Developing a Markov Decision Process Model to Support ESG Decision Making in the International Construction Market

In an era of increasing uncertainty and rapid change, international contractors are faced with significant challenges in navigating pressures across diverse institutional environments. In response, contractors are adopting Environmental, Social, and Governance (ESG) strategies to manage these institutional challenges and enhance their legitimacy. However, the decision-making process surrounding ESG implementation is complex, particularly under volatile conditions where traditional frameworks fall short in addressing uncertainty. This study proposes a novel approach using a Markov Decision Process (MDP) model to optimize ESG decision-making for international contractors. The results demonstrate that MDP provides a structured, scientific approach to ESG decision-making in uncertain and changing environments, offering actionable insights for contractors operating in global markets.