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Ghaffari, A (2013) Developing a mathematical model for profit sharing amongst partners in consulting engineering companies of construction projects, Unpublished PhD Thesis, Sinhgad College of Engineering, Savitribai Phule Pune University, India .

• Type: Thesis
• Keywords: liability; motivation; residential; civil engineering; partnering; professional liability; teamwork; client; professional; productivity; qualitative research; questionnaire survey; competition; construction project; joint venture; consultant; interview
• ISBN/ISSN:
• URL: http://hdl.handle.net/10603/126436
• Abstract:
  Consulting Civil Engineering is becoming a more complex business. To survive in tomorrow's consulting business world, organizations must enhance their technical skills with business expertise because civil engineering becomes more sophisticated and more complicated by financial issues, such as profitability, professional liability, client relations, and civil engineering business trends and issues. Over the years the construction project from planning to completion is full of claims and intractable disputes. So to overcome these impedes innovative method such as partnering and profit sharing have come up to reorient job participants towards a ‘‘win-win’’ environment by minimizing claim and dispute and fostering synergistic teamwork for succession. Partnering is a commitment between two or more organizations for the purpose of achieving specific business objectives by maximizing the effectiveness of each participant’s resources. It derives many benefits to contracting parties, including the client, consultants, project managers, main contractor, subcontractors, and on-site employees. It has been revealed from literature review that success of U.S construction companies to compete in international tenders is due to strong research carried out on partnering in that country. Therefore, it is felt there is a need to study about the partnering process for developing Asian countries and to develop a suitable model to portray combine impact of partnering concept, significant factors in partnering and fair distribution of profit sharing amongst partners. While developing such model fundamental concept of partnering developed by construction companies from developed countries and opinion of the experts working in construction companies in a Asian country has been taken so that proposed model shall be more acceptable universally. After studying different research designs and methods, a cross-sectional mixed method approach using Sequential exploratory mixed model employing advantages of both quantitative and qualitative research methods has been adopted in this study. Sequential mixed model design is a multi-strand mixed, as qualitative-quantitative or quantitative-qualitative design in which the conclusions are drawn on the basis of the results of the first strand, e.g. a quantitative phase lead to modify the first round questions, data collection, and data analysis for the next strand as a qualitative phase. The final inferences are based on the results of both strands of the study. The second phase of the study is conducted to either confirm or disconfirm the inferences of the first strand or to provide further explanation for unexpected findings of the first phase. Capital does not play pivotal role in the economic success of the engineering consulting services companies and should be considered as a sub factor. This is a basic hypothesis of this study. This study had been conducted in various stages. Before the actual data collection process, in the preliminary stage exploratory interviews with 10 construction experts working as PMs with minimum 15 years’ experience in CECC, has been conducted to design the questionnaire. A total of 13 major factors contributing for economic success of consulting engineering companies were finally identified after conducting an extensive literature review and using knowledge of experts. In First stage a questionnaire survey was conducted, and data was collected from 80 project managers in twenty major consulting engineering construction companies. It was decided that respondent should be having minimum B.E degree with at least 15 years of experience in the construction industry and holding the responsibility as project manager only. Iranian companies whose major activities are in the field of building designing (residential, trading, industrial, cultural, sporting, port, rails, roads etc.), architecture, urban development, etc. with their experience records of minimum 14 years are selected. Finally, important factors effecting to the success of economical profitability of the Consulting Engineering Companies have been finalized by questionnaire survey responded by 68 PMs from 17 CECCs out of 80 CECCS contacted. The second phase is conducted to either confirm or disconfirm the inferences of the first phase, or to provide further explanation for unexpected findings of the first stage. In second stage the weight of each factor obtained from mean/average value of each factor has been finalized and confirmed by conducting personal interview of selected PMs from consulting engineering companies. The validation of various values and overall factors had been carried out by Inter group validation, cross group validation, design method cross-validation and finally by using a five-point Likert scale ranging from. 1=low satisfied to 5=fully satisfied, as a measurement scale of satisfaction. The mean value of all participant's responses obtained is 4.18, which may be considered as high satisfaction value for validation of this research. The weights of all the factors responsible for profit distribution to various partners in a CECC obtained from the questionnaire survey and other stages have been further verified for statistical checks by using SPSS. Using these final weights following mathematical model has been developed in this study: [equations not formatted for plain text storage]. This concept of fair distribution model has also been explained by using an example of a company with 6 partners and by making different assumptions such as total worth of the work referred to the company, gross profit (Profit + salary of the partners), education level and experiences of the employs etc. This research work has relevance in day-to-day life of consulting engineering companies, their persistency, stability and may facilitate consulting companies to act in major international contracts competitions. This proposed fair and just distribution model provides incentive and motivation to the partners which ultimately enhance their performance, productivity and competitive attitude. Even more significant is the model for attending the international tenders by facilitating the Joint Ventures formation specially in the Gulf and newly independent republic countries of the Soviet Union, Afghanistan, Iraq etc.