Factor analysis of partners' commitment to risk management in public-private partnership projects

Jin, Xiao-Hua, Zhang, Guomin and Yang, Rebecca J. 2012, Factor analysis of partners' commitment to risk management in public-private partnership projects, Construction Innovation : information process management, vol. 12, no. 3, pp. 297-316.

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Title Factor analysis of partners' commitment to risk management in public-private partnership projects
Author(s) Jin, Xiao-Hua
Zhang, Guomin
Yang, Rebecca J.
Journal name Construction Innovation : information process management
Volume number 12
Issue number 3
Start page 297
End page 316
Total pages 20
Publisher Emerald Group Publishing
Place of publication Bingley, England
Publication date 2012
ISSN 1471-4175
Keyword(s) Australia
Factor analysis
Organizational commitment
Risk allocation
Risk management
Purpose – The purpose of this paper is to investigate and uncover key determinants that could explain partners' commitment to risk management in public-private partnership projects so that partners' risk management commitment is taken into the consideration of optimal risk allocation strategies.

Design/methodology/approach – Based on an extensive literature review and an examination of the purchasing power parity (PPP) market, an industry-wide questionnaire survey was conducted to collect the data for a confirmatory factor analysis. Necessary statistical tests are conducted to ensure the validity of the analysis results.

Findings – The factor analysis results show that the procedure of confirmatory factor analysis is statistically appropriate and satisfactory. As a result, partners' organizational commitment to risk management in public-private partnerships can now be determined by a set of components, namely general attitude to a risk, perceived one's own ability to manage a risk, and the perceived reward for bearing a risk.

Practical implications – It is recommended, based on the empirical results shown in this paper, that, in addition to partners' risk management capability, decision-makers, both from public and private sectors, should also seriously consider partners' risk management commitment. Both factors influence the formation of optimal risk allocation strategies, either by their individual or interacting effects. Future research may therefore explore how to form optimal risk allocation strategies by integrating organizational capability and commitment, the determinants and measurement of which have been established in this study.

Originality/value – This paper makes an original contribution to the general body of knowledge on risk allocation in large-scale infrastructure projects in Australia adopting the procurement method of public-private partnership. In particular, this paper has innovatively established a measurement model of organisational commitment to risk management, which is crucial to determining optimal risk allocation strategies and in turn achieving project success. The score coefficients of all obtained components can be used to construct components by linear combination so that commitment to risk management can be measured. Previous research has barely focused on this topic.

Language eng
Field of Research 120201 Building Construction Management and Project Planning
Socio Economic Objective 870599 Building Management and Services not elsewhere classified
HERDC Research category C1 Refereed article in a scholarly journal
Copyright notice ©2012, Emerald Group Publishing
Persistent URL http://hdl.handle.net/10536/DRO/DU:30047004

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