Research On SEPCO Risk Management For Internationalization

Since the BRI initiative more and more Chinese Oversea Project Contracting enterprises become very active in the Global market.The world witnessed many challenges for global economy growth,such as setbacks of nationalism,Sino-America trade conflict,interest rate cut of FED,terrorism and pandemic,etc.The global economy may even step into short-term recession.However,along with the further implementation and development of BRI,the shift to growth of the infrastructure of Asia,the diversifying economy approach of many Gulf Countries,the whole world in the long term is still starving for infrastructure which would be feel-good factors for Chinese Oversea project contracting companies.As one renowned company in terms of International project contracting,90%of the total annual turnover of SEPCO is contributed by International business,which indicates that the effective risk management on international business will be crucial to the survival and development of SEPCO.However,along with the exploration and operation in middle-range and high-end market SEPCO fails to enhance business management capabilities,it have been encountered with development stagnation evidenced by shrinking business margin,falling turnover and shortfall of effective contract value.Poor risk management is commonly seen in Chinese firms,especially for oversea project contracting companies.The risk management against the risks during internationalization is becoming more and more important as SEPCO enters new development stage and shift its core business from power sector to diversified sectors such as power,oil&gas as well as marine works.Once risks are out of control,project profit will be eroded or even under the worst case scenario the survival of SEPCO will be affected.Unfortunately,till nowadays there is no systematic or scientific risk management system been established in SEPCO and the risk management remain on the surface of implementation and far from company strategy,the capability on risk management urgently needs to be improved and enhanced.By reviewing the relevant theories of performance management,taking the current situation of the risk management of SEPCO as the research object,and through interview and survey,this paper summarizes the existing problems of the risk management system of SEPCO,such as the low-level capability for risk identification,unscientific risk analysis,insufficient risk response measures taken for risks as well as weak consciousness towards risks supervision.In view of the above problems,this paper puts forward some solutions to address them.The International business risk management system is set up in light of the four steps of risk management.Aiming at the problem of low-level capability for risk identification,risk factors list is set and confirmed by experts.As for the unscientific risk analysis,qualitative and quantitative measure are put forward,and during quantitative analysis process AHP method is adopted based upon the appraisals from experts.For the insufficient risk response measures International risk response system is constructed among three stages of project:pre-bidding,bidding and implementation stage,and hence response selection procedure and response strategies are put forward.Aiming at the problems of weak consciousness towards risks supervision,the risk supervision system and risk early warning system are engineered with reasonable range of supervision indicators to supervise the variation tendency of risks.Saudi King Salman International Complex for Maritime Industries and Services Project(King Salman Project)is taken for demonstration based upon the aforesaid risk management system.The main innovative points of this paper are:identification and classification based upon three perspectives:macro,meso and micro levels and establish the preliminary risk factor list for SEPCO,upon the verification of experts the risk factor list is confirmed for further analysis.AHP method is adopted for measuring the levels of main risks and sub-risks,enhancing the subjectivity of risk analysis.After completion of the above two steps the risk response system and risk supervision system are constructed,finally the scientific and systematic risk management system is set up.