The Moderating Role of Government Policy on Contractors’ Risk Attitudes in Malaysia Construction Companies The Moderating Role of Government Policy on Contractors’ Risk Attitudes in Malaysia Construction Companies

Taofeeq D.M A.Q. Adeleke A.K Hassan

Abstract

Contractors’ risk attitudes influence their bidding decisions because of their exposure to uncertainties and competitions. The competing contractors may have, over time, developed different risk attitudes that are part of their own organizational culture. Different risk attitudes explain the peculiarity in how firms do their businesses. In a risky situation, individuals’ perceptions have influence on their own risk attitudes. Organizational risk attitude operates within an organization and it defines the accepted and unaccepted risks. This is attributed to how people perceived the control over the intended behaviour which relies on the availability of resources, competency, educational background, support from other people and past experience in the same project. Therefore, this study aims to identify the factors affecting contractors' risk attitudes and then determine the relationship with government policy. A total of 140 copies of questionnaire were randomly distributed to the construction companies in Malaysia. Out of the 140 copies of questionnaire distributed, 124 copies were returned.  Conversely, 12 copies of the questionnaire were found to be unusable due to missing data or provided the same responses to all the questions. Thus, overall, 80% of the total copies of questionnaire were usable thereby making up an effective sample of 112. SmartPLS 3 for structural equation modelling was utilized in confirming the hypotheses developed for the study. The findings of this research confirmed that government policy (rules and regulations) played a moderating role in enhancing the factors affecting contractors’ risk attitudes in construction companies in Malaysia.

References

REFERENCES

Abd.Aziz, N., & Yassin, N. M. (2015). How Will Market Orientation and External Environment Influence the Performance among SMEs in the Agro-Food Sector in Malaysia ? International Business Research, 3(3), 154–164.
Abidin, N. Z. (2010). Investigating the awareness and application of sustainable construction concept by Malaysian developers. Habitat international, 34(4), 421-426.
Adeleke, A. Q., Bahaudin, A. Y., Kamaruddeen, A. M., Bamgbade, J. A., Salimon, M. G., Khan, M. W. A., & Sorooshian, S. (2018). The influence of organizational external factors on construction risk management among Nigerian construction companies. Safety and Health at Work, 9(1), 115-124.
Adeleke, A. Q., Bahaudin, A. Y., & Kamaruddeen, A. M. (2017). Organizational internal factors and construction risk management among Nigerian construction companies. Global Business Review, 0972150916677460.
Adeleke, A. Q., Bahaudin, A. Y., & Kamaruddeen, A. M. (2016). Moderating Effect of Regulations on Organizational Factors and Construction Risk Management: A Proposed Framework. International Journal of Economics and Financial Issues, 6(7S), 92-97.
Adeleke, A. Q., Bahaudin, A. Y., & Kamaruddeen, A. M. (2016). Preliminary analysis of organizational factors influencing effective construction risk management: A case study of Nigerian construction companies. Sains Humanika, 8(2).
Adeleke, A. Q., Bahaudin, A. Y., & Kamaruddeen, A. M. (2015). A Partial Least Square Structural Equation Modeling (PLS-SEM) Preliminary Analysis on Organizational Internal and External Factors Influencing Effective Construction Risk Management among Nigerian Construction Industries.
Ahmed, I. (2008). "Adherence to Health and Safety Regulation on Construction Site". Unpublished Project.
Afzan, M. Y., Sivanandam, S., & Kumar, G. S. (2010). Modified Field's staining—a rapid stain for Trichomonas vaginalis. Diagnostic microbiology and infectious disease, 68(2), 159-162.
Ajzen, I., 1993. Attitude theory and the attitude–behaviour relation. In: Krebs, D., Schmidt, P. (Eds.), New Directions in Attitude Measurement. Walter de Gruyter, Berlin, New York.
Alaghbari, W. e., Kadir, M. R. A., & Salim, A. (2007). The significant factors causing delay of building construction projects in Malaysia. Engineering, Construction and Architectural Management, 14(2), 192-206.
Al-Bahar, J.F., Crangell, K.C., 1990. Systematic risk management approach for construction projects. Journal of Construction Engineering and Management 116 (3), 533–546.
Ang, M. C., Ramayah, T., & Amin, H. (2015). A theory of planned behavior perspective on hiring Malaysians with disabilities. Equality, Diversity and Inclusion: An International Journal, 34(3), 186-200.
Aniekwu, A. (1995). The business environment of the construction company in Nigeria. Construction Management and Economics, 13(6), 445-455.
Avkiran, N. K., Zhu, Y., Tripe, D. W., & Walsh, K. (2017). Can foreign banks compete in C hina?. Accounting & Finance, 57(4), 961-980.
Bamgbade, J. A., Kamaruddeen, A. M., & Nawi, M. N. M. (2017). Malaysian construction firms' social sustainability via organizational innovativeness and government support: The mediating role of market culture. Journal of Cleaner Production, 154, 114-124.
Bamgbade, J. A., Kamaruddeen, A. M., Nawi, M. N. M., Adeleke, A. Q., Salimon, M. G., & Ajibike, W. A. (2019). Analysis of some factors driving ecological sustainability in construction firms. Journal of Cleaner Production, 208, 1537-1545.
Bamgbade, J. A., Kamaruddeen, A. M., & Nawi, M. N. M. (2016). Contractors’ Environmental Sustainability: The Roles of Innovativeness and Market Orientation. Int. J Sup. Chain. Mgt Vol, 5(3), 185.
Chauvin, B., Hermand, D., & Mullet, E. (2007). Risk perception and personality facets. Risk Analysis: An International Journal, 27(1), 171-185.
Chervinski, A. (2014). Ecological evaluation of economic evaluation of environmental quality. Procedia Economics and Finance, 8, 150-156.
Chin, W.W. (1998a). Issues and opinion on structural equation modelling. MIS Quarterly, 22, 1, VII-XVI.
Chin, W. W. (1998b). The partial least squares approach for structural equation modelling. In George A. Marcoulides (Ed.), Modern Methods for BusinessResearch, Lawrence Erlbaum Associates, Lawrence Erlbaum Associates, Mahwah, NJ, 295-336.
Chin, W. W., Marcolin, B. L., & Newsted, P. R. (2003). A partial least squares latent variable modeling approach for measuring interaction effects: Results from a Monte Carlo simulation study and an electronic-mail emotion/adoption study. Information systems research, 14(2), 189-217.
Chin, W. (2010). How to write up and report PLS analyses. In V. Esposito Vinzi. Handbook of Partial Least Squares (pp. 655-690): Springer Berlin Heidelberg.
Chun, Y., Tsai, C., & Hsu, Y. (2016). Research on the operational performance of ISO 14000 Certified Taiwan’s manufacturers.
Chung, T. S., Jiang, L. Y., Li, Y., & Kulprathipanja, S. (2007). Mixed matrix membranes (MMMs) comprising organic polymers with dispersed inorganic fillers for gas separation. Progress in polymer science, 32(4), 483-507.
Cohen, J. (1988). Statistical power analysis for the behavioural sciences (2nd ed.). Hillsdale, NJ: Lawrence Erlbaum Associates, Inc.
Diekola, A. M. (2016). The moderating effect of environmental regulation and policy on the relationship between total quality management (TQM) and organizational performance in the Malaysian food and beverage companies (Doctoral dissertation, Universiti Utara Malaysia).
Dikmen, I., Birgonul, M. T., & Han, S. (2007). Using fuzzy risk assessment to rate cost overrun risk in international construction projects. International Journal of Project Management.
Etemadinia, H., & Tavakolan, M. (2018). Using a hybrid system dynamics and interpretive structural modeling for risk analysis of design phase of the construction projects. International Journal of Construction Management, 1-20.
Falk, R. F., & Miller, N. B. (1992). A primer for soft modelling. Ohio: The University of Akron Press.
Flanagan, R., & Norman, G. (1993). Risk management and construction. Oxford, Blackwell Science Ltd.
Florescu, E. (2010). State of the Future. J. C. Glenn, & T. J. Gordon (Eds.). Washington DC: American Council for the United Nations University.
Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable and measurement error. Journal of Marketing Research, 18, 39- 50.
Gibb, K. (2011). Delivering new affordable housing in the age of austerity: housing policy in Scotland. International Journal of Housing Markets and Analysis, 4(4), 357-368.
Goleman, D. (1998a), “What makes a leader?” Harvard Business Review, pp. 93‐102.

Goleman, D. (1998b), “The emotional intelligence of leaders”, Leader to Leader, fall, pp.

Hair, J.F., Ringle, C.M., Sarstedt, M., 2011. PLS-SEM: indeed a silver bullet. J. Mark. Theory Pract. 19 (2), 139–151.
Hair, J. F., Black, W. C., Babin, B. J., Anderson, R. E., & Tatham, R. L. (2006). Multivariate data analysis 6th ed. Uppersaddle River: Pearson Prentice Hall.
Hair, J. F., Ringle, C. M., & Sarstedt, M. (2011). PLS-SEM: Indeed a silver bullet. The Journal of Marketing Theory and Practice, 19(2), 139-152.
Hair, J. F., Sarstedt, M., Pieper, T. M., & Ringle, C. M. (2012). The Use of Partial Least Squares Structural Equation Modeling in Strategic Management Research: A Review of Past Practices and Recommendations for Future Applications. LongRange Planning, 45(6), 320-340.
Hair, J. F., Ringle, C. M., & Sarstedt, M. (2013). Editorial-partial least squares structural equation modelling: Rigorous applications, better results and higher acceptance. Long Range Planning, 46(1-2), 1-12.
Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2014). A primer on partial least squares structural equation modelling (PLS-SEM). Thousand Oaks: Sage Publications.
Hamid, A., Rahim, A., Yusuf, W., Zulkifli, W., & Singh, B. (2003). "Hazards at Construction Sites", the Proceedings of the fifth Asia-Pacific Structural Engineering and Construction Conference.
Hamzah, A. (2004). Policy and planning of the tourism industry in Malaysia. The sixth. ADRF General Meeting.
Hartono, B., Sulistyo, S. R., Praftiwi, P. P., & Hasmoro, D. (2014). Project risk: Theoretical concepts and stakeholders' perspectives.
Hasan, Nordin, A.A. Hear and Mohd, (2012). The evolution of environmental policy in
Malaysia. Natural Resources Forum 30 (2006) 37–50).
Helm, S., Eggert, A., & Garnefeld, I. (2010). Modelling the impact of corporate reputation on customer satisfaction and loyalty using partial least squares. In V. Esposito Vinzi, W. W.Chin, J. Henseler & H. Wang (Eds.), Handbook ofPartial Least Squares (pp. 515-534).
Henseler, J., Ringle, C. M., & Sinkovics, R. R. (2009). The use of partial least squares path modelling in international marketing. In R. R. Sinkovics & P. N. Ghauri (Eds.), Advances in International Marketing (Vol. 20, pp. 277-320). Bingley: Emerald.
Henseler, J., & Chin, W. W. (2010a). A Comparison of Approaches for the Analysis of Interaction Effects Between Latent Variables Using Partial Least Squares Path Modeling. Structural Equation Modeling: A Multidisciplinary Journal,17(1), 82-109.
Henseler, J., & Fassett, G. (2010a). Testing Moderating Effects in PLS Path Models: An Illustration of Available Procedures. In V. Esposito Vinzi, W. W. Chin, J. Henseler & H. Wang (Eds.), Handbook of Partial Least Squares:
Henseler, J., & Chin, W. W. (2010b). A comparison of approaches for the analysis of interaction effects between latent variables using partial least squares path modelling. Structural Equation Modeling, 17(1), 82-109.
Hillson, D. & Murray-Webster, R. (2007). Understanding and Managing Risk Attitude. Burlington, USA: Gower.
Iroegbu, A.N. (2005). Housing in Nigeria: A role of the construction company. In A.I. Kalu & G.N. Chima (eds). Housing development in Nigeria: Concepts, issues and strategies. Abakaliki: Pauli ton press.
Ismail, E. (2001). “Industrialized building system for housing in Malaysia”, paper presented at the 6th Asia Pacific Science and Technology Management Seminar, Tokyo.
ISO 9000. (2008). Quality management principles International Standards for Business, Government and Society: International Organization for Standardization (ISO).
Jato-Espino, D., Castillo-Lopez, E., Rodriguez-Hernandez, J., & Canteras-Jordana, J. C. (2014). A review of application of multi-criteria decision making methods in construction. Automation in Construction, 45, 151-162.
Jayaram, J., Ahire, S., Nicolae, M., & Ataseven, C. (2012). The moderating influence of Product orientation on coordination mechanisms in total quality management.
Jepson, J., Kirytopoulos, K., & London, K. (2018). Insights into the application of risk tools and techniques by construction project managers. International Journal of Construction Management, 1-19.
Kang, H. G., & Dingwell, J. B. (2008). Effects of walking speed, strength and range of motion on gait stability in healthy older adults. Journal of biomechanics, 41(14), 2899-2905.
Kenny, D. A., & Judd, C. M. (1984). Estimating the nonlinear and interactive effects of latent variables. Psychological bulletin, 96(1), 201.
Kaynak, H. (2003). The relationship between total quality management practices and their effects on firm performance. Journal of operations management, 21(4), 405-435.
Kim Hyung-Jin and Reinschmidt Kenneth, (2011), “Effects of Contractors Risk Attitude on Competition in Construction”, Journal of Construction Engineering and Management, Vol. 10, No. 61, pp. 275-283.
Krosnik, J.A. (1991). Maximizing Questionnaire Quality. In P.R. John, P.R. Shaver, & L.S.Wrightsman (Eds).San Diego, CA: Academic Press.
Kulatunga, Udayangani, et al. "Attitudes and perceptions of construction workforce on construction waste in Sri Lanka." Management of Environmental Quality: An International Journal 17.1 (2006): 57-72.
Kumar, P., Henikoff, S., & Ng, P. C. (2009). Predicting the effects of coding non-synonymous variants on protein function using the SIFT algorithm. Nature protocols, 4(7), 1073.
Landrum, M. J., Lee, J. M., Benson, M., Brown, G., Chao, C., Chitipiralla, S., ... & Jang, W. (2015). ClinVar: public archive of interpretations of clinically relevant variants. Nucleic acids research, 44(D1), D862-D868.
Liu, Y. W., Zhao, G. F., & Wang, S. Q. (2010). Many hands, much politics, multiple risks–the case of the 2008 Beijing Olympics Stadium. Australian Journal of Public Administration.
Lyons, T., & Skitmore, M. (2004). Project risk management in the Queensland engineering construction industry: a survey.
Malhotra, N. K., Kim, S. S., & Patil, A. (2006). Common method variance in IS research: A comparison of alternative approaches and a reanalysis of past research. Management Science, 52(12), 1865-1883.
Manu, P., Mahamadu, A. M., Ath, C., Heng, A. Y. T., & Kit, S. C. (2018). Health and safety management practices of contractors in South East Asia.
Mele, C., & Colurcio, M. (2006). The evolving path of TQM: towards business excellence and stakeholder value. International Journal of Quality & Reliability Management, 23(5), 464-489.
Memon, A.H., Ismail, A.R., Ade Asmi, A. and Nor Hazana, A. (2013), "Using structural equation modelling to assess effects of construction resource-related factors on cost overrun", WorldApplied Sciences Journal, Vol. 21, pp. 6-15 (Mathematical Applications in Engineering).
Mohamed, O., Abd-Karim, S. B., Roslan, N. H., Mohd Danuri, M. S., & Zakaria, N. (2015). Risk management: Looming the modus operandi among construction contractors in Malaysia. International Journal of Construction Management, 15(1), 82-93.
Mohd Zakir, I. (2012). A Case Study of Safety Behaviour in the Construction Site (Doctoral dissertation, Universiti Utara Malaysia).
Molina-Azorin, J. F. (2009). Understanding how mixed methods research is undertaken within a specific research community: The case of business studies. International Journal of Multiple Research Approaches, 3(1), 47-57.
Munoz, A. M. (Ed.). (2013). Sensory evaluation in quality control. Springer Science & Business Media.
Neupane, A., Soar, J., Vaidya, K., & Yong, J. (2014). Willingness to adopt e-procurement to reduce corruption: Results of the PLS Path modeling. Transforming Government: People, Process and Policy, 8(4), 500-520.
Niu, Y. (2008). The performance and problems of affordable housing policy in China: The estimations of benefits, costs and affordability. International Journal of Housing Markets and Analysis, 1(2), 125-146.
Park, P., Ko, J. W., & Jeong, C. (2011). Reciprocally convex approach to stability of systems with time-varying delays. Automatica, 47(1), 235-238.
Project Management Body of Knowledge (PMBOK) a guide to the project management body of knowledge Project Management Institute, Newtown Square (PA) (2000).
Raftery, J. (2003). Risk Analysis in Project Management, London, E&FN Spoon.

Razak Bin Ibrahim, A., Roy, M. H., Ahmed, Z., & Imtiaz, G. (2013). An investigation of the status of the Malaysian construction industry.
Rigdon, E. E., Schumacker, R. E., & Wothke, W. (1998). A comparative review of interaction and nonlinear modelling. In R. E. Schumacker & G. A. Marcoulides (Eds.), Interaction and nonlinear effects in structural equation modelling (pp. 1- 16).
Ringle, C. M., Wende, S., & Will, A. (2005). SmartPLS 2.0. Retrieved January 4, 2015, from www.smartpls.de.
Rigdon, E. E. (2016). Rethinking partial least squares path modeling: breaking chains and forging ahead. Long range planning, 47(3), 161-167.
Santos-Reyes, D. E., & Lawlor-Wright, T. (2001). A design for the environment methodology to support an environmental management system. Integrated Manufacturing Systems, 12(5), 323-332.
Sathishkumar, V., Raghunath, P. N., & Suguna, K. (2015). Critical Factors Influencing to Management Risk in Construction Projects.
Sekaran, U. (2010). Research Methods For Business: A Skill Building Approach Singapore: John Willey dan Sonic: Inc.
SS, M. S. (2017). Risk Management and Effect of Contractors Risk Attitude on Competition in Construction.
Tabachnick, B. G. & Fidel, L. S. (2007). Using multivariate statistics (5th ed.). Boston: Pearson Education Inc.
Tam, V. W., Shen, L. Y., Fung, I. W., & Wang, J. Y. (2007). Controlling construction waste by implementing governmental ordinances in Hong Kong. Construction Innovation, 7(2), 149-166.
Udayangani, K., Dilanthi, A., Richard, H., Raufdeen, R., 2006. Attitudes and perceptions of construction workforce on construction waste in Sri Lanka. Management of Environmental Quality: An International Journal 17 (1), 57–72.
Velcu, O. (2007). Exploring the effects of ERP systems on organizational performance: evidence from Finnish companies. Industrial Management & Data Systems, 107(9), 1316-1334.
Vollrath, M., & Torgersen, S. (2002). Who takes health risks? A probe into eight personality types. Personality and Individual Differences, 32(7), 1185-1197.
Wang, C. M., Xu, B. B., Zhang, S. J., & Chen, Y. Q. (2016). Influence of personality and risk propensity on risk perception of Chinese construction project managers. International Journal of Project Management, 34(7), 1294-1304.
Wang, J., & Yuan, H. (2011). Factors affecting contractors' risk attitudes in construction projects: a Case study from China.
Wang, Jiayuan, et al. "Critical success factors for on-site sorting of construction waste: a China study." Resources, conservation and recycling 54.11 (2010): 931-936.
Ward, S.C., Chapman, C.B., Curtis, B., 1991. On the allocation of risk in construction projects. International Journal of Project Management 9 (3), 140–147.
Weber, E.U., Blais, A.-R., Betz, N.E., 2002. A domain-specific risk attitude scale: measuring risk perceptions and risk behaviours. Journal of Behaviour Decision Making 15, 263–29.
Wilden, R., Gudergan, S. P., Nielsen, B. B., & Lings, I. (2013). Dynamic capabilities and performance: strategy, structure and environment. Long Range Planning, 46(1-2), 72-96.
Wong, K. K.-K. (2013). Partial least squares structural equation modeling (PLS-SEM) techniques using SmartPLS. Marketing Bulletin, 24(1), 1-32.
Zeng, J.H., an, M., Smith, N.J., 2007. Application of a fuzzy based decision making methodology to construction project risk assessment. International Journal of Project Management 25 (6), 589– 600. Zou, P.X.W.

Authors

Taofeeq D.M
A.Q. Adeleke
A.K Hassan
[1]
“The Moderating Role of Government Policy on Contractors’ Risk Attitudes in Malaysia Construction Companies: The Moderating Role of Government Policy on Contractors’ Risk Attitudes in Malaysia Construction Companies”, Soc. sci. humanities j., vol. 3, no. 06, pp. 1261–1280, Jun. 2019, Accessed: Mar. 28, 2024. [Online]. Available: https://sshjournal.com/index.php/sshj/article/view/398
Copyright and license info is not available