Case study on risk management in construction industry

Risk Management in Health Care Construction Projects By Tom Petersen Jan 01, Health care workers are, like patients, subject to illness from a variety of airborne pathogens common to hospital settings. This risk increases during construction and renovation because these endeavors release dust and disease-inducing microbes into the surrounding environment.

Case study on risk management in construction industry

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Abstract Construction industries are exposed to wide array of risks, such as financial, design, and contractual ones, which might have a direct impact on their performance toward achieving the desired objectives. Risk Management is a proactive decision-making process used to minimize and manage the risks in the most efficient and appropriate manner.

However, most construction firms in Malaysia do not apply formal risk management in their projects. Thus, this study aims to identify the actual process of risk management that is being applied in the construction projects and to determine the effects of risk management implementation on the performance of the construction projects in terms of time and cost.

The data were obtained from four case studies in Kuala Lumpur, Malaysia, through semistructured interviews. It was found that the implementation of risk management process in Malaysian construction industry is still at a low level, mainly due to the fact that most of the construction employees involved in risk management are not fully aware of the available risk management techniques that can be applied in construction projects.

Introduction According to Smith et al. Studies show that construction industry is subject to more risks and uncertainties than any other industries [ 2 ]. The reason for that is mainly due to the complex nature of construction business activities, processes, environment, and organization [ 3 ].

In fact, risk in construction industry has been the object of attention because of time and cost overruns associated with construction projects [ 4 ].

The construction industry is well-known for being full of projects that were completed with significant cost overruns [ 5 ].

Case study on risk management in construction industry

The risks that occur in construction projects will usually lead to inability to achieve the desired project objectives. Delays, cost overruns, and reduction of quality of projects are the common negative effects of risk inherent to construction projects.

Failure to manage such risks might further result in financial loss, damage of reputation, and loss of future business.

Thus, a systematic risk management must be implemented to deal with the risk associated with construction projects. Risk management is an essential part of construction projects which aims at identifying the potential risks associated with a project and responding to those risks to reduce them to an acceptable extent [ 78 ].

Risk management is indeed a dynamic tool which must be continuous throughout the project life cycle, and it is based on intuition and past experience for a high level of judgment.

Case study on risk management in construction industry

There are three main processes in risk management which are risk identification, risk analysis, and risk response [ 19 — 11 ]. It should be borne in mind that the main principle of risk management is not about eliminating the whole risks but to control them properly [ 12 ].

The construction project is overwhelmed by many predictable and unpredictable risks due to different sources of uncertainty, which include the performance of construction parties, resources availability, environmental conditions, involvement of other parties, and contractual relations.

The main objectives of risk management in a construction project include completing the project within the specified cost and time and within the required quality, safety, and environmental limits [ 13 ]. Systematic risk management practices are essential in order to handle and manage risks so that the success of projects can be ensured [ 14 ].

In fact, having systematic risk management results in the early detection of risks where there is no more need for contingency plans to cover almost every eventuality.

Hence, limited resources can only be concentrated on the major risks to achieve maximum effects. Construction industry is one of the most challenging and dynamic industries in Malaysia.

This industry is different from other industries due to its unique and complex features.

As most construction projects in Malaysia do not have systematic risk management procedures, this study could not find successful examples in conducting risk management in construction projects in the country; thus a comprehensive model for risk management could not be developed for the local construction industry. Construction organizations in developing countries, approach risk management in construction projects by using a set of practices that are normally insufficient, produce poor results often, and limit the success of project management. The goal of the paper is thus to propose a new stochastic programing model which makes it possible to differentiate various construction project risk categories with respect to risk management treatment and to validate the model using a real world construction project case study.

The factors of type, size, duration, diversity, players, and location would contribute to such differences which are the reasons for construction industry being exposed to many risks. In Malaysia, risk management has been implemented since early s [ 16 ].

However, not all companies have established their own risk management departments. Moreover, due to insufficiency of relevant data, most of the Malaysian construction firms still do not apply risk management in their construction projects [ 17 ].

Given that risks can have major impacts on the outcomes of the construction projects, the objectives of this study are to identify the current tools and techniques used in risk management during the construction and to determine the effects of risk management implementation on the performance of the construction projects in terms of time and cost.

Implementation of Risk Management in Malaysian Construction Industry: Case Studies

Research Methodology The methodologies used in this study include comprehensive literature review as well as semistructured interviews. A comprehensive literature review was conducted through relevant books, academic research journals, academic dissertations, and online database.

Then, four interviews were carried out in order to obtain information and opinion about the process of risk management implemented in four on-going construction projects in Kuala Lumpur, Malaysia. The case study is defined as a research strategy or an empirical inquiry that investigates a phenomenon within its real-life context.

Case study research includes single or multiple case studies.

Construction - Resources - Case studies

In multiple case studies, researchers study cases individually in depth as well as looking across cases for similarities and differences [ 18 ].

In addition, according to Silverman [ 20 ], the reliability of a qualitative method can be enhanced by comparing the analysis of the same data by several observers. Therefore, this research obtained data from four case studies in Kuala Lumpur, Malaysia, through semistructured interviews with four expert observers to ensure the accuracy and reliability of the data.

Moreover, this study used information-oriented sampling for the case selection and interviewees were chosen based on a purposive sampling so that the respondents include one site engineer of the project the first case study and three project managers other case studies who have been directly involved in construction industry for at least some years.

A draft of the protocol was developed as follows: Interview is one of the most important sources of case study information. In open-ended interviews, the researchers have the chance to gain sufficient information as well as personal opinion regarding the topic under study.

This could serve to corroborate previously gathered data.Risk is involved in every business, and the Indian construction industry is no exception. Because of the nature and the size of the projects, the construction industry in India continues to face challenges around shortage of talent, rise in.

Risk management practices of contractors: A case study of power station projects in Egypt Author(s): AMR A G Hassanein (Construction Engineering, the American University in Cairo, Cairo, Egypt). Risk Management Practices in a Construction Project – a case study Risk Management Practices in a Construction Project – a case study Master of Science Thesis in the Master regard to the construction industry, risk management is not commonly used (Klemetti, ).

The impact of risk management on construction projects success from the employees perspective The main objective of this research was to study the impact of risk management on believes that the circumstances within the construction industry had led to adopting risk management and analysis into practice.

Risk is one of key factors that.

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