Arewa, A and Farrell, P (2012) A review of compliance with health and safety regulations and economic performance in small and medium construction enterprises. In: Smith, S D (ed.) Proceedings of 28th Annual ARCOM Conference, 3-5 September 2012, Edinburgh, UK.
Abstract
Small and medium enterprises (SMEs) constitute over 90% of construction businesses and are vital to construction industry operation. Health and safety regulations in the UK compel all organizations, regardless of their nature or size to comply with health and safety rules. However, there is evidence that the risk of suffering an occupational accident in SMEs is higher compared to large enterprises. For every 100,000 workers in the European Union SME sector there are more than 4100 accidents involving over three days absence; while the same rate is 3088 in large firms. In terms of cost, SMEs spend more to remedy (considering costs of rectification work, fines, prosecutions and sentences) adverse health and safety incidents. Fundamentally, the high cost of human capital and the destabilizing effects of health and safety make the financial performance of SMEs exposed to greater uncertainties and risks. Indeed SME financial performance is often worse than for large firms. Various attempts by previous research work to substantiate the relationship between compliance with safety and financial performance of SMEs seems elusive. The research question is; does compliance with health and safety enhance SME financial performance? It is argued that SME commitment to health and safety spins off into many aspects of business performance and thus they simultaneously also benefit from better profitability. The paper is based on a literature review and an appraisal of HSE prosecutions in the period 2007-2011. It is a supplementary study and part of an ongoing PhD that seeks to appraise the effects of investment in health and safety in the UK construction industry.
| Item Type: | Conference Paper (Paper) |
|---|---|
| Uncontrolled Keywords: | compliance; financial performance; health and safety; SME |
| Index terms: | European Union, literature review, commitment, human capital, health and safety, compliance, appraisal, construction industry, occupational accident, evidence, business performance, profitability, regulation, financial performance |
| Subjects: | evaluation and assessment methods, psychology, data analysis and analytics, economic analysis, performance measurement, factor and component analysis, physical geography and landforms, health risk and incident analysis, economics, business analysis, health safety and environment, industry analysis, political science |
| Topics: | Quality Management, Organizational Design, Business Strategy, Health and Safety, Research Practice, Geographical Context, Governance |
| Descriptive scope: | 4 PCTA |
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