Project Risk Management and Performance in the Ghanaian Construction Industry

Abstract

The study sought to assess the perception of project risk, project risk management practices in the Ghanaian construction industry and its effect on project performance. It employed a mixed approach using an exploratory sequential design. Contractors, quantity surveyors, and project managers were interviewed and given questionnaires. The responses analysed using descriptive statistics, structural equation modelling and thematic analysis. The study found that the construction industry perceived risk as an event with a negative outcome and risks inherent in the industry included financial risk, safety and human risk, political risk and weather conditions. The study also found that the main response to the various risks is in the industry was risk reduction. Project risk had a 52% significant negative effect on project performance. Measuring risk in the project lifecycle, risks at project initiation, planning and execution had negative effect on project performance. However, risks at project closure phase did not have any significant effect on project performance. The study concluded that firms in the construction industry perceived that risk had damaging effect on their performance. Also, the industry adopted risk reduction strategies and a backup (contingency) to manage risks. The study recommended that though risks are mostly negative outcomes, some event have positive outcomes hence a proper risk assessment can improve project performance in the construction industry. Also, more resources should be allocated to manage risk since it accounts for more than half of project performance. Continuous monitoring of risks should be done in all phases of the project lifecycle to avoid escalation of risk