Implementing enterprise risk management (ERM) systems in construction firms of developing countries like India is critical for targeting strong risk management strategies that support their growth. It requires such firms to holistically understand the major barriers in terms of their definitions, relationships with one another and interdependencies. Thus, this study aims to identify, model and analyze the barriers to implementing ERM in construction firms using interpretive structural modeling (ISM).
This study used a Delphi process to identify barriers to the implementation of ERM in Indian construction firms, ISM to model them and Matrice d’Impacts Croisés Multiplication Appliquée à un Classement (MICMAC) to analyze their interrelationships.
The study’s results revealed that individual-level factors are the most important among the barriers present at the lowest level in the hierarchical model, whereas organizational commitment with the highest dependence power is present at the highest level in the hierarchical model.
Since the usage of ERM in the construction industry is highly culture-dependent and may have regional nuances, the data on ERM usage might accurately reflect the Indian construction industry but may not apply to other regions.
This study can be used to develop effective strategies to improve the implementation of ERM in construction firms in developing countries like India.
ERM is crucial for managing risks in Indian construction firms due to the high degree of complexity and uncertainty associated with construction projects coming from changes due to technological advancement, regulatory changes, changes in consumer preferences, global competition and other socioeconomic and political factors.
The study’s results will help researchers and practitioners working in the construction industry of developing countries like India to identify the challenges in adopting ERM systems. It will guide construction firms to appropriately develop risk management strategies for managing the inevitable risks in their complex project environments. This will help improve their contribution to the country’s economic development.
