RISK MANAGEMENT DETERMINANTS AND PERFORMANCE OF RESIDENTIAL BUILDINGS CONSTRUCTION PROJECTS IN NAIROBI COUNTY, KENYA
Abstract
Project performance is evaluated based on cost, time, and quality. Residential building construction projects encounter various risks that hamper those components of performance. Risk management enhances project performance and it is affected by various determinants. This study established the impact of risk management determinants on performance of residential buildings construction projects in Nairobi, Kenya. The identified determinants were risk mitigation strategy, risk management skills, project organization structure, and resource allocation. The study was anchored on decision theory, cost-benefit analysis model, and stakeholder theory. The target population was 1024 projects undertaken by contractors in the NCA 1, 2, 3 categories. The applied stratified random sampling method yielded 103 projects as the sample size (sampling factor being 0.1). Descriptive survey research design was used. The pilot study comprised sample of 5 projects. Data was collected using a questionnaire. The response rate from the targeted sample was 73.8% which was above the expected threshold. Data analysis was done on SPSS for both inferential and descriptive analysis. The respondents’ education level was noted to be 42.11%, 36.16%, and 19.74% for post-graduate, undergraduate, and diploma respectively. 50% of the respondents had worked between 5-10 years, 36.84% had worked over 10 years, while 13.16% had worked for less than 5 years. A reliability analysis was conducted using Cronbach’s Alpha test which yielded 0.762, an indication of higher level of internal consistency. The model summary indicated R to be 0.676 which showed high levels of correlation between project performance and the identified determinants. Regression analysis yielded coefficients that resulted in the equation, Y = 1.779 + 0.258X1 - 0.049X2 + 0.303X3 + 0.120X4. That illustrated that all determinants had positive correlation with project performance except project organization structure. The study concluded that risk management strategies and risk management skills had positive and significant impact on the project performance of residential buildings’ construction in Nairobi, Kenya. Project stakeholders were recommended to adopt these strategies without fail. The study recommended undertaking the study in other areas to ascertain a comparative analysis on the significant determinants.
Key Words: Risk Mitigation Strategy, Risk Management, Project Organization Structure, Resource Allocation
CITATION: Kahanya, N. M., & Ondara, A. (2023). Risk management determinants and performance of residential buildings construction projects in Nairobi County, Kenya. The Strategic Journal of Business & Change Management, 10 (2), 1479 – 1495.
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DOI: http://dx.doi.org/10.61426/sjbcm.v10i2.2680
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