Risk management implementation in small and medium enterprises in the UK construction industry

Abstract

Purpose – The competition and challenges facing construction firms during the recent recession have brought risk management (RM) to the fore in people’s minds. Examination of the difficulties of implementing RM in small and medium enterprises (SMEs) in the UK construction industry has been relatively untouched. The paper aims to discuss these issues. Design/methodology/approach – As part of on-going research to facilitate RM processing aimed at improving the competitiveness of SMEs, the difficulties in RM implementation were identified through a literature review of RM implementation in SMEs. Postal questionnaire were sent to SMEs who have experience of construction management. Findings – Of the 153 of SMEs responding, most highlighted that the main difficulty experienced is how to scale RM process to meet their requirements. None of the available standards explain the fundamental principle of applying RM to the situations that SMEs find themselves in. This difficulty is further exacerbated by a lack of management skills and knowledge in the adoption of RM tools or techniques to identify and analyse the business’ risks. Originality/value – The identified difficulties can be considered to develop a process to facilitate RM process within SMEs.