The findings of this study cannot be generalised statistically to all of Ghana because it is geographically constrained, with respondents only drawn from a purposive sampling of construction organisations in the Greater Accra Region. Furthermore, the study did not distinguish between local and foreign contractors.
As Adams (2008) demonstrated, perceptions of risks between the two groups tend to vary. Nevertheless, as asserted by Chileshe (2004), the findings represent a snapshot of the perceptions of construction professionals regarding the likelihood and the degree of impact of the identified risks on construction projects. The second limitation pertains to the usage of survey data based on self-reported opinions of professionals within organisations. Such data may not provide reliable estimates of the likelihood of occurrence and severity of impact of risks. However, there is consistency between the quantitative and qualitative parts (such as the literature review) of this study. Moreover, the results do appear to be consistent with previous research examining the likelihood of occurrence and severity of impact of risk factors on construction projects.
be the least important. These results also provide some insights into the Ghanaian contractors’ understanding of the risk of financial failure. Given that no distinction was provided between ‘contractor failure’ and ‘client failure’ within the catalogue of risks, as in previous studies classifying financial failure, the lower ranking (8th) of this risk by contractors compared with either clients or consultants suggests the contractor sub-group could have made incorrect assumptions. Kartam and Kartam (2001) suggest that this risk is linked to economic conditions, and the importance attached by contractors to it would be dependent on the economic climate at the given time. Thus, during recessionary periods, contractors would be expected to desire a risk-sharing approach.
Magnitude of the impact of quality and performance Quality and performance control was ranked fifth based on the overall sample score; it was ranked fourth and fifth by clients and consultants, respectively, whereas contractors ranked it tenth. This finding is very notable given that contractors have a major influence on the end product during the construction process. However, as observed by Agyakwa-Baah (2009), specifications from clients are not always adequate, and contractors seek to make profit by compromising and using low-quality materials. Corruption is another contributor to the lack of control over quality and performance (Agyakwa-Baah, 2009). One of the mitigating measures for this risk is the adoption of effective quality control procedures.
Analysis of the results revealed that there was complete agreement among the three samples (clients, contractors and consultants) regarding the ranking of the financial risk factor ‘delay in payment’. There was also complete agreement between the clients and consultants on the ranking of the economic risk factor ‘inflation’. Nevertheless, some differences in the perception of risk occurrence were found to exist in relation to ‘construction methods’, ‘inflation’, ‘weather conditions’, ‘ground conditions and contaminant conditions’, and ‘poor communication amongst project team’. Whereas the clients and contractors did not regard some of these risk factors as crucial, the contractors ranked ‘construction methods’, ‘weather conditions’ and ‘ground conditions and contaminant conditions’ moderately higher than did the clients and consultants. In contrast, poor communication amongst project team’ and ‘inflation’ were ranked higher by
‘consultants’. Several implications emerge that affect the implementation of mitigation measures targeting the consequences of the risks affecting construction projects in the Ghanaian construction industry. Three can be singled out as having major implications.
Economic implications
The issue of economic risk factors is of paramount importance given that the construction industry is facing a number of challenges that the present economic crisis has exacerbated. Moreover, price fluctuations and high CONCLUSIONS
This paper has presented the perceptions of contractors, clients and consultants within medium and large Ghanaian construction-related organisations regarding the likelihood of occurrence and severity of impact of construction project risk factors. The risk factors identified from an extensive literature review have been analysed using analysis of variance in order to identify differences in perception among the respondent sub-groups (contractors, clients and consultants), and descriptive statistics such as mean scores and standard deviations were used to rank the factors.
It can also be concluded that the ranking and importance of different factors vary between developed and developing economies. For example, a study by Odeyinka et al. (2008) limited to contractors in the UK ranked ‘changes to initial design’ first in both frequency and severity of impact, whereas ‘delay in payment from the client’ is the major risk factor in developing economies. The different risk variable rankings between developing countries (as identified in this study) and developed countries (e.g., Odeyinka et al., 2008) illustrates how the country context sheds new theoretical light on the interpretation and importance of risk variables.
Relationship implications
In terms of the relationship risk factor, it is worth noting that effective communication is vital to project success and must be established early in the project.
Another risk factor is that of resources. In Ghana, finding labour for a project is not a problem, but factories and equipment are a major problem for most construction firms, especially local firms. One major challenge mentioned by professionals who work for local firms was that local construction organisations are gradually dying out because foreign firms carry out almost all the projects, leaving very few projects for local firms.
ACKNOWLEDGEMENTS
The material for this paper was extracted from an MSc dissertation in project management on ‘Implementation of risk assessment and management practices (RAMP) in medium and large Ghanaian Construction Organisations’ on which the authors carried out further analysis.
inflation have contributed to considerable instability in the industry. It can also be argued that financial risks are vital to organisations and the economy as a whole.
Freezes on capital, delays in payment, bankruptcy of stakeholders or financial failure all create difficult situations for firms carrying out projects. This situation calls for movement towards bespoke contracts, which might introduce contract flaws, as opposed to the over-reliance on standard contracts. This change would not only enable contractors to allocate risk to the client by ensuring that interest is paid on delayed payments, but it could also incorporate better payment terms.
Government implications
The political risk factor was ranked fourth by the three groups in terms of the severity of impact. Change of government and change in government policy are ever-present risk factors in view of the frequency of elections (every four years in Ghana). Therefore, the inference to be drawn is that during that period (election years), most government projects and pending payments are put on hold until the next ruling party comes into office.
This situation creates problems for the industry because monies are locked up and, therefore, organisations are not able to take on other private jobs.
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