The What Drives Variation Order Impact on Project Performance? PLS-SEM Evidence from Omani Fishery Port ProjectsT

The impact of Varetion Order

Abstract

Construction projects are inherently characterised by complexity, multi-stakeholder decision-making, and evolving technical requirements, conditions that render the original project scope susceptible to modification throughout the delivery lifecycle. Variation orders (VOs), also referred to as change orders, represent the formal contractual mechanism through which such modifications are processed. These may encompass alterations to scope, design specifications, quantities, construction methods, or project schedules, and arise routinely across both public and private sector projects worldwide (Ezeldin & El Sarag, 2018; Abdullah & Mustapa, 2022). While a degree of variation is expected in complex undertakings, the cumulative impact of poorly managed change orders is one of the most pervasive and costly challenges facing the global construction industry. Empirical evidence consistently demonstrates that variation orders are primary contributors to schedule overruns, budget inflation, rework, productivity losses, and deteriorating stakeholder relationships (Mahamid & Abdelaal, 2025; Volner et al., 2025). Oladapo (2007) estimated that variation orders account for approximately 79% of cost overruns and 68% of delays across construction projects, figures that underscore the magnitude of their systemic impact.

The academic literature identifies a broad and heterogeneous set of causal factors underlying variation orders, which are typically classified according to the responsible stakeholder group or origin domain. Owner- and client-initiated changes driven by evolving functional requirements or budget revisions represent one of the most frequently cited categories, followed by consultant-related deficiencies such as design omissions, coordination failures, and inadequate site investigation (Albasyouni & Ashraf, 2024; Nguyen & Do, 2023). Contractor-related causes, including site mismanagement, execution errors, and poor workmanship, compound these challenges, while organisational dysfunctions such as weak change control systems and unclear stakeholder accountability further amplify variation order frequency and severity (Mohammad et al., 2022). Environmental and resource-related factors, encompassing unforeseen ground conditions, material shortages, and labour unavailability, add additional layers of complexity, particularly in infrastructure projects executed in technically demanding settings (Msiska et al., 2022). More recently, innovation-driven modifications arising from value engineering, material substitutions, and the integration of new technologies have been identified as an emergent, directionally ambiguous category of variation-order cause, one capable of both enhancing and undermining project performance, depending on the adequacy of change management protocols (Plast, 2025). Despite this breadth of causal understanding, existing models frequently treat these categories in isolation, thereby limiting their explanatory power for integrated project performance outcomes.

Oman's construction sector occupies a strategically significant position within the national economy, underpinned by sustained public investment in infrastructure to drive economic diversification aligned with Vision 2040. Among the infrastructure typologies receiving growing institutional attention are fishery port developments, which serve dual imperatives of food security and coastal community livelihood. However, the distinctive risk profile of marine construction, characterised by tidal exposure, geotechnical variability, logistical complexity, and stringent regulatory requirements, renders fishery port projects particularly susceptible to variation orders and their downstream consequences. Studies conducted within the Omani construction environment have consistently identified client-initiated scope changes, design discrepancies, and inter-stakeholder communication failures as leading drivers of VOs, which manifest as rework, time lags, cost escalations, and labour inefficiencies (Alnuaimi et al., 2010; Al Maamari & Khan, 2021). These findings indicate that variation orders in the Omani context are not merely technical phenomena but also reflect deeper institutional and behavioural dynamics embedded in public-sector procurement structures, contractual relationships, and project governance norms. Furthermore, the consequences of unmanaged VOs extend beyond technical project metrics to encompass reputational risks, unresolved disputes, and erosion of stakeholder confidence in public delivery institutions, outcomes that are particularly salient given the community and environmental dependencies associated with fishery infrastructure.

Despite the substantial body of international research on variation orders, significant gaps remain in both contextual coverage and methodological integration. First, the extant literature exhibits a pronounced bias toward large-scale building and civil infrastructure typologies in developed economies, with comparatively limited empirical attention directed at specialised marine infrastructure in emerging construction markets such as Oman (Al Maamari & Khan, 2021). Second, while individual causal categories have been examined in isolation, there is a paucity of studies that simultaneously assess the relative influence of multiple heterogeneous VO cause categories on project performance within a single structural framework. Third, structural modelling approaches capable of accommodating complex, multi-construct causal relationships, such as Partial Least Squares Structural Equation Modelling (PLS-SEM), remain underutilised in VO research despite their suitability for exploratory, prediction-oriented analysis of latent constructs in small-to-medium sample construction contexts (Hair et al., 2019). Critically, no validated, context-sensitive model currently exists that is tailored to the institutional, contractual, and environmental specificities of Oman's fishery port sector, leaving practitioners, government agencies, and project stakeholders without an evidence-based framework for proactive VO management and performance improvement.

This study addresses these gaps by empirically examining the causes and performance impacts of variation orders in Omani fishery port projects through a PLS-SEM analytical framework. Seven theoretically and contextually grounded VO cause categories are operationalised as independent constructs: contractor-related causes (CON), client-related causes (CR), consultant-related causes (CS), environmental-related causes (ER), innovation-related causes (IR), organisational-related causes (OR), and resource-related causes (RR). These are hypothesised to exert differential effects on project performance (PP), measured across cost, time, quality, and stakeholder satisfaction dimensions. By modelling these relationships simultaneously, the study moves beyond descriptive enumeration of VO causes toward a predictive understanding of which categories matter most for project outcomes in this specific context. The findings are intended to generate both theoretical contributions, specifically an integrated, sector-specific causal model of variation order impact, and practical guidance for contractors, engineering consultants, and public procurement authorities seeking to strengthen change management governance within Oman's maritime infrastructure programmes.

The remainder of this paper is structured as follows. Section 2 presents a systematic review of the relevant literature, establishing the theoretical foundations for the proposed conceptual framework and research hypotheses. Section 3 details the research methodology, including the questionnaire instrument design, sampling strategy, and PLS-SEM analytical procedures. Section 4 reports the results of the measurement and structural model assessments. Section 5 provides a discussion of findings in relation to the seven hypothesised causal pathways and their implications for VO management practice in Oman. Section 6 concludes with theoretical contributions, practical recommendations, study limitations, and directions for future research.