Pathways for Navigating Prevalent Construction Risk Types in Nigerian Building Projects
DOI:
https://doi.org/10.5281/Keywords:
Contractors, prevalent risk types, project success, risk management, risk mitigating strategyAbstract
Contractors are compelled to reduce direct and indirect project costs due to escalating competition in the building industry. Many contractors find that implementing a risk management strategy enhances competitiveness. This study uniquely evaluates risk mitigation strategies for SMEs in a developing economy context. Thus, this study analyses the adequacy of contractors’ pathways to navigate common risk types with a view to achieving sustainable growth of contracting firms. The study adopts a survey research design and collected data from 103 contracting firms registered in categories A, B, and C of the Lagos State Tender Board using the stratified random sampling technique. Statistical tools such as frequency, percentages, standard deviation, mean, ranking, and ANOVA test were deployed for data analysis. Results show that contractors commonly use 33 pathways to navigate 13 construction risk categories, the most effective pathway being cost control and estimating techniques for managing the financial risk category. This implies that it is integral to the financial success of construction projects. Moreover, the ANOVA test of the hypothesis formulated for the study showed that there is a significant difference among the three categories of contracting firms on communication and transparency with stakeholders as a pathway for mitigating construction risks. Therefore, it is recommended that contractors implement modern cost control and estimation techniques for effective risk management. This may be accomplished by co-opting key financial experts in budgeting and keeping contingency funds on hand for emergencies.
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