Risk and Financial Management Practice in the Construction Sector in Nigeria, System Thinking Perspective

Risk and financial management of construction projects have been widely studied using different approaches and systems. Three basic frontiers underpin project management research in this area: normative; descriptive; and instrumental. The descriptive approach deals with how project managers perceive and represent risks that is, risk analysis. Instrumental approach study’s the impact of risk management on projects and the organisation. This perspective informs the premise in which studies that seek to justify the need for risk management are based. The normative approach identifies the moral and ethical linkages between the individual, organisations and supra system and risk management practice. While a vast of number of studies have been descriptive and instrumental, very few however address systemic issues impacting risk and financial management practice. This paper sets out to reflect on the risk and financial management practice in Nigeria using system approaches. It is a critical appraisal involving SLEEPT, Multiple goal and the GESTALT theories. In reprising the problem, the report assessed the national economy of Nigeria using SLEEPT, with a view to establishing whether it is situated in extremistan or mediocristan. The organisation, a sub-system of the supra system is evaluated to establish its links with the supra system using GESTALT. A refinement is carried out based on these analyses in order to achieve congruence and to establish a baseline upon which risk and financial can be improved. The analysis reveals social, political, environmental and economic context of the supra system are in extremistan while the legal and technology are in mediocristan. The linkage in the different systems is anchored on decision making by the individual. Optimal decision making is therefore formulated using interactive framework.