Enterprise risk management practices of top ENR international contractors

Abstract

ABSTRACTConfronted with increasingly complex and severe risk situations, more and more international contractors have advocated enterprise risk management (ERM) – recognizing its integrated capacity to control risks effectively. In particular, top construction firms have benefited greatly from ERM practices by establishing their own risk management philosophies and systems. The aim of this study is to explore current ERM practices of top international contractors, as ranked by the Engineering News Record (ENR), and to identify an ERM practice model adopted by top ENR international contractors. An archival research method was employed for this study, combining a coding framework and thematic analysis, using the 2013 annual reports of the top ENR international contractors. The research proposes an integrated ERM model for analysis which combines ERM process, ERM operations and an ERM control environment. In addition, the research investigates the home location, main overseas market and main industry sector as being the external driving factors of ERM practices adopted by top ENR international contractors. The study concludes that ERM practice is a proactive and continuing process for the international contractors, driven by their internal enterprise culture and risk management desires as well as other external requirements.