Abstract
In the era of progressive globalisation, risk has become an integral component of entrepreneurship, which makes it necessary for every enterprise to design a risk prevention plan. The research aim is to assess the expert opinions on risks and risk management alternatives for building construction industry enterprises in Latvia. To achieve the aim, the following specific research tasks are set: 1) to assess the most essential and widespread risks for building construction industry enterprises in Latvia; 2) to identify the most effective risk management alternatives for building construction industry enterprises.Research methods used: monographic, descriptive, analysis, synthesis, data grouping and a sociological method – a structured expert survey.The research results showed that almost half of the identified risks for building construction industry enterprises could be prevented by applying the risk mitigation strategy and taking various daily control and internal management measures, thereby investing no additional funds and reducing the consequences caused by the existing risks. A calculation of the average risk severity level by risk group revealed that the most essential risks affecting the building construction industry were those related to human capital.To reduce the effect of seasonality and the risk of unforeseeable orders, building construction industry enterprises have to diversify their business, developing some auxiliary kind of economic activity. This would ensure earning revenues throughout the year.
Highlights
In the era of progressive globalisation, risk has become an integral component of entrepreneurship, which makes it necessary for every enterprise to design a risk prevention plan
It might seem that risk management is meaningless, as it generates no extra revenue, yet there is not a single economic activity being not associated with the occurrence of some risk
After conducting the expert survey and performing calculations, one can conclude that the most essential risk for building construction industry enterprises was the lack of pre-financing (F3), as the probability of occurrence of it was rated as very high, and the potential loss caused by it is moderate
Summary
In the era of progressive globalisation, risk has become an integral component of entrepreneurship, which makes it necessary for every enterprise to design a risk prevention plan. The research aim is to assess the expert opinions on risks and risk management alternatives for building construction industry enterprises in Latvia. The authors of the present research have conducted the expert survey with the purpose to assess the risks and potential risk management strategies for building construction industry enterprises. After conducting the expert survey and performing calculations, one can conclude that the most essential risk for building construction industry enterprises was the lack of pre-financing (F3), as the probability of occurrence of it was rated as very high (several times a month), and the potential loss caused by it is moderate (less than 50% of net turnover). As regards the risk of noncompliance of input materials with quality standards – it could be prevented by requiring documentation certifying the quality of the materials from their suppliers and performing a study of suppliers
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