Hlaing, N N; Singh, D; Tiong, R L K and Ehrlich, M (2008) Perceptions of Singapore construction contractors on construction risk identification. Journal of Financial Management of Property and Construction, 13(2), pp. 85-95. ISSN 1366-4387
Abstract
Purpose Recent changes in corporate environment coupled with emerging challenges as a result of turbulent economy have exposed participants in the construction industry to more and more surprises in project management. As a result, the construction industry has witnessed significant changes particularly in procurement methods with clients allocating greater risks to contractors, making risk management a necessity, with organizations needing to look across the whole life of a project from inception to occupancy. To minimize or optimize all these risks, formulating an effective risk management system is a crucial challenge faced by any construction contractor. This paper aims to investigate contractors' perceptions of risk. Design/methodology/approach The perception of risks at estimating and tendering stage was investigated through a survey among construction contractors operating in the Singapore construction industry. The preferences of risk identification procedures and techniques are observed. Factors which are dominating constraints for the implementation of risk management elements are assessed. The process of risk identification from the standpoints of contractors and their preference of various risk response strategies to reduce the likelihood of occurrence of the identified risks and their impact were evaluated. Findings The findings from the study highlight that risk factors having great impact on the financial aspect of the project, namely lack of financial resources of the contractor, financial stability of the client and cost overruns due to delay are considered most important by contractors and that risk response methods are favored in the order of risk reduction, risk transfer, risk avoidance and risk retention. Originality/value The findings may help construction contractors in reviewing decision factors they consider when making bidding decision at estimating and tendering stage, and also be useful for improving their risk management plan in line with important risk factors considered by the construction industry.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | decision making; risk analysis; risk management; Singapore |
| Index terms: | estimating, bidding, preference, construction contractor, risk analysis, risk retention, methodology, decision-making, survey, risk identification, risk response, stability, risk reduction, project management, implementation, construction industry, risk response strategy, risk factor, risk management, cost overrun, procurement method, Singapore |
| Subjects: | structural engineering, research methods, decision-making and reasoning, Geography, project management theory and practice, financial risk, decision analysis, industry analysis, environmental hazards, risk assessment, data collection methods, practitioner, contractual arrangements, bidding, financial and cost management |
| Topics: | Risk Management, Roles and Professions, Procurement, Sustainability, Cost Management, Research Practice, Project Management, Geographical Context, Engineering Principles |
| Descriptive scope: | 4 PCTE |
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