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This thesis offers a comprehensive risk assessment methodology that provides a decision support tool, directed for Turkish construction organizations, which can be utilized through the bidding decisions for international construction projects. Within this context the analytic network process technique is implemented to develop a risk assessment model, which is used to derive the relative priorities of the risk factors associated with international construction projects. The findings of the risk assessment model have demonstrated that the most significant sources of risk are vagueness of contract conditions about risk allocation, client, and immaturity of legal system in the host country. Factors such as low % of advance payment, geographical distance, and bribery were found to be relatively insignificant. An international construction project risk rating software application is then developed. The application incorporates the derived priorities from the risk assessment model to calculate a risk rating for a given international construction project. To increase the credibility of the results a risk rating adjustment methodology was integrated into the application. Its purpose is to count for the potential influencing factors that may increase the risk level of a given project. The influencing factors which were considered are the company&rsquo / s experience, contract type, level of the available project data from the outset, and project delivery system. The application is also structured to enhance the organizational learning practices. It improves the process of the organizational memory formation with respect to postproject risk data by developing a database of risk information of the rated projects for future references. The reliability of the application was tested with post-projects risk data and was found to be satisfactory.

Due to its complex nature, risk and uncertainty are more widespread in construction industry than many other industries. Aiming to ensure that all project objectives are met, risk management is considered as a critical success factor for construction projects. The core elements of risk management are now known and used by many organizations. On the other hand, as declared by Project Management Institute (PMI), the ability to measure the effectiveness in managing risk is one of the most important areas that risk management needs to be developed in. Designed to assess the capability of a project or an organization in a particular area, a maturity model aids in determining strengths and weaknesses, and to target improvement strategies accordingly. Several maturity models have been developed for the area of risk management and furthermore, an attempt to adapt a generic risk management maturity model to the construction industry was specified from the literature. All in all, when examined, it was seen that most of these models outline the topics to be investigated in a maturity assessment and provide guidance in terms of content. It was believed that a practical approach was needed and the diagnostic characteristics of these models should be enhanced. Therefore, the aim of this study was to propose a construction risk management maturity framework, together with an easily applicable and effective questionnaire. To achieve this aim, six outstanding risk management maturity models were examined, and the proposed model was further supported with construction-specific attributes such as construction supply chain issues. The applicability of the model was tested through case studies conducted with five large scale Turkish construction companies. The results were evaluated and interpreted for each company and the gathered data were further investigated through statistical tests for certain comparisons. Finally, the questionnaire was revised with respect to the feedback received from the case studies.

The overall research objective was to identify the effects of reward systems (rewards and a penalty) on risk-taking behavior and performance (quality and time) of construction workers from different cultures (American, Asian, and Latin American cultures). This research used the sociotechnical system as the underlying, guiding scientific framework. The research found that Americans and Latin Americans had higher risk-taking behavior than Asians (p<0.01). No difference in risk-taking behavior was found between Americans and Latin Americans (p<0.05). Although culture may influence individuals' risk-taking behavior, the results from this study showed that risk-taking behavior could be altered and suppressed by providing individuals with the proper safety training, education, and safety equipment. Customized safety training for people from different cultures would be useful because the culture elements that contribute to high risk-taking behavior could be addressed. The results also showed that the effects of reward systems on risk-taking behavior were not statistically significant (p>0.1). One possibility that no difference was found may be because the tasks used in this study did not contain enough possibility for participants to take more risk. The effects of reward systems on risk-taking behavior may have been reduced by the low possibility of risky behavior. It is suspected that if the tasks contained more opportunities for participants to take risk, differences in risk-taking behavior would have been significant. The researcher concluded that risk perception is situation-specific and has an influence on the individual's risk-taking behavior on that particular situation but cannot be used to predict risk-taking behavior. Also, general locus of control and general self-efficacy cannot be used to predict risk-taking behaviors. These findings are consistent with many studies that explore locus of control (Iversen & Rundmo, 2002; Rolison & Scherman 2002; Crisp & Barber, 1995), and many researchers that suggested self-efficacy is situation specific (Murdock et al., 2005; Martin et al., 1995; Perraud, 2000; Slanger & Rudestam, 1997). This study also found no relationship between risk-taking behavior and productivity, for both time and quality. / Ph. D.

In the global construction market, most construction companies are willing to undertake international projects in order to maximise their profitability by taking advantage of attractive emerging markets and minimise dependence on unfavorable domestic market conditions. In order to be awarded a contract in highly competitive global construction market, companies should excel in choosing the most attractive markets and prepare winning bids for the selected construction projects in those markets. While preparing bids, the major concern of companies is to offer an optimum price that will enable them to earn enough profits and win the contract at the same time, where profit making ability is strongly correlated with proper estimation of a risk premium that is added onto the estimated cost of the project. Due to the nature of construction works, there are lots of uncertainties associated with the project, market and country conditions. Therefore, how the profitability of the project changes with occurrence of various risk events, in other words, the sensitivity of project costs to risk events, should be estimated by bidders realistically. In this study, fuzzy set theory is used to estimate cost overrun risk in international projects at the bidding stage. The objective is to propose a methodology which can be used by bidders to quantify cost overrun risk so that a realistic risk premium may be determined. A fuzzy risk rating approach is proposed to quantify cost overrun risk rating, which takes into account of risks characterised in international construction projects. For this purpose, risk sources have been identified and a risk model is put forward by using influence diagramming method. Based on this risk model, a fuzzy risk rating algorithm has been defined and software has been developed to conduct fuzzy risk rating calculations easily. After a decision-maker inserts the necessary inputs related with project and country risk factors, the output of the software is a rating that takes into account of all factors that may affect cost overrun risk in international construction projects. The reliability of the algorithm and developed software have been tested by an application on a real construction project. The proposed methodology and decision support tool have been proved to be reliable for the estimation of cost overrun risk while giving bidding decisions in international markets.

It has been suggested that projects in the construction industry are subject to risks more than other industries. However, there is often little parity in allocation of risks in the construction industry. Usually, project participants allocate risks by aversion where owners tend to shift risks to the primary contractor, who in turn transfers them to the subcontractors. As a result of this, risks are not necessarily allocated/ re-allocated to the party that is best able to manage them efficiently and effectively. Risk allocation can significantly influence the behavior of the project participants and hence affects project schedule, cost and performance. Inappropriate risk allocation has led to adversarial relationships between contracting participants and has consequently increased project cost. The objective of this dissertation is to shed light on the current practices of risk allocation in the construction industry. The dissertation consists of three sections. The first section investigates and evaluates the problems of the current practice of risks allocation and their impacts on project performance. The second section investigates, identifies, and classifies barriers to optimal risk allocation. The third section looks into allocating construction risk from a more cooperative and rational perspective. The goal is to provide the construction industry with a rational decision-making mechanism that will provide an alternative to the current practice of typically allocating risks by aversion. To meet the objectives, structured survey questionnaires for Sections One and Two were used. The first survey found that the current practice of risk allocation has four major problems. These problems include: 1. Dispute, claims and tension leads to adversarial relationships. 2. Competitive relationship leads to aggressive relationships. 3. Subjective pricing of risk leading to higher contingency. 4. Allocation by aversion that leads to misallocation of risks. The second survey found thirteen barriers to optimal risk allocation, which were classified into three main categories: behavioral, technical, and organizational barriers. Lack of an efficient risk allocation mechanism ranks at the top of the identified barriers. These findings were linked, in causal-effects relationships, to formulate an analytic model for the current practice of risk allocation. This dissertation uses the research findings and the rational decision-making process to develop a practical mechanism for optimizing risk allocation. The developed mechanism was then fine-tuned and validated by a Delphi expert panel technique. The developed mechanism should aid construction industry professionals and construction project participants in making rational and economical risk allocation decisions to alleviate the identified above-mentioned problems, overcome the identified barriers, and improve project efficiency by minimizing the negative impacts of the current practice of risk allocation on project cost, schedule and overall project performance. / Graduation date: 2013 / Access restricted to the OSU Community at author's request from Jan. 4, 2013 - July 4, 2013

The thesis includes business intention of construction company in the form of a feasibility study. Planned company deals with the realization of timber-framed buildings that are built by hand directly on the construction site. The introductory part describes basic knowledge of the investment projects planning. One subchapter shortly describes the timber construction system. Parts of the business intention are oriented on corporate strategy, marketing, production technology, manpower, economic a financial analysis and risk management. In conclusion is an overall assessment of the project feasibility.