Risk Management Strategy and Performance of Construction Projects in Homa Bay County, Kenya
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Date
2025-01
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Kenyatta University
Abstract
To improve accessibility in remote areas, Homa Bay County has carried out a major road restoration project that includes building a primary route every administrative ward. Through the expansion of piped water infrastructure, the County has made impressive strides in extending shoreline amenities. However, data research shows that just 15% of the construction projects the County commissioned between 2019 and 2023 are still partially operational, with the remaining projects becoming obsolete and untraceable once the funding ended. Homa Bay's agreement to build 400 affordable homes is already 70% advanced. The Homa Bay County Referral Hospital's outpatient block, which is expected to be finished by the end of 2021, is currently 80% complete. On the other hand, the Maternity Wing renovation project has been stalled since 2022, the Rachuonyo Outpatient Block improvement is still in its early stages, the Homa Bay Raila Odinga Stadium project is 50% complete, and the lakefront development project, which was started in 2022, is still unfinished. Therefore, this study aimed at investigating the influence of risk management strategies on performance of construction projects in Homa Bay County, Kenya. The specific objectives include to determine the effects of risk retention strategy, risk avoidance strategy, risk transfer strategy and risk reduction strategy on construction projects performance in Homa Bay County, Kenya. Project management theories, corporate risk management, contingency planning, and contemporary portfolio management served as the study's compass. The study utilized a design known as a descriptive research design. This study focused on seven construction projects in Homa Bay County, Kenya, that began in 2019 and were still ongoing as of 2022. There were 85 respondents in all. In Homa Bay County, Kenya, 78 members of the project and 7 managers of the project took part in the study. Population sample of 85 participants was conducted. The primary instrument employed for obtaining data is semi structured questionnaire. 8 respondents who were excluded from the main sample participated in the pilot study. The study employed a content validity test to assess the questionnaires’ validity. Coefficient of Cronbach's alpha was adopted to assess the reliability of the questionnaire items. The qualitative data was presented narratively after a theme analysis that aligned with the research objectives. Conversely, quantitative data was analyzed using descriptive statistics. In particular, the inferential statistics were analyzed using multiple regression analysis. The diagnostic tests included the multicollinearity test, normality test and autocorrelation test. The results indicated that the total performance of these projects was positively correlated with the application of risk avoidance, retention, transfer, and reduction measures. According to the findings of this survey, companies that highly prioritize proactive management and transparent risk avoidance are more likely to boost stakeholder trust and enhance project performance. Retaining risk encourages adaptation and ongoing improvement, both of which are critical for negotiating the challenges of project execution. By shifting some risks to third parties, like insurers or subcontractors, project managers can lessen the financial effect of unanticipated events. Successful risk-reduction techniques contribute to the timely, budget- friendly, and high-standard completion of projects. According to the report, the County should use SWOT analysis and other techniques to identify potential hazards throughout the project design phase by conducting thorough risk assessments. To recognize any risks that are likely to impact project performance, the Homa Bay County administration should host thorough risk identification workshops that involve all stakeholders. To precisely identify any risks at every stage of the project, the County should lead thorough brainstorming sessions with stakeholders.
Description
A Project Submitted to the School of Business, Economics and Tourism in Partial Fulfilment of the Requirement for the Award of the Degree of Master of Business Administration (Project Management Option) of Kenyatta University, January, 2025
Supervisor:
1.Sang Paul