Zhao, X; Hwang, B G and Low, S P (2014) Investigating enterprise risk management maturity in construction firms. Journal of Construction Engineering and Management, 140(8): 05014006, ISSN 0733-9364
Abstract
Enterprise risk management (ERM), as a holistic approach to risk management, has been advocated in the construction industry. The objectives of this paper are to assess the ERM maturity in Chinese construction firms (CCFs) based in Singapore and uncover how ERM was implemented in these firms. Through a questionnaire survey with 35 CCFs, the data relating to ERM implementation were collected. The analysis results indicated a low level of ERM maturity in these firms, and the positive association between ERM maturity and firm size. In addition, risk communication, objective setting, and risk-aware culture were the top three scores, while formalized key risk indicators and a risk management information system were the bottom two scores. Moreover, three case studies were conducted. The cross-case comparison results substantiated the survey findings, highlighted the influence of the parent firms on the ERM implementation, and indicated that the firms without formal ERM implementation can still have some practices consistent with the ERM fundamentals. These empirical results are arguably the first to be presented for the construction industry and therefore add to existing knowledge of ERM. In addition, various organizational issues have been identified that may influence ERM maturity. The future development of the ERM body of knowledge can, for enhancement purposes, take into account ERM maturity as well as the organizational issues for implementation. Furthermore, the ERM maturity of Singapore-based CCFs can serve as a ballpark benchmark, with which the other firms can compare in terms of ERM practices, and the similar research design and method can be used to investigate ERM implementation in CCFs located in other countries. Therefore, this paper significantly contributes to the ERM body of knowledge.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | construction firms; enterprise risk management; maturity; project planning and design |
| Index terms: | cross-case comparison, survey, construction firm, questionnaire, body of knowledge, information system, project planning, Singapore, case study, low level, research design, enterprise risk management, risk management, holistic approach, implementation, construction industry, organizational issue |
| Subjects: | risk assessment, data collection methods, research design and methodology, organization, business, control systems, knowledge management, contractual arrangements, data analysis and analytics, Geography, financial risk, measurement and scaling, industry analysis, information systems |
| Topics: | Organizational Design, Digital Applications, Risk Management, Procurement, Cost Management, Business Strategy, Geographical Context, Project Management, Research Practice, Information Management |
| Descriptive scope: | 5 PCTEA |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here