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The purpose of this study is to examine the capital budgeting strategies that are used by foreign subsidiaries of U.S.‐based multinational enterprises. While the results indicated a preference for sophisticated capital budgeting techniques as the primary method of analysis, the actual use of sophisticated capital budgeting techniques by foreign managers may not be as widespread as expected by financial theorists. Although it was found that certain environmental and company‐specific factors influenced the level of sophistication of capital budgeting practices used by U.S. foreign subsidiaries, the associations were small and had only minor explanatory significance. The results showed that foreign subsidiaries exposed to high levels of political and financial risk tended to use sophisticated capital budgeting strategies. Subsidiaries characterized by high levels of financial leverage and high cost of capital requirements also employed advanced capital budgeting strategies. Multinational enterprises (MNEs) have many options available to them in terms of how they manage their foreign subsidiaries. Traditionally, most major policy decisions were made at the parent firm's headquarter office while foreign subsidiaries had few opportunities to influence major corporate decisions. Today, more companies are using a flexible approach which involves setting strategic goals at the home office and allowing local managers to implement their own specific policies. An important question in this study involved determining how effective local foreign managers were in implementing their capital budgeting processes. As U.S.‐based MNEs continue to expand their operations abroad, there is an increased need to examine which financial decision models are actually used by subsidiary managers to deal with the increased complexity of investing in foreign countries. Unlike traditional capital budgeting analysis, international analysis is a considerably more complex process. These complexities occur for a number of reasons including complicated cash flows estimates, changes in foreign exchange rates, different accounting systems, potential for blocked funds, and political risk considerations. These factors are rarely experienced by traditionally domestic U.S. firms. To maintain a competitive edge, MNEs must continue to use the most efficient approaches available to them. This study provides a detailed analysis of the capital budgeting practices that are actually being used by foreign subsidiaries of U.S.‐based MNEs. The paper is organized in the following manner. Section I provides a brief overview of the theoretical and practical issues of international capital budgeting analysis. Section II focuses on the areas of data collection, questionnaire design, and environment‐specific and company‐specific factors. Section III discusses usage of capital budgeting techniques, adjustment and assessment of project risk, and factors influencing capital budgeting policies. The final section presents some findings from this study.

Risk response decisions (RRDs) are vital for project risk mitigation. Although past research has focused on RRDs for independent single projects, it has scarcely explored how to make RRDs for single projects in project portfolios (SPPPs). Consequently, this study aims to bridge the gap in extant literature by developing an integrated approach to select risk response strategies (RRSs) for SPPPs considering objective adjustments and project interdependencies (PIs).

An integrated quality function deployment (QFD) method was used throughout this study. More so, a balanced score card (BSC) and stratified-Z-numbers-full consistency method (SZFUCOM) was applied to identify SPPP success criteria (SP3SC) to determine their weights. In addition, a spherical fuzzy set-design structure matrix (SFDSM) was used to quantify the correlation between the risks and the relationship between the risks and the predecessor projects. Consequently, the relationships between the risks and SP3SC and RRSs were described by the spherical fuzzy set (SFS) and Z-numbers, respectively. Besides, the results are weaved into QFD to transform SP3SC into risks and then into RRSs, while a linear optimization model is used to obtain the optimal RRSs. Lastly, a construction project portfolio (PP) was used to test the veracity of the results to prove their validity.

The approach to RRDs for single projects is observed to be different from that of SPPPs. In addition, this study finds that project portfolio objective adjustments (PPOAs) and PIs have significant impacts on RRDs given that they influence the risk priorities of independent single projects and SPPPs. Moreover, the application of an integrated QFD effectively synthesized the results from the findings of this study, as well as enabled companies to determine robust RRSs. Finally, the consistency results of the SZFUCOM were better than those of the triangular fuzzy number-full consistency method.

The study innovatively explores the method of RRDs for SPPP, which has been ignored by past research. SP3SC highly compatible with PP success is determined. Z-numbers are first used to evaluate the effect of RRSs to enhance the robustness of RRDs. The study proposes a method of RRDs comprehensively considering PPOAs and PIs, which provides robust methodological guidance for SPPP managers to control risks.

The aim of the study was to develop a practical construction time model for public building projects in Addis Ababa, Ethiopia.

This research work used regression analysis and also exploratory scatter and residual plot techniques. Simple and multiple regressions were used for the investigation of the best fit time model. The analyses were carried out using IBM SPSS statistical software, version 20.

The result revealed that the Bromilow time-cost principle was moderately applicable. However, the cubic regression model (CUB) was found a better time-cost relationship. On the contrary, the study has shown a poor relationship between actual time and gross floor area. Furthermore, multiple linear regression analysis (MLR) consists of three statistically significant variables were found a better fit time model.

The study is limited to only six project scope factors. Further research is recommended to include more building projects of similar type and implications of other factors to improve the reliability of the models.

The developed model was not intended as a replacement for detailed construction scheduling techniques. The resulting model is applicable for front-end predictions of construction duration.

The main parties involved in the building projects should apply the model for benchmarking a precise construction time during the early planning phase.

Project networks are an increasingly salient organisational temporary form to deal with complex problems. It remains unclear, however, whether and how project networks adapt over time, and hence implement changes, both within the span of the specific project, and across projects. The authors apply the performance feedback (PF) perspective to explore how adaptive responses to PF are organised and absorbed within project networks. The authors investigate these matters in the area of humanitarian and development aid efforts, which represent complex social issues. In this context, project networks involve a multitude of actors at different distances from the implementation field, ranging from the donor, through an international Non-Governmental Organisation (NGO), to the NGO’s country offices, local NGOs and the beneficiary communities. This study’s qualitative findings, which the authors generate through an abductive analytical process, highlight that project networks dealing with complex social issues face six paradoxes based on work by DeFillippi and Sydow: the distance, difference, identity, learning, temporal and performance paradoxes. Collective goal setting, adaptive monitoring and evaluation practices, and continuous re-negotiation of aspiration levels emerge as coping mechanisms enabling project networks to internalise insights from the field and translate them into adaptive behavioural responses, mainly at the intra-project level. The authors contribute to a better understanding of adaption in these temporary forms, and particularly in its behavioural consequences. The study also advances knowledge on the PF perspective, through its application in temporary settings, on the level of the project network and in the context of complex social issues, where organisational arrangements strive to pursue multiple interdependent goals.

This study develops a model and algorithm to solve the decentralized resource-constrained multi-project scheduling problem (DRCMPSP) and provides a suitable priority rule (PR) for coordinating global resource conflicts among multiple projects.

This study addresses the DRCMPSP, which respects the information privacy requirements of project agents; that is, there is no single manager centrally in charge of generating multi-project scheduling. Accordingly, a three-stage model was proposed for the decentralized management of multiple projects. To solve this model, a three-stage solution approach with a repeated negotiation mechanism was proposed.

The experimental results obtained using the Multi-Project Scheduling Problem LIBrary confirm that our approach outperforms existing methods, regardless of the average utilization factor (AUF). Comparative analysis revealed that delaying activities in the lower project makespan produces a lower average project delay. Furthermore, the new PR LMS performed better in problem subsets with AUF < 1 and large-scale subsets with AUF > 1.

A solution approach with a repeated-negotiation mechanism suitable for the DRCMPSP and a new PR for coordinating global resource allocation are proposed.

These are the three most important learning outcomes: discuss the relevance of capital asset pricing model (CAPM) as the methodology to estimate the cost of equity for an investment in an emerging market; analyze the different alternatives to estimate country risk discussing the pros and cons of each. Consider the additional complexity in estimating the cost of equity, contrasting the perspective of a local, non-diversified investor with that of a multinational company operating in 39 countries.

The Chief Financial Officer of a business group has to determine the correct discount rate for an investment in a new hotel in Guayaquil, Ecuador. The group has traditionally used the same discount rate for all projects and is now presented with several alternatives by his team. Estimating the correct country risk adjustment for the project is an important challenge. He knows that there is no clear solution to this challenge that is accepted by all practitioners and academics, but he has to present a recommendation to the board.

The case study is designed for corporate finance, appraisal or international finance courses in both MBA and executive training programs. To discuss this case study, students are assumed to have been already exposed to the weighted average cost of capital and the CAPM.

Teaching Notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

CSS 1: Accounting and finance.

This paper aims to unpack the relationship between the interactive use of project control systems (PCS) and project performance by examining the role of stakeholder analysis effectiveness in enacting this relationship. A conceptual framework was developed based on the stakeholder theory and the levers of control framework.

Partial least square-structural equation modelling analysis was conducted on the cross-sectional questionnaire data collected from 109 information technology (IT) projects.

The interactive use of PCS enables project managers to effectively deal with the stakeholders-related uncertainty, and stakeholder analysis effectiveness partially mediates the positive relationship between the interactive use of PCS and IT project performance.

This study extends the project control literature by explaining the positive relationship between the interactive use of PCS and project performance. The findings contribute to the stakeholder analysis literature by operationalizing the stakeholder analysis effectiveness construct and identifying it as a new mediator between the interactive use of PCS and project performance.

Urban rail projects are typically large-scale transport infrastructure projects (megaprojects) which have many potential risks that can influence the strategic goals of owners. However, there is a paucity of studies which explore the impact of risks on both “urban rail” project time and cost together considering quantitative assessments. Therefore, this paper focuses on investigating critical risks and quantifying such risk impacts on urban railway project schedule and cost in practice.

A combination of qualitative and quantitative research methods comprising semi-interviews with five experts and a questionnaire survey of 132 professional respondents is used. The data were modeled using Monte Carlo Simulation to predict the probability of project schedule and cost.

The results show that 30 risk variables are categorized into seven main groups which have significant impacts on both project time and cost. Outstanding five risk variables were highlighted as follows: (1) project site clearance and land compensation; (2) design changes; (3) physical project resources; (4) contractors’ competencies and (5) project finance. Such findings were supported by Monte Carlo simulation which predicted in the worst case that the project may suffer 11.03 months’ delays and have cost overrun with a contingency of US$287.68 million.

This study expands our knowledge about time and cost contingency of urban metro railway implementation across developing economies and particularly within the context of Vietnam. Policymakers will not only gain an understanding about risk structure but will also recognize the significant impacts of critical risk through risk impact modeling and simulation. Such an approach provides insights into risk treatment priorities for planners so that they can proactively establish suitable strategies for risk mitigation in practice.

While there is a general belief that a defective institutional environment will lead to higher compliance risk, the current state of knowledge about how the institutional environment affects enterprises' compliance is equivocal. This study aims to explore how does the host country's institutional environment affect the compliance risk perception of international engineering contractors and how to mitigate this impact.

This study empirically tests the impact of the institutional environment from the two dimensions of the institutional environment: legal completeness reflects whether the formal regulations are clear, detailed and comprehensive and legal effectiveness reflects whether rules and policies can be implemented effectively when the proper legal codes are provided. Based on 213 questionnaire data, this study uses partial least squares structural equation model (PLS-SEM) and Smart PLS software to test the hypothesis.

This study finds a negative relationship between the host country's legal completeness (LC) or legal effectiveness (LE) and a contractor's compliance risk perception. Further, the results show potential absorptive capacity (PAC) and realized absorptive capacity (RAC) of a contractor are critical for mitigating the impact of low LC in the host country, but not when LE is low.

The findings will be useful for international engineering contractors to respond to the compliance risk of the host country, both in choices of overseas investment locations and compliance capacity building.

This study reveals the impact of the host country's institutional environment on the compliance risk perception of international contractors, and provides theoretical guidance for how to alleviate the compliance barriers brought by the host country's institutional environment to international engineering contractors.

This research aims to focus on the strategic management by National Olympic Committees (NOCs) during the COVID-19 crisis. The authors investigate “How are strategies being developed within European NOCs to tackle the impact of the corona crisis?” and “which measures have proven to be particularly helpful?”

The research uses a sequential exploratory mixed-methods approach. Five high-level representatives of European NOCs were interviewed using expert interviews to gain insights into their strategy development process. The interviews were analyzed using qualitative content analysis, and a questionnaire was developed based on the results. Nineteen other European NOCs were surveyed using this questionnaire to verify the strategy development process steps on a larger sample.

The research resulted in a six-step NOC strategy development process framework, with helpful measures for each step. It can help the organizations to better cope with current or upcoming crises.

This framework can serve as a guide for NOCs to find the right steps and measures to better perform in crisis situations.