Conceptualization of IPOs

IPO or international project management has its root derived from the general project management literature. Project refers to any unique and short-term endeavour to deliver agreed beneficial change, value or outcome for an organization considering the limitations of cost and time (Köster 2013: 3). Whereas, The Association of Project Management (APM) (2006) defines project management as;

‘‘The process by which projects are defined, planned, monitored, controlled and delivered such that the agreed benefits are realised.’’

The Project Management Institute’s (PMI) a guide to the Project Management Body of Knowledge (PMBOK® Guide, 6^th Edition) (2017), defines project management as;

‘‘Project management is the application of knowledge, skills, tools, and techniques to project activities to meet the project requirements.’’

PMI’s PMBOK® Guide (2017) conceptualizes project management into five broad project management processes and 10 project management knowledge areas. The five processes are also considered as the project life cycle and they are divided as initiating, planning, executing, monitoring and controlling, and closing. Whereas, the 10 project management knowledge areas are integration, scope, time, cost, quality, procurement, human resources, communications, risk management, and stakeholder management.

However, emergence of international project management can be realized when projects are executed across a project company’s national boundary by deploying human recourse and other technical resources in different cultures and involving stakeholders from another country other than that of the project company’s home country (Köster 2013: 12). (Köster 2013: 12) further maintains international project operators (companies) go beyond their national boundaries to deliver value, change or project benefits to a group of diverse multicultural stakeholders. For instance, an assessment a of global megaproject called the

Nabucco Project 2009 by Kardes et al. (2013) clearly represents one of the examples of complex international project management endeavour. The concept of the Nabucco project was realized in enactment in 2009 in order to build a gas transmission pipeline among Georgia, Turkey, Romania, Bulgaria, Hungary and Austria. Consequently, a consortium was formed consisting six companies and an intergovernmental agreement was drawn among participating countries. The length of pipeline was assumed to be 3900 km with an approximate investment of €7.9 billion EURO.

However, IPOs can be classified into two groups such as the small projects (Griffith and Headley 1998;Dunston & Reed 2000; Liang 2005; Hwang et al. 2014) and megaprojects or large projects (Miller & Lessard 2001; Gellert & Lynch 2003; Van Marrewijk et al., 2008; Haas 2009). But, there is no concrete agreement on this aforementioned classification and the definitions of small projects and megaprojects (Köster 2013; Kardes et al. 2013; Hwang et al.

2014).

Griffith and Headley (1998) have attempted to characterize small projects and commented that small projects are typically of short durations, have limited documentation requirements and experience high uncertainty. Whereas, Dunston & Reed (2000) maintained that small projects are those which are repetitive, require uncomplicated construction process, and total investment requirement is less than $1 million USD. For instance, maintenance, renovations, remodelling and upgradation projects. Liang (2005) offers the most representative characterization of small projects where a) project costs is between $0.1 million to $5 million USD; b) project duration is no more than 14 months to complete; c) project work hours is up to 100,000 hours; d) project does not consume a significant percentage of firm resources. However, small projects are undertaken most often nationally (Hwang et al. 2014), but megaprojects are often of international scope involving multiple stakeholders from various industries and countries (Kardes et al. 2013).

Megaprojects or large projects are massive manufacturing or infrastructural initiatives (Kardes et al. 2013) that require substantial amount of coordinated capital, advanced technology, comprehensive planning and reporting requirements and strong political influence (Gellert & Lynch 2003). In general, megaprojects require many months to complete, are extremely expensive and require substantial irreversible resource and capital

requirements by the project contractors and various stakeholders often from multiple countries (Miller & Lessard 2001; Kardes et al. 2013).

Van Marrewijk et al. (2008) further maintained that these projects mostly undertaken by the sovereign governments and delivered by the highly sophisticated and specialized private contractors. Despite general agreement on the definition and categorization of the megaprojects (Kardes et al. 2013), megaprojects can be divided into four categories according to Gellert & Lynch (2003) such as infrastructure development projects (e.g., power plants, dams, ports, railroads, etc.); extraction projects (e.g., minerals, oil, gas, etc.); production or manufacturing (e.g., military defence equipment, chemical plants, production lines/parks, etc.); and, consumption (e.g., manmade tourist attractions, shopping malls, theme parks, etc.) On the other hand, Haas (2009) even sub-categorized megaprojects into four categories based on some project complexity dimensions such as size, time, cost, schedule/budget, political implications, and risk level and so on. The following table 5 illustrates a comparative view of different characteristics of international small and megaprojects.

Table 5. Different characteristics of international small and megaprojects. (Adapted from Liang 2005 and Haas 2009).

working hours Flexible Minor variations Inflexible Aggressive Requirements

implication None None Minor Major, impact

core mission

However, IPOs either small or large can be undertaken in various industries and fields such as physical infrastructure, telecommunications, networking and satellite navigations, large scale IT systems and computing, etc. (Gil & Beckman 2009). In particular, emerging markets are demonstrating increasing demands for infrastructure development projects in recent years.

(OECD 2007; Gil & Beckman 2009; Kardes et al. 2013; Chang et al. 2018). Infrastructure development projects provide substantial opportunities for emerging markets to develop appropriate support structures and delivery of services required to ensure economic growth (Gil & Beckman 2009). Moreover, these projects have the potential to positively change the social-technical systems of a country by supporting a wide range of production activities (Hughes 1987).

Gil & Beckman (2009) attempted to classify infrastructure development projects and grouped them into four categories as demonstrated in figure 4 below;

Figure 4. Typology of infrastructure development projects. (Adapted from Gil & Beckman 2009).

However, regardless of such potential profit and growth opportunity exist in this field, extant empirical evidence suggest a significant paucity of recent research that analyse the impact of political risk in international Infrastructural projects relative to the developing countries, in

Infrastructure development

projects

Transportation assets

(e.g., airports, roads, railways, and ports)

Utility networks (e.g., gas, water, and electricity)

Resource extraction facilities

(e.g., mines, offshore platforms, and pipelines)

Social assets (e.g., hospitals, prisons, and schools).

particular to the context of emerging markets (Gil & Beckman 2009; Kardes et al. 2013; Chang et al. 2018; Han et al. 2018).

Thus the primary objective of this study is to investigate the perception and management of political risks by DMNE when undertaking infrastructure development projects in EMs. As such, this study adopts the classification of infrastructure development projects and characteristics of highly complex project offered by Gil & Beckman (2009) and Liang (2005), Haas (2009) respectively as a scope of this research.