Risk Assessment and Operational Efficiency of Companies in the Road Construction Industry in Kenya

Operational efficiency is important to road construction companies because it reflects firms’ capacity to use resources economically, complete projects promptly, deliver services effectively and meet client quality requirements. This study examined the relationship between risk assessment and operational efficiency of companies in the road construction industry in Kenya. The study adopted a descriptive research design. The target population comprised 16,684 road works contractors licensed by the National Construction Authority as of 1 July 2025. A sample of 391 was determined, and 288 usable responses were obtained, representing a 74% response rate. Risk assessment was measured using four items covering risk identification, risk sensitization, risk evaluation and risk response. The risk-assessment scale recorded Cronbach’s alpha of .752, KMO of .597 and a significant Bartlett’s test (χ² = 475.246, df = 6, p < .001). Operational efficiency was measured perceptually using four questionnaire items assessing respondents’ views on the contribution of internal controls to cost effectiveness, prompt project completion, service delivery and meeting client quality demands. The operational-efficiency scale recorded Cronbach’s alpha of .856. Pearson correlation analysis showed a positive and statistically significant relationship between risk assessment and operational efficiency (r = .433, p < .001, N = 288). Simple linear regression analysis further established that risk assessment significantly predicted operational efficiency, F (1, 286) = 66.01, p < .001, accounting for approximately 18.7% of the variation in operational efficiency (R² = .187). The standardized regression coefficient was positive (β = .433). The null hypothesis that risk assessment has no statistically significant relationship with operational efficiency was therefore rejected. The study concludes that stronger risk-assessment practices are associated with higher perceived operational efficiency among road construction companies in Kenya. It recommends strengthening systematic risk identification, risk sensitization, risk evaluation and timely response to risk mitigation measures to support operational efficiency.

Risk assessment, operational efficiency, internal controls, road construction industry, Kenya

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