Assessment of Risk Management in Building Construction Projects
The aspect of construction has been associated with many risks and managing them is usually perceived as a difficult task. The accidents become a burden to the society involved.
Rationale
The rationale of this study is to impact people with knowledge on identification of the risks that might threaten the goals of the project, provision of knowledge on how to manage the risks by the personnel in the construction sites and enhancing establishment of strategic measures to lower the occurrence and effects of the risks.
Scope
The scope of the research is carrying out comparative analysis to assess the risks in construction sites, effects and the theory application for measurement, analysis, and management of the same.
Aim and objectives
The aim of this study is to assess the risks management of building construction projects while the objectives include examining the risks associated with building construction projects identifying the effects of the risks to the project and enhancing establishment of applicable strategies to reduce the impacts of the risks.
Overview
According to experts, construction works take place under risky circumstances. Based on the utility theory, builders can assess threats through various mechanisms. The zone of groundwork and implementation of building works is a beneficial issue from the perspective of technical studies and essentially from the opinion of economic impacts of choices executed at various phases of the construction project (Wang et.al, 2012, 221). The thin line between whether or not to invest in building materials or produce ready-made resources for warehouses may somehow be essential for analyzing risks associated with construction projects.
As a way of recompensing for the uncertainty related to building projects, contingency, that is, time and expenses is usually contained within the preliminary project estimate (Sunindijo et.al, ,2011.139). Cost contingency or administration reserves or budget, is the amount supplemented to a construction project’s estimates to permit for additional expenses that will in turn insure or reduce the risk associated with building projects.
Modern utility theory assists constructors make sound decisions under uncertain situations and it contains alternative measures to safeguard the completed sections of a building project. A person’s attitude toward risk may expose certain options they have while dealing with the risk. More so, it is vital to note that construction works occur under risky situations most of the times. Hence, the need for risk analysis through the utility theory mechanism (Sunindijo et.al,2011 ,140). For instance, taking data meant for the construction project, current economic status inclusive of association between supply and demand. Besides this, the type of decision people make and historical data may influence the risks encountered and measures formulated throughout the project.
Integration of Areas of MBA
One of the MBAs associated with the topic is risk management which informs on the various ways an organization can actively and persistently during a project reduce the number of risks encountered (Sunindijo et.al,2011 ,144). In fact risk management entail various details and the best place for implementing certain elements of insurance against the risks is by construction companies gaining knowledge on the various elements of the challenges encountered (Cerić et.al,2011, 530). In addition, risk management tends to contain various procedures to help in builders interpret and rank risks.
As a project manager, one manages risks each day; it is one of the most vital things to do. If a project manager learns, strategic ways of applying systematic risks management mechanisms, and execute various systematic risk management procedures and elements containing the same specifics that would reduce risk encountered. Risk management MBA is simple but effective and takes place under 5 categories one of which is identification of risks. By defining and identifying risks, the project manager describes the risk in detail (Cerić et.al,2011, 534). The second step of risk management is examination of the risks in order to identify and define magnitudes of the consequences and understand the negative impacts of construction risks. In addition, identifying the consequences that comes with each risk may help comprehend the risk management procedures further and take time to offer sustainable solutions. Developing understanding on risks help protect long term and short-term goals of the building project.
The third phase on the procedure is assessment and ranking the procedures for the sake of determining and isolating the probability of the risk taking place. One usually ranks a risk from the one most likely to happen to the one that may least occur. In this sequence, then, one can decide whether to accept the consequences or leave them to take their natural course (Sunindijo et.al, 2011, 140). The last phase of risk management is monitoring the progress of the risks and developing fresh areas of concentrating the effects or simply dispersing the effects for a much effective procedure. In other words, risk management has all the relevant information and facts that can help shape the way people the entire process and give more clarity to all the stakeholders involved in the procedure.
Method of Analysis
In terms of definition, risk refers to the likelihood of a destructive event taking place during the project and as stated earlier, risk management caters to the needs of the project through the professional teams available and give chance to for streamlining of various aspects of a risks (Sunindijo et.al, 2011, 139).The risk valuation model is a method of analysis relevant to construction risk and as stated earlier it occur under five stages. Risk grouping, risk definition, risk examination, risk reaction, and risk monitoring. The risk model analysis is not like the traditional risk assessment perspectives and captures the accurate nature of construction issues specifically when it comes to intrinsic bias and indecision (Aminbakhsh et.al, 2013, 20). The exclusivity of construction projects limited the application of numerical and probability methods of analysis which were vague and incapable of presenting a complete picture of the situations as they are on the ground. The manner in which risk analysts perceive risk based in data derive from certified surveys is somehow incredible and able to produce understanding into the actual situation as it is on the ground. For instance, for probability fails to materialize into the actual happenings on the ground hence not as effective as risk management models that take one through the entire procedure of identification and monitoring of associated risks.
In summary, numerous risk analysis methods are available during construction procedures and the like hood of sizing the magnitude of the risks impacts and interceding at the right time might are some of the factors that into minimizing risks impacts. Risk probability and evaluation are some of the analytic mechanisms utilized for risk assessment and developing interceding mechanisms for the skilled laborers hence reducing both risks and helps in the decision making process.
References
Wang, Y., Tian, M., Wang, D., Zhao, Q., Shan, S. and Lin, S., 2012. Study on the HSE management at construction site of oil and gas processing area. Procedia Engineering, 45, pp.231-234.
Sunindijo, R.Y. and Zou, P.X., 2011. CHPT construct: essential skills for construction project managers. International Journal of Project Organisation and Management, 3(2), pp.139-163.
Aminbakhsh, S., Gunduz, M. and Sonmez, R., 2013. Safety risk assessment using analytic hierarchy process (AHP) during planning and budgeting of construction projects. Journal of safety research, 46, pp.99-105.
Cerić, A., Marčić, D. and Ivandić, K., 2011. A risk-assessment methodology in tunneling. Tehnički vjesnik, 18(4), pp.529-536.
