The Effects of Procurement Management Practices on Risk Management in Construction Firms

Abstract

It is obvious that effective procurement management practices remain the cardinal bridge between reduction of procurement risks and successful delivery of construction projects. In most parts of Africa, construction industry is of paramount importance as an evidence of economic growth and civilization. In Ghana, the construction industry, as in other parts of the world, is huge and a crucial segment in economic development. The performance of the government and an individual is measured by the construction of roads, bridges, housing facilities, etc. This study was conducted within the Ashanti Region of Ghana. The study primarily sought to describe how procurement management practices influences risk management in construction firms, from the context of construction firms in the Ashanti Region. Statistically, there are at least 114 construction companies in Ghana, and about one-third of these firms are within the Ashanti Region. Thus, at least 38 construction firms can be located within the Ashanti Region. These firms include both private, local and foreign firms. In all, a sample frame of 80 participants was drawn for the study. Given that the study primarily sought to describe how procurement management practices influences risk management in construction firms, the study has established that the procurement management practices, for most of the firms, followed a process of risk identification, risk assessment, risk response, and in some few cases there was also a component of risk monitoring. Mostly, the management teams were responsible for risk identification/assessment procedures.