Drivers for and Obstacles to Enterprise Risk Management in Construction Firms: A Literature Review

Abstract

Regardless of the increased number of studies on risk management (RM) in various firms, limited studies have strived to reveal the components driving and obstructing Enterprise Risk Management (ERM) implementation in construction firms. These firms are constantly exposed to business risks, thus requiring an integrated, focused RM approach to managing risks on an enterprise basis defined as ERM. Hence, this study aims to investigate the drivers for and obstacles to ERM implementation in construction firms. The work methodology included a literature search relating to ERM. The review spanned a decade and lustrum between January 2000 and December 2015 and was based on a combination keyword search in three databases namely; Science Direct, Taylor and Francis Online, and Emerald. Fifteen drivers and thirty-four obstacles were identified. The study revealed that proper ERM requires the board and senior management to ensure that all potential threats to ERM are taken into account. They should also check the efficiency of the measures adopted at the enterprise level, document on the outcomes and review the assessment regularly to keep it updated. Construction firms can use the drivers and obstacles revealed in this treatise to prepare their customized list of drivers and obstacles. This study contributes to global knowledge relating to ERM and allows management to overcome the challenges posed by the significant obstacles.

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