Project Risk Factors Facing Construction Management Firms
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Very little is known about the project risk factors that affect construction management (CM) firms, which often struggle due to a lack of effective risk management practices. This study investigates the risk factors critical to project execution in CM firms and ranks them using the analytic hierarchy process (AHP) and failure mode and effects analysis (FMEA) methods. Interviews with executives at the top 15 Korean CM firms are carried out to identify major risk factors in the CM sector, and a survey is used to develop priority ranking. We find that payment delays and project delays are the two most critical risk factors affecting CM firms because of (1) lack of communication between headquarters and field offices, (2) shift of responsibility from headquarters to a field office, (3) absence of regular monitoring of project progress, and (4) ex-post management practices. The findings presented in this study should assist CM firms in establishing more robust risk management practices, thereby improving firms’ profitability, project performance, and customer satisfaction.
KeywordsRisk management Construction management Risk factors Analytic hierarchy process Failure mode and effects analysis Korea
This research was supported by the Basic Science Research Program through the National Research Foundation of Korea funded by the Ministry of Science, ICT and Future Planning (No. 2015R1A5A1037548).
Compliance with ethical standards
National Research Foundation of Korea and the Ministry of Science, ICT & Future Planning (No. 2015R1A5A1037548).
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