Although risk and innovation are often linked, current studies exploring the correlation between these terms are scarce. This study empirically examines the relationship between construction firms’ risk perception, risk management planning and innovation orientation.
A conceptual framework was formed through the literature and validated by the partial least squares structural equation modeling (PLS-SEM) technique, employing the data collected from 182 practitioners working in the Vietnamese construction sector.
This study highlighted that innovation orientation can be categorized as creation and adoption. The findings indicated that while risk perception can hinder innovation creation, effective risk management planning can mitigate the adverse effects. The findings also highlighted that the focus on innovation adoption will negatively affect innovation creation. Additionally, the findings showed that risk management planning has a positive relationship with innovation creation.
This study fills the research gap by explaining why innovation creation is often prioritized by innovation adoption, as risk perception acts as a deterrent. The results imply that construction firms should balance adopting innovations and fostering an environment conducive to innovation creation. It is recommended that these firms invest organizational resources in forming effective risk management plans to create a more secure environment for innovation creation.
