An analysis of risk management in practice: the case of Ghana’s construction industry

2015 ◽  
Vol 13 (2) ◽  
pp. 240-259 ◽  
Author(s):  
Adwoa Boadua Yirenkyi-Fianko ◽  
Nicholas Chileshe
Keyword(s):  
Risk Management ◽  
Construction Industry ◽  
Management Practices ◽  
Perceived Benefits ◽  
Scoring Method ◽  
Cross Sectional ◽  
Content Type ◽  
Private And Public ◽  
Internal Benchmarking ◽  
Project Objectives

Purpose – The purpose of this paper is to report the findings of research into the levels of awareness, usage and benefits of risk assessment and management practices (RAMP) within the construction industry in Ghana. Design/methodology/approach – The study was conducted through a structured questionnaire administered to 103 construction professionals practising with construction client (private and public), consultant and contractor organisations within the Ghanaian construction industry. The results were analysed to establish the current levels of awareness, usage and perceived benefits of risk management practices. Survey response data were subjected to descriptive statistics; subsequently, ANOVA and other non-parametric tests were used to examine the differences in the levels of agreement of the perceived benefits. Findings – This study illustrates that although the majority of the respondents are aware of RAMP, some professionals found the process not to be formal. Relative to the benefits, there was a disparity in the ranking of agreement scores on two of the eight benefits among the respondents in relation to “product to the required quality” and “reduction in contract claims”. However, they all agreed on “improved team morale” as the most important benefits. Research limitations/implications – The research limitation of the study is that the cross-sectional data made it difficult to generalise the findings. Geographically, only respondents from construction organisations in the Greater Accra Region were considered. However, it is recommended that future work on RAMP be extended to cover all the regions of the country. Practical implications – The findings of the study provide practical for organisations to measure the benefits and capture the awareness of risk management practices through the provision of a framework based on an index and scoring method. This can be used by senior management in assessing the current benefit levels within projects “internal benchmarking” and has potential for external benchmarking purposes. Furthermore, through education and training, both formal and informal process including more information and provision of expertise within RAMP could enhance the levels of awareness. Originality/value – Little is known about the current levels of awareness, usage and benefits of risk management among Ghanaian construction organisations, and this study provides some insights and deepening our understanding on the uptake and perceived benefits of RAMP among construction professions in Ghana. These findings may help construction practitioners in having an increased awareness of risk management practices, and this can further lead to a higher uptake and usage resulting in reaping the advocated benefits of the implementing risk management practices such as achievement of project objectives of time, cost and quality, as well as enhanced decision-making processes.

A stakeholder-based risk assessment and intervention framework for international construction projects

2019 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Tao Wang ◽  
Shangde Gao ◽  
Pinchao Liao ◽  
Tsenguun Ganbat ◽  
Junhua Chen
Keyword(s):  
Risk Factors ◽  
Risk Assessment ◽  
Risk Management ◽  
Construction Projects ◽  
Management Practices ◽  
Intervention Strategies ◽  
The Body ◽  
Content Type ◽  
International Construction ◽  
Project Objectives

Purpose The purpose of this paper is to construct a two-stage risk management framework for international construction projects based on the meta-network analysis (MNA) approach. A plethora of international construction studies seems to assume risks as independent and therefore, risk intervention strategies are usually critiqued as ineffective. Design/methodology/approach In the risk assessment stage, a multi-tiered risk network structure was developed with the project objectives, risk events, risk factors and stakeholders, and critical risk factors were selected based on a series of calculations. In the risk intervention stage, targeted risk intervention strategies were proposed for stakeholders based on the results of the first stage. A highway construction project in Eastern Europe was selected as a case study. Findings The results showed that 17 risk factors in three categories – external, stakeholder-related and internal – are critical, and the project manager, construction management department, supplier and contract department are the most critical stakeholders that affect the entire project performance. Based on the critical risk factors and project stakeholders, targeted risk intervention strategies were proposed. The risk assessment results of MNA were found to be more reliable and consistent with the project conditions than the risk matrix method; the risk intervention strategies of MNA can effectively address project objectives. Originality/value This study modeled risk priorities based on risk associations and put forward a new method for risk management, supplementing the body of knowledge of international construction. The results of this study are of critical importance in management practices.

Regression analysis of the influence of demographic characteristics using risk management practices within South African small and medium construction enterprises

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Berenger Yembi Renault ◽  
Justus Ngala Agumba ◽  
Nazeem Ansary
Keyword(s):  
Risk Management ◽  
Regression Analysis ◽  
Construction Industry ◽  
South African ◽  
Management Practices ◽  
Action Planning ◽  
Developed Countries ◽  
Risk Identification ◽  
Demographic Characteristics ◽  
Content Type

Purpose Demographics are perceived to influence risk management practices (RMPs) in construction. However, empirical evidence supporting this perception is lacking in the South African Construction Industry (SACI), especially within small and medium enterprises (SMEs). This study, therefore, aims to investigate the influence of demographic characteristics on RMPs. Design/methodology/approach This study followed a positivist research philosophy, using a questionnaire survey for data collection. In total, 225 questionnaires were distributed, of which 187 were returned from conveniently sampled respondents, which included owners and senior managers of construction SMEs organizations in Gauteng province in South Africa (SA). In total, 181 questionnaires were usable, yielding a response rate of 80.44%. Data from the survey were analyzed using descriptive and inferential statistics i.e. multiple regression analysis (MRA). The outputs were represented using percent and regression coefficients values, respectively. Findings In total, 42 practices were established from the literature review and grouped into 9 major RMPs. The data analysis suggested that understanding the organizational environment, defining objectives, resource requirements, risk measurement, risk identification, risk assessment, risk response and action planning, communication and monitoring and review are reliable and valid practices. Findings from MRA established that demographic characteristics i.e. experience in the construction industry (CI), education level and the number of employees in the organization are not good predictors to determine the use of RMPs. Research limitations/implications The study was limited to the data acquired from the SACI and to a lesser extent, construction SMEs in Gauteng. Therefore, the findings cannot be generalized to all SMEs in SA. Though neighboring and developing countries can use the RMPs identified in this study, the results cannot be directly used in developed countries without adequate substantiation. Practical implications The current study provides useful information to assist construction organizations to pay more attention to risk management implementation. The RMPs established in this paper are reliable and valid in projects undertaken by SMEs, and therefore, may be used by top management and/or the risk task team of these enterprises for effective project risk management. Originality/value The study presents findings of an investigation of the influence of demographics on RMPs from the perspectives of construction SMEs, an area less explored. This work advances knowledge of RMPs in the SME sector. It, therefore, adds value to researchers and industry practitioners on the theme where no agreement has been attained relating to key factors and practices that should constitute a risk management model.

Measuring project risk management process for construction contractors with statement indicators linked to numerical scores

2010 ◽  
Vol 17 (4) ◽  
pp. 336-351 ◽  
Author(s):  
Grant Kululanga ◽  
Witness Kuotcha
Keyword(s):  
Risk Management ◽  
Construction Industry ◽  
Management Practices ◽  
Project Risk Management ◽  
Management Process ◽  
Project Risk ◽  
Content Type ◽  
Management Processes ◽  
Risk Management Process ◽  
Sub Saharan

PurposeThere is relatively low implementation of formal project risk management methods in practice, leading to the construction industry consistently suffering from poor project performance. This study aims to ascertain the extent to which current project risk management practices are used by construction contractors in one of the countries of the sub‐Saharan region – Malawi.Design/methodology/approachA management process tool with statement indicators linked to numerical scores was conceived that characterised a series of steps of project risk management process. To ascertain the degree to which project risk management processes were used, a questionnaire survey was employed. Data were elicited from registered Malawian construction contractors on the elements underlining a series of steps of project risk management process as espoused by the literature. Out of 84 sampled construction contractors, 51 completed questionnaires were received.FindingsApart from large‐sized and more experienced construction contractors, all the small and medium‐sized construction contractors – which constitute the largest proportion of the construction industry – were characterised by a low implementation of the various required steps for the project risk management process. The application of project risk management processes was significantly influenced by the various categories of size and experience of the surveyed construction contractors at p<0.01. Furthermore, contingence planning within the series of steps of project risk management process featured highly among the surveyed construction contractors. The majority of the variables under the series of steps of project risk management process were positively and significantly linked to progression in size and experience of construction contractors at p<0.01.Research limitations/implicationsThe study forms the basis for further research; replication of this study to other parts of world about how the actual implementation of the series of steps of project risk management process is undertaken could yield rich lessons for the construction industry.Practical implicationsThe intentional move by industry towards measuring management processes as a precursor to uncovering the root causes that underlie project success or failure to provide quick feedback for remedial action is supported by an approach such as this.Originality/valueThe originality of this paper lies in its uniqueness for a systematic approach to quantifying the project risk management processes with the view to understanding the implementation behaviours of construction contractors in one country in the sub‐Saharan region.

The evolution of stakeholder management practices in Australian mega construction projects

2018 ◽  
Vol 25 (6) ◽  
pp. 690-706 ◽  
Author(s):  
Rebecca Jing Yang ◽  
Sajani Jayasuriya ◽  
Chathuri Gunarathna ◽  
Mehrdad Arashpour ◽  
Xiaolong Xue ◽  
...  
Keyword(s):  
Stakeholder Engagement ◽  
Construction Projects ◽  
Management Practices ◽  
Stakeholder Management ◽  
Empirical Studies ◽  
Stakeholder Analysis ◽  
Secondary Data ◽  
Project Teams ◽  
Content Type ◽  
Project Objectives

Purpose The complicated nature of megaprojects requires appropriate analysis of multiple stakeholders to achieve project objectives and to accommodate stakeholder interests. During the last two decades, many stakeholder theories and empirical studies have sprouted. Although previous studies have contributed to the development of stakeholder theory, it seems that these theoretical advances have not been fully adopted and acknowledged in practices, especially in megaprojects. The purpose of this paper is to explore the evolution of stakeholder analysis and engagement practices adopted in the Australian megaprojects over the last two decades. Design/methodology/approach Four mega construction projects are described and analysed in this study. Secondary data were first assembled in order to get general knowledge of each case. Interviews were conducted with the project directors. Project documents were collected from the project teams and reviewed. Wherever the project information was unclear, e-mails were sent to the directors and the team members to confirm the details. Findings Project teams have started to apply snowball rolling and stakeholder attribute assessment methods to analyse stakeholders. However, there is still a way to adopt the “network” analysis perspective because the project teams are reluctant to use complicated tools which need specialists’ assistance. The stakeholder engagement practices have evolved to an extent where the project teams monitor the dynamics of stakeholders’ requirements. Projects teams have identified the importance of continuity to manage stakeholders in these massive projects. However, a structured method selection mechanism for stakeholder engagement has not been developed. Originality/value This study will help academics to understand the adoption progress and status of stakeholder management methods.

Cybersecurity and the new firm: surviving online threats

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Vallari Chandna ◽  
Praneet Tiwari
Keyword(s):  
Risk Management ◽  
Data Privacy ◽  
Small Firms ◽  
Management Practices ◽  
Privacy Management ◽  
Privacy Risk ◽  
Entrepreneurial Ventures ◽  
Content Type ◽  
New Firm ◽  
Established Firms

Purpose Nascent firms and startups are often subject to challenges that their more mature counterparts can avoid. While cybersecurity is an issue that all firms contend with, it is especially challenging for new entrepreneurial ventures who lack the resources and capabilities of established firms. The purpose of this paper is to seek to delve deeper into the cybersecurity and risk management needs of small firms and startups. Design/methodology/approach Extant literature and available tools are explored to develop a usable framework applicable to small firms and new entrepreneurial ventures. Findings The liabilities of newness and smallness make entrepreneurial ventures a unique context in which to study the significance of cybersecurity and data privacy risk management. The authors offer an overview of issues and potential solutions relevant to entrepreneurial ventures. Research limitations/implications While offering practical insights, the work is a theoretical framework. The framework will enable researchers to develop more nuanced theory when it comes to cybersecurity and data privacy risk management. Practical implications The framework illustrates four distinct contexts for cybersecurity and risk management when it comes to the needs of small firms and startups. Adoption levels are explained, and small business operators and entrepreneurs can thus use the framework to determine the most appropriate approach for their enterprise. Originality/value The authors develop a framework illustrating adoption of different security and risk management practices by entrepreneurial ventures based on their specific needs and context. The authors thus offer practical solutions for startups and nascent firms regarding cybersecurity and privacy management.

Customisable framework for project risk management

2017 ◽  
Vol 17 (1) ◽  
pp. 68-89 ◽  
Author(s):  
Jennifer Firmenich
Keyword(s):  
Risk Management ◽  
Management Practices ◽  
New Institutional Economics ◽  
Future Research ◽  
Project Risk Management ◽  
Management Process ◽  
Project Risk ◽  
Content Type ◽  
Risk Management Process ◽  
Management Concepts

Purpose The purpose of this paper is to emphasise on the need for efficient and effective project risk management practices and to support project managers in increasing the cost certainty of projects by proposing a new framework for project risk management. Design/methodology/approach The author adopts a “constructivist” methodology, drawing on practices common in construction management sciences and new institutional economics. Findings The author presents a holistic and customisable project risk management framework that is grounded in both practice and academia. The framework is holistic because, amongst others, all steps of the typical risk management process are addressed. The framework is customisable, because it allows for alternative ways of implementing the project risk management steps depending on the project-specific circumstances. Research limitations/implications The framework does not address the potential unwillingness of the project players to set up a project risk management process, at all. The proposed framework has not yet been tested empirically. Future research will seek to validate the framework. Originality/value The framework is designed to account for the difficult circumstances of a complex construction project. It is intended to support decision makers in customising a practical yet comprehensive project risk management concept to the characteristics of the unique project. Although many other project risk management concepts are designed based on the assumption that actors are perfectly rational and informed, this framework’s design is based on the opposite assumption. The framework is dynamic and should adapt over time.

Factors influencing Midwestern grain farmers’ use of risk management tools

2019 ◽  
Vol 79 (2) ◽  
pp. 192-203
Author(s):  
Brian K. Coffey ◽  
Ted C. Schroeder
Keyword(s):  
Risk Management ◽  
Management Practices ◽  
Mail Survey ◽  
Management Tool ◽  
Farm Size ◽  
Management Tools ◽  
Content Type ◽  
Multinomial Logit Regression ◽  
Decision Choices ◽  
Grain Farmers

PurposeThe purpose of this paper is to identify the relationships between grain farm and farmer profiles and their respective choices to use forward pricing techniques and revenue protection crop insurance to manage risk.Design/methodology/approachAn e-mail survey of Midwestern grain farmers elicited farmer demographic information, farm profile, risk attitudes and farmer use of forward pricing and revenue protection insurance. Responses regarding use of risk management tools were compiled as choices to use possible bundles of tools to account for simultaneous nature of the decision. Choices to use bundles of tools were used as the independent variable categories in a multinomial logit regression. Regressors were relevant data collected from the survey.FindingsFarm size, using a market advisory service, and being a technology adopter are the most important factors in predicting risk management tool use by grain farmers. Farmers tend to use forward pricing and revenue protection insurance in combination. Large farms are more likely to use forward pricing tools.Practical implicationsResults provide researchers, extension professionals and risk management specialists with a current understanding of how farm and farmer characteristics relate to use of risk management tools. The authors also elaborate on findings to provide guidance for future risk management research.Originality/valueThe survey covered 9 Midwestern states and 648 grain farmers. The survey results update understanding of grain farmers’ risk management practices. The empirical approach treats risk management decisions to use available tools as simultaneous, which recent literature suggests is more appropriate than earlier approaches.

Determinants of voluntary formation of risk management committees

2014 ◽  
Vol 29 (7) ◽  
pp. 649-671 ◽  
Author(s):  
Nkoko Blessy Sekome ◽  
Tesfaye Taddesse Lemma
Keyword(s):  
South Africa ◽  
Risk Management ◽  
Corporate Governance ◽  
Management Practices ◽  
Emerging Economy ◽  
Board Structure ◽  
Content Type ◽  
Listed Firms ◽  
Practical Implications

Purpose – The aim of this paper is to examine the nexus between firm-specific attributes and a company’s decision to setup a separate risk management committee (RMC) as a sub-committee of the board within the context of an emerging economy, South Africa. Design/methodology/approach – The authors analyse data extracted from audited annual financial reports of 181 non-financial firms listed on the Johannesburg Securities Exchange (JSE) by using logistic regression technique. Findings – The results show a strong positive relationship between the existence of a separate RMC and board independence, board size, firm size and industry type. However, the authors fail to find support for the hypotheses that independent board chairman, auditor reputation, reporting risk and financial leverage have an influence on a firm’s decision to establish RMC as a separately standing committee in the board structure. The findings signify the role of costs associated with information asymmetry, agency, upkeep of a standalone RMC, damage to the reputation of directors and industry-specific idiosyncrasies on a firm’s decision to form a separate RMC. Research limitations/implications – As in most empirical studies, this study focuses on listed firms. Nonetheless, future studies that focus on non-listed firms could add additional insights to the literature. Investigating the role of firm-specific governance attributes other than those considered in the present study (e.g. gender of directors, ownership structure, etc.) could further enhance the understanding of antecedents of risk-management practices. Practical implications – The findings have practical implications for the investment community in assessing the quality of risk management practices of companies listed on the JSE. Furthermore, the results provide insights that are potentially useful to the King Committee and other corporate governance regulators in South Africa in their effort to improve corporate governance practices. Originality/value – The present study focuses on firms drawn from an emerging economy which has profound economic, institutional, political and cultural differences compared to advanced economies, which have received a disproportionately higher share of attention in prior studies. Thus, the study contributes additional insights to the literature on corporate risk management from the perspective of an emerging economy.

scholarly journals Establishing Core Factors of Risk Management Influencing Performance Outcome of Small and Medium Firm's Construction Projects in Gauteng

2020 ◽  
Vol 25 (2) ◽  
pp. 93-127
Author(s):  
Berenger Yembi Renault ◽  
Justus Ngala Agumba ◽  
Nazeem Ansary
Keyword(s):  
Risk Management ◽  
Construction Industry ◽  
South African ◽  
Construction Projects ◽  
Geographical Area ◽  
Risk Identification ◽  
Influential Factors ◽  
Performance Outcome ◽  
Management Factors ◽  
Project Objectives

The quest for delivering successful construction projects has urged South African small and medium enterprises (SMEs) to adopt risk management in their projects. However, it has been evinced that SMEs projects in South Africa especially in the Gauteng province have encountered poor performances. Thus, this article determines core risk management factors influencing project outcome of SMEs. A deductive approach was embraced using a questionnaire. The data were collected from 181 conveniently sampled respondents in Gauteng, graded from Grade 1 to 6 of the CIDB (Construction Industry Development Board) grading system. The Statistical Package for the Social Science (SPSS) version 23 was used to analyse the data by computing exploratory factor analysis and multiple regression analysis. It was revealed that SMEs performance outcome is influenced by eight risk management factors. The influential factors are organisational environment, defining project objectives, resource requirements, risk measurement, risk identification, risk assessment, risk response and action planning and monitoring, review and continuous improvement. The risk management factors established in this article are reliable and valid in projects undertaken by SMEs in the South African construction industry and the findings can serve as a guideline for contractors to achieve success in this context. The study may be repeated in other countries globally, however, it cannot be generalised due to the restrictions pertaining to the geographical area.

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