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Analysis of Cost Overrun Factors for Small Scale Construction Projects in Malaysia Using PLS-SEM Method

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  • Aftab Memon
  • Ismail Rahman

Abstract

This study investigated the effect of various factors affecting cost performance in achieving project success. Investigation was carried out with quantitative approach of questionnaire survey to understand the perception of practitioners involved in construction industry towards various factors in causing cost overrun. The targeted respondents were client, contractor, and consultant representative involved in handling small scale projects in Malaysia. A total of 54 completed responses were collected against 100 sets of questionnaire distributed. Collected questionnaires were analyzed with advance multivariate statistical approach of Partial Least Square Structural Equation Modeling (PLS-SEM). It modeled the relationship of various factors and their relative effects to cost overrun. Structural Model analysis results showed that the identified factors have overall substantial impact on cost overrun. This was assessed with convergent and discriminant validity test where R2 value for the model is 0.71 which means that 71% variance extraction is resulted from investigated factors. Further, GoF value of the model achieved is 0.70 which shows that developed structural model has substantial power in explaining the factors of cost overrun in small scale projects of Malaysia. Amongst all the factors, contractor’s site management related factors are found as most significant factors. This indicated that for achieving better cost performance in small projects, contractors are required to improve their management related to the identified factors. Beside that, these findings will benefit parties involved in managinging cost performance of small scale construction projects.

Suggested Citation

  • Aftab Memon & Ismail Rahman, 2013. "Analysis of Cost Overrun Factors for Small Scale Construction Projects in Malaysia Using PLS-SEM Method," Modern Applied Science, Canadian Center of Science and Education, vol. 7(8), pages 1-78, August.
    • Handle: RePEc:ibn:masjnl:v:7:y:2013:i:8:p:78
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    References listed on IDEAS

    as
    1. P. A. Koushki & K. Al-Rashid & N. Kartam, 2005. "Delays and cost increases in the construction of private residential projects in Kuwait," Construction Management and Economics, Taylor & Francis Journals, vol. 23(3), pages 285-294.
    2. Tenenhaus, Michel & Vinzi, Vincenzo Esposito & Chatelin, Yves-Marie & Lauro, Carlo, 2005. "PLS path modeling," Computational Statistics & Data Analysis, Elsevier, vol. 48(1), pages 159-205, January.
    3. Dadi He, 2010. "Engineering Quality Systems: Cost of Quality," Modern Applied Science, Canadian Center of Science and Education, vol. 4(5), pages 102-102, May.
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    1. Laura Molinari & Elvira Haezendonck & Katrien Van Rompay & Vincent Mabillard & Michaël Dooms, 2024. "Persisting Cost Overruns in Public Infrastructure Projects: Lessons From the Belgian Case," ULB Institutional Repository 2013/374781, ULB -- Universite Libre de Bruxelles.

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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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