An Investigation of preferences of risks responses in Malaysia.pdf

An effective risk management system is significant in providing a better decision making framework to achieve project or organisational objectives. Risks cannot be avoided in such dynamic construction sector, irrespective of construction project size. An appropriate treatment plan should be adopted to counter different types of risks.

The selection of risk response should consider the magnitude of the risk significance and its impacts on the project objectives. The objectives of this paper are to identify risk responses taken by local construction players in facing with the risks and also to study the underlying reasons for the preference of risk retention in treatment of financial risk. A combination of questionnaire survey and interview was applied to investigate the selection of treatment plans in dealing with risks. Different risk treatment plans were selected to deal with the different risks in accordance to the risk nature and characteristic themselves. The questionnaire survey result shows that risk retention is the preferred strategy when responding to financial risk while risk control is chosen to react with time risk. A follow-up clarification by interview survey was carried out to further investigate respondents’ responses. This study could help in expanding the risk management knowledge in the Malaysian construction industry by increasing one’s understanding towards the suitability of risk responses employed for different kinds of risks.