AN ASSESSMENT OF RISK MANAGEMENT PRACTICES FOR SME CONSTRUCTION COMPANIES IN DEVELOPING COUNTRIES: THE CASE OF MALAWI

Abstract

Infrastructure development is a critical element for economic growth for developing countries (DBSA, 2012). For Malawi, the deficit in civil infrastructure like roads and bridges, and building infrastructure like schools and hospitals if evident. However, it is common case for projects to perform below their expected performance parameters of cost, time, scope, and quality leading to chaotic project delivery and multiple project failures (Kululanga & Kuotcha, 2010). Project failures hinder the rate at which infrastructure is developed thus hindering the rate of economic growth for developing countries.

The thesis aims to investigate the various risks faced by SME contractors in Malawi, examine and analyse the current risk management tools and approaches used during projects, and develop a best practice risk management model for the Malawian context. The methodology used an extensive literature review and field survey conducted on 64 SMEs across the 4 regions of Malawi. Random sampling and a questionnaire were utilized in the field study, additionally interviews were carried out with 4 experts with relevant experience in the construction industry. Findings showed that financial, technical, and contractual risks are the most rampant. Additionally, most SME contractors only discover risks during execution phase of the project. Finally, a model was developed specifically designed for utilization by SME contractors operating within the Malawian construction industry.