Portfolio Management for Construction Company during Covid-19 Using AHP Technique
In general, Covid-19 created many financial and non-financial damages to the economy and community. Level and severity of covid-19 as pandemic case varies over the region and due to different types of the projects. Covid-19 virus emerged as one of the most imperative risk management factors word-wide recently. Therefore, as part of portfolio management assessment, it is essential to evaluate severity of such risk on the project and program in portfolio management level to avoid any risky portfolio. Covid-19 appeared very effectively in South America, part of Europe and Middle East. Such pandemic infection affected the whole universe, due to lock down, interruption in supply chain management, health and safety requirements, transportations and commercial impacts. Therefore, this research proposes Analytical Hierarchy Process (AHP) to analyze and assess such pandemic case like Covid-19 and its impacts on the construction projects. The AHP technique uses four sub-criteria: Health and safety, commercial risk, completion risk and contractual risk to evaluate the project and program. The result will provide the decision makers with information which project has higher or lower risk in case of Covid-19 and pandemic scenario. Therefore, the decision makers can have most feasible solution based on effective weighted criteria for project selection within their portfolio to match with the organization’s strategies.
[1] "PORTFOLIO," Northwest Florida Daily News, p. F.3, 2007.
[2] G. Bilgin, G. Eken, B. Ozyurt, I. Dikmen, M. T. Birgonul, and B. Ozorhon, "Handling project dependencies in portfolio management," Procedia Computer Science, vol. 121, pp. 356-363, 2017, doi: 10.1016/j.procs.2017.11.048.
[3] P. E. Eriksson, "Exploration and exploitation in project-based organizations: Development and diffusion of knowledge at different organizational levels in construction companies," International Journal of Project Management, vol. 31, no. 3, p. 333, 2013.
[4] W. Heising, "The integration of ideation and project portfolio management - A key factor for sustainable success", Int. J. Proj. Manag., vol.30, pp. 582-595, 2012.
[5] C. Beringer, D. Jonas, and A. Kock, "Behavior of internal stakeholders in project portfolio management and its impact on success", Int. J. Proj. Manag., vol. 31, pp. 830-846, 2013.
[6] C.P. Killen, and R.A. Hunt, "Robust project portfolio management: capability evolution and maturity", Int. J. Manag. Projects Business, vol.6, pp. 131-151, 2013.
[7] Y. Petro, and P. Gardiner, "An investigation of the influence of organizational design on project portfolio success, effectiveness and business efficiency for project-based organizations", Int. J. Proj. Manag., vol. 33, pp. 1717-1729, 2015.
[8] N. Guo and S. W. Yu, "The Necessity of Project Portfolio Management in the Construction Industry of China Mainland," Applied Mechanics and Materials, vol. 357-360, p. 2238, 2013, doi: 10.4028/www.scientific.net/AMM.357-360.2238.
[9] M. Martinsuo, "Project portfolio management in practice and in context", Int. J. Proj. Manag., vol. 31, pp. 794-803, 2013.
[10] B.-G. Jadwiga and G. Jaroslaw, "Establishing the project portfolio management in the construction company," vol. 603, no. 5, 2019, doi: 10.1088/1757-899X/603/5/052014.
[11] R. Kangari and L. S. Riggs, "Portfolio Management in Construction," Construction Management and Economics, vol. 6, no. 2, p. 161, 1988.
[12] O. Kokshagina, P. Le Masson, B. Weil, and P. Cogez, "Portfolio Management in Double Unknown Situations: Technological Platforms and the Role of Cross-Application Managers," Creativity and Innovation Management, vol. 25, no. 2, pp. 270-291, 2016, doi: 10.1111/caim.12121.
[13] H. Terho, "A Measure for Companies' Customer Portfolio Management," Journal of Business to Business Marketing, vol. 16, no. 4, p. 374, 2009.
[14] Y. Wu, H. Zhang, and H. Xu, "A Three-Dimensional Project Portfolio Management Framework for Construction Companies," The Open Civil Engineering Journal, vol. 10, no. 1, pp. 433-447, 2016, doi: 10.2174/1874149501610010433.
[15] "Industry Focus on Risk Management; A critical element to success in new construction lending is managing risks in a changing environment," National Mortgage News, vol. 31, no. 18, p. 20, 2007.
[16] S. H. Cox, Y. Lin, R. Tian, and L. F. Zuluaga, "Mortality Portfolio Risk Management," Journal of Risk and Insurance, vol. 80, no. 4, pp. 853-890, 2013, doi: 10.1111/j.1539-6975.2012.01469.x.
[17] W. Eid Junior and S. C. Lee, "Portfolio construction and risk management: theory versus practice," RAUSP Management Journal, vol. 53, no. 3, pp. 345-365, 2018, doi: 10.1108/rausp-04-2018-009.
[18] S. H. Han, J. E. Diekmann, Y. Lee, and J. H. Ock, "Multicriteria Financial Portfolio Risk Management for International Projects," Journal of Construction Engineering and Management, vol. 130, no. 3, pp. 346-356, 2004, doi: 10.1061/(ASCE)0733-9364(2004)130:3(346).
[19] S. H. Han, Y. Lee, and J. H. Ock, "Corporate risk management for global contractors," KSCE Journal of Civil Engineering, vol. 6, no. 2, pp. 77-88, 2002, doi: 10.1007/BF02829127.
[20] B.-G. Jadwiga and G. Jaroslaw, "Establishing the project portfolio management in the construction company," vol. 603, no. 5, 2019, doi: 10.1088/1757-899X/603/5/052014.
[21] R. J. Kauffman and R. Sougstad, "Risk Management of Contract Portfolios in IT Services: The Profit-at-Risk Approach," Journal of Management Information Systems, vol. 25, no. 1, pp. 17-48, 2008.
[22] S. C. Lee and W. Eid, "Portfolio construction and risk management: theory versus practice," RAUSP Management Journal, vol. 53, no. 3, pp. 345-365, 2018, doi: 10.1108/RAUSP-04-2018-009.
[23] "COVID-19," The Ottawa Citizen, p. A.1, 2020.
[24] G. Ientile, "COVID-19," Drug Topics, vol. 164, no. 4, pp. 10-11, 2020.
[25] A. Shingler-Nace, "COVID-19," Nurse Leader, vol. 18, no. 3, pp. 202-203, 2020, doi: 10.1016/j.mnl.2020.03.017.
[26] H. Markowitz, Portfolio selection: efficient diversification of investments (Cowles foundation for research in economics. Monograph; 16). New Haven: Yale University Press (in English), 1959.
[27] Farid and J.-L. Prigent, "Constant Proportion Portfolio Insurance Effectiveness under Transaction Costs," International Journal of Business, vol. 15, no. 3, pp. 243-253, 2010.
[28] F. Mkaouar and J.-L. Prigent, "Constant Proportion Portfolio Insurance Effectiveness under Transaction Costs," International Journal of Business, vol. 15, no. 3, pp. 243-253, 2010.
[29] Rom, B.M. and Ferguson, K.W. (1994), “Post-modern portfolio theory comes of age”, The Journal of Investing, Vol. 3 No. 3, pp. 11-17.
[30] Roman, D. and Mitra, G. (2009), “Portfolio selection models: a review and new directions”, Wilmott Journal, Vol. 1 No. 2, pp. 69-85.
[31] Bawa, V.S. (1975), “Optimal rules for ordering uncertain prospects”, Journal of Financial Economics, Vol. 2 No. 1, pp. 95-121.
[32] Fishburn, P.C. (1977), “Mean-risk analysis with risk associated with below-target returns”, American Economic Review, Vol. 67 No. 2, pp. 116-126.
[33] Dowd, K. (2000), “Adjusting for risk: an improved Sharpe ratio”, International Review of Economics and Finance, Vol. 9 No. 3, pp. 209-222.
[34] Rockafeller, R.T. and Uryasev, S. (2000), “Optimization of conditional value-at-risk”, The Journal of Risk, Vol. 2 No. 3, pp. 21-41.
[35] Mailles A, Blanckaert K, Chaud P, van der Werf S, Lina B, Caro V, et al. First cases of Middle East respiratory syndrome Coronavirus (MERS-CoV) infections in France, investigations and implications for the prevention of human-to-human transmission, Euro Surveill. 2013;18:20502.
[36] Gwaltney JM Jr. Virology and immunology of the common cold. Rhinology. 1985;23:265.
[37] Woo PC, Lau SK, Huang Y, Yuen KY. Coronavirus diversity, phylogeny and interspecies jumping. Exp Biol Med (Maywood). 2009;234:1117–27.
[38] Hemida MG, Chu DKW, Poon LL, Perera RA, Alhammadi MA, Ng H-Y, et al. MERS coronavirus in dromedary camel herd, Saudi Arabia. Emerg Infect Dis. 2014;20:1231–4.
[39] Nowotny N, Kolodziejek J. Middle East respiratory syndrome coronavirus (MERS-CoV) in dromedary camels, Oman, 2013. Euro Surveill. 2014;19:20781.
[40] Bin Saeed AA, Abedi GR, Alzahrani AG, Salameh I, Abdirizak F, Alhakeem R, et al. Surveillance and testing for Middle East respiratory syndrome Coronavirus, Saudi Arabia, April 2015–February 2016. Emerg Infect Dis. 2017;23(4):682–5. doi:10.3201/eid2304.161793.
[41] Al-Qahtani AA, Lyroni K, Aznaourova M, Tseliou M, Al-Anazi MR, Al-Ahdal MN, et al. Middle East respiratory syndrome corona virus spike glycoprotein suppresses macrophage responses via DPP4-mediated induction of IRAK-M and PPARγ. Oncotarget. 2017;8(6):9053–66. doi:10.18632/oncotarget.14754.
[1] "PORTFOLIO," Northwest Florida Daily News, p. F.3, 2007.
[2] G. Bilgin, G. Eken, B. Ozyurt, I. Dikmen, M. T. Birgonul, and B. Ozorhon, "Handling project dependencies in portfolio management," Procedia Computer Science, vol. 121, pp. 356-363, 2017, doi: 10.1016/j.procs.2017.11.048.
[3] P. E. Eriksson, "Exploration and exploitation in project-based organizations: Development and diffusion of knowledge at different organizational levels in construction companies," International Journal of Project Management, vol. 31, no. 3, p. 333, 2013.
[4] W. Heising, "The integration of ideation and project portfolio management - A key factor for sustainable success", Int. J. Proj. Manag., vol.30, pp. 582-595, 2012.
[5] C. Beringer, D. Jonas, and A. Kock, "Behavior of internal stakeholders in project portfolio management and its impact on success", Int. J. Proj. Manag., vol. 31, pp. 830-846, 2013.
[6] C.P. Killen, and R.A. Hunt, "Robust project portfolio management: capability evolution and maturity", Int. J. Manag. Projects Business, vol.6, pp. 131-151, 2013.
[7] Y. Petro, and P. Gardiner, "An investigation of the influence of organizational design on project portfolio success, effectiveness and business efficiency for project-based organizations", Int. J. Proj. Manag., vol. 33, pp. 1717-1729, 2015.
[8] N. Guo and S. W. Yu, "The Necessity of Project Portfolio Management in the Construction Industry of China Mainland," Applied Mechanics and Materials, vol. 357-360, p. 2238, 2013, doi: 10.4028/www.scientific.net/AMM.357-360.2238.
[9] M. Martinsuo, "Project portfolio management in practice and in context", Int. J. Proj. Manag., vol. 31, pp. 794-803, 2013.
[10] B.-G. Jadwiga and G. Jaroslaw, "Establishing the project portfolio management in the construction company," vol. 603, no. 5, 2019, doi: 10.1088/1757-899X/603/5/052014.
[11] R. Kangari and L. S. Riggs, "Portfolio Management in Construction," Construction Management and Economics, vol. 6, no. 2, p. 161, 1988.
[12] O. Kokshagina, P. Le Masson, B. Weil, and P. Cogez, "Portfolio Management in Double Unknown Situations: Technological Platforms and the Role of Cross-Application Managers," Creativity and Innovation Management, vol. 25, no. 2, pp. 270-291, 2016, doi: 10.1111/caim.12121.
[13] H. Terho, "A Measure for Companies' Customer Portfolio Management," Journal of Business to Business Marketing, vol. 16, no. 4, p. 374, 2009.
[14] Y. Wu, H. Zhang, and H. Xu, "A Three-Dimensional Project Portfolio Management Framework for Construction Companies," The Open Civil Engineering Journal, vol. 10, no. 1, pp. 433-447, 2016, doi: 10.2174/1874149501610010433.
[15] "Industry Focus on Risk Management; A critical element to success in new construction lending is managing risks in a changing environment," National Mortgage News, vol. 31, no. 18, p. 20, 2007.
[16] S. H. Cox, Y. Lin, R. Tian, and L. F. Zuluaga, "Mortality Portfolio Risk Management," Journal of Risk and Insurance, vol. 80, no. 4, pp. 853-890, 2013, doi: 10.1111/j.1539-6975.2012.01469.x.
[17] W. Eid Junior and S. C. Lee, "Portfolio construction and risk management: theory versus practice," RAUSP Management Journal, vol. 53, no. 3, pp. 345-365, 2018, doi: 10.1108/rausp-04-2018-009.
[18] S. H. Han, J. E. Diekmann, Y. Lee, and J. H. Ock, "Multicriteria Financial Portfolio Risk Management for International Projects," Journal of Construction Engineering and Management, vol. 130, no. 3, pp. 346-356, 2004, doi: 10.1061/(ASCE)0733-9364(2004)130:3(346).
[19] S. H. Han, Y. Lee, and J. H. Ock, "Corporate risk management for global contractors," KSCE Journal of Civil Engineering, vol. 6, no. 2, pp. 77-88, 2002, doi: 10.1007/BF02829127.
[20] B.-G. Jadwiga and G. Jaroslaw, "Establishing the project portfolio management in the construction company," vol. 603, no. 5, 2019, doi: 10.1088/1757-899X/603/5/052014.
[21] R. J. Kauffman and R. Sougstad, "Risk Management of Contract Portfolios in IT Services: The Profit-at-Risk Approach," Journal of Management Information Systems, vol. 25, no. 1, pp. 17-48, 2008.
[22] S. C. Lee and W. Eid, "Portfolio construction and risk management: theory versus practice," RAUSP Management Journal, vol. 53, no. 3, pp. 345-365, 2018, doi: 10.1108/RAUSP-04-2018-009.
[23] "COVID-19," The Ottawa Citizen, p. A.1, 2020.
[24] G. Ientile, "COVID-19," Drug Topics, vol. 164, no. 4, pp. 10-11, 2020.
[25] A. Shingler-Nace, "COVID-19," Nurse Leader, vol. 18, no. 3, pp. 202-203, 2020, doi: 10.1016/j.mnl.2020.03.017.
[26] H. Markowitz, Portfolio selection: efficient diversification of investments (Cowles foundation for research in economics. Monograph; 16). New Haven: Yale University Press (in English), 1959.
[27] Farid and J.-L. Prigent, "Constant Proportion Portfolio Insurance Effectiveness under Transaction Costs," International Journal of Business, vol. 15, no. 3, pp. 243-253, 2010.
[28] F. Mkaouar and J.-L. Prigent, "Constant Proportion Portfolio Insurance Effectiveness under Transaction Costs," International Journal of Business, vol. 15, no. 3, pp. 243-253, 2010.
[29] Rom, B.M. and Ferguson, K.W. (1994), “Post-modern portfolio theory comes of age”, The Journal of Investing, Vol. 3 No. 3, pp. 11-17.
[30] Roman, D. and Mitra, G. (2009), “Portfolio selection models: a review and new directions”, Wilmott Journal, Vol. 1 No. 2, pp. 69-85.
[31] Bawa, V.S. (1975), “Optimal rules for ordering uncertain prospects”, Journal of Financial Economics, Vol. 2 No. 1, pp. 95-121.
[32] Fishburn, P.C. (1977), “Mean-risk analysis with risk associated with below-target returns”, American Economic Review, Vol. 67 No. 2, pp. 116-126.
[33] Dowd, K. (2000), “Adjusting for risk: an improved Sharpe ratio”, International Review of Economics and Finance, Vol. 9 No. 3, pp. 209-222.
[34] Rockafeller, R.T. and Uryasev, S. (2000), “Optimization of conditional value-at-risk”, The Journal of Risk, Vol. 2 No. 3, pp. 21-41.
[35] Mailles A, Blanckaert K, Chaud P, van der Werf S, Lina B, Caro V, et al. First cases of Middle East respiratory syndrome Coronavirus (MERS-CoV) infections in France, investigations and implications for the prevention of human-to-human transmission, Euro Surveill. 2013;18:20502.
[36] Gwaltney JM Jr. Virology and immunology of the common cold. Rhinology. 1985;23:265.
[37] Woo PC, Lau SK, Huang Y, Yuen KY. Coronavirus diversity, phylogeny and interspecies jumping. Exp Biol Med (Maywood). 2009;234:1117–27.
[38] Hemida MG, Chu DKW, Poon LL, Perera RA, Alhammadi MA, Ng H-Y, et al. MERS coronavirus in dromedary camel herd, Saudi Arabia. Emerg Infect Dis. 2014;20:1231–4.
[39] Nowotny N, Kolodziejek J. Middle East respiratory syndrome coronavirus (MERS-CoV) in dromedary camels, Oman, 2013. Euro Surveill. 2014;19:20781.
[40] Bin Saeed AA, Abedi GR, Alzahrani AG, Salameh I, Abdirizak F, Alhakeem R, et al. Surveillance and testing for Middle East respiratory syndrome Coronavirus, Saudi Arabia, April 2015–February 2016. Emerg Infect Dis. 2017;23(4):682–5. doi:10.3201/eid2304.161793.
[41] Al-Qahtani AA, Lyroni K, Aznaourova M, Tseliou M, Al-Anazi MR, Al-Ahdal MN, et al. Middle East respiratory syndrome corona virus spike glycoprotein suppresses macrophage responses via DPP4-mediated induction of IRAK-M and PPARγ. Oncotarget. 2017;8(6):9053–66. doi:10.18632/oncotarget.14754.
@article{"International Journal of Business, Human and Social Sciences:79960", author = "Sareh Rajabi and Salwa Bheiry", title = "Portfolio Management for Construction Company during Covid-19 Using AHP Technique", abstract = "In general, Covid-19 created many financial and non-financial damages to the economy and community. Level and severity of covid-19 as pandemic case varies over the region and due to different types of the projects. Covid-19 virus emerged as one of the most imperative risk management factors word-wide recently. Therefore, as part of portfolio management assessment, it is essential to evaluate severity of such risk on the project and program in portfolio management level to avoid any risky portfolio. Covid-19 appeared very effectively in South America, part of Europe and Middle East. Such pandemic infection affected the whole universe, due to lock down, interruption in supply chain management, health and safety requirements, transportations and commercial impacts. Therefore, this research proposes Analytical Hierarchy Process (AHP) to analyze and assess such pandemic case like Covid-19 and its impacts on the construction projects. The AHP technique uses four sub-criteria: Health and safety, commercial risk, completion risk and contractual risk to evaluate the project and program. The result will provide the decision makers with information which project has higher or lower risk in case of Covid-19 and pandemic scenario. Therefore, the decision makers can have most feasible solution based on effective weighted criteria for project selection within their portfolio to match with the organization’s strategies.
", keywords = "Portfolio management, risk management, COVID-19, analytical hierarchy process technique. ", volume = "14", number = "11", pages = "1111-11", }
