Critical Success Factors for Effective Risk Management

Risk management is extremely important in achieving overall organizational goals and objectives. Achieving organizational goals amid risks entails determining and implementing critical success factors (CSFs). This chapter presents composite CSFs which organizations can focus on to achieve their overall goals and objectives by portraying a case study of the construction industry. Using this case study reveals statistical significance of impact of risk management on the project as reduction in design/production time, improved public perception, and improved team morale and productivity. Similarly, CSFs mostly implemented are awareness of risk management processes, appreciating that risk management practice is viable in the construction industry, organizations have policies to support the development of risk management and organization deal with internal/external environment that influences risk management in their organizations. The chapter also presents nine composite CSFs determined by the case study namely: management approach; goals and objectives of the organization; risk management policy and experts; information technology and culture; environment and usage of tools; teamwork and commitment of the top management; communication and training; awareness of risk management process and legal requirements; and risk monitoring and review. Lastly, the conclusion is drawn on nine composite CSFs for effective risk management.