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

Abstract

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.