Risk management practices in construction projects: a qualitative exploration of MSMEs in India

PurposeThe study is an attempt to find the major risks faced by Micro, Small and Medium Enterprises (MSMEs) engaged in construction business in India. Further, the study attempts to find how MSMEs mitigate those risks.Design/methodology/approachToward the objective of study, the authors used a case-based qualitative research design. Four firms were selected, and their owners and selected employees/partners were interviewed. Each firm is presented as an independent case to highlight the core risk management (RM) philosophy of each firm. This was followed by a thematic analysis to arrive at the major risks involved in MSME construction projects and their mitigation strategy.FindingsMSME firms engaged in the construction business in India are not keen on following formal RM practices because they believe that it makes the bid unviable. MSMEs find it difficult to identify most of the problems in a construction project due to an uncontrolled environment and believe that it is best to resolve the issues as and when they occur. They have acquired tacit knowledge on hindrances and deal with them as and when they occur. Anything that can go wrong will go wrong is the basic philosophy.Research limitations/implicationsA small sample size makes the generalization of its findings difficult.Practical implicationsMSMEs cannot afford to hire specialists in project RM due to financial constraints. Hence, it would be worthwhile sending experienced employees for a short duration of training on the same.Originality/valueTo the best of the authors knowledge, it is a first-of-its-kind study focusing on RM practices of MSME, particularly in the construction sector.