Tools and Techniques in Risk Identification: A Research within SMEs in the UK Construction Industry

Abstract

Risk identification plays a key role in the success of managing risk. Failure in the identification of risks can cause inadequacy in the whole process of risk management which led to non-achievement of organisational objectives. Tools and techniques facilitate the process of identification, and need to be adopted on the basis of firms' characteristics. The difficulty to recognise applicable tools and techniques within organisations is investigated as one of the key barriers that obstruct practise of risk management. This study discusses the efficacy of different tools and techniques of risk identification within Small and Medium Enterprises (SMEs) in the UK construction industry. Results from a questionnaire survey shows the challenges faced by SMEs in undertaking risk identification and highlights the most common techniques adopted among 453 organisations. Documentation review, expert judgment, checklist analysis and information gathering are seen as the most important techniques within risk identification; which are practised for their valuable results, uncomplicated processes and easy to understand structure. Conversely, the group-based techniques like brainstorming and Delphi techniques because of SMEs' inadequate level of knowledge and resources are less practised.