In addition, main challenges facing joint ventures are: identification of possible risks and joint venture agreement interpretation. The study concludes that formation of JVs have been addressing some of emerging challenges facing local construction organizations despite the risks and challenges that exist. The study recommends that firms entering joint ventures should explore the benefits of registering with RDA and ensure risks associated with their JV are properly assessed. The study also recommends introduction of an incentive scheme through Tanzania Investment Centre to grant tax relief for foreign contractors going into joint venture with local construction firms.

scholarly journals Adequacy of Quality Provisions in Standard Forms of Local and International Construction Contracts

2009 ◽  
Vol 1 (1) ◽  
pp. 1-9
Author(s):  
Kwang Q.W. ◽  
Ting S. N
Keyword(s):  
Construction Industry ◽  
Current Standard ◽  
International Standard ◽  
Construction Contracts ◽  
Construction Market ◽  
International Construction ◽  
Construction Disputes ◽  
Local Construction ◽  
The One

Standard forms of contracts have been in use in the Malaysian construction industry as a means to expedite contractual and legal duties for the clients who wish to avoid expensive and complex legal endeavors to arrive at an agreement with their contractors. Various forms have been drafted by various professional bodies and organizations, both locally and internationally, to meet the demands of the local construction market for standard forms. Quality provisions are among the topics/issues covered in the standard forms. However, evidently, it is noted that the quality and its standards in the Malaysian construction industry has consistently remained as the root for many construction disputes. Whether or not standard forms of construction contracts have sufficiently cater for quality, remains a question. If the "one-size fits all" postulate does not hold especially when it comes to ensuring quality on site, the question of validity and effectiveness of standard forms becomes a pertinent one. This paper presents a study of various quality related clauses in local and international standard forms and comparisons were made among the chosen forms. Experts opinion within this field are sought as well in order to improve the robustness of this study. This paper also investigates the adequacy of the provision of these forms and suggests suitable changes to the current standard forms, where necessary, within the study.

Joint Ventures between Nonprofit and For-Profit Organizations

2000 ◽  
Vol 22 (s-1) ◽  
pp. 76-88 ◽  
Author(s):  
Richard C. Sansing
Keyword(s):  
Joint Ventures ◽  
Joint Venture ◽  
Nonprofit Organization ◽  
Profit Sharing ◽  
Production Costs ◽  
Competition Effect ◽  
Sharing Rule ◽  
For Profit ◽  
Tax Regimes ◽  
Cost Effect

This paper examines the consequences of allowing a nonprofit organization to form a joint venture with a for-profit organization. Three tax regimes are considered: prohibiting all such joint ventures, allowing all such joint ventures, and restricting joint ventures between nonprofit and for-profit entities to those controlled by the nonprofit organization. The paper derives the equilibrium profit-sharing rule, output decision, and organizational form choice under each tax regime. Joint ventures can create both private and social benefits by reducing production costs. They can also create private benefits and social costs by reducing competition. Prohibitions or restrictions on joint ventures can either increase or decrease social welfare depending on whether the production cost effect or the competition effect is more important.

scholarly journals Concentration in the international construction market

2009 ◽  
Vol 27 (12) ◽  
pp. 1197-1207 ◽  
Author(s):  
Kunhui Ye ◽  
Weisheng Lu ◽  
Weiyan Jiang
Keyword(s):  
Construction Market ◽  
International Construction

Constraints and opportunities facing construction organization in post-conflict condition in Afghanistan

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Qais Amarkhil ◽  
Emad Elwakil
Keyword(s):  
Matrix Analysis ◽  
Content Type ◽  
Construction Firms ◽  
Construction Companies ◽  
Post Conflict ◽  
Conflict Condition ◽  
Local Construction ◽  
And Performance ◽  
Construction Organization ◽  
Critical Constraints

Purpose Although there are many challenges and constraints for construction organization operation and performance in a post-conflict condition, there is insufficient construction project management literature. Therefore, the purpose of this paper is to identify a framework to understand and determine critical constraints and opportunities in a post-conflict condition facing local construction firms in Afghanistan. The proposed framework is composed of three major steps: identify and determine key performance indicators; identify challenges impacting organization operation and performance in post-conflict condition; determine critical constraints and opportunities based on prioritized performance measures; and organizational strength and weakness factors. Design/methodology/approach The strength, weakness, opportunities and threat matrix analysis has been used to determine post-conflict condition constraints and opportunities. Then the analytical hierarchy process has been used to prioritize the measures and identify the constraints and opportunities facing construction companies in a post-conflict situation. The mix-research method is applied to this study to analyse qualitative variables and quantitative variables obtained from the experts’ opinions and 51 filled questioners. Findings The study shows that there are a total of 11 critical constraints and three essential opportunities for construction companies that industry practitioners and policymakers should take into account while formulating the organizational strategy. Practical implications The developed framework will benefit construction companies in improving their performance and operation in after-conflict conditions. Originality/value This paper is the first to provide a comprehensive conceptualization of the challenges and constraints for construction organization operation and performance in a post-conflict condition. It also offers a novel conceptual framework to understand and determine critical constraints and opportunities in a post-conflict condition facing local construction firms in Afghanistan.

scholarly journals Valuation of Guaranteed Maximum Price Contracts in Korea Using the Collar Option Model

2018 ◽  
Vol 2018 ◽  
pp. 1-9
Author(s):  
Sanghyo Lee ◽  
Hyeongjae Jang ◽  
Yonghan Ahn
Keyword(s):  
Profit Sharing ◽  
Construction Companies ◽  
Construction Market ◽  
Positive Effects ◽  
Valuation Model ◽  
Maximum Price ◽  
Proposed Model ◽  
Option Model ◽  
Payoff Structure ◽  
Future Work

This study assessed the levels of risk that contractors may be subject to while executing a GMP contract by applying a collar option model to the case study of an apartment project in Korea and identified implications for the application of GMP contracts in Korea. The payoff structure of the GMP contract was defined based on the collar option model and a profit sharing ratio calculated to evaluate the risks involved in GMP contracts. The results showed that an increase in the GMP and a decrease in the expected cost and cost range were accompanied by a decrease in the profit sharing ratio. The proposed valuation model for GMP contracts is expected to help clients and contractors in Korea negotiate reasonable contracts as it enables the contractor to utilize the proposed model as basic data, the client to evaluate the performance of the contractor, and both parties to agree a reasonable profit sharing ratio. Implementing GMP contracts with CMR is likely to have a number of positive effects on the Korean construction market. However, in order to maximize these effects, it is necessary to have the ability to evaluate cost uncertainty. Accordingly, it is very important to analyze the factors that influence cost volatility. In future work, the various factors that have an impact on the GMP must be studied to maximize the positive effects of the framework proposed in this paper. An analysis of the effect of each factor on the change in the GMP will help Korean construction companies who are attempting to introduce GMP contracts to perform their preconstruction services effectively.

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