Correlation analysis between risk measurement and project success of small and medium contractors in Gauteng, South Africa

Abstract

Risk measurement (RM) and construction project success (PS) are closely related. Preceding studies highlight the importance of RM in the management of risks without revealing its effect on PS. This study aims to determine the influence of RM on the PS of small and medium enterprises (SMEs). A positivist research design was applied using a survey questionnaire circulated to 181 respondents in Gauteng, South Africa (SA). Raw data analysed using inferential statistics extracted one-component solution and evinced statistical significance (p=0.000<0.05) between RM and PS. In particular, results revealed that RM significantly influences PS of construction SMEs through delimiting the RM criteria to be adopted, establishing the level of acceptable risk and risk timeframe relevant to risk effect and risk likelihood. It is suggested that the management of SMEs and industry professionals involved in risk management should adopt RM for the management of their project risks to accomplish project objectives effectively. The study renders new empirical evidence of risk management factors that influence PS of SMEs in the context of SA. It remains to be seen whether the current finding could be replicated in other datasets. If indeed that is the case, then this article expands to the discourse and literature on RM of SMEs. However, the current findings cannot be generalised due to the restrictions pertaining to the geographical area and respondents. Keywords: Contractors, Correlation analysis, Factor analysis, Project success, Risk measurement.