Abstract:
Construction industries are prone to competitiveness and loss of profits. This is due to
multiplicity of groups of companies handling projects nowadays. Empirical evidence from
previous studies shows that lack of risk management processes affects profit output.
Identification of risk management processes and critical risk factors is important to minimising the likelihood of non-profits occurring in the industries. Thus this study is aimed at investigating risk management processes, identifying critical risk factors and validating the identified risk factors as they affects profitability and competitiveness in the construction industry in Nigeria.
Responses from 68 respondents were analysed using statistical method. Thirty significant risk
management processes were validated. A likert scale of 1 – 5 was used for qualitative analysis of survey data. Based on the survey analysis, quality of the project was identified as the most significant critical risk factor with a mean and SD value of 4.19 (0.76), followed by time allocated to project 4.18 (0.73), cost of project 4.18 (0.81), interest rate 3.99(0.82) and environment of the project 3.90 (0.85). Furthermore it was found that most construction firms, up to 93%, do not use risk management tools at the optimum value of hundred percent. Taken together these findings support strong recommendations on the need for effective risk management processes in the Nigeria construction industry. Implementation of these recommendations will minimize the likelihood of non-profits in the industry.
