CONSTRUCTION STAKEHOLDERS’ PERSPECTIVE ON EXTERNAL RELATED RISK FACTORS INFLUENCING CONSTRUCTION PROJECT PERFORMANCE

Abstract

The construction industry is extremely complex, with dynamic project environments creating an atmosphere of high uncertainty and risk. For that reason, risks in construction project have become an inevitable feature and the industry is susceptible to numerous business, socio-political and technical risks that negatively influence project delivery. This study therefore investigates the causes of external risks factors in construction project delivery and the effect on project and organisational performance so that efficient control measures can be designed to minimise its occurrence. A quantitative research design was adopted, and the sample comprised of randomly selected construction professionals in the Western Cape Province. The data was statistically analysed using descriptive and inferential analyses. The salient findings revealed that socio-political-related risk factors were the major causes of risks during construction project delivery, these factors include labour strikes and disputes due to union issues, excessive influence by government on court proceedings regarding construction project disputes, and constraints on the availability and employment of expatriate staff. In addition, the study revealed the impact of external related risks on projects and organisational performance, and it was found that cost overrun was ranked the most significant on project performance and disputes between parties to the contract was ranked the most significant on organisational performance. In the context of the South African construction industry, previous studies tended to focus more on internal risks as opposed to external risks. Therefore, this study makes a contribution to the body of knowledge on the subject within a previously unexplored context. The study provides insights with regard to the sources of external related risks associated with construction project within the context of the South African construction industry.