A fuzzy ahp framework for evaluating stakeholders performance in construction projects

VIETNAM NATIONAL UNIVERSITY HO CHI MINH CITY HO CHI MINH CITY UNIVERSITY OF TECHNOLOGY NGUYEN THANH MINH A FUZZY - AHP FRAMEWORK FOR EVALUATING STAKEHOLDERS PERFORMANCE IN CONSTRUCTIO

VIETNAM NATIONAL UNIVERSITY HO CHI MINH CITY

HO CHI MINH CITY UNIVERSITY OF TECHNOLOGY

NGUYEN THANH MINH

A FUZZY - AHP FRAMEWORK FOR EVALUATING STAKEHOLDERS PERFORMANCE

IN CONSTRUCTION PROJECTS

Major: Construction Management Major code: 8580302

MASTER’S THESIS

HO CHI MINH CITY UNIVERSITY OF TECHNOLOGY - VNU - HCM

Instructor 1: Dr Nguyen Thanh Viet

Instructor 2: Dr Do Tien Sy

Examiner 1: Dr Nguyen Anh Thu

Examiner 2: Dr Pham Hai Chien

Master’s thesis is defended at HCM city University of Technology, VNU- HCM City

on August 22nd, 2022

The board of the Master’s Thesis Defense Council includes:

1 Assoc Prof Dr Luong Duc Long - Chairman

2 Assoc Prof Dr Pham Vu Hong Son - Secretary

Verification of the Chairman of the Master’s Thesis Defense Council and the Dean of faculty of Civil Engineering after the thesis being corrected (If any)

CIVIL ENGINEERING

VIETNAM NATIONAL

UNIVERSITY HO CHI MINH CITY

HO CHI MINH CITY

SOCIALIST REPUBLIC OF VIETNAM Independence ậ Freedom ậ Happines

UNIVERSITY OF TECHNOLOGY

THE TASK SHEET OF MASTER’S THESIS

II TASKS AND CONTENTS

- Determine factors that affect Stakeholders Performance in construction project

- Apply SEM Model to estimate the relationships of constructs affecting Stakeholders Performance and define a model to explain the entire set of relationships

- Using the AHP approach, compute the weights of the groups of factor and evaluate their impact on Stakeholder Performance

- Propose a thoroughly and objectively framework for evaluating Stakeholders Performance in construction project

III TASKS STARTING DATE: 01/03/2022

IV TASKS ENDING DATE: 30/06/2022

V INSTRUCTOR: Dr Nguyen Thanh Viet and Dr Do Tien Sy

Ho Chi Minh City, 29th August 2022

INSTRUCTOR 1

(Full name and signature)

Dr Nguyen Thanh Viet

INSTRUCTOR 2 (Full name and signature)

(Full name and signature)

Assoc Prof Le Anh Tuan

I would like to express my deep gratitude to Dr Nguyen Thanh Viet and Dr Do Tien

Sy, who gave me their maximal support and guidance throughout the process of completing this thesis The teachers have created all favorable conditions to support me

in the whole time

In the process of doing this thesis, I did not stop trying and trying to complete it well However, due to the limitation of knowledge and limitation of time, negligence and omission in the thesis cannot be avoided I am look forward to receiving contributions from teachers and friends

Sincerely,

Ho Chi Minh City, August 29th 2022

Nguyen Thanh Minh

ABSTRACT

Vietnam is a country with extremely rapid urbanization The urban system develops very quickly with many new urban areas being formed, and the infrastructure is continuously upgraded Therefore, in recent years, the construction industry is one of the most important spearhead industries for the country's economy However, the project implementation efficiency still has many problems, slow progress, negative in construction projects, inefficient use of capital are always topics that appear frequently

in the news and newspaper The reason for this comes from the fact that the parties involved have not performed their responsibilities job well enough Therefore, it is necessary to study which factors affecting the project performance of the stakeholders and propose an evaluation framework to monitor the Stakeholders Performance throughout project life-cycle

In this study, the main survey subjects and areas are located in Ho Chi Minh City Research to collect data to assess the causes affecting the working performance of parties in construction projects in Vietnam Through survey questionnaires and run statistical analysis to identify and rank these factors Then, the Exploratory Factor Analysis (EFA) method is applied to eliminate redundant factors and group the main groups of factors that affect the working performance between parties in a construction project The groups are named as “Working Environment”, “Project Management Organization Expertise”, “Contractor’s Construction Capacity”, “Client’s Comprehension”, “Effectiveness of Consultant/Designer”, “Proficient Supplier” The study also proposes to build an evaluation framework to monitor the performance of the parties in order to make timely recommendations and adjustments if the project implementation efficiency of the stakeholders is not good

Structural Equation Modeling (SEM) model is also applied to analyze the correlation between groups of factors In particular, the group of “Proficient Supplier” has the strongest impact on the performance of stakeholders This indicates that, in order for the work of related stakeholders not to be negatively affected, the supplier needs to supply enough and timely the necessary amount of materials for the project

TÓM T T

Vi t Nam là m t qu c gia có t c đ đô th hóa di n ra c c k m nh m H th ng đô th phát tri n r t nhanh chóng v i nhi u khu đô th m i đ c hình thành, h t ng c s

đ c nâng c p liên t c Chính vì v y trong nh ng n m tr l i đây, ngành xây d ng là

m t trong nh ng ngành m i nh n quan tr ng cho kinh t c a đ t n c D u v y hi u

qu th c hi n d án nhìn chung v n còn nhi u v n đ , ch m ti n đ , tiêu c c trong các

d án xây d ng, s d ng v n không hi u qu v n luôn là nh ng đ tài xu t hi n th ng xuyên trên báo chí và các b n tin Lí do c a vi c này đ n t vi c các bên liên quan đã

th c hi n trách nhi m công vi c c a mình ch a đ t t Do đó, vi c nghiên c u có nguyên nhân nào tác đ ng đ n hi u qu th c hi n d án c a các bên liên quan và t o b ng đánh giá đ theo dõi hi u qu th c hi n d án c a các bên là r t c n thi t

Trong bài nghiên c u này, đ i t ng và khu v c kh o sát chính n m Thành ph H Chí Minh Nghiên c u thu th p d li u đ đánh giá các nguyên nhân gây nh h ng

đ n hi u su t làm vi c c a các bên trong d án xây d ng t i Vi t Nam Thông qua b ng câu h i kh o sát và ch y phân tích s li u th ng kê đ xác đ nh và x p h ng các nhân

t này Sau đó ng d ng ph ng pháp Phân tích y u t khám phá (EFA) đ lo i b các nhân t d th a và nhóm l i các nhóm nhân t chính gây nh h ng t i hi u su t làm

vi c gi a các bên trong m t d án xây d ng Các nhóm đ c k tên nh “Môi tr ng làm vi c”, “Chuyên môn t ch c c a ban Qu n lý d án”, “N ng l c thi công c a Nhà

th u”, “S hi u bi t c a Ch u T ”, “N ng l c T v n-Thi t k ”, “S chuyên nghi p

c a Nhà Cung c p” Bài nghiên c u c ng đ xu t xây d ng khung đánh giá đ theo dõi

hi u su t làm vi c c a các bên nh m có nh ng đ xu t và đi u ch nh k p th i n u hi u

qu th c hi n d án c a các bên liên quan đang ch a t t

Mô hình tuy n tính SEM c ng đ c ng d ng đ phân tích m i t ng quan gi a các nhóm nhân t Trong đó, nhóm “các nhân t liên quan đ n Nhà cung c p” có tác đ ng

m nh nh t t i hi u qu th c hi n c a các bên liên quan Bài lu n v n đ xu t m t s

g i ý cho nhóm nhân t này, nh m đ m b o ngu n hàng luôn đ c cung ng k p th i

và đ y đ , tránh gây nh h ng đ n ti n đ d án và các chi phí phát sinh c ng nh đình tr công vi c c a các bên liên quan khác

AUTHOR’S COMMITMENT

I take full responsibility for my research with all data collected, research results presented in this thesis, I guarantee that they are completely honest and have never been published in any other form or in any other research

Ho Chi Minh City, August 29th 2022

Nguyen Thanh Minh

Table of Contents

THE TASK SHEET OF MASTER’S THESIS i

ACKNOWLEDGEMENT iii

ABSTRACT iv

TÓM T T v

AUTHOR’S COMMITMENT vi

LIST OF FIGURES xi

LIST OF TABLES xii

LIST OF APPENDIX xiv

CHAPTER 1: INTRODUCTION 1

1.1 General Introduction 1

1.2 Problem Statement 2

1.3 Objectives of the Topic 4

1.4 Research Scope 5

CHAPTER 2: LITERATURE REVIEW 6

2.1 Definitions and Concepts 6

2.1.1 Definitions about Stakeholders in Construction Project 6

2.1.2 Definitions about Stakeholders Performance 7

2.1.3 Definitions about Evaluating Framework 8

2.2 Related Studies 9

2.2.1 Studies about Factors that affect Stakeholders Performance 9

2.2.2 Studies about Stakeholder Performance Criteria 10

2.3 Theoretical related to the Research 11

2.3.1 Fuzzy Set Theory 11

2.3.2 Analytical Hierarchy Process – AHP Method 13

2.3.3 Fuzzy AHP Method 14

2.3.4 SEM approach 14

CHAPTER 3: RESEARCH METHODOLOGY 16

3.1 Research Process 16

3.2 Theories and Models 17

3.2.1 Principal Component Analysis (PCA) 17

3.2.2 Analytical Hierarchy Process (AHP) Method 18

3.2.3 Research Model 21

3.3 Data Collection Phase 1: Determine Factors that influence Stakeholders Performance 22

3.3.1 Determine Factors that influence Stakeholders Performance and Stakeholders Performance Criteria 23

3.3.2 Create Questionnaire Survey 34

3.3.3 Data Collection Method 34

3.4 Data Collection Phase 2: Construct Pairwise Comparison Matrices 35

3.4.1 Create Pairwise Comparison Questionnaire Survey 35

3.4.2 Expert Selection 35

3.4.3 Data Collection Method 36

CHAPTER 4: FACTORS INFLUENCE STAKEHOLDERS PERFORMANCE 37

4.1 Descriptive Analysis and Rank Factors 37

4.1.1 Data Selection 37

4.1.2 Descriptive Statistics 38

4.1.3 Rank Factors 42

4.2 Factor Analysis 44

4.2.1 Cronbach’s Alpha 44

4.3 Result Discussion 60

4.3.1 Group 1 – Working Environment and Parties Coordination 62

4.3.2 Group 2 – Project Management Skills and Expertise 63

4.3.3 Group 3 – Contractor Capability and Experience 64

4.3.4 Group 4 – Client’s Comprehension 64

4.3.5 Group 5 – Professional Designer/Consultant 65

4.3.6 Group 6 – Proficient Supplier 65

CHAPTER 5: STAKEHOLDERS PERFORMANCE EVALUATION FRAMEWORK USING AHP METHOD 67

5.1 Apply Fuzzy AHP 67

5.1.1 Construct Fuzzy Evaluation Matrices 67

5.1.2 Synthesize Expert Opinions 69

5.1.3 Defuzzification 70

5.1.4 Check consistency ratio and calculate weight criteria 70

5.2 Sensitivity Analysis 73

5.3 A Framework for Evaluating Stakeholders Performance 76

5.4 Case Study 80

CHAPTER 6: RELATIONSHIP MODEL BETWEEN FACTORS AND STAKEHOLDERS PERFORMANCE 84

6.1 MEASUREMENT MODEL 84

6.1.1 Quality of Variable 87

6.1.2 Convergent Validity and Discriminant Validity 90

6.1.3 Relationship between Group factors 92

6.2 SEM Model 93

6.3 Model Evaluation 97

6.3.1 Effect of Working Environment and Parties Coordination to Stakeholders

Performance 97

6.3.2 Effect of Project Management Skills and Expertise to Stakeholders Performance 98

6.3.3 Effect of Contractor Capability and Experience to Stakeholders Performance 99 6.3.4 Effect of Client’s Comprehension to Stakeholders Performance 99

6.3.5 Effect of Professional Consultant/Designer to Stakeholders Performance 100

6.3.6 Effect of Proficient Supplier to Stakeholders Performance 101

CHAPTER 7: CONCLUSION AND DISCUSSION 102

7.1 Conclusion 102

7.2 Contribution 103

7.3 Limitations of the Study 103

7.4 Recommendation to the following Study 104

REFERENCES 105

APPENDIX 110

PROFILE 169

List of Figures

Figure 2-1: Stakeholders in Construction Project 7

Figure 2-2: Crisp Set and Fuzzy Set 12

Figure 2-3: Triangular fuzzy number 13

Figure 3-1: Research Process of the Thesis 16

Figure 3-2: Fuzzy AHP method process (Tesfamariam & Sadiq, 2006) 20

Figure 3-3: Data Collection Process 22

Figure 4-1: Group of respondents according to work experience 38

Figure 4-2: Group of respondents according to work unit 39

Figure 4-3: Group of respondents according to work position 40

Figure 4-4: Group of respondents according to project joined 41

Figure 4-5: Group of respondents according to project scale 42

Figure 4-6: Hierarchical structure derived from Factor Analysis 61

Figure 5-1: Weight Sub-Criteria 72

Figure 5-2: Weight between Criteria 72

Figure 5-3: Weights of factors for a optimistic Decision maker ( = 1) 74

Figure 5-4: Weights of factors for a moderate Decision maker ( = 0.5) 74

Figure 5-5: Weights of factors for a pessimistic Decision maker ( = 0) 75

Figure 6-1: Model of Confirmatory Factor 85

Figure 6-2: Model CFA Result Standardized estimates 92

Figure 6-3: Theoretical model of the influence of factors on Stakeholders Performance 94

Figure 6-4: Results of theoretical model 95

List of Tables

Table 1.1 – Construction Industry Proportion in GDP of Vietnam 1

Table 2.1 – Stakeholders Performance Characteristics 8

Table 2.2 – Common fuzzy arithmetical operations using two TFNs 13

Table 3.1 - Level of Acceptance of the KMO (Field, 2000) 18

Table 3.2 - AHP Pairwise comparison table by Saaty (1980) 19

Table 3.3 – Factors affecting Stakeholders Performance 24

Table 3.4 – Stakeholders Performance Criteria 32

Table 4.1 – Summary Experience of Respondents 38

Table 4.2 – Summary Work Unit of Respondents 38

Table 4.3 – Summary Work Position of Respondents 39

Table 4.4 – Summary Project Joined of Respondents 40

Table 4.5 – Summary Project Joined of Respondents 41

Table 4.6 - Rank Mean of Factors 42

Table 4.7 – Group Working Environment Cronbach’s Alpha in the first run 45

Table 4.8 - Group Working Environment Cronbach’s Alpha in the second run 46

Table 4.9 - Group Client/Owner Cronbach’s Alpha 47

Table 4.10 - Group Contractor Cronbach’s Alpha 48

Table 4.11 - Group Supplier Cronbach’s Alpha 49

Table 4.12 - Group Designer/Consultant Cronbach’s Alpha 50

Table 4.13 - Group Project Management Cronbach’s Alpha 50

Table 4.14 - KMO and Bartlett's Test in the first run 53

Table 4.15 - Total Variance Explained in the first run 53

Table 4.16 - Rotated Component Matrix in the first run 54

Table 4.17 - KMO and Bartlett's Test in the second run 55

Table 4.18 - Total Variance Explained in the second run 56

Table 4.19 - Rotated Component Matrix in the second run 57

Table 4.20: Name factor results 59

Table 5.1 – Fuzzy evaluation matrix S 67

Table 5.2 – Fuzzy evaluation matrix S1 67

Table 5.4 - Fuzzy evaluation matrix S3 68

Table 5.5 - Fuzzy evaluation matrix S4 68

Table 5.6 - Fuzzy evaluation matrix S5 69

Table 5.7 - Fuzzy evaluation matrix S6 69

Table 5.8 – Consistency ratio calculation results 70

Table 5.9 – Weight calculation results 71

Table 5.10 – Framework for Evaluating Stakeholders Performance 77

Table 5.11 – Results of Contractor Performance in a Project 81

Table 5.12 – Results of Project Management Team Performance in a Project 82

Table 6.1 – Regression Weights (CFA) 87

Table 6.2 - Standardized Regression Weights (CFA) 89

Table 6.3: Evaluate Convergent and Discriminant 91

Table 6.4 - Regression Weights (SEM) 96

Table 6.5 - Standardized Regression Weights (SEM) 96

Table 6.6 - Squared Multiple Correlations (SEM) 97

List of Appendix

Appendix 1: Questionnaire Survey 110

Appendix 2: Pairwise matrices comparison questionnaire 116

Appendix 3: Expert Information 134

Appendix 4: Fuzzy Expert assessment for matrices S 135

Appendix 5: Fuzzy Expert assessment for matrices S1 139

Appendix 6: Fuzzy Expert assessment for matrices S2 151

Appendix 7: Fuzzy Expert assessment for matrices S3 156

Appendix 8: Fuzzy Expert assessment for matrices S4 160

Appendix 9: Fuzzy Expert assessment for matrices S5 162

Appendix 10: Fuzzy Expert assessment for matrices S6 163

Appendix 11: Fuzzy Matrices S 164

Appendix 12: Interval Matrices S1 164

Appendix 13: Interval Matrices S2 165

Appendix 14: Interval Matrices S3 165

Appendix 15: Interval Matrices S4 165

Appendix 16: Interval Matrices S5 166

Appendix 17: Interval Matrices S6 166

Appendix 18: Defuzzification Matrices S 166

Appendix 19: Defuzzification Matrices S1 166

Appendix 20: Defuzzification Matrices S2 167

Appendix 21: Defuzzification Matrices S3 167

Appendix 22: Defuzzification Matrices S4 167

Appendix 23: Defuzzification Matrices S5 167

Appendix 24: Defuzzification Matrices S6 168

In a nation that is still pushing economic growth, such as Vietnam, the construction sector is contributing a substantial amount to this rising economy The statistics in the table below show the Vietnam's economic size, as measured by the gross domestic product index, is growing at a rate of 6% per year (despite year 2019 and 2020 are greatly affected by the covid-19 pandemic, the data is not influenced by it as well) Furthermore, the construction sector has traditionally accounted for a large share of overall GDP and has been growing steadily, demonstrating that the government has a strong interest in the industry The Vietnam construction industry is Asia-Pacific’s best performing, according to a GlobalData report

Table 1.1 – Construction Industry Proportion in GDP of Vietnam

Construction Industry

(Data from www.gso.gov.vn)

Vietnam's young population and high rate of urbanization are two main forces behind construction demand, with a focus on housing, factories, offices and urban infrastructure The young population is both an abundant human resource and, in the

long run, encourages the trend of construction demand Vietnam has a population of roughly 97.4 million people The population is in the golden age, with an average age

of 33.3 years (danso.org) and around 50.7 million individuals of working age (gso.gov.vn)

Urbanization trends increase demand for housing, commercial, public buildings and urban infrastructure Up to now, only one third of Vietnam's population lives in urban areas, which is quite low compared to other countries in the region This indicates the large development potential of Vietnamese cities At the same time, at the end of the golden population period, construction demand will shift from apartments, schools, factories, and offices to medical facilities to serve the aging population

The above figures and data show that the construction industry is on a strong development momentum and has very diverse outputs, easily attracting investment from domestic and foreign enterprises

However, in Vietnam, the effectiveness of a construction project is a regular annual concern The loss of resources is a topic that is regularly reported everyday in the newspapers, televisions Some examples, such as, The Thai Nguyen Steel Plant (losses

3843 billion VND), Metro 1 Railway (adjusted total investment from 17000 billion VND to 47000 billion VND)

In order to increase the efficiency of construction projects, the parties involved must constantly innovate and improve themselves, the construction must ensure progress, the quality must be good and the cost must be as committed to the investor To do that, a performance review is a must for any project The evaluation framework will help in determining the efficacy of each project's work and will serve as a database for systematically evaluating contractors and investors in future projects It should be a required part before a project starts

Project Management Institute (2001) defines the stakeholders as: “individuals and organizations who are actively involved in the project, or whose interests may be positively or negatively affected as a result of project execution or successful project

performance significantly contributed to construction projects cost overruns which resulted into project failure In line with the findings, Rajeev and Kothai (2014) mentioned that, in construction projects where the interactions and interrelationships among stakeholders were not strong, it was observed that projects were not executed within the budgeted cost whereas in situation where interrelationships and interactions between stakeholders were strong, projects where implemented within their initially budgeted cost Kivitis (2013) stating that effective stakeholder performance benefits project performance by eliminating conflicts and reducing costs through increased stakeholder participation in projects decision making

In a developing country that is growing so quickly that infrastructure has not kept up, such as Vietnam, monitoring the efficiency of construction projects is extremely important Throughout the years, a waste of construction resources that has often appeared in newspapers and media has put a lot of pressure on project managers and investors In order to avoid that, all causes affecting Stakeholders Performance in construction projects need to be identified and clearly understood Acknowledge what are stakeholders, persons who impact and were directly impacted by the project, as well

as causes affect efficiency of stakeholders, will be the first step to propose improvement plans to increase Stakeholder Performance It helps produce construction sustainability and improved performance of construction project and that eventually leads to develop professional construction industry

Hence, the aim of the study was to evaluate the impact of factors on Stakeholders Performance in construction projects Previous studies have not focused much on assessing stakeholder performance in construction projects, but mainly on evaluating project performance based on time and cost, or based on the investor's perspective, contractor’s perspective… However, those assessment is inadequate because besides time and cost, there are many other factors that affect the performance of the project, especially those related to people (this is the topic that thesis will mention) Moreover, most of the current assessments are still subjective assessments and in an environments with a lot of uncertainty and decision making based on many factors such as the construction industry, the thesis will apply Fuzzy AHP method with triangular number

to give an objective evaluation framework in order to evaluate stakeholders performance in construction projects

Durdyev (2017) reported that besides poor project management skills, poor planning and poor resource allocation, inadequate involvement of key stakeholders namely, Contractors, Consultants and Clients was noted to be the main contributor of increased cost overruns in construction projects In addition, ineffective stakeholder engagement contributed to problems such as inaccurate drawings and planning (Durdyev, 2017) Mambwe et al (2020) and Aigbavboa et al (2014) also state that ineffective scheduling

of projects was attributed to poor stakeholder involvement Therefore, having a performance evaluation framework will help stakeholders continuously improve themselves throughout the project phases, thereby helping the project go on schedule, without exceeding the costs and benefits of the parties will not be lessened

The SEM model will also be applied to demonstrate the relationship between the factors affecting Stakeholders Performance The model will help to discover which construct has the most affect on efficiency of stakeholders and measure how these construct related to each others It supports the decision maker to manage the project more effectively by providing solutions timely and righty to improve the work performance

of the parties involved throughout the project life cycle

1.3 Objectives of the Topic

 Determine factors that affect Stakeholders Performance in construction projects

 Identify criteria which evaluate Stakeholders Performance

 Using the AHP approach, compute the weights of the groups of factor and evaluate their impact on stakeholder performance

 Apply Structural Equation Modeling (SEM) Model to estimate the relationships between constructs and define a model to explain the entire set of relationships

 Propose a thoroughly and objectively framework for evaluating Stakeholders Performance This can help for measuring the work efficiency of stakeholders in every stage of a project

1.4 Research Scope

Research scope was executed in the following area:

 Data collection from construction project in Ho Chi Minh City and some other Southern province

 Research time: From 02/2022 – 06/2022

 Respondents to the questionnaire survey: contractors, sub-contractors, project managers, owners, end-users, experts… in construction field

CHAPTER 2: LITERATURE REVIEW

2.1 Definitions and Concepts

This chapter helps us to have an overview of issues related to the research topic through published journals, scientific articles, domestic and foreign theses From there, we may learn about the current state of the research and the connections to this issue

2.1.1. Definitions about Stakeholders in Construction Project

During the different stages of a construction project, from project conceptual to project completion, a vast number of interests will be affected, both positively and negatively The project's stakeholders are representatives of these interests

According to Freeman (1984), stakeholders would be any group or person who can affect or is affected by a corporation's achievements Freeman also stated that the stakeholder approach is about groups and individuals who can affect the organization, project Phillips (2003) added stakeholder theory should be concerned with who has input in decision making as well as who benefits from the outcomes of such decision PMI (2004) practically accepted this definition of project stakeholders, noting that they are individuals or organizations that are actively participating in the project or whose interests may be affected as a result of project execution or project completion

There has been debate on how to define stakeholders Freeman’s (1984) definition, those who impact or are impacted are considered too wide, because everyone will deserve to be a stakeholder If everyone is stakeholder, there is no sense in using stakeholder concept

In this thesis, stakeholder definition will follow the concept of McElroy and Mills (2000) They suggest a definition of project stakeholders as "a person or a group of persons who have a vested interest in the success of a project and the environment in which the project operates." This is a more narrow definition than PMI (2004), as it clearly says that a stakeholder must have a vested interest in the project at hand

A vested interest is described as possessing one or more of the stakeholder attributes of power, legitimacy, and urgency There are essentially two categories of stakeholders

external stakeholders are those who are affected by the project Within the scope of the thesis, we mainly focus on internal Stakeholders

EXTERNAL STAKEHOLDERS

 Local authorities

 Governments

 Political Organization

Figure 2-1: Stakeholders in Construction Project

2.1.2. Definitions about Stakeholders Performance

The participation of different stakeholders in construction projects is a key factor to achieve project goal and objectives, the success of the project depends on the stakeholder’s efficiency participation in the project Stakeholders Performance is defined as the results achieved by stakeholders after a project finished

Performance has developed from “output oriented” approach to a “process oriented” approach and then to the integration of the two in support of the project’s strategy Initially within performance management, maximizing profits was the primary target and before the 1970s, financial factors were almost the only criteria for performance evaluation Later, people paid more attention to other perspectives such as customer satisfaction, quality of project or trust among stakeholders In this study, stakeholders performance criteria was referred from Roshana Takim and Akintola Akintoye (2002), details was shown in Table 2.1

Table 2.1 – Stakeholders Performance Characteristics

1 Project Completion Time

2 Project Cost

3 Project Quality

4 Level of Disputes and Litigation

5 Client's Satisfaction

6 Relationship between Parties

7 Financial profit for Stakeholders

8 Bring experience value to the following projects

9 Ensure Health and Safety

2.1.3. Definitions about Evaluating Framework

Evaluating frameworks were created to give instructions for evaluating - what will be assessed and how evaluation would be performed

Evaluation frameworks provide a systematic approach to evaluation and can benefit in the reduction of complexity when dealing with uncertainty or making decisions Frameworks can facilitate numerous stakeholders in creating a better understanding of the project and evaluation process, as well as in identifying and agreeing on appropriate criteria and methodologies Frameworks are frequently necessary for system changes, plans, or firm-wide initiatives

A well evaluation framework will lead effective and comprehensive data collecting and provide as the evidence trail for measuring progress and influence over time It should

be created from the start phase, as part of the construction project A framework improves comprehension of the project's goal and objectives, identifies the relationships between important implementation components, and articulates the internal and external factors that may impact the project's success

 Understanding and Analyzing project’s goal;

 Develop monitoring and evaluation plan and implementation of monitoring and evaluation activities;

 Define relationship between activities, outcomes and impact on project

 Propose strategies to improve efficiency during project phases

2.2 Related Studies

2.2.1. Studies about Factors that affect Stakeholders Performance

According to Nabil Ibrahim El-Sawalhi & Salah Hammad (2015) research, evaluating the success of a project performance is more challenging than examining the factors such as time, money, or quality, which are still considered to be dominating criteria Because stakeholders are major source of uncertainty, one of the major concerns increasing in construction projects is the identification and management of project stakeholders, including evaluation

The research indicates that stakeholders need to be identified, their power and influence should be mapped so that their potential impact on projects can be better understood Failure to appreciate this has led to countless project failures (Bourne & Walker 2005), primarily because construction stakeholders have the resources and capability to stop construction projects (Lim et al 2005)

The aim of Israa Fadhil Ibraheem (2018) research was to evaluate the most common factors that affect stakeholder working process in construction projects The study finds that the role of the project manager with high abilities, experience, and strong communication skills is essential to the effective relationship management of stakeholders and will contribute to the project's positive performance Furthermore, it

is important to the project's success to consider stakeholder concerns and demands It is critical to evaluate the information input while sharing common project goals and meeting the requirements and expectations of stakeholders

Also related to this topic, Rateb J Sweis, Sharaf M Bisharat, Lorina Bisharat, Ghaleb Sweis (2014) identified a host of factors affecting contractor performance by using both the data collected through a survey and interviews with senior professionals and

managers in the construction field Most correspondents agreed that financial difficulties, manpower shortage and excessive owner change orders are the leading factors directly affecting contractor performance in construction project Changes in government regulations and laws, contractor violations of safety rules, and modifications to materials specifications ranked among the least important factors Adnan Enshassi, Abdul-Rashid Abdul-Aziz and Saleh Abushaban (2012) stated that the average delay due to closures and material shortages was the most significant performance factor, ranking first among all factors These issues might be viewed as obstacles to project completion Furthermore, staff competence development and job satisfaction have a significant impact on stakeholders' productivity, cost, and time performance It is suggested that human resources be developed in the construction project through effective and regular training programs In addition, it is preferred to develop and improve the managerial skills of engineers in order to improve performance

of construction projects

The study of Arazi Idrus, Mahmoud Sodangi and Mohamad Haq Husin (2011) concluded that the most significant factors affecting consultant/designer performance are: urgency of the project at hand, project duration in terms of time spent in getting the work done, political influence, timely decision making and the experience of design team on the project The others are ability of the consultant to work as a team, creativity

on the part of consultant in controlling cost so that contract sums are within budget

2.2.2. Studies about Stakeholder Performance Criteria

Ivan K.W Lai and Frankie K.S Lam (2009) conducted a study in Hong Kong to examine the importance of stakeholder performance criteria and their respective outcomes in a construction project The study shows that timely completion is the most important performance criterion, followed by profit, environmental protection and quality This means that time management is the most important factor in the success

of a construction project Safety and no claims or contractual disputes also mentioned

in the order of performance criteria The performance of these performance criteria can

be increased by providing a bigger budget during project process Most clients are

reflecting the reality that, with the lowest price wins, the main contractor still stands to lose

Maria Creuza Borges de Araújo, Luciana Hazin Alencar, Caroline M Miranda Mota (2016) go further on monitoring the performance of the contractors by proposing a model They identified the following criteria to evaluate contractors in projects, such

as, relation between other parties, work management, quality control, time management and ability to control financial status quo Moreover, Dave C.A Butcher (2009) also indicated what exellent construction contractor performance is from the perspective of customer There is a number of key factors, namely, being open about their business strengths and weaknesses, challenging and improving themselves, really listening and acting, keeping business promises and many others behavioural Dave suggested that the client would have to develop a framework around these factors in a way that best suit with their project requirements

2.3 Theoretical related to the Research

2.3.1. Fuzzy Set Theory

Fuzzy logic was first it introduced by Lotfi A Zadeh in 1965 This technique can provide a definite conclusion from vague and inaccurate information (Al-Zarrad & Fonseca, 2018) Fuzzy logic has been used to solve problems related to uncertain and imprecision data Fuzzy set theory is a research approach that can deal with problems relating to ambiguous, subjective and imprecise judgments, and can quantify the linguistic facet of available data and preferences for individual or group decision-making (Shan et al., 2015a)

Nowadays, fuzzy seet theory has been widely used in many different fields to optimize and answer uncertainty or unorthodox information

2.3.1.1. Fuzzy Set

A fuzzy set is any set that allows its members to have different grades of membership (membership function) in the interval [0,1] A numerical value between 0 and 1 that represents the degree to which an element belongs to a particular set, also referred to as membership value

Let X be a space of points (objects), with a generic element of X denoted by x Thus, X

= {x}

A fuzzy set à in set of X is characterized by a membership function µ(x), which associates with each point in X a real number in the interval [0, 1], with the value of µ(x) at x representing the "grade of membership" of x in à When à is a set in the ordinary sense of the term, its membership function can take on only two values 0 and

1, with µ(x) = 1 or 0 according as x does or does not belong to A

Figure 2-2: Crisp Set and Fuzzy Set

2.3.1.2. Fuzzy number

A fuzzy number is a quantity whose value is imprecise, rather than exact value number

A fuzzy number is a fuzzy set with the conditions such as, convex, normalized, continuous and it is defined in the real number

Generally, environmental decision making process is subjected to scarcity of data and lack of knowledge, fuzzy numbers if they are normal, convex, and bounded (Klir and Yuan, 1995) Different shapes of fuzzy numbers are possible (e.g., bell, triangular, trapezoidal, Gaussian, etc.) In order to simplify the implementation, in this thesis, triangular fuzzy numbers (TFN) are used TFN is represented by three point, A is a fuzzy number if A = (a1, a2, a3), representing the minimum, most likely, and maximum values, respectively

Figure 2-3: Triangular fuzzy number

The common calculation of two TFNs was shown below, according to Tesfamariam & Sadiq (2006):

Table 2.2 – Common fuzzy arithmetical operations using two TFNs

Summation A+B (a1+b1, a2+b2, a3+b3) Subtraction A-B (a1-b3, a2-b2, a3-b1) Multiplication AxB (a1xb1, a2xb2, a3xb3) Division A/B (a1/b3, a2/b2, a3/b1) Scalar product Q.B (Qxb1, Qxb2, Qxb3)

2.3.2. Analytical Hierarchy Process – AHP Method

The Analytic Hierarchy Process (AHP) is a method for organizing and analyzing complex decisions, using math and psychology It was developed by Thomas L Saaty

in the 1970s and has been refined since then It contains three parts: the ultimate goal

or problem you're trying to solve, all of the possible solutions, called alternatives, and

the criteria you will judge the alternatives on AHP provides a rational framework for a needed decision by quantifying its criteria and alternative options, and for relating those elements to the overall goal

To obtain priority criteria, this method uses a comparison of criteria paired with a measurement scale that has been determined The main input of the AHP method is the perception of experts or experts, so there is a factor of subjectivity in retrieval decision This method also takes into account data validity with inconsistency limits

Fuzzy Analytic Hierarchy Process is a method of Analytic Hierarchy Process (AHP) developed with fuzzy logic theory The Fuzzy AHP method is used in the same way as the AHP method used The Fuzzy AHP method is used in the same way as the AHP method used It's just that the Fuzzy AHP method puts the AHP scale into a fuzzy triangle scale that could be accessed in order of priority

The Fuzzy Analytical Hierarchy Process method – FAHP is the expansion of AHP to effectively solve the fuzzy data related to decision making Fuzzy AHP helps the leader easier to make the decision and more than that, fuzzy AHP can handle both qualitative and quantitative data in Multi Criteria Decision Making (MCDM), according to Saaty (1980)

2.3.4. SEM approach

An SEM approach is a collection of statistical techniques that allows a set of relationships between one or more independent and dependent variables to be examined (Tabachnick and Fidell, 2012) This methodology is confirmed to be more useful than multivariate or logistic regression methods, especially in the case that there are a large number of variables in data samples that may lead to unexpected measurement errors

It also allows examinations of mutual influences among variables, either directly or indirectly, through other variables as intermediaries

In comparison to other statistical tools such as factor analysis and multivariate regression, SEM performs factor analysis and path analysis simultaneously because it can measure and accommodate errors of manifest variables (i.e observed variables);

variables) by using several manifest variables; and simultaneously estimate both causal relationships among latent variables and manifest variables It is an advanced application of factor analysis and regression analysis They are being analyzed in simultaneously for theory testing SEM may also be used as an advanced statistical tool

to analyze causal models with complicated relationships between one or more dependent and independent latent variables

In SEM, two types of variables are often used: manifest variables and latent variables Manifest variables are variables that can only be measured or viewed directly Latent variables, on the other hand, are hypothetical or theoretical elements of the model that cannot be assessed directly

CHAPTER 3: RESEARCH METHODOLOGY

Based on existing research and expert s opinion STEP 1:

Quantitative Analysis Factors STEP 2:

Applying F-AHP Method STEP 3:

Measure relationships between constructs of factors that affect SP

Figure 3-1: Research Process of the Thesis The research process consists 3 main stages:

 Stage 1: Collecting Information

After determining research aim and objectives of in Chapter 1, literature review related

to evaluate stakeholders performance is conducted to gain basic knowledge and research gaps (Chapter 2) The factors that affect stakeholders performance was referred from

 Stage 2: Surveying and Collecting Data

The authors have shown a lot of factors influencing stakeholders performance during three phases of project life cycle Thesis take 33 factors from those then conducting a questionnaire survey to collect data Phase 1 will collect to identify factors affecting Stakeholders Performance Phase 2 will collect pairwise comparison matrix evaluation data from experts

 Stage 3: Data Analyze and Discussion

After collecting enough survey data, conduct analysis and comment on the results obtained Finally, give opinions and recommendations to help improve the working efficiency between the parties in the construction project

3.2 Theories and Models

3.2.1. Principal Component Analysis (PCA)

PCA method is a very popular technique used in data reduction (input variables) That

is, instead of using all the variables, we just use some of the new variables that keep most of the information of the original data The number of factors is less than or equal

to the original number of variables and there is no correlation between them In this study, the purpose of using PCA is to reduce the initial factors into new groups of factors, thereby building a hierarchical structure for the next steps

PCA method can only be performed if the newly created factors do not cause significant information loss But, how is the loss of significant information? This depends on the characteristics and objectives of each type of research, which determines how much information loss is appropriate The greater the correlation between variables, the more data reduction we can achieve and vice versa To test the correlation between variables,

a statistical test such as Bartlett's test can be used, but this test can only be used for normalized data There is also a KMO test (sampling adequacy Kaiser Meyer Olkin measure) used to check whether the PCA model is suitable:

Table 3.1 - Level of Acceptance of the KMO (Field, 2000)

KMO Value

Level of Acceptance

3.2.2. Analytical Hierarchy Process (AHP) Method

The AHP method was first introduced in 1971 by Thomas Saaty to solve the problem

of resource allocation and planning needs in the military Since then, AHP has become

a quantitative multi-objective decision support method widely used in many different fields such as economic, social, scientific, etc to arrange alternatives and select the solution that satisfies the given criteria The criteria are hierarchical into sub-criteria represented on the hierarchy, making it easier for decision makers to see problems and analyze them independently

To facilitate the pairwise comparison process, the size of the comparison matrices should not exceed 9

Steps to apply the AHP method:

 Define the problem and research objectives

 Construct pairwise comparison matrices using scales from 1 to 9 These pairwise comparison scales are shown in the Table 3.2

 Convert those comparison parameters into weights and check the Consistency ratio

CR (Consistency ratio) from expert judgments

 Use calculated weights for alternatives to make provisional decisions

 Perform sensitivity analysis This step is used to test the effect of changing the weights of the criteria on the final result

Table 3.2 - AHP Pairwise comparison table by Saaty (1980)

Relative

objective

favour one activity over another

favour one activity over another

7 Demonstrated Importance One activity is strongly favoured and

demonstrated in practice

The evidence favouring one activity over another is of highest possible order of affirmation

2, 4, 6, 8 Intermediate values When compromise is needed between

to adjacent judgments

As introduced in Chapter 2, although it has the same name as Fuzzy AHP, in fact there are many methods proposed by different authors Each method has a completely

different argument and implementation This thesis references the method proposed by Tesfamariam & Sadiq (2006)

Build Hierarchical Structure

Construct set of Pairwise Comparison Matrices

Check the Consistency Ratio

Synthesize Expert Opinions

to represent unobserved concepts in these relationships and account for measurement error in the estimation process Moreover, SEM help define a image model to explain the entire set of relationships

SEM is often applied in the research fields of psychology, marketing, strategic management, etc Based on previous researches, there have been related articles about

“Effect of project characteristics on project performance in construction projects based

on structural equation model” (KM Cho, 2009); “Modeling success factors for public construction projects with the SEM approach: Engineer's perspective (EG Sinesilassie, 2019); “SEM Model for Investigating Factor of an Accident Affecting Safety Performance in Construction Sites in Nepal” (D Sukanami, 2020)…

Therefore, the use of SEM to analyze the factors belonging to Stakeholders and Performance is quite appropriate, and the SEM model is also more responsive and eliminates errors because this is a study on human psychology on performance, suitable for this study

Five steps to building an SEM model:

 Specify the individual factors, which factor is the measurement variable

 Develop and define a measurement model

 Evaluate the reasonableness of the model

 Clearly define the structural model, convert the measurement model to the structural model

 Evaluate the reasonableness of the newly created structural model

3.3 Data Collection Phase 1: Determine Factors that influence Stakeholders Performance

Construct Questionnaire Survey

A pilot test was conducted and modified until the survey gets good rated from professional experts When the survey is completely designed, it will be sent to those who have experience and who are working in the construction field, such as, Owner, Contractor, Sub-contractor, Consultant, Designer, Engineer, Supplier… In this thesis, the survey was directly mailed and collected through Google Forms

 Part 1: General information of respondents such as: their professional, workplace, experience, position in their current company…

 Part 2: Measuring factors that affect Stakeholders Performance, using a five-point Likert Scale

 Part 3: Respondents are requested to provide suggestion related to which criteria related to evaluate their company performance in construction project Those criteria was referred from a study of Roshana Takim and Akintola Akintoye (2002),

“Performance indicators for successful construction project performance”

3.3.1. Determine Factors that influence Stakeholders Performance and Stakeholders

Performance Criteria

Based on previous studies and expert opinions, the study identified 33 factors that affect Stakeholders Performance Those are divided into 6 main groups including group of Factors related to Working Environment, of Factors related to Client/Owner, of Factors related to Contractor, group of Factors related to Supplier, group of Factors related to Consultant/Designer, group of Factors related to Project Management

For convenience in the data input and data analysis process, the factors are denoted by groups shown in Table 3.3

Table 3.3 – Factors affecting Stakeholders Performance

No Factor affecting Stakeholders Performance References

1 W1 Leadership Style

"Factors afecting performance at the Iraqi Construction Projects, Ministry of Construction, and Housing

and Municipalities and Public Works of Iraq

Djoen San Santoso and Polwatta Gallage Madusha Piumal Gallage (2019)

3 W3 Communication with Other Stakeholders

"Factors Affecting the Performance of Labour in Nigerian Construction Sites"

Fagbenle Olabosipo I.; Ogunde Ayodeji O.;

Owolabi James D (2017)