The "Scene-Tactic" Study Of Political Risks In International Construction Project

With the development of economic globalization, multinational operation have become the main form of global economic integration. According to the 2015 annual "Engineering News-Record",250 world’s largest international engineering contractors achieved overseas turnover of $521.6 billion, among which 65 Chinese contractors’ overseas turnover was $89.7 billion, accounting for 17.19% of the turnover of the international engineering. Chinese contractors have become a significant force in the international contracting market. However, catastrophic losses had been brought to Chinese contractors by Political risks overseas at the same time. In the passing decade, kinds of political risk events with different degrees of damage occurred almost every year around the world. Unfortunately, political risks hadn’t attracted enough attention among Chinese contractors and the Chinese government. It is imperative to evaluate the scenes of political risk and take scientific and effective tactics for international contractors.Based on the research of design and evaluation of political risk and identification and analysis of feasible tactics, the paper built a political risk "scene-tactic" model and a "scene-tactic" flow chart for international projects. The contingency mechanism of political risks was analyzed as well. And the empirical analysis was carried out, demonstrating the research results of this article.First of all, the paper identified the political risks through literature review and case study, and analyzed the characteristics of 17 types of political risk events, and then a political risk management research survey questionnaire was designed and issued to collect datum of international engineering projects. Fuzzy clustering analysis was used to rank the political risk events, combined with qualitative analysis, working out seven kinds of political risk scenes, namely "government intervention"," default of government or partner", "policy changes", "government poor governance", "conflict or war", "exclusion behavior", "boycott project". Secondly,64 feasible tactics were identified from the different stages before and after political risks and the main bodies of management, by means of literature review and case study. Considering the political risk scenes, the 64 feasible tactics all experienced separation and recombination, refining and combination to form the feasible policy set. What’s more, on the basis of the analysis of political risk scenes and tactics above, a political risk investigation questionnaire of "scene-tactic" in international engineering projects was designed and issued. According to the mean value analysis and the key factor analysis, the paper built a political risk "scene-tactic" model for Chinese government, Chinese contractors, and project managers and a political risk "scene-tactic" flow chart based on the timeline. Contingency mechanism of political risk management was analyzed as well. Last but not least, the reliability of the model was studied using independent sample T test based on the analysis of 24 overseas projects of political risk management performance within a company. And using a political risk management case of a international project as an example, the validity and operability of the tactics to political risks was demonstrated finally.In this paper, the results enriched the research of political risk and its management system to a certain extent in international engineering project. The political risk "scene-tactic" strategy space and decision- making mechanism built can provide a viable and effective decision support for Chinese contractors to explore the overseas market.