An assessment of risk management techniques by subcontractors on selected construction projects in Ghana

Abstract

The construction industry is one of the most dynamic, risky and challenging industries. Managing risks in construction projects is recognized as a very important management process which enables the achievement of project objectives in terms of cost, time and quality. In achieving project and business objectives, subcontractors usually tryout numerous techniques and management practices in addressing construction risk. The aim of this study is to carefully explore the risk management techniques used by the subcontractors in the Ghanaian construction industry. The risk factors that typically affect Subcontracting and their severity on construction projects were assessed. The study investigated the relative use of various risk management practices and the popularity of available analysis techniques used by the subcontractor. The objectives of this study have been achieved through a questionnaire survey, which was used for data collection and the simple descriptive statistics, relative importance index and mean score were employed analytical tools and methods. Eighty (80) questionnaires were distributed to the subcontractors. Respondents were selected using purposive sampling technique. Results showed that subcontractors are very much familiar with various categories of risk involved in any given project. However, financial risk happens to be the most threatening of all in that, the issue of undamaged cash-flow was the profound issue. It was also revealed that subcontractors were only use to brainstorming as risk identification despite the other techniques which are more resourceful than brainstorming. Though brainstorming is good it had the limitation of being controlled by the chairman at the sitting of discussion who may sometimes exercise their own whims and caprices. Recommendations of this study suggested that, there must be improvements in education on risk management for professionals in construction industry and then availability of a robust project development process, which is documented, adaptable, periodically evaluate. Also, payment systems for completed contracts ought to be modernized to offer financial stability to subcontractors.