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Critical success factors for enterprise risk management in Chinese construction companies
journal contributionposted on 06.12.2017, 00:00 by Xianbo ZhaoXianbo Zhao, B-G Hwang, SP Low
Construction businesses are risky ventures and enterprise risk management (ERM) has been advocated in construction companies. To ensure ERM success and the subsequent benefits, it is necessary to understand the key activities of ERM. The objectives are to identify the critical success factors (CSFs) for ERM and analyse the interrelationships among these CSFs in Chinese construction companies (CCCs). To achieve this objective, 16 CSFs were identified through a comprehensive literature review and 89 completed survey questionnaires were received. The results of the analysis show that the three most important CSFs are ‘commitment of the board and senior management’, ‘risk identification, analysis and response’ and ‘objective setting’. Additionally, the three underlying CSF groupings are (1) execution and integration; (2) communication and understanding; and (3) commitment and involvement of top management. The commitment and involvement of top management positively contributed to the communication and understanding as well as the execution and integration of ERM, while the communication and understanding facilitated the execution and integration of ERM. The proposed framework indicating the key ERM practices and the inter-grouping relationships provides an in-depth understanding of ERM in CCCs, compared with the existing not so relevant ERM frameworks in various other industries.