Enterprise risk management in international construction firms: drivers and hindrances

Purpose - The specific purposes of this paper are: to identify the critical drivers for and hindrances to enterprise risk management (ERM) implementation; and to compare the influence of these factors on ERM implementation between large and small-medium (SM) Chinese construction firms (CCFs) in Singapore. Design/methodology/approach - A questionnaire survey was conducted and responses were received from 35 experienced managers in CCFs operating in Singapore. Findings - A total of 13 drivers and 22 hindrances were found critical to ERM implementation in Singapore-based CCFs. Improved decision making were the top influential driver, while insufficient resources (e.g. time, money, people, etc.) were the most significant hindrances. Additionally, despite significant differences in the mean scores of seven drivers and four hindrances, the large and SM CCFs agreed on the rankings of drivers and hindrances, respectively. Research limitations/implications - As the survey was performed with the Singapore-based CCFs, there may be geographical limitation on the identification of the critical drivers for and hindrances to ERM implementation. The sample size was still small, despite a relatively high response rate. Practical implications - The findings of this study allow the management to strengthen the positive influence from the drivers and overcome the challenges posed by the significant hindrances. Originality/value - Despite studies on ERM in various industries, few studies have attempted to disclose the factors driving and hindering ERM implementation in construction firms. Thus, this study expands the existing literature relating to ERM. An understanding of the drivers for ERM implementation enables the management to obtain sufficient support for the ERM program and strengthen the positive influence from the drivers. The identification of the hindrances allows the management to be clear about the challenges faced by the ERM program and take measures to diminish their negative influence and overcome them. Additionally, other construction firms can use the drivers and hindrances identified in this study to prepare their customized list of drivers and hindrances.