Moderation role of government acts, laws and policies between economic factors and risk management: A case study of Saudi Arabia contractors

Abstract

In construction projects, contractors have prioritized risks due to abandonment of operations and events, interruptions, time, and cost overruns. Construction hazards are linked to the ambiguity and unpredictability of the timely delivery of a project, with standard quality and within an allowable budget. The bid process is heavily reliant on economic considerations which include the exchange market, rate of interest and cost inflation for equipment and workforce. Project failure takes place if economic considerations have not complied for effective management of risks in construction. The research framework is founded on Organization Control Theory and focused on the PLS-SEM approach which addresses the effect of economic factors with moderating government regulatory procedures on the management of risks in construction within 303 large (higher than 250 workers) Saudi Arabian contractors. In the PLS-SEM approach, complicated models are effectively analyzed with higher statistical power. The findings show that economic factors and government regulatory procedures have a favorable impact on the management of risks in the Saudi Arabian development industry. Additionally, moderating government regulatory procedures has a favorable correlation to the management of risks in the Saudi Arabian construction sector. By addressing economic considerations, this study enables practitioners, experts and stakeholders involved in construction industries to conduct effective management of risks in the construction sector.