The Impact Of Institutional Differences On International Project Delivery

While Chinese contractors’ share of international contracting markets has been growing rapidly,they encounter great challenges from institutional differences between overseas and domestic markets.Their failing to adapt to differences between domestic and foreign laws,regulations,technical standards,cultural habits,etc.,brings great risks to the cost,time and quality control in international construction projects.As with the application of institutional theory in modern project organization and management theory,the study of institutional differences in the field of international project management attracts many scholars’ attention.However,current research on the application of institutional perspective in international project management is still at the stage of conceptual reference and phenomenon analysis.Thus,this study establishes a theoretical model for management of institutional differences in international projects,by combining the institutional,resource and dynamic perspectives in modern project organization and management theory.The model provides a systematic analysis framework including factors of institutional differences,inputs of institutional and resource support,process dynamic control,organizational network development and project performance,to reveal the influence mechanism of institutional differences on the implementation of international projects and its corresponding management path.The empirical study adopts the mixed research method combining quantitative and qualitative analysis.E-questionnaires,interviews and case studies were used to collect data.381 valid questionnaires were collected.101 experts experienced in international project management were interviewed and five typical cases were collated.The Partial Least Squares Structural Equation Modeling method is used to verify and analyze the theoretical model.The findings reveal that institutional difference has significantly direct negative effects on the project cost and time performance and the project quality and acceptance performance(≈-0.1),and can decrease the efficiency of organizational cooperation,but its direct effect on the corporate social responsibility performance is not significant.The survey results further emphasize the impact of difference in technical standards on design management,and the impact of difference in cultural habits on the communication between project participants.It is also found that the challenge of institutional differences is regionally dependent,which is greater in Middle East,North Africa and Latin America than in Southeast Asia.On the other hand,the model results demonstrate that contractors’ institutional and resource support can promote their process dynamic control and organizational network development,and further has a positive effect on the overall project performance,which indicates management paths for the contractors to deal with the institutional difference challenge.The inputs of organizational cooperation mechanism and project management system are emphasized owing to their greater path effects on project performance.In addition,the model path can vary for different kinds of project performances,which emphasizes the importance of dynamic control in realizing the project quality and acceptance performance.This paper then proposes strategies for the international contractors to manage institutional differences in international construction projects and improve project performances: changing thinking inertia and emphasizing the risk analysis and response of institutional differences;emphasizing international experience of human resources and facilitating localization;building a win-win,fair,and efficient inter-organizational cooperation mechanism;building project management system with a focus on collaborative participation of parties and coordination between processes;improving the efficiency of change identification and adjustment.