Analysis of Risk in Construction Projects

2019 ◽  
Vol 1 (1) ◽  
pp. 64-69
Author(s):  
B Dhivya ◽  
V Prabu
Keyword(s):  
Risk Management ◽  
Construction Industry ◽  
Construction Projects ◽  
Behavioral Pattern ◽  
Survey Questionnaire ◽  
Cross Sectional ◽  
Project Risks ◽  
Key Barrier ◽  
Priority Model ◽  
Current Risk

The construction industry is subject to more risk and uncertainty than any other industry. Most of the participants experience risks in cost and time over runs and many times fail to meet quality standards and operational requirements. Therefore the need to increase the understanding of risk management. In this project, the qualitative analysis of all types of risks except financial and economical risks in the construction projects is done by ‘Risk factor and priority model’. The industry has shifted from risk transfer to risk reduction, current risk management systems are inadequate to manage project risks, and lack of joint risk management mechanisms is the key barrier to adequate risk management. SPSS (Statistical Package for Social Sciences) software is used for statistical analysis of the data collected from respondents. The general methodology of this study relies largely on the survey questionnaire which was collected from the local building contractors of different sizes by mail or by personnel meeting. A thorough literature review is initially conducted to identify the risk factors that affect the performance of construction industry as a whole. The survey questionnaire is designed to problem the cross-sectional behavioral pattern of construction risks in construction industry.

ASSESSMENT OF CONTRACTORS’ PRACTICES TOWARDS RISKS OUT OF CONTRACTORS CONTROL IN CONSTRUCTION INDUSTRY

2018 ◽  
Vol 5 (1) ◽  
Author(s):  
Mohammed Algahtany ◽  
Dean Kashiwagi ◽  
Kenneth Sullivan ◽  
Jacob Kashiwagi ◽  
Majed Alzara
Keyword(s):  
Risk Management ◽  
Saudi Arabia ◽  
Performance Measurement ◽  
Construction Industry ◽  
Questionnaire Survey ◽  
Construction Projects ◽  
And Performance ◽  
Public Construction ◽  
Measurement Practices ◽  
Current Risk

Research has shown that public construction projects in Saudi Arabia have exhibited poor performance for the past three decades. Recent studies have identified the ownership of parties who cause risks and lead to low performance in the Saudi construction industry. These studies identified that contractors are not the main party that cause risks as owners, consultants, and other parties have the major share of causing risks in the industry. The aim of this study is to assess the current risk management and performance measurement practices applied by contractors to minimize risk out of their control (caused by other parties) through conducting a questionnaire survey. The questionnaire survey was sent to contractors who work in public construction projects in Saudi Arabia. The assessment included the contractors’ practices in the identification of projects activities and risks, contractors’ practices in mitigating other parties’ activities and risks, and contractors’ practices in measuring the performance of all project parties. The study identified that contractors’ current risk management and performance measurement practices are not effective in minimizing projects risks caused by other parties and ineffective in measuring performance of all parties. The study recommends a proactive risk management approach that can help contractors to minimize risks caused by other parties and can measure the performance of all parties in projects.

scholarly journals Establishing Core Factors of Risk Management Influencing Performance Outcome of Small and Medium Firm's Construction Projects in Gauteng

2020 ◽  
Vol 25 (2) ◽  
pp. 93-127
Author(s):  
Berenger Yembi Renault ◽  
Justus Ngala Agumba ◽  
Nazeem Ansary
Keyword(s):  
Risk Management ◽  
Construction Industry ◽  
South African ◽  
Construction Projects ◽  
Geographical Area ◽  
Risk Identification ◽  
Influential Factors ◽  
Performance Outcome ◽  
Management Factors ◽  
Project Objectives

The quest for delivering successful construction projects has urged South African small and medium enterprises (SMEs) to adopt risk management in their projects. However, it has been evinced that SMEs projects in South Africa especially in the Gauteng province have encountered poor performances. Thus, this article determines core risk management factors influencing project outcome of SMEs. A deductive approach was embraced using a questionnaire. The data were collected from 181 conveniently sampled respondents in Gauteng, graded from Grade 1 to 6 of the CIDB (Construction Industry Development Board) grading system. The Statistical Package for the Social Science (SPSS) version 23 was used to analyse the data by computing exploratory factor analysis and multiple regression analysis. It was revealed that SMEs performance outcome is influenced by eight risk management factors. The influential factors are organisational environment, defining project objectives, resource requirements, risk measurement, risk identification, risk assessment, risk response and action planning and monitoring, review and continuous improvement. The risk management factors established in this article are reliable and valid in projects undertaken by SMEs in the South African construction industry and the findings can serve as a guideline for contractors to achieve success in this context. The study may be repeated in other countries globally, however, it cannot be generalised due to the restrictions pertaining to the geographical area.

scholarly journals A Study on Construction Risks Prioritization and its Management

2018 ◽  
Vol 7 (3.12) ◽  
pp. 822
Author(s):  
Subramanyam B ◽  
Nycilin Karunya.Nemi Chandran
Keyword(s):  
Risk Management ◽  
Construction Industry ◽  
Construction Projects ◽  
Development Process ◽  
Direct Costs ◽  
Bodily Injury ◽  
Proposed Model ◽  
Model Set ◽  
Management Techniques ◽  
Financial Losses

Construction industry is an important industry and remains so with the continuation of the development process especially in the developing countries. On the other it is very risk and hazard. As industry when compared to other industries financial losses and bodily injury and death, and resulting human, social impacts are more in the case of construction.  Mishaps also contain significant costs that are not insurable. Financial deliberations contains direct costs like medical reimbursement and  hidden costs includes loss of competence by breaking up crew, cost to train fresh or changed employee, damage to equipment and tools, cost experienced by delays. Many researchers have been suggested risk management techniques to minimize the losses in the industry and very few companies may be implemented the suggestions.  The goal of this study is to recognize and rank risks in construction projects. This study proposes the hierarchical dependencies between the criteria. The variations and factors have been investigated via questionnaire and is an element of an on-going research into the application of risk management in major projects. To know the performance and applicable of proposed model set of data collected from different industries by using the informal approaches such as intuition and experiences the study is conducted to prioritize and manage risks. 

Developing a Model for Risk and Responsibility Management Share Amongst Stakeholders Consortium in Construction Projects

2013 ◽  
Vol 684 ◽  
pp. 639-643 ◽  
Author(s):  
Alireza Ghaffari
Keyword(s):  
Risk Factors ◽  
Risk Management ◽  
Construction Industry ◽  
Construction Projects ◽  
Construction Project ◽  
Significant Risk ◽  
Interest Rate Risk ◽  
Extensive Literature ◽  
Productivity Cost ◽  
Management Techniques

The construction project is a complex sector which characterized with low productivity, cost and time overruns and conflicts. The major challenges in construction project risk assessment which may attributed to knowledge requirements for determining the level of uncertainty and development of complex models to predict . Portfolio theory and capital market theory stipulate that risk consists of two types, First, systematic risk, which cannot be controlled, emanates from external factors such as acts of God, natural disasters, market risk, interest-rate risk, and purchasing-power risk. Second, unsystematic risk, which can be controlled, relates to organization-specific factors such as business risk and financial risk (Fischer and Jordan 1996).) . To identifies the risk factors that influence the cost-effective management, operation, and maintenance of construction project, as well as how and when in the project life cycle the identified risk factors impact to the associated costs . The identification and design of risk is the first step of risk management. It contain the recognition of potential risk event conditions in a project and the clarification of risk responsibilities. A total of 50 risk factors on construction for stake holders (client , contractor ,consultant ) share projects were identified after conducting an extensive literature survey. A questionnaire survey was conducted from 60 project managers(20 from each category) in all three proficiencies with background experience in buildings ,road and bridges with minimum 15 years experience , to identify the most significant risk factors impact in construction projects . Interviews were conducted face to face, ensuring a 100 percent response rate. The questionnaire was amended by incorporating feedback of the experts to suit the local environments of the construction industry. The weight or rate of each risk factor gained by using a five-point Liker scale from a consolidated conceptual framework of all 50 risk factors identified from the deep literature work . The main aim of these research is to identify ,categorize and ranking common risks, exert management techniques to address those risks , effective risk management and risk status in the construction industry and to help stakeholders to take stock of their ongoing and future projects, with a focus on important risks, their management techniques and barriers to effective implementation of risk management systems.

scholarly journals Network Theory-Based Analysis of Construction Project Risks

2016 ◽  
Vol 5 (2) ◽  
pp. 24
Author(s):  
Hafida Lmoussaoui ◽  
Hicham Jamouli
Keyword(s):  
Risk Management ◽  
Network Theory ◽  
Construction Projects ◽  
Construction Project ◽  
Risk Identification ◽  
Project Risk Management ◽  
Monitoring And Control ◽  
Project Risk ◽  
Novel Approach ◽  
Project Risks

<p>Because of their specific and complex characteristics, construction projects are exposed to numerous risks of various natures, which make their management more difficult. In this setting, Project Risk Management is an indispensable activity for their successful delivery. It consists in the risk identification, assessment, prioritization, treatment, monitoring and control. This paper presents a novel approach for the identification of construction project risks and a network theory-based methodology for their modelling and analysis. These models serve as a powerful tools comparing to classical methods and provide a support for decision-making regarding Project Risk Management. A case study of a real construction project is used to illustrate these findings.</p>

scholarly journals AN INVESTIGATION INTO CONTRACTORS’ EVALUATION OF RISKS ASSOCIATED WITH THE JBCC PRINCIPAL BUILDING AGREEMENT IN SOUTH AFRICA

2011 ◽  
Vol 1 (1) ◽  
pp. 1-26
Author(s):  
Ayman Othman ◽  
Nishani Harinarain
Keyword(s):  
South Africa ◽  
Risk Management ◽  
Construction Projects ◽  
Validity And Reliability ◽  
Classification Framework ◽  
Data Collection And Analysis ◽  
Risk Management Process ◽  
Unbiased Manner ◽  
Project Risks ◽  
The Relationship

Construction is a risky business, and risk management is an essential responsibility in managing construction projects and organisations. Hence, construction contracts have been developed to organise the relationship between project participants and manage associated risks. This paper provides an investigation into the contractors’ responses and feedback obtained through the application of an innovative framework developed by the authors towards identifying, quantifying and classifying the risks associated with the Joint Building Contractors Committee Principal Building Agreement Series 2000 (JBCC PBA) in South Africa. Qualitative and quantitative techniques have been used in this study for data collection and analysis. Purposive sampling was adopted to identify the respondents, and 9 construction managers were interviewed. The interviews were structured so that they were carried out in a free and unbiased manner and responding contractors were asked to complete a questionnaire. Analysis of responses showed that the developed Identification, Quantification and Classification Framework (IQCF) is an innovative and accepted tool that is able to fill the gap in managing project risks and will complement current practices. It is seen to be of benefit to firms in assisting with training of employees and helping junior employees understands and uses the JBCC (PBA). Investigating the validity and reliability of the developed framework is of prime importance to ensure its suitability to manage risks associated with the JBCC (PBA). For this reason contractor’s responses and feedback are based on the practical application of the framework which ultimately increases its value and contribution to the construction industry. The adoption and application of the framework will enable contractors to enhance the risk-management process in South Africa.

scholarly journals Contractor's Attitude towards Risk and Risk Management in Construction in Two Western Provinces of Vietnam

2020 ◽  
Vol 10 (6) ◽  
pp. 6418-6421
Author(s):  
V. T. Phan
Keyword(s):  
Risk Management ◽  
Construction Industry ◽  
Construction Management ◽  
Construction Projects ◽  
Risk Identification ◽  
Research Data ◽  
Important Task ◽  
Structured Interviews ◽  
Perception Of Risk ◽  
Negative Impacts

Risk management is an important task in construction management that helps the contractor to actively identify, evaluate, control, and minimize negative impacts of risks on the project, thereby ensuring its effectiveness. People involved in the construction industry need to be well - equipped with information and knowledge to manage risks adequately and systematically. The purpose of this research is to explore the attitude towards risk and risk management in construction projects of the Vietnamese construction industry, with emphasis on the perspective of contractors. The research data are collected through a questionnaire associated with in-depth semi-structured interviews. The results indicate that the perception of risk within the Vietnamese construction industry includes both threats and opportunities. The majority of professionals in the industry have a risk-neutral approach, contrary to previous research. The importance of implementing effective risk management is shared, in the planning and production phase while risk identification was perceived to be the most important out of the four core processes.

scholarly journals Risk management in construction projects in Somalia

2021 ◽  
Vol 2 (2) ◽  
pp. 38-41
Author(s):  
Abdirahman Jibril ◽  
Belal A. Shaban
Keyword(s):  
Risk Management ◽  
Project Management ◽  
Construction Projects ◽  
Risk Tolerance ◽  
Construction Companies ◽  
Use Of Resources ◽  
Foreign Countries ◽  
Project Risks ◽  
Negative Impacts ◽  
Building Project

These days, risk management and analysis are serious issues in the effective management of construction projects, because construction projects are likely to be very dynamic, productive, diverse and increasingly competitive. Risk management helps project parties such as clients, contractors and vendors/suppliers to meet their obligations to reduce negative impacts on their works. The outcomes of the risk management method include the analysis and detection of risks, the creation of building project management systems and the efficient use of resources. The aim of this article is to find out how the Somalian construction companies see the value of construction project risks and how to manage it by dispatching a questionnaire. The total questions of the questionnaire are seventeen questions and were distributed by various participants such as clients, contractors and designers. The findings show that in the implementation of risk management techniques, the Somalian construction industry varies greatly from building companies in foreign countries. The contractor needs to consider risk obligations, dynamics of risk incidents, risk tolerance and risk control skills to handle the risks effectively and efficiently. Due to the insufficiency of experience in the attitude of Somalian entrepreneurs towards risk management is very hard to change. However, as a component of their project management, the construction companies must include risk analysis in projects. The application of risk management in Somalian construction companies is small to moderate, with little difference between organizations' types, sizes and risk tolerances and individual respondents' experience.

DISPUTED RISKS IN CONSTRUCTION

2019 ◽  
Vol 6 (1) ◽  
Author(s):  
Rita Awwad ◽  
Joe Karam
Keyword(s):  
Risk Factors ◽  
Risk Management ◽  
Construction Industry ◽  
Mitigation Strategy ◽  
Descriptive Statistics ◽  
Cost Overrun ◽  
Project Risks

The construction industry is perceived as one of the most crucial fields in risk management studies due to its inherent risks and complexity. Despite the large amount of research presented in this area, experts still prefer relying on their own knowledge and experience to manage project risks. This approach leads to various disputes among construction stakeholders over the ownership of these risks and their mitigation. Such disputes normally affect the project’s goals in terms of budget and schedule. Many researchers have addressed risk factors in the construction field; however, none has tackled the disputed risks among construction parties. This research aims at identifying the different disputed risk factors among project stakeholders along with their respective mitigation strategy. It is based on an empirical questionnaire sent to construction practitioners with various expertise. An analysis of the results is conducted using descriptive statistics and one-on-one interviews. This research provides experts with a list of the most disputed risks in construction, along with their mitigation approach. In the end, construction parties will be able to meet the project’s goals and steer clear of any delay or cost overrun resulting from the occurrence of disputed risks.

Application of Risk Significance Index Score to Construction Projects in Malaysia

2013 ◽  
Vol 838-841 ◽  
pp. 3102-3108
Author(s):  
Boon Hoe Goh ◽  
Byung Gyoo Kang ◽  
Chung Lian Liew ◽  
Wee Kang Choong ◽  
Tuck Wai Yeong
Keyword(s):  
Risk Management ◽  
Project Management ◽  
Literature Review ◽  
Construction Industry ◽  
Questionnaire Survey ◽  
Construction Projects ◽  
Index Score ◽  
Project Risk ◽  
Interview Survey ◽  
Potential Risks

Risk management is one of the most important areas in project management particularly in the construction industry. However it is not possible to analyze all of the potential risks as it will require too much time and effort. Therefore in order to identify and analyze the significant risks, the risks should be categorized and ranked. This research applied the concept of risk significance index score to construction projects in Malaysia. A comprehensive list of 40-potential risks has been developed through literature review and an interview survey. A questionnaire survey was conducted to produce project risk significance index score for the risks. The ranks of the risks have been identified and solutions for the significant risks have been produced through interviews. This research proves the practical use of risk significance index score for construction projects in Malaysia.

Sign in / Sign up

Export Citation Format

Share Document