Risk management analysis in construction enterprises in selected regions in Poland

Abstract

This paper aims to outline the selected issues of risk management in construction enterprises operating in the Silesian and Małopolskie voivodships (Poland). In this context, it seems vitally important to have risk accurately identified, quantified and, consequently, responded to in the right way. Although the paper is mainly empirical in its character, it is based on a theoretical background, particularly when it comes to risk management in the construction industry, which is referred to in the literature on the subject as CRM (Construction Risk Management). The paper contains a review of the literature in this field and uses the method of synthesis. It emphasises the applicability and methodology of the issues discussed here, i.e. those which were verified in the empirical research conducted among construction contractors as participants of investment and construction processes.

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“…An extreme way of handling risk in the construction industry is making a decision not to perform high-risk works. The results of the empirical studies from 2016, however, show that 47% of contractors agree to perform even high risk construction projects (Myrczek, and Tworek, 2019;Myrczek et al, 2020). In the research the respondents indicated some reasons for taking up risky construction projects.…”

“…These included: ensuring healthy cashflow (4 contractors), maintenance of high turnover figures (2 contractors), financial reasons (2 contractors), the belief that risk can be eliminated (2 contractors), an investment project with a relatively late delivery date (1 contractor), a high value investment project (1 contractor), the prestige given by the project -the renovation of Auschwitz (1 contractor), the need to perform a given task (1 contractor), an investment project with highly filled order portfolio (1 contractor), poor market conditions -a small number of tenders (1 contractor), good construction practice (1 contractor), a big number of employees (1 contractor), more lucrative works (1 contractor), the company's position on the market (1 contractor), the investor's insolvency (1 contractor), technical documentation (1 contractor). Such arguments allow us to get a better understanding of the motives behind construction contractors' practical decisions, although only 9% of them agreed to absorb all the risk (Myrczek, and Tworek, 2019;Myrczek et al, 2020). As many as 38% of the contractors eliminate risks, 34% of the respondents mitigate risks, while 13% of them transfer risk onto other participants of investment and construction processes (Myrczek, and Tworek, 2019;Myrczek et al, 2020).…”

“…Such arguments allow us to get a better understanding of the motives behind construction contractors' practical decisions, although only 9% of them agreed to absorb all the risk (Myrczek, and Tworek, 2019;Myrczek et al, 2020). As many as 38% of the contractors eliminate risks, 34% of the respondents mitigate risks, while 13% of them transfer risk onto other participants of investment and construction processes (Myrczek, and Tworek, 2019;Myrczek et al, 2020). For the sake of comparison -no one from among the surveyed major construction and assembly companies operating on the Polish market stated that they absorb risk, while 54% of them eliminate risks, 11.4% of the respondents transfer risks and 34.6% of the biggest contractors limit construction risks (Tworek, 2013).…”

“…This publication is a follow-up on the research into risks encountered by Polish construction companies, conducted by the authors (Tworek, 2012(Tworek, , 2013Myrczek et al, 2015Myrczek et al, , 2020Myrczek, and Tworek, 2019;Kosmalski, and Myrczek, 2019). In broad terms, the aim of a series of publications focusing on this topic is an attempt to find an answer to the following question: How should risk be managed by construction contractors operating on the Polish market?…”

“…The key reasons behind this, as indicated by the contractors surveyed in 2016, include the belief that the risk they face is not high enough to hire a person (set up a unit) to specifically deal with it (25% of the contractors) and that their peer companies do not employ any specialists in this field either  31% of the contractors (Myrczek, and Tworek, 2019;Myrczek et al, 2020).…”