RISK MANAGEMENT IN CONSTRUCTION Task 2 is a report that you convey your research methodology to your readers. In general, methodology refers to definitions of academic questions, ways of answering...

Risk Management in Construction Projects
Contents
Introduction    1
Research Questions & Objectives    1
Literature Review    1
Understanding Risks    2
Risks in Construction Industry    2
Risk analysis and management techniques    3
Methodology    4
Discussions & Findings    5
References    5
Introduction
Construction industry is a growth engine for most nations and contribute significantly to GDP. However, construction being a highly resource consuming sector faces several risks and challenges which is why the concept of risk management was initially established for construction projects around 1985. Risk management since then has become a widely accepted tool for management of risks on construction projects. Because of increasing volatility of the industry, risk management practice has gained prominence and thus, a large number of studies have been conducted on risk management. However, limited studies have been done on the real practice of Risk Management as most studies focused on possible risks and applications of risk management practices with some highlights on tools and processes within risk management framework identified as accepted practices by the construction industry.
The cu
ent research would focus on the practice of risk management in construction organization and thus, would involve the primary research through which the perspectives of the risk managers involved in construction projects would be taken to understand the real challenges in the construction sector and the techniques that are used for managing risks in the sector.
Research Questions & Objectives
The aim of this research is to explore the kinds of risks that are faced by the construction projects in UK and identify practical solutions that work in the industry. To achieve this aim, following research questions would have to be answered:
· What are the risks faced by the construction industry in UK?
· How can risks be managed in a construction sector?
· What methods are effective in managing risks in the construction sector of UK?
· What risk management best practices exist that can be used by construction industry in the UK?
In the process of answering the above mentioned research questions, following research objectives would be achieved:
· Understanding risks in construction sector in UK
· Exploring and assessing risk management practices in construction sector of UK
· Recommending best practices for risk management in construction secto
Literature Review
Project Management Institute has defined Risk Management as one of the 10 knowledge areas of the PMBOK guide. In a construction project, it can be viewed as a systematic way of identification, analysis and management of risks so that objectives of the project can be effectively achieved. There are several benefits of risk management practices such as effective resource usage, improved construction management processes, and effective management or mitigation of project risks (Osipova, 2008).
Construction projects can be very complex and they come with a high level of uncertainty that can have severe negative consequences on a project. Thus, risk management is a major part of project management in construction projects and project teams have to effectively deal with uncertainties on the project. Construction projects are unique as well as complex in nature and the risks faced in the projects can arise from a large number of different sources. The complexity majorly arises due to participation from a large number of individuals as well as organizations that have to work together for project execution. Large number of participants also come with lot of differences in their preferences, expectations, and interests that can be conflicting and can cause confusions or issues. Multiple feedback processes emerge when this large number of people work as one project team, which further raises the complexity of a construction project (Lyons & Skitmore, 2004).
The objectives of risk management on a construction project are meeting requirements of all key stakeholders of the project within the constraints of time, cost, and quality. Effective risk management can help in building an effective project management strategy that
ings effective results. Risk management is among the 10 knowledge areas of project management framework defined by PMI. Each knowledge area defined in the framework can have a major influence on the project including risk management. All or a set of some project management processes are included in each of these knowledge areas. Under risk management include planning, risk identification, risk analysis, response planning, monitoring and control (Baloi, 2003).
Risk management needs project managers to identify the risks and their root causes as well as assess their potential impacts on the project based on which a mitigation or response strategy can be formalized. Risk management process is applied from the start of the project in its early development stage so that risks can be addressed at the starting stage itself and its influences on the project outcome can be minimized (Smith, et al., 2006).
Understanding Risks
As per PMBOK guide of project management a risk is “an uncertain event or condition that, if it occurs, has a positive or negative effect on at least one project objective”. Risks if severe can lead to a failure of a construction project. If there are many risks prevailing then they can cause problems like delays in construction, cost ove
un, or dissatisfactory results. Risks can be categorized into internal and external risks based on their nature as per Tah and Car. Some authors categorize them into local, global, political, physical, economic and technological changes. As per the PMBOK guide, risks can be organizational, external, technical, environmental and project management (Ward & Chapman, 2003).
Risks in Construction Industry
Construction industry is complex and heterogeneous. It involves new construction, renovation of projects, demotion, and public works such as construction of roads, highways, streets,
idges, tunnels, and plants. Classifications of...